Certara announces Q1 revenue growth and $100 million buyback

RADNOR, Pa. - Certara, Inc. (NASDAQ:CERT), a company specializing in model-informed drug development, has announced its preliminary financial results for the first quarter of 2025, highlighting a revenue increase and initiating a significant stock repurchase program. The company reported a 10% revenue growth to $106.0 million from the previous year’s first quarter and a projected 13-20% rise in adjusted EBITDA. The announcement has driven significant investor interest, with InvestingPro data showing a remarkable 37.8% stock price increase over the past week, pushing shares to $12.91.

The software segment experienced an 18% increase in revenue, reaching $46.4 million, while service revenue saw a 4% growth to $59.6 million. Bookings also rose by 12%, with software bookings up 22% and service bookings growing by 7%. These figures include contributions from Chemaxon, a recent addition to Certara’s portfolio. According to InvestingPro analysis, the company maintains a strong financial position with a healthy current ratio of 2.13, indicating robust liquidity. InvestingPro Tips reveal that Certara operates with a moderate debt level and its liquid assets exceed short-term obligations.

In a move demonstrating confidence in its long-term strategy, Certara’s Board of Directors has authorized a stock repurchase plan, allowing the company to buy back up to $100 million of its outstanding common stock. William F. Feehery, CEO of Certara, expressed satisfaction with the first quarter performance, attributing it to strong commercial execution and customer demand for the company’s software and services.

Additionally, Arsenal Capital Partners, an investor in Certara since 2013, has agreed to a one-year lock-up on the sale of shares acquired from EQT in December 2022. Steve McLean, Senior Partner at Arsenal, underscored the firm’s commitment to supporting Certara’s investment in technologies that enhance pharmaceutical development.

Looking ahead, Certara is reiterating its full-year 2025 guidance, anticipating revenue between $415 million and $425 million, with an adjusted EBITDA margin of 30-32% and adjusted diluted earnings per share between $0.42 and $0.46. Based on InvestingPro’s Fair Value analysis, the stock is currently trading near its Fair Value. The company’s EV/EBITDA multiple of 25.4x suggests a premium valuation, reflecting market confidence in its growth prospects. Discover 10+ additional exclusive ProTips and comprehensive valuation metrics with an InvestingPro subscription, including detailed analysis available in the Pro Research Report.

The company is also in the midst of a strategic review of its regulatory services business, engaging in preliminary discussions with several external parties.

Investors can expect further details when Certara hosts its conference call on May 5, 2025, to discuss the first quarter financial results in depth.

These preliminary first quarter results are unaudited and may be subject to adjustments during the company’s regular financial and accounting procedures. The information provided is based on a press release statement from Certara.

In other recent news, Certara Inc. reported strong financial results for the fourth quarter of 2024, with earnings per share (EPS) of $0.15, surpassing analyst expectations of $0.12. The company achieved a revenue of $100.4 million, exceeding forecasts of $97.92 million, marking a 14% year-over-year increase. KeyBanc Capital Markets maintained an Overweight rating on Certara, highlighting a 22% growth in total bookings for the quarter, driven by a 38% surge in software bookings. Additionally, TD Cowen initiated coverage with a Buy rating, setting a price target of $16, citing the potential of Certara’s Model-Informed Drug Discovery and Development platform.

Certara also announced leadership changes, with Dr. Patrick F. Smith stepping down as President of Certara Drug Development Solutions, while continuing in a senior advisory role. The company released an updated version of its Simcyp Simulator, Version 24, enhancing its capabilities in physiologically-based pharmacokinetic modeling. These developments come as Certara continues to innovate in the biosimulation field, with a focus on expanding its AI capabilities and reviewing its regulatory services business. Despite cautious spending in the biopharma sector, Certara’s outlook for 2025 remains optimistic, with projected revenue growth between 8% and 10%.

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