Certara Q2 FY26 earnings call CERT

Certara is actively transforming its business to achieve sustainable double-digit growth, focusing on execution and operational discipline. Key initiatives include the divestiture of the regulatory and medical writing business, reprioritization of the product portfolio, and a reorganization into two business units: Model-informed Discovery and Drug Development (MID3) and Accelerated Clinical Evidence (ACE). The company also announced a new Chief Commercial Officer to lead a redesigned commercial go-to-market engine, aiming to integrate sales and marketing and activate growth across all segments.

To address stranded costs from the divestiture and accelerate innovation investments, Certara executed a reduction in force impacting approximately 5% of its global employee base. This action, combined with other operational excellence steps, is expected to result in run rate savings of approximately $13 million, primarily focused on overhead. These savings are intended to improve margins and free up capital for strategic investments.

Certara emphasizes its unique position at the intersection of regulatory and scientific leadership, proprietary software, and AI. The company actively shapes policies, with its scientists engaging directly with agencies like the FDA on model-informed approaches. Recent regulatory guidance, such as HHS's Operation Trialblazer and ICHM15 taking effect at EMA, are seen as favorable macro conditions amplifying Certara's positioning.

Certara serves over 2,600 customers globally, with nearly 160,000 daily software users. In Q2 FY26, all 13 novel therapies approved by the FDA came from Certara clients, including Eli Lilly's orforglipron (a GLP-1 therapy) and a new rare autoimmune therapy. The company's Simcyp Simulator and QSP platform were instrumental in supporting drug development and regulatory submissions for these approvals.

Certara is deeply integrating AI across its operations and product offerings, leveraging 25 years of accumulated scientific data and proven algorithms. Internally, AI-assisted code development accounts for up to 85% of new code, leading to a 65% year-on-year increase in development rate per software engineer. AI agents are also cutting cycle times by up to 90% in legal and IT and driving sales prospecting.

AI is enabling new customer use cases and enhancing existing software products like Phoenix Cloud, Pinnacle, Certara IQ, D360, and CoAuthor. CoAuthor, used in over 400 regulatory submissions, now provides nearly 600 AI agents, resulting in a 40% productivity increase in drafting quality control documents and over 90% accuracy in summarizing complex data. Scientific services are also seeing accelerated delivery steps by up to 80% for certain tasks through proprietary AI-driven workflows.

Certara expanded its global footprint with a major Simcyp win in China, increased engagement in the Middle East, and a full modeling collaboration in Japan. The company also highlighted its partnership with NVIDIA, which aims to integrate NVIDIA's BioNeMo agent toolkit with Certara's next-generation platform, enabling new use cases in discovery and accelerating timelines.