Certara, Inc. outlined strategic changes during its second-quarter earnings discussion, emphasizing a shift from generalist to specialist sales operations. The company hired PhD-led science teams to better serve clients requiring complex modeling services, representing a departure from its previous engagement approach.
The divestiture of the regulatory and medical writing business was presented as a critical strategic decision to strengthen the core software-services platform and enhance financial predictability. Software revenue reached 53% of total business, climbing from 40% two years prior, reflecting the company’s deliberate transition toward higher-margin, scalable offerings. A global workforce reduction of 5% was implemented to eliminate costs displaced by the divestiture and reallocate resources toward artificial intelligence and innovation initiatives.
Operational developments benefited from global regulatory advancements, particularly the ICH M15 standard that standardizes model-informed drug development across the United States and Europe. The company is utilizing a 25-year proprietary dataset to establish what management termed an “accountability layer” for artificial intelligence applications, positioning specialized offerings as distinct from generic artificial intelligence models in regulated sectors. A transition from desktop to cloud-based software expanded visibility into future revenue patterns and strengthened momentum for the Phoenix platform.
Financial guidance remained unchanged at 0% to 4% full-year revenue growth, with software expected to perform at or above the high end of the range while services may fall at or below the low end. A 27% year-over-year pipeline increase exiting the quarter is anticipated to drive improved revenue growth during the remainder of 2026. Adjusted EBITDA margin guidance was adjusted to 29% to 31% to account for the new business composition following the divestiture. Management projects $13 million in run-rate savings from operational initiatives will fully emerge in subsequent periods to support margin growth.
The company authorized a new $50 million share repurchase program following completion of a previous $100 million program. A net loss from continuing operations of $6.1 million was reported, primarily attributable to the absence of a prior-year contingent consideration adjustment and currency effects. Management indicated that international expansion in Europe and Asia, particularly in China, Japan, and the Middle East, represents a key strategic priority moving forward.
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