Certara’s Q1 2026: Software Momentum, a Divestiture Pivot, and a Narrowed Revenue Forecast

Certara, Inc. (Nasdaq: CERT) reported its first quarter of 2026 with total revenue of $106.9 million, a modest 1% year-over-year uptick. Software revenue climbed 7% to $49.7 million, while Services revenue declined 4% to $57.2 million. The company posted a net loss of $8.8 million, versus a $4.7 million net income in the prior-year quarter, and adjusted EBITDA of $31.7 million, down from $34.8 million a year ago. A key strategic move accompanies the results: Certara completed the divestiture of its Regulatory Writing and Medical Writing Business, a step designed to tilt the business mix toward software and AI-enabled offerings.

Operational snapshot

The quarter produced a bookings balance of $115.3 million, down 2% year over year. Software bookings surged 20% to $48.7 million, while Services bookings declined 14% to $66.6 million, reflecting the divestiture-driven shift in contract mix and timing. Total cost of revenues held steady at $41.6 million, up only modestly from the prior year. The divestiture is expected to influence revenue mix and operating leverage in the near term, with governance guidance calling out the impact in the second quarter.

Management commentary

CEO Jon Resnick framed the quarter as the start of a sharper, more focused Certara. “I am pleased with the progress we made in my first quarter at Certara. We are taking decisive steps to sharpen our execution and position Certara for long-term growth, including divesting our Regulatory Writing and Medical Writing Business, reorganizing around two focused growth areas, and accelerating our enterprise-wide AI program. Together, these actions strengthen our ability to transform drug development and deliver greater value to our customers and shareholders.”

CFO John Gallagher added that the software business is improving against plan, while services faced go-to-market challenges that the company expects to resolve in the second half of the year. He noted the post-divestiture mix is anticipated to be roughly even between software and services, with updated 2026 guidance reflecting the divestiture’s impact in Q2 and a revenue growth trajectory of 0% to 4% excluding the divested business.

EPS, earnings surprise, and the revenue forecast

On the earnings line, Certara did not publish an explicit earnings-per-share figure in the release. The quarter produced a net loss, so any reported EPS would be negative in a per-share sense—leaving the EPS consensus and any earnings surprise to analysts’ forward-looking models rather than this press sheet. The absence of a stated EPS and consensus makes the near-term earnings surprise harder to quantify from the release alone. The revenue forecast thus hinges on how quickly software gains momentum and how the remaining services business adapts post-divestiture, particularly as the company aims for a roughly even software/services mix and a 0%–4% topline path outside the divested entity.

Strategic implications for the sector and peers

Certara’s pivot—pulling away from lower-margin writing services and doubling down on software and AI—mirrors a broader industry shift: platforms and analytics-driven offerings are increasingly the margin accelerants. If software bookings sustain their 20% YoY growth and the AI program begins to contribute meaningfully to operating leverage, Certara’s peers with similar portfolios may feel pressure to articulate clearer growth vectors and unit economics post-divestiture. Investors will scrutinize whether the 0%–4% revenue growth target, excluding the divested business, translates into tangible earnings momentum once the Q2 divestiture effects are fully realized.

Takeaways

Certara’s first quarter reads as a strategic retooling rather than a triumph of topline momentum. The software line is the bright spot, and the divestiture offers potential for improved margins and focus. The near-term challenge is to translate software growth and AI investments into sustained profitability while the company completes the wind-down of its writing-services portfolio. If the trajectory holds, sector peers that have navigated similar transitions may find validation for a software-first narrative—provided bookings strengthen and the AI program delivers the expected efficiency gains.

Conclusion

Certara’s Q1 2026 update is less about a dramatic earnings surprise and more about a deliberate pivot toward a software-centric, AI-enabled model. The divestiture clears room for a leaner, more scalable growth engine, but the market will demand evidence that the improved margin profile and the 0%–4% revenue forecast can translate into actual earnings power in the back half of 2026 and beyond. For now, the signal is: software bookings are the lever, AI is the tail, and the divestiture is the hinge.