Certara, Inc. (NASDAQ: CERT) has unveiled its second-quarter financial outcomes for 2026, marking a pivotal moment in its strategic redirection toward bolstering its high-profit software offerings and pioneering model-informed drug development. The company's recent actions include divesting its regulatory and medical writing division, implementing a workforce reduction to streamline operations and mitigate stranded costs, and reorganizing its structure into two distinct business units: Model Informed Discovery and Drug Development (MID3) and Accelerated Clinical Evidence (ACE). These moves are designed to foster sustainable growth and enhance operational efficiency, with a strong emphasis on leveraging artificial intelligence across various facets of the business.
During the quarter, Certara reported total revenue of $93.3 million, a modest 1% increase year-over-year. This growth was primarily fueled by a 4% rise in software revenue, reaching $48.8 million, which now constitutes 53% of the total revenue, up from 40% two years prior. Conversely, services revenue saw a 3% decline to $44.5 million, a decrease attributed to the divestiture of the regulatory and medical writing business. Software bookings demonstrated robust performance, climbing 9% year-over-year to $50.7 million, driven by strong demand for products like Simcyp, Phoenix, and Pinnacle 21. Total bookings for the quarter amounted to $98.3 million, representing a 1% increase from the previous year. The company's adjusted EBITDA stood at $26.2 million, with an adjusted EBITDA margin of 28.1%, and adjusted diluted EPS remained flat at $0.08 compared to Q2 2025.
Certara is actively integrating AI into its internal processes and product development, leading to significant productivity gains. Up to 85% of new software code is now AI-assisted, resulting in a 65% year-over-year increase in development rates per engineer. AI agents have also reduced cycle times by as much as 90% in internal functions such as legal and IT. Furthermore, the company's CoAuthor platform, which supports regulatory submissions, now incorporates nearly 600 AI agents, boosting productivity in drafting quality control documents by 40% and achieving over 90% accuracy in summarizing complex databases. These technological advancements underscore Certara's commitment to innovation and efficiency in the regulated environments it serves.
The company also highlighted its strong pipeline growth, with a 27% year-over-year increase, which management anticipates will translate into revenue in the latter half of 2026. This optimism is supported by strategic partnerships, such as the collaboration with NVIDIA to integrate BioNeMo agents into Certara’s next-generation AI platform, aiming to accelerate high-throughput discovery workflows. Certara's global presence continues to expand, marked by its first significant Simcyp win in China and a comprehensive modeling collaboration in Japan. The leadership team, including CEO Jon Resnick and newly appointed Chief Commercial Officer Julien Perrier, is focused on refining its go-to-market strategy, transitioning to a specialist-led engagement model, and enhancing customer impact across its nearly 160,000 daily software users and over 2,600 clients worldwide.
Certara's financial guidance for the full year 2026 remains consistent, projecting revenue growth between 0% and 4%, translating to a range of $367 million to $382 million on a comparable continuing operations basis. The adjusted EBITDA margin guidance has been slightly adjusted downward to 29% to 31% to reflect the impact of the divestiture, not a change in underlying business performance. Adjusted diluted EPS for the full year is expected to be in the range of $0.31 to $0.36 per share. The company's robust cash balance of $184.1 million and a new $50 million share repurchase program authorized by the Board reflect ongoing confidence in its business strategy and a disciplined approach to capital allocation, positioning Certara for future growth and market leadership in drug development solutions.
Certara is actively recalibrating its business model to capitalize on market opportunities and technological advancements. The recent organizational changes, including the divestiture of its medical writing segment and strategic hires, are aimed at creating a more agile and focused enterprise. The emphasis on AI-driven solutions and an evolving commercial approach are expected to drive increased client engagement and market penetration. These foundational shifts are crucial for Certara to achieve its long-term objectives of sustainable double-digit growth and solidify its position as a leader in model-informed drug development.