Certara's software sales accelerate. Services are still shrinking.
The drug-development software maker generated more quarterly cash, but narrowed its annual sales range and trimmed the top of its adjusted earnings target.
Certara's software business returned to double-digit growth in the third quarter, but its services business was still shrinking. The split leaves the drug-development technology company with a recovery that has yet to spread across its operations.
Software revenue rose 11% from a year earlier to $48.8 million, while services revenue fell 2% to $46.1 million. Both comparisons exclude the regulatory and medical-writing business sold in May. Certara narrowed its annual revenue-growth forecast and lowered the upper end of its adjusted earnings-per-share outlook.
| Continuing operations, quarter ended September 30 | 2026 | 2025 |
|---|---|---|
| Software revenue | $48.8 million | $43.8 million |
| Services revenue | $46.1 million | $47.1 million |
| Total revenue | $94.9 million | $90.9 million |
| Net loss | $3.6 million | $4.8 million |
Software strengthens as services work through the pipeline
Certara sells software that models how medicines behave and provides consulting services to drug developers. Management described the quarter's software growth as organic, rather than acquisition-driven. Reported software growth had been 4% in the second quarter.
New software bookings rose 15% from a year earlier, while services bookings fell 5%. Bookings estimate the value of signed contracts and purchase orders.
The services business did improve modestly: its revenue decline narrowed from 3% in the second quarter, and its bookings decline narrowed from 6%. In August, management had expected improving services performance during the second half. It now says it is working to convert the pipeline into bookings and revenue, with services growth expected at or below the low end of the company's annual range.
What changed in the annual forecast
Certara now expects annual revenue growth of 2% to 3%, within the original August range of 0% to 4%. The adjusted diluted earnings target is $0.31 to $0.34 a share, compared with $0.31 to $0.36 previously.
The quarter's adjusted earnings were $0.09 a share, unchanged from a year earlier. That measure removes stock compensation, acquired-intangible amortization, reorganization and other specified costs, with tax effects.
The continuing business returned to an operating profit of $2.3 million from a $0.6 million loss. Its adjusted EBITDA margin rose to 31.8% from 31.5% a year earlier. That measure removes net interest, taxes, depreciation and amortization, stock compensation and specified acquisition, reorganization and other items.
Management said 29% to 31% remained an appropriate adjusted EBITDA margin range for the fourth quarter.
Quarterly cash generation is stronger
Continuing operations generated $30.7 million of operating cash in the quarter, versus about $28 million a year earlier. The prior-year quarterly amount is calculated from matched nine-month and first-half statements. That stronger quarter contrasts with the first nine months, when continuing operating cash flow fell to $46.3 million from $51.4 million.
September cash and cash equivalents were $214.9 million, alongside $293.3 million of term-loan principal and a fully unused $100 million revolver. Capitalized software-development spending used $20.7 million over the first nine months.
The Certara company profile tracks the software and services split, the completed divestiture, cash uses and earlier forecasts.