Certara, Inc. (NASDAQ:CERT) shares plunged more than 12% in premarket trading on Monday after the company issued weaker-than-expected full-year guidance despite reporting first-quarter revenue slightly ahead of forecasts.
The drug development software and services company posted adjusted earnings per share of $0.09, missing analyst expectations of $0.11 per share.
Revenue Edges Higher but Profitability Softens
First-quarter revenue totaled $106.9 million, narrowly topping the consensus estimate of $106.1 million and increasing 1% from $106.0 million in the same period last year.
Software revenue rose 7% year-over-year to $49.7 million, while services revenue declined 4% to $57.2 million.
Adjusted EBITDA fell 9% to $31.7 million from $34.8 million in the prior-year quarter.
Investors React to Lower-Than-Expected Outlook
The company’s updated 2026 guidance disappointed investors, particularly on earnings expectations.
Certara forecast full-year adjusted earnings per share in a range of $0.35 to $0.41, well below analyst consensus estimates of $0.45 per share.
The midpoint of the guidance range, $0.38, sits roughly 16% below market expectations.
The company also projected full-year revenue of $395 million to $405 million, with the midpoint of $400 million trailing the Wall Street consensus forecast of $425 million.
Divestiture and Strategic Reorganization Underway
Certara said the updated outlook reflects the completed sale of its Regulatory and Medical Writing business to Veristat.
The transaction included $85 million in cash upfront, with the potential for up to an additional $50 million in future consideration.
“I am pleased with the progress we made in my first quarter at Certara,” said Chief Executive Officer Jon Resnick. “We are taking decisive steps to sharpen our execution and position Certara for long-term growth, including divesting our Medical Writing business, reorganizing around two focused growth areas, and accelerating our enterprise-wide AI program.”
Chief Financial Officer John Gallagher said that excluding the divested business, the company expects full-year revenue growth of between 0% and 4%.
Certara also forecast a full-year adjusted EBITDA margin in the range of 30% to 32%.