Certara (NASDAQ:CERT) executives used a fireside chat at the TD Cowen Health Care Conference to outline early priorities under new CEO Jon Resnick, discuss the company’s ongoing strategic review of its Regulatory Services business, and provide additional context on recent guidance and product momentum.
New CEO emphasizes execution, investment focus, and “platform” approach
Resnick, who said he was roughly 60 days into the role, described his early tenure as moving from “fact-finding” to “solutioning” and emphasized internal appetite to raise operational standards. He said his initial impression was that Certara has “phenomenal” tools, expertise, and “market-leading products,” alongside opportunities to better connect assets and drive innovation.
Looking forward, he outlined three priority areas:
- Strategic clarity on where the company will invest, with an emphasis on the MIDD side and building a more disciplined product management culture.
- Customer centricity, including partnering beyond “power users” to better fit broader client needs.
- Operating cadence and execution to pull through investments consistently and measurably.
Regulatory Services review: resilience vs. AI narrative, but growth headwind
Resnick was asked about the company’s Regulatory Services business, which has been under a strategic review for an extended period. He noted that, since the review was announced, the market refrain from bankers and others had been to sell the unit, but he said he approached the decision with fresh eyes.
He cited several points in the discussion:
- On the positive side, he said the business generates “high profit” and continues to perform despite commoditization pressures and revenue compression narratives tied to generative AI. He pointed to a 1.5 book-to-bill in December as evidence of resilience.
- On the other hand, he acknowledged concerns that it is “on the wrong side” of the generative AI trend and that it has held back Certara’s top-line growth rates over the last couple of years.
- He said some investors view a divestiture as a way to demonstrate strategic focus, though he added focus could also be achieved through resource redeployment.
Resnick said he wanted to ensure any outcome from the review would reflect the economic value he believes the business provides and added that the company hoped to wind down the process in the next couple of weeks.
Product and regulatory tailwinds: Simcyp, QSP growth, and relationships with regulators
On product momentum, Resnick highlighted Simcyp as “core” to the company’s MIDD strategy and described it as a market-leading product. He said a major Simcyp release was aligned with consortium member requests and represented continued investment in the biosimulation/MIDD area, which he characterized as having higher growth and higher potential.
Resnick also addressed regulatory dynamics and said the broader secular tailwinds for Certara’s work were positive, referencing public commentary from FDA leadership as supportive of the company’s areas of focus. He cautioned, however, that adoption and change can take time across drug development processes.
He said Certara has relationships with more than 20 regulators globally and described those relationships as helpful in building trust, facilitating communication between biopharma customers and regulators, and reinforcing Certara’s products as preferred tools within customers’ organizations.
Guidance context: software booking deceleration, services bookings strength, and margin outlook
CFO John Gallagher provided detail around the company’s outlook and underlying assumptions. He said the company was pleased with the year-end performance on revenue and adjusted EBITDA, noting Certara ended the year at the high end of its adjusted EBITDA margin guidance at 32%.
Looking ahead, Gallagher said Certara saw a deceleration in software bookings driven by customer dynamics in big pharma, including:
- Seat license reductions in Phoenix
- Flatness in Pinnacle related to study counts
He added that management also sees opportunities to improve execution. He said trailing twelve-month software bookings were about 1%, which informed an expectation for low-single-digit growth. On the services side, Gallagher noted the business has been around a 3% grower historically and said Q4 services bookings were 17%, spanning both biosimulation services and regulatory services. He attributed part of the strength to a typical seasonal fourth quarter and said the December acceleration suggested discretionary spending was improving across customer tiers, including Tier 1 accounts where the company had faced challenges during the prior year.
On profitability, Gallagher said the company’s guide for adjusted EBITDA margin remained 30% to 32%. While that implies a potential step down from the 32% year-end level, he characterized 2026 as “another investment year,” with additional spending planned in MIDD to catalyze future growth. He also said management had discussed $10 million of cost avoidance outside of the 2026 plan and was reviewing cost measures to balance investment needs with efficiency.
AI and cloud: near-term focus on Phoenix Cloud and QSP-enabled software
Management discussed AI as an embedded capability across products and highlighted specific initiatives including Phoenix Cloud and AI-enabled QSP software. Resnick said Phoenix Cloud launched last year, saw adoption among Tier 1 clients, and has a “good, healthy pipeline” moving into the current year. He also referenced Certara IQ as an AI-based QSP technology and suggested early pull-through may be faster in services before expanding more meaningfully into software over time.
When asked about catalysts to watch, Gallagher pointed to two areas:
- Phoenix Cloud conversions, beginning with Tier 1 customers and later extending to Tier 2 and Tier 3
- QSP, including both services growth and the commercialization of Certara IQ for consultants and customers
Resnick added that the company is evaluating how it communicates performance and may introduce additional metrics over time, including greater focus on ARR for the software business. He said Certara intends to provide clearer messaging on its portfolio and growth engines in coming months.
About Certara (NASDAQ:CERT)
Certara is a biosimulation software and services company that partners with pharmaceutical, biotechnology and medical device developers to accelerate drug discovery, development and regulatory approval. The company’s platform integrates quantitative pharmacology, real-world evidence, artificial intelligence and machine learning to model and simulate drug behavior across a range of therapeutic areas and patient populations. By applying these mechanistic and data-driven approaches, Certara helps its clients predict clinical outcomes, optimize dosing strategies and streamline decision-making throughout the product lifecycle.
The company’s offerings are divided into software tools and consulting services.
