Certara 2025 Q2 Earnings Narrows Losses, Reports 84.3% Reduction in Net Loss

Certara (CERT) reported mixed results for its fiscal 2025 Q2 earnings on Aug 07th, 2025. While revenue beat expectations with a 12.1% year-over-year increase, GAAP EPS missed. The company reiterated full-year guidance, reflecting confidence in its long-term growth prospects despite ongoing GAAP-level losses.

Revenue
Certara’s total revenue for the quarter rose by 12.1% to $104.57 million in 2025 Q2, compared to $93.31 million in 2024 Q2. The software segment performed particularly well, with revenue increasing by 22% to $46.70 million, driven largely by growth in biosimulation software and contributions from M&A activity. Meanwhile, the services segment posted a more modest 5% increase to $57.88 million, reflecting sustained demand for biosimulation services. These figures highlight the company’s growing focus on software solutions as a key revenue driver.

Earnings/Net Income
Certara significantly narrowed its losses, reporting a net loss of $1.97 million in Q2 2025, down from $12.57 million in the same period the previous year—a reduction of 84.3%. On a per-share basis, the loss improved to $0.01 from $0.08, representing an 87.5% improvement. The company also achieved a new six-year high for Q2 net income, despite remaining unprofitable on a GAAP basis. These results suggest improving operational efficiency and cost management.

Price Action
The stock experienced a downward trend in the latest trading session, with a 2.85% decline in daily price, a 6.84% drop over the past week, and a 12.81% decline month-to-date. These figures reflect mixed investor sentiment, influenced by both the positive revenue growth and the ongoing GAAP-level losses.

Post Earnings Price Action Review
The investment strategy of purchasing CERT following a revenue beat and holding for 30 days shows potential, especially considering the positive revenue performance and strong software segment growth. However, the strategy carries risks, particularly due to the non-GAAP EPS miss and the company’s ongoing GAAP-level losses. While a revenue beat can signal strong market demand and potentially boost investor confidence, GAAP-level financial challenges may weigh on stock price performance. Additionally, stock volatility and market expectations mean the price may not respond significantly to the revenue beat if the market has already priced in such outcomes.

CEO Commentary
William F. Feehery, Certara’s CEO, emphasized sustained customer interest in model-informed drug development, stating that software enhancements and new product introductions are key to the company’s long-term growth. John Gallagher, the CFO, highlighted strong performance in biosimulation software and QSP services amid a challenging operating environment. Both executives expressed confidence in the company’s full-year plan and the potential for continued growth.

Guidance
Certara reiterated its full-year 2025 financial guidance, maintaining expectations for revenue between $415 million and $425 million. The company also targets an adjusted EBITDA margin of 30–32% and an adjusted diluted EPS range of $0.42–$0.46. Certara attributed its confidence to growing commercial momentum and sustained demand for its model-informed drug development solutions.

Additional News
Certara announced a $25 million common stock repurchase program during the quarter, signaling its commitment to returning value to shareholders. Additionally, the company acquired Chemaxon, a chemistry software firm, to expand its biosimulation offerings, with $5.3 million in revenue attributed to the acquisition in Q2 2025. On the leadership front, Certara appointed a new Chief Technology Officer, reinforcing its focus on product innovation and digital transformation in drug development.