Certara (CERT) Stock Price Faces Loss Pressure Despite Software Gains

Certara entered this earnings report with the stock up strongly over the past three months, then gave back 4.7% to close at US$7.80 after the Q2 release. The selloff contrasts with the core thesis that this is a steadily improving software driven drug development platform.

The headline this quarter is not revenue growth. It is the tension between healthy profitability on an adjusted basis and continuing losses under generally accepted accounting principles. Certara delivered US$93.3m in revenue with a 28.1% adjusted EBITDA margin, yet still reported a loss from continuing operations of US$6.1m.

Is Certara a genuine bargain at US$7.80, or is the discounted share price just mirroring its ongoing losses and modest 2.4% trailing revenue growth? Compare that 46% DCF gap against current market expectations on our valuation analysis for Certara

Q2 2026 Earnings Summary

• Revenue, Q2 2026 vs. Q2 2025: US$93.3m vs. US$104.6m (declined 10.8%)
• Net Loss from Continuing Operations, Q2 2026 vs. Q2 2025: US$6.1m loss vs. US$2.0m loss (loss widened 209%)
• Basic EPS, Q2 2026 vs. Q2 2025: loss of US$0.04 per share vs. loss of US$0.01 per share (loss per share increased 222%)
• Adjusted EBITDA Margin, Q2 2026: 28.1% on revenue of US$93.3m (management described this as healthy on an adjusted basis)

Prefer visual charts instead of another wall of earnings figures and footnotes? Get a clear, interactive view of Certara's valuation in the full company report for Certara.

Certara’s Software Shift Hits Key Early Targets

Bulls argue Certara is becoming a higher margin, software and AI focused drug development platform. The quarter gives some concrete proof points, but mainly on mix and pipeline rather than the income statement. Software now contributes about 53% of revenue compared with roughly 40% two years ago, and Q2 software revenue of US$48.8m grew while services revenue of US$44.5m declined. Trailing 12 month software bookings of US$196.4m grew faster than overall bookings and still show 7% growth even when stripping out Chemaxon.

AI and cloud adoption also moved from story to early usage milestones. Management cited 30 Phoenix Cloud implementations year to date and over 400 regulatory submissions supported by CoAuthor AI agents. However, overall revenue only grew 1% and adjusted EBITDA margin stayed roughly flat, so the thesis of materially stronger earnings leverage still needs more time to show up in reported results.

Reveal where the surface looks calm but the models start to disagree on Certara's next leg of growth, and see what the street is secretly modeling beyond the next quarter with our multi year analyst estimates for Certara.

Evaluating Certara Bears: Growth Story Still On Pause

The cautious view on Certara says services softness, uneven bookings and limited cash upside could cap the benefits of its software and AI pivot. This quarter lines up with that concern. Software revenue grew 4% to US$48.8m and reached 53% of total revenue, yet total revenue only grew 1%. Services revenue fell 3% to US$44.5m and trailing 12 month services bookings were slightly down, which supports worries about Tier 1 and regulatory work staying weak.

Bears also worry that higher license and Chemaxon exposure adds volatility instead of cleaner recurring growth. Q2 bookings were only up 1% to US$98.3m and total trailing 12 month bookings grew 3%, which does not yet show a strong inflection. The reaffirmed full year revenue outlook of 0% to 4% growth and slightly lower margin guidance underline that many of the milestones needed to disprove the cautious case are still ahead, not behind.

With Certara still unprofitable and revenue growth only around 2.4% a year, the real question is how secure the balance sheet looks if this pace holds. Check the full financial health analysis of Certara stock

Stay Ahead Of Your Next Move

If Certara’s mix of software growth, ongoing losses and that sizeable DCF gap has your attention, register for free with Simply Wall St and add it to a Watchlist to track the share price against fair value and watch for a more attractive entry point. After you own Certara or any other stock, use the Portfolio Command Center to cut through market noise and focus on the updates that actually matter to your holdings. For a longer term view, tap into the Community to see how other investors are thinking about the same risks and potential catalysts. By spotting key shifts early, you can react faster, manage risk more confidently and stay ahead of the market.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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