CERT earnings analysis
What we found in CERT's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
Certara's continuing-operations revenue grew 1% year over year to $93.271 million in Q2, driven by 4% software growth and improved 107.6% net software retention, but services declined 3%. Gross margin held at approximately 62.3%, yet sharply higher G&A and other costs moved the company to a $6.081 million continuing-operations loss, or $(0.04) diluted EPS, versus $1.496 million of income a year ago. Liquidity remains meaningful at $184.138 million of cash plus a fully available $100.0 million revolver, but operating cash flow fell to $15.584 million for the first half and the company retains $294.028 million of term debt.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Software supported 1% revenue growth
- Continuing-operations revenue increased $0.915 million, or 1%, year over year to $93.271 million. Software revenue rose $2.101 million (4%) to $48.796 million, offsetting a $1.186 million (3%) services decline to $44.475 million.
- Gross margin held near 62%
- Gross profit was $58.149 million on $93.271 million of revenue, implying a 62.3% gross margin. This was broadly stable versus the prior-year gross margin implied by $58.071 million of gross profit on $92.356 million of revenue.
- Software retention accelerated
- Net software retention improved to 107.6% from 101.5%, while bookings were $97.4 million versus $98.3 million in the comparable prior-year quarter.
- Cash conversion remained positive but weakened
- Operating cash flow from continuing operations remained positive at $15.584 million for the first six months of 2026, although down from $23.329 million a year earlier. Investing cash use was $14.475 million, leaving only about $1.109 million before financing activities; the filing does not separately report free cash flow.
- Divestiture added liquidity optionality
- The company completed the Regulatory and Medical Writing divestiture on May 8, 2026, receiving $69.4 million of cash consideration, with $15.0 million in escrow and potential earn-out proceeds of up to $35.0 million.
- Buyback materially reduced share count
- The company repurchased 9,009,459 shares for $57.4 million during the first six months of 2026, and the $100.0 million authorization had no remaining funds as of June 30, 2026.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- Profitability reversed despite revenue growth
- GAAP continuing-operations results swung to a $6.081 million net loss, or $(0.04) diluted EPS, from $1.496 million of income, or $0.01 diluted EPS, a year earlier. Operating margin fell to approximately (0.2%) from approximately 8.3%.
- Expense growth exceeded revenue growth
- General and administrative expense rose $5.233 million, or 31%, to $21.933 million, including a $5.7 million unfavorable contingent-consideration comparison, while sales and marketing rose $1.320 million (10%) and R&D increased $0.733 million (8%).
- Divestiture created a large reported loss
- The divestiture generated an estimated $65.481 million pretax loss on disposal and a $49.189 million after-tax quarterly discontinued-operations loss. The final recognized loss may change based on the ultimate escrow realization and earn-out settlement.
- Leverage and interest burden remain material
- Cash and cash equivalents declined to $184.138 million at June 30, 2026 from $189.392 million at December 31, 2025, while term-loan borrowings remained substantial at $294.028 million. Interest expense was $4.987 million in Q2, up 4% year over year.
- Services demand remained soft
- Services revenue declined $1.186 million, or 3%, to $44.475 million in Q2, and six-month services revenue declined $2.550 million, or 3%, to $88.841 million.
- No material risk-factor updates
- Item 1A states there were no material changes to the risk factors disclosed in the 2025 Annual Report; consequently, the filing identifies no newly added or materially revised risk factor for the quarter ended June 30, 2026.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $-0.04
- Gross margin
- 62.3%
- Operating margin
- -0.2%
- Segment
- Software revenue: $48.796 million, up $2.101 million (4%) year over year
- Segment
- Services revenue: $44.475 million, down $1.186 million (3%) year over year
What they said about what is next.
The 10-Q MD&A contains no quantitative revenue, EPS, EBITDA, or capital-spending outlook; numeric guidance appears to have been deferred to the earnings release/call.
The filing reads worse than the one before it.
What came before.
- 10-Q · May 11, 2026
- Certara reported Q1 2026 results with total revenues of $106.9 million, up 1% from $106.0 million a year ago, driven primarily by a 7% increase in software revenues. However, the company incurred a net loss of $8.8…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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