What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-08-09 compared with 2023-05-08 · 264 added, 142 removed, 450 unchanged (47% of the section changed)

3 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS, EXCEPT PER SHARE AND SHARE DATA)

(IN THOUSANDS, EXCEPT PER SHARE AND SHARE DATA) JUNE 30,

2023 DECEMBER 31,

Current assets:

Cash and cash equivalents $ 245,190 $ 236,586

Accounts receivable, net of allowances for credit losses of $ 736 and $ 1,250 , respectively

Accounts receivable, net of allowance for credit losses of $ 460 and $ 1,250 , respectively

83,952 82,584

Restricted cash 3,020 3,102

4 unchanged sentences

Operating lease right-of-use assets 12,326 14,427

Intangible assets, net of $ 231,384 and $ 217,705 , respectively

Goodwill 721,853 717,743

Intangible assets, net of accumulated amortization of $ 244,974 and $ 217,705 , respectively

473,805 486,782

Deferred income taxes 3,703 3,703

Other long-term assets 5,283 5,615

Total assets $ 1,572,220 $ 1,572,922

Liabilities and stockholders’ equity

4 unchanged sentences

Current portion of long-term debt 3,020 3,020

Current operating lease liabilities

Other current liabilities 4,645 4,993

9 unchanged sentences

Stockholders' equity:

Preferred shares, $ 0.01 par value, 50,000,000 authorized as of March 31, 2023 and December 31, 2022, respectively, no shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively

Common shares, $ 0.01 par value, 600,000,000 shares authorized, 160,218,109 and 159,676,150 shares issued as of March 31 ,2023 and December 31, 2022, respectively;

159,839,743 and 159,525,943 shares outstanding as of March 31, 2023 and December 31, 2022, respectively

Preferred shares, $ 0.01 par value, 50,000,000 shares authorized, no shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively

Common shares, $ 0.01 par value, 600,000,000 shares authorized, 160,171,493 and 159,676,150 shares issued as of June 30, 2023 and December 31, 2022, respectively;

159,777,284 and 159,525,943 shares outstanding as of June 30, 2023 and December 31, 2022, respectively

Additional paid-in capital 1,162,317 1,150,168

1 unchanged sentence

Accumulated other comprehensive loss ( 3,173 ) ( 8,230 )

Treasury stock at cost, 378,366 and 150,207 shares at March 31, 2023 and December 31, 2022, respectively

Treasury stock at cost, 394,209 and 150,207 shares at June 30, 2023 and December 31, 2022, respectively

( 8,762 ) ( 3,000 )

Total stockholders’ equity 1,097,174 1,079,661

1 unchanged sentence

The accompanying notes are an integral part of the condensed consolidated financial statements

Table of Content s

CERTARA, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE ICOME(LOSS )

THREE MONTHS ENDED MARCH 31,

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE INCOME (LOSS)

THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,

(IN THOUSANDS, EXCEPT PER SHARE AND SHARE DATA) 2023 2022 2023 2022

Revenues $ 90,450 $ 82,760 $ 180,751 $ 164,311

Cost of revenues 36,224 35,194 71,080 67,983

7 unchanged sentences

Income from operations 13,039 4,149 20,477 10,282

Other expenses:

Other income (expenses):

Interest expense ( 5,668 ) ( 3,879 ) ( 11,143 ) ( 7,107 )

3 unchanged sentences

Provision for income taxes 3,675 3,380 4,786 4,916

Net income (loss) 4,706 ( 589 ) 6,064 1,621

Other comprehensive income (loss):

Foreign currency translation adjustment 1,815 ( 7,520 ) 4,416 ( 10,704 )

Change in fair value from interest rate swap, net of tax of $( 588 ) and $ 60 , respectively

Change in fair value from interest rate swap, net of tax of $ 762 , $ 362 , $ 174 , $ 422 , respectively

2,332 848 641 912

Total other comprehensive income (loss) 4,147 ( 6,672 ) 5,057 ( 9,792 )

Comprehensive income (loss) $ 8,853 $ ( 7,261 ) $ 11,121 $ ( 8,171 )

Net income per share attributable to common stockholders:

Net income (loss) per share attributable to common stockholders:

Basic $ 0.03 $ 0.00 $ 0.04 $ 0.01

Diluted $ 0.03 $ 0.00 $ 0.04 $ 0.01

Weighted average common shares outstanding:

Basic 158,955,822 156,478,724 158,568,575 156,209,335

Diluted 159,906,972 156,478,724 159,817,688 159,293,362

The accompanying notes are an integral part of the condensed consolidated financial statements

Table of Content s

CERTARA, INC.

2 unchanged sentences

(IN THOUSANDS,

EXCEPT SHARE DATA) COMMON STOCK ADDITIONAL

CAPITAL ACCUMULATED

DEFICIT ACCUMULATED

COMPREHENSIVE

TREASURY STOCK

LOSS TREASURY STOCK TOTAL

STOCKHOLDERS'

EXCEPT SHARE DATA)

SHARES AMOUNT SHARES AMOUNT

Balance as of March 31, 2022 159,660,048 $ 1,596 $ 1,127,334 $ ( 73,394 ) $ ( 7,046 ) ( 2,874 ) $ ( 85 ) $ 1,048,405

Equity-based compensation awards 9,501 — — 9,501

Common shares issued for employee share-based compensation awards 331,309 4 ( 4 ) — — —

Restricted stock withheld for tax liability ( 106,121 ) ( 2,264 ) ( 2,264 )

Change in fair value from interest rate swap, net of tax 848 — — 848

Net income ( 589 ) — — ( 589 )

Foreign currency translation adjustment ( 7,520 ) — — ( 7,520 )

Balance as of June 30, 2022 159,991,357 $ 1,600 $ 1,136,831 $ ( 73,983 ) $ ( 13,718 ) ( 108,995 ) $ ( 2,349 ) $ 1,048,381

Balance as of December 31, 2021 159,660,048 $ 1,596 $ 1,119,821 $ ( 75,604 ) $ ( 3,926 ) ( 1,100 ) $ ( 38 ) $ 1,041,849

Equity-based compensation awards — — 17,014 — — — — 17,014

Common shares issued for employee share-based compensation awards 331,309 4 ( 4 ) — — — —

Restricted stock withheld for tax liability — — — — — ( 107,895 ) ( 2,311 ) ( 2,311 )

Change in fair value from interest rate swap, net of tax — — — — 912 — — 912

Net income — — — 1,621 — — 1,621

Foreign currency translation adjustment — — — — ( 10,704 ) — — ( 10,704 )

Balance as of March 31, 2022

Balance as of June 30, 2022 159,991,357 $ 1,600 $ 1,136,831 $ ( 73,983 ) $ ( 13,718 ) ( 108,995 ) $ ( 2,349 ) $ 1,048,381

The accompanying notes are an integral part of the condensed consolidated financial statements

Table of Content s

CERTARA, INC.

2 unchanged sentences

(IN THOUSANDS,

EXCEPT SHARE DATA) COMMON STOCK ADDITIONAL

CAPITAL ACCUMULATED

DEFICIT ACCUMULATED

COMPREHENSIVE

TREASURY STOCK

LOSS TREASURY STOCK TOTAL

STOCKHOLDERS'

EXCEPT SHARE DATA)

SHARES AMOUNT SHARES AMOUNT

Balance as of March 31, 2023 160,218,109 $ 1,601 $ 1,158,708 $ ( 59,515 ) $ ( 7,320 ) ( 378,366 ) $ ( 8,419 ) $ 1,085,055

Equity-based compensation expense, net of forfeiture — — 3,610 — — — — 3,610

Common shares issued for share-based compensation awards and shares withheld for tax 78,327 1 ( 2 ) — — ( 15,843 ) ( 343 ) ( 344 )

Restricted stock forfeiture* ( 124,943 ) ( 1 ) 1 — — — — —

Change in fair value from interest rate swap, net of tax — — — — 2,332 — — 2,332

Net income — — — 4,706 — — — 4,706

Foreign currency translation adjustment, net of tax — — — — 1,815 — — 1,815

Balance as of June 30, 2023 160,171,493 $ 1,601 $ 1,162,317 $ ( 54,809 ) $ ( 3,173 ) ( 394,209 ) $ ( 8,762 ) $ 1,097,174

Balance as of December 31, 2022 159,676,150 $ 1,596 $ 1,150,168 $ ( 60,873 ) $ ( 8,230 ) $ ( 150,207 ) $ ( 3,000 ) $ 1,079,661

3 unchanged sentences

Change in fair value from interest rate swap, net of tax — — — — 641 — — 641

Net income — — — 6,064 — — — 6,064

Foreign currency translation adjustment, net of tax — — — — 4,416 — — 4,416

Balance as of March 31, 2023

* Legal forfeiture occurred in Q1 2023;

Balance as of June 30, 2023 160,171,493 $ 1,601 $ 1,162,317 $ ( 54,809 ) $ ( 3,173 ) ( 394,209 ) $ ( 8,762 ) $ 1,097,174

• Legal forfeiture 66,220 shares occurred in Q1 2023;

and the accounting forfeiture occurred in Q3 2022.

The accompanying notes are an integral part of the condensed consolidated financial statements

Table of Content s

CERTARA, INC.

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

THREE MONTHS ENDED MARCH 31,

SIX MONTHS ENDED JUNE 30,

(IN THOUSANDS) 2023 2022

Cash flows from operating activities:

Net income $ 6,064 $ 1,621

Adjustments to reconcile net income to net cash provided by operating activities:

2 unchanged sentences

Amortization of debt issuance costs 765 771

(Recovery of) provision for credit losses

Provision for credit losses ( 172 ) 217

Loss on retirement of assets 29 7

Change in fair value of contingent consideration

Equity-based compensation expense 12,153 17,014

Change in fair value of contingent considerations 2,559 —

Deferred income taxes ( 10,237 ) ( 5,607 )

1 unchanged sentence

Accounts receivable ( 272 ) ( 5,706 )

Prepaid and other assets

Prepaid expenses and other assets 494 4,586

Accounts payable and accrued expenses ( 8,343 ) ( 7,934 )

11 unchanged sentences

Payments on financing component of interest rate swap — ( 1,085 )

Payment of taxes on shares and units withheld for employee taxes

Payment of taxes on shares withheld for employee taxes ( 5,735 ) ( 2,312 )

Net cash used by financing activities ( 7,270 ) ( 5,051 )

Effect of foreign exchange rate changes on cash and cash equivalents, and restricted cash 2,239 ( 4,471 )

Net increase (decrease) in cash and cash equivalents, and restricted cash

Net increase in cash and cash equivalents, and restricted cash 8,522 11,626

Cash and cash equivalents, and restricted cash, at beginning of period 239,688 186,624

3 unchanged sentences

Cash paid for taxes $ 9,034 $ 5,558

Supplemental schedule of non-cash investing and financing activities

Contingent liabilities established in connection with business acquisition $ 790 $ —

The accompanying notes are an integral part of the condensed consolidated financial statements

Table of Content s

CERTARA, INC.

8 unchanged sentences

When combined, these solutions allow the Company to offer customers end-to-end support across the entire product life cycle.

The Company has operations in the United States, Australia, Canada, China, France, Germany, India, Italy, Japan, Luxembourg, Netherlands, Philippines, Poland, Portugal, Spain, Switzerland and the United Kingdom.

Summary of Significant Accounting Policies

1 unchanged sentence

These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes as of and for the year ended December 31, 2022.

Basis of Presentation and Use of Estimates

(a) Basis of Presentation and Use of Estimates

The preparation of consolidated financial statements in conformity with U.S.

generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.

generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.

Significant estimates include, among other estimates, assumptions used in the allocation of the transaction price to separate performance obligations, estimates towards the measure of progress of completion on fixed-price service contracts, the determination of fair values and useful lives of long-lived assets as well as intangible assets, goodwill, allowance for credit losses for accounts receivable, recoverability of deferred tax assets, recognition of deferred revenue, valuation of interest rate swaps, determination of fair value of equity-based awards, measurement of fair value of contingent consideration, and assumptions used in testing for impairment of long-lived assets.

Actual results could differ from those estimates, and such differences may be material to the consolidated financial statements.

Actual results could differ from those estimates, and such differences may be material to the condensed consolidated financial statements.

(b) Unaudited Interim Financial Statements

The accompanying condensed consolidated balance sheet as of March 31, 2023, the condensed consolidated statements of operations and comprehensive income (loss) for the three months ended March 31, 2023 and 2022, the condensed consolidated statements of stockholders’ equity for the three months ended March 31, 2023 and 2022, the condensed consolidated statements of cash flows for the three months ended March 31, 2023 and 2022, and the related interim disclosures are unaudited.

The accompanying condensed consolidated balance sheet as of June 30, 2023, the condensed consolidated statements of operations and comprehensive income (loss) for the three and six months ended June 30, 2023 and 2022, the condensed consolidated statements of stockholders’ equity for the three and six months ended June 30, 2023 and 2022, the condensed consolidated statements of cash flows for the six months ended June 30, 2023 and 2022, and the related interim disclosures are unaudited.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S.

3 unchanged sentences

The accompanying condensed consolidated financial statements should be read in conjunction with the Company’s 2022 audited consolidated financial statements and notes thereto.

The information as of December 31, 2022 in the Company’s condensed consolidated balance sheet included herein is derived from the Company’s audited consolidated financial statements included in the Company’s 2022 Annual Report.

Recently Issued Accounting Pronouncements

The information as of December 31, 2022 in the

Table of Content s

Company’s condensed consolidated balance sheet included herein is derived from the Company’s audited consolidated financial statements included in the Company’s 2022 Annual Report.

In March 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-01, “Common Control Arrangements (Topic 842),” which provide private companies and not-for-profit organizations that are not conduit bond obligors with a practical expedient to use the written terms and conditions of a common control arrangement to determine whether a lease exists and, if so, the classification of and accounting for that lease.

5 unchanged sentences

All intercompany balances and transactions have been eliminated in consolidation.

Fair Value Measurements

The Company follows FASB Accounting Standards Codification (“ASC”) 820 10, “Fair Value Measurements” (“ASC 820-10”), which defines fair value, establishes a framework for measuring fair value in U.S.

(e) Fair Value Measurements

The Company follows FASB ASC 820 10, “Fair Value Measurements” (“ASC 820-10”), which defines fair value, establishes a framework for measuring fair value in U.S.

GAAP, and requires certain disclosures about fair value measurements.

8 unchanged sentences

For the acquisitions noted in Note 5, the fair value measurement methods used to estimate the fair value of the assets acquired and liabilities assumed at the acquisition dates utilized a number of significant unobservable inputs of Level 3 assumptions.

These assumptions included, among other

things, projections of future operating results, implied fair value of assets using an income approach by preparing a discounted cash flow analysis, and other subjective assumptions.

These assumptions included, among other things, projections of future operating results, implied fair value of assets using an income approach by preparing a discounted cash flow analysis, and other subjective assumptions.

Interest rate swaps are valued in the market using discounted cash flows techniques.

5 unchanged sentences

Any changes in the fair value of these contingent liabilities are included in the earnings in the condensed consolidated statements of operations and comprehensive income (loss).

To estimate the fair value of the contingent consideration liability, management utilized a Monte Carlo simulation model to value the earn-out based on the likelihood of reaching certain eligible revenue thresholds.

Significant inputs used in the fair value measurement of contingent consideration are the amount and timing of the acquired entity’s eligible revenue over a three-year period subsequent to the acquisition date.

At the acquisition date, the fair value of the contingent consideration liabilities was $ 19.8 million.

The following table sets forth the assets and liabilities that were measured at fair value on a recurring and non-recurring basis by their levels in the fair value hierarchy at March 31, 2023:

Table of Content s

To estimate the fair value of the contingent consideration liability for Vyasa Analytics, LLC ( " Vyasa"), management utilized a Monte Carlo simulation model to value the earn-outs based on the likelihood of reaching certain eligible revenue thresholds.

To measure the fair value of the contingent consideration liability for the Drug Interaction Database ("DIDB"), management utilized present value discounted based on a multiple of eligible revenue over two separate measurement periods.

Significant inputs used in the fair value measurement of contingent consideration is the amount and timing of the acquired entity’s eligible revenue over certain periods subsequent to the acquisition date.

At the acquisition date, the fair value of the contingent consideration liabilities was $ 19,813 and $ 790 for the Vyasa acquisition and DIDB, respectively.

The following table sets forth the assets and liabilities that were measured at fair value on a recurring and non-recurring basis by their levels in the fair value hierarchy at June 30, 2023:

LEVEL 1 LEVEL2 LEVEL 3 TOTAL

(In thousands)

1 unchanged sentence

Interest rate swap assets — 9,190 — 9,190

Total assets $ 143,679 $ 9,190 $ — $ 152,869

Contingent liabilities $ — $ — $ 23,162 $ 23,162

1 unchanged sentence

The following table sets forth the assets and liabilities that were measured at fair value on a recurring and non-recurring basis by their levels in the fair value hierarchy at December 31, 2022:

LEVEL 1 LEVEL2 LEVEL 3 TOTAL

(In thousands)

1 unchanged sentence

Interest rate swap assets — 8,374 — 8,374

Total assets $ 100,999 $ 8,374 $ — $ 109,373

Contingent liabilities $ — $ — $ 19,813 $ 19,813

Total liabilities $ — $ — $ 19,813 $ 19,813

For the period ended March 31, 2023, there were no transfers between the levels within the fair value hierarchy.

The Company’s Level 3 liability is the acquisition related contingent consideration liability.

For the period ended June 30, 2023, there were no transfers between the levels within the fair value hierarchy.

The Company’s Level 3 liabilities are acquisition related contingent consideration liabilities.

Table of Content s

The following table summarizes the Level 3 activity of the changes in the contingent consideration liability.

1 unchanged sentence

Beginning balance at December 31, 2022

Additions 790

Change in fair value 2,559

Ending balance at March 31, 2023

Ending balance at June 30, 2023

For more information regarding fair value measurements and the fair value hierarchy, see Note 2.

“Summary of Significant Accounting Policies” in the notes to the consolidated financial statements in the Company’s 2022 Annual Report.

Cash and Cash Equivalents, and Restricted Cash

(f) Cash and Cash Equivalents, and Restricted Cash

Cash equivalents include highly liquid investments with maturities of three months or less from the date purchased.

Restricted cash represents cash that is reserved to provide for a Company credit card program and unexpended restricted grant funds.

The restricted cash balance was $ 3,103 and $ 3,102 at March 31, 2023 and December 31, 2022, respectively.

Restricted cash represents cash that is reserved for unexpended restricted grant funds and for a Company's credit card program.

The restricted cash balance was $ 3,020 and $ 3,102 at June 30, 2023 and December 31, 2022, respectively.

The following table provides a reconciliation of cash and cash equivalents and restricted cash to the amounts presented in the condensed consolidated statements of cash flows:

2023 DECEMBER 31,

(In thousands)

10 unchanged sentences

The Company generally writes off a receivable or records a specific allowance for credit losses if the Company determines that the receivable is not collectible.

Allowances for credit losses of $ 736 and $ 1,250 were provided in the accompanying condensed consolidated financial statements as of March 31, 2023 and December 31, 2022, respectively.

Allowances for credit losses of $ 460 and $ 1,250 were provided in the accompanying condensed consolidated financial statements as of June 30, 2023 and December 31, 2022, respectively.

Table of Content s

Accounts receivable consists of the following:

2023 DECEMBER 31,

(In thousands)

5 unchanged sentences

The following table presents the information regarding the allowance of accounts receivable:

2023 DECEMBER 31,

(In thousands)

3 unchanged sentences

Ending balance $ 460 $ 1,250

Derivative Instruments

(h) Derivative Instruments

In the normal course of business, the Company is subject to risk from adverse fluctuations in interest rates.

10 unchanged sentences

Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.

The Company had entered into an interest rate swap agreement in May 2022 that pays a fixed interest rate and receives a variable interest rate to modify the interest rate characteristics of term loan debt from variable to fixed in order to reduce the impact of changes in future cash flows due to market interest rate changes.

The Company entered into an interest rate swap agreement in May 2022 that pays a fixed interest rate and receives a variable interest rate to modify the interest rate characteristics of term loan debt from variable to fixed in order to reduce the impact of changes in future cash flows due to market interest rate changes.

The swap agreement has a notional amount of $ 230,000 , a fixed rate of 2.8 % and a termination date of August 31, 2025.

At March 31, 2023 and December 31, 2022, the interest swap had a fair value of $ 6,096 and $ 8,374 , respectively;

The fair value recognized in accumulated other comprehensive income was $ 6,096 and $ 8,374 , respectively, at March 31, 2023 and December 31, 2022.

The interest income on derivative instruments recognized in the Company’s condensed consolidated statements of operations and comprehensive income (loss) was $ 986 for the three months ended March 31, 2023 and there was no changes in the fair value of the interest rate swap in interest expense for the three month ended March 31 2022.

At June 30, 2023, the Company and the counter party was in the process to amend the floating rate of the swap agreement from term LIBOR to term SOFR due to LIBOR cessation.

At June 30, 2023 and December 31, 2022, the interest swap had a fair value of $ 9,190 and $ 8,374 , respectively;

The fair value recognized in accumulated other comprehensive income was $ 9,190 and $ 8,374 , respectively, at June 30, 2023 and December 31, 2022.

The Company uses derivatives to manage certain interest exposures and designated all the derivatives as cash flow hedges.

The Company records derivatives at fair value on its condensed consolidated balance sheets.

Changes in the fair value of derivatives designated as cash flow hedges are recorded as a component of accumulated other comprehensive income

Those amounts are reclassified into interest expense in the same period during which the hedged transactions impact earnings.

The notional amounts and fair values, locations of derivative instruments in the condensed consolidated balance sheets as of March 31, 2023 and December 31, 2022 were as follows:

Interest rate swap derivative designated as cash flow hedging instruments:

March 31, 2023

Changes in the fair value of derivatives designated as cash flow hedges are recorded as a component of accumulated other comprehensive income (loss).

Those amounts are reclassified into interest expense in the same period during which the hedged transactions impact

Table of Content s

The amount of derivative gains reclassified from accumulated other comprehensive income on derivative instruments recognized in the Company’s condensed consolidated statements of operations and comprehensive income (loss) was $ 1,276 and $ 2,262 for the three and six months ended June 30, 2023, respectively.

The notional amounts, fair values, and classification of derivative instruments in the condensed consolidated balance sheets as of June 30, 2023 and December 31, 2022 were as follows:

Interest rate swap derivative designated as cash flow hedging instrument:

2023 DECEMBER 31,

3 unchanged sentences

Other long-term assets $ 3,523 $ 3,736

The net amount of deferred gains related to derivative instruments designated as cash flow hedges that is expected to be reclassified from accumulated other comprehensive gains into earnings over the next twelve months is $ 4,272 .

Revenue Recognition

In accordance with Accounting Standards Codification Topic 606 ("ASC Topic 606"), “Revenue from Contracts with Customers”, the Company determines revenue recognition through the following steps:

(i) Revenue Recognition

In accordance with ASC Topic 606, “Revenue from Contracts with Customers”, the Company determines revenue recognition through the following steps:

Identification of the contract, or contracts, with a customer

15 unchanged sentences

The Company’s software contracts do not typically include, variable consideration, or options for future purchases that would not be similar to the original goods.

Table of Content s

Software Service Revenues

27 unchanged sentences

The portion of deferred revenue that will be recognized within 12 months is recorded as current deferred revenue, and the remaining portion is recorded as deferred revenue in the condensed consolidated balance sheets.

Contract balances at March 31, 2023 and December 31, 2022 were as follows:

Contract balances at June 30, 2023 and December 31, 2022 were as follows:

2023 DECEMBER 31,

(In thousands)

1 unchanged sentence

Contract liabilities 54,844 55,024

During the first quarter of 2023, the Company recognized revenue of $ 24,488 related to contract liabilities at December 31, 2022.

The unsatisfied performance obligations as of March 31, 2023, were approximately $ 130,237 .

Table of Content s

During the six months ended at June 30, 2023, the Company recognized revenue of $ 38,087 related to contract liabilities at December 31, 2022.

The unsatisfied performance obligations as of June 30, 2023, were approximately $ 119,407 .

We expect to recognize approximately $ 102,781 or 86.1 % of this revenue over the next 12 months and the remainder thereafter.

6 unchanged sentences

Amortization of capitalized costs is included in sales and marketing expenses in our condensed consolidated statements of operations and comprehensive income (loss).

Capitalized contract acquisition costs were $ 814 and $ 981 as of March 31, 2023, and December 31, 2022, respectively, and were included in prepaid expenses and other current assets in the condensed consolidated balance sheets.

Capitalized contract acquisition costs were $ 749 and $ 981 as of June 30, 2023 , and December 31, 2022, respectively, and were included in prepaid expenses and other current assets in the condensed consolidated balance sheets.

Grant Revenue

6 unchanged sentences

The following table presents the Company’s revenue by timing of revenue recognition to understand the risks of timing of transfer of control and cash flows:

THREE MONTHS ENDED MARCH 31,

THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,

2023 2022 2023 2022

(In thousands)

2 unchanged sentences

Service revenues earned over time 56,727 54,036 114,023 106,394

Earnings per Share

Total $ 90,450 $ 82,760 $ 180,751 $ 164,311

(j) Earnings per Share

Basic earnings per common share is computed by dividing the net earnings by the weighted-average number of shares outstanding during the reporting period, without consideration for potentially dilutive securities.

Diluted earnings per share is computed by dividing the net earnings attributable to stockholders by the weighted-average number of shares and dilutive securities outstanding during the period.

Table of Content s

Public Offerings and Other significant Shareholder Transactions

15 unchanged sentences

The Company invests available cash in bank deposits, investment-grade securities, and short-term interest-producing investments, including government obligations and other money market instruments.

At March 31, 2023 and December 31, 2022, the investments were bank deposits, overnight sweep accounts, and money market funds.

At June 30, 2023 and December 31, 2022, the investments were bank deposits, overnight sweep accounts, and money market funds.

The Company has adopted credit policies and standards to evaluate the risk associated with sales that require collateral, such as letters of credit or bank guarantees, whenever deemed necessary.

Management believes that any risk of loss is significantly reduced due to the nature of the customers and distributors with which the Company does business..

As of March 31, 2023 and December 31, 2022, no single customer accounted for more than 10% of the Company’s accounts receivable.

No single customers accounted for more than 10% of the Company’s revenues during the three months ended March 31, 2023 and 2022.

Business Combinations

As of June 30, 2023 and December 31, 2022, no single customer accounted for more than 10% of the Company’s accounts receivable.

No single customer accounted for more than 10% of the Company’s revenues during the six months ended June 30, 2023 and 2022.

Acquisitions have been accounted for by using the acquisition method of accounting pursuant to FASB ASC 805, “Business Combinations.” Amounts allocated to the purchased assets and liabilities assumed are based upon the total purchase price and the estimated fair values of such assets and liabilities on the effective date of the purchase as determined by an independent third party.

The results of operations have been included in the Company’s results of operations prospectively from the date of acquisition.

Since its inception, and as of March 31, 2023, the Company has completed 17 acquisitions, of which 12 have included software or technology.

Since its inception, and as of June 30, 2023, the Company has completed 18 acquisitions, of which 13 have included software or technology.

Details of acquisitions that have closed since the beginning of fiscal year 2022 are provided below.

Table of Content s

Integrated Nonclinical Development Solutions, Inc.

4 unchanged sentences

Vyasa Analytics, LLC

On December 28, 2022, the Company completed the acquisition of Vyasa Analytics, LLC (“Vyasa”), a company that provides an AI powered, scalable deep learning software and analytics platform for organizations within healthcare and life sciences for a total estimated consideration of $ 29,276 .

On December 28, 2022, the Company completed the acquisition of Vyasa Analytics, LLC (“Vyasa”), a company that provides an artificial intelligence (" AI") powered, scalable deep learning software and analytics platform for organizations within healthcare and life sciences for a total estimated consideration of $ 29,276 .

The business combination was not significant to the Company’s condensed consolidated financial statements.

6 unchanged sentences

Any changes in the fair value of these contingent liabilities are included in the earnings in the condensed consolidated statements of operations and comprehensive income (loss).

At March 31, 2023, contingent consideration was remeasured to $ 21,074 , resulting in a fair value adjustment of $ 1,261 and recorded in general and administrative (“G&A”) on the accompanying condensed consolidated statement of operations and comprehensive income (loss).

At June 30, 2023, the contingent consideration was remeasured to $ 22,372 , resulting in a fair value adjustment of $ 2,559 and recorded in general and administrative (“G&A”) on the accompanying condensed consolidated statement of operations and comprehensive income (loss).

Drug Interaction Solutions, University of Washington ("DIDB")

On June 20, 2023, the Company entered into an asset purchase agreement with the University of Washington and completed the acquisition of Drug Interaction Solutions, including the Drug Interaction Database and related products, from The University of Washington for a total estimated consideration of $ 8,340 .

The business combination was not significant to the Company’s condensed consolidated financial statements.

The total estimated consideration includes a portion of contingent consideration that is payable over the next two years in cash, not to exceed $ 2,000 .

Future payments of contingent consideration are based on eligible revenue for the period from July 1, 2023 through June 30, 2025.

The fair value of the contingent consideration was estimated to be $ 790 as of the acquisition date.

The current purchase price allocation is preliminary.

The primary areas of the preliminary purchase price allocations that are not yet finalized relate to the fair value of certain tangible and intangible assets acquired and liabilities assumed, and residual goodwill.

The Company expects to continue to obtain information to assist in determining the fair values of the net assets acquired at the acquisition date during the measurement period.

Any adjustments to the preliminary purchase price allocation identified during the measurement period, which will not exceed one year from the acquisition date, will be accounted for prospectively.

Based on the Company’s preliminary purchase price allocation, approximately $ 330 , $ 5,600 , $ 360 , and $ 2,316 of the purchase price were assigned to trademarks, database content/technology, customer relationships and goodwill, respectively.

The condensed consolidated financial statements include the operating results of each acquisition from the date of acquisition.

Table of Content s

Prepaid Expenses and Other Current Assets and Other Long-Term Assets

2023 DECEMBER 31,

(In thousands)

6 unchanged sentences

Other long-term assets consisted of the following:

2023 DECEMBER 31,

(In thousands)

10 unchanged sentences

assets and stock pledges for the non-U.S.

subsidiaries and contain various financial and nonfinancial covenants.

As of March 31, 2023 and December 31, 2022, available borrowings under the revolving lines of credit were $ 100,000 .

Available borrowings under the revolving lines of credit as of March 31, 2023 and December 31, 2022 were reduced by $ 120 and $ 120 , respectively, of standby letters of credit issued to a landlord in lieu of a security deposit in addition to any outstanding borrowings.

Borrowings under the Credit Agreement are subject to a variable interest rate at LIBOR plus a margin.

The applicable margins are based on achieving certain levels of compliance with financial covenants.

The effective interest rate was 8.03 % and 3.64 % for the three months ended March 31, 2023 and 2022 for the term loan debt, respectively.

As discussed previously, the Company has interest rate swap agreements to mitigate the interest rate risk.

Interest incurred on the Credit Agreement with respect to the term loan amounted to $ 5,974 and $ 2,737 for the three months ended March 31, 2023 and 2022, respectively.

Accrued interest payable on the Credit Agreement with respect to the term loan amounted to $ 69 and $ 130 at March 31, 2023 and December 31, 2022, respectively, and is included in accrued expenses.

Interest incurred on the Credit Agreement with respect to the revolving line of credit was $ 63 and $ 63 for the three months ended March 31, 2023 and 2022, respectively.

There was $ 1 and $ 66 of accrued interest payable on the revolving line of credit at March 31, 2023 and December 31, 2022, respectively.

subsidiaries and contains various financial and nonfinancial covenants.

As of June 30, 2023 and December 31, 2022, available borrowings under the revolving lines of credit were $ 100,000 .

Available borrowings under the revolving lines of credit as of June 30, 2023 and December 31, 2022 were reduced by $ 120 and $ 120 , respectively, of standby letters of credit issued to a landlord in lieu of a security deposit in addition to any outstanding borrowings.

Borrowings under the Credit Agreement were subject to a variable interest rate at LIBOR plus a margin.

The applicable margins were based on achieving certain levels of compliance with financial covenants.

Due to the cessation of LIBOR, the Company signed a LIBOR transition amendment on June 26 2023, agreeing to replace LIBOR with the Secured Overnight Funding Rate (“SOFR”).

In order to make SOFR similar to LIBOR in terms of the overall interest rate being earned by the lenders under the Credit Agreement, a Credit Spread Adjustment (“CSA”) is added to the SOFR.

The CSA varied depending on the selected interest period.

to adopt a new benchmark interest rate determined in accordance with the Credit Agreement dated June 17, 2021, in order to replace LIBOR, as LIBOR settings are no longer be provided.

The effective interest rate was 8.38 % and 3.98 % for the six months ended June 30, 2023 and 2022 for the term loan debt.

As discussed previously, the Company entered into interest rate swap agreements to mitigate the interest risk.

Table of Content s

Interest incurred on the Credit Agreement with respect to the term loan amounted to $ 6,465 , $ 3,241 , $ 12,439 , and $ 5,978 for the three and six months ended June 30, 2023 and 2022, respectively.

Accrued interest payable on the Credit Agreement with respect to the term loan amounted to $ 2,291 and $ 130 at June 30, 2023 and December 31, 2022, respectively, and is included in accrued expenses.

Interest incurred on the Credit Agreement with respect to the revolving line of credit was $ 64 and $ 128 for both the three and six months ended June 30, 2023 and 2022, respectively.

There was $ 1 and $ 66 accrued interest payable on the revolving line of credit at June 30, 2023 and December 31, 2022, respectively.

Long-term debt consists of the following:

2023 DECEMBER 31,

(In thousands)

Term loans $ 295,960 $ 297,470

Revolving line of credit — —

debt issuance costs ( 3,836 ) ( 4,462 )

Total 292,124 293,008

Current portion of long-term debt ( 3,020 ) ( 3,020 )

Long-term debt, net of current portion and debt issuance costs $ 289,104 $ 289,988

The principal amount of long-term debt outstanding as of March 31, 2023 matures in the following years:

Remainder of 2023

The principal amount of long-term debt outstanding as of June 30, 2023 matures in the following years:

Remainder of 2023 2024 2025 2026 TOTAL

(In thousands)

Maturities $ 1,510 $ 3,020 $ 3,020 $ 288,410 $ 295,960

The Credit Agreement requires the Company to make an annual mandatory prepayment as it relates to the Company’s Excess Cash Flow calculation.

For the year ended December 31, 2022, the Company was not required to make a mandatory prepayment on the term loan.

For the Credit Agreement, the Company is required to make a quarterly principal payment of $ 755 on the term loan each quarter starting from September 30, 2021.

For the Credit Agreement, the Company is required to make a quarterly principal payment of $ 755 on the term loan each quarter starting September 30, 2021.

The fair values of the Company’s variable interest term loan and revolving line of credit are not significantly different than their carrying value because the interest rates on these instruments are subject to change with market interest rates.

1 unchanged sentence

Operating lease right-of-use (“ROU”) assets are included in other assets while finance lease ROU assets are included in property and equipment, net in the condensed consolidated balance sheets.

With respect to operating lease liabilities, current operating lease liabilities are included in current liabilities and non-current operating lease liabilities are included in long-term liabilities in the condensed consolidated balance sheets.

With respect to operating lease liabilities, current operating lease liabilities are included in other current liabilities and non-current operating lease liabilities are included in long-term liabilities in the condensed consolidated balance sheets.

Current finance lease liabilities are included in other current liabilities in the condensed consolidated balance sheets.

At March 31, 2023, the weighted average remaining lease terms were 3.77 years for operating leases, respectively;

the weighted average discount rate was 3.43 % for operating leases, respectively.

For additional information on the Company's leases, see Note 14 to the condensed consolidated financial statements included the Company’s 2022 Annual Report.

The following table summarizes the lease-related assets and liabilities recorded in the condensed consolidated balance sheets at March 31, 2023 and December 31, 2022:

Lease Position

Balance Sheet Classification

At June 30, 2023, the weighted average remaining lease terms were 3.61 years for operating and finance leases, respectively;

the weighted average discount rate was 3.41 % for operating leases.

For additional information on the Company's leases, see Note 14 to the condensed consolidated financial statements included in the Company’s 2022 Annual Report.

Table of Content s

The following table summarizes the lease-related assets and liabilities recorded in the condensed consolidated balance sheets at June 30, 2023 and December 31, 2022:

Lease Position Balance Sheet Classification JUNE 30, 2023 DECEMBER 31, 2022

(In thousands)

Operating lease assets

Operating lease ROU assets

Finance lease assets

Property and equipment, net

Operating lease assets Operating lease right-of-use assets $ 12,326 $ 14,427

Finance lease assets Property and equipment, net — 24

Total lease assets $ 12,326 $ 14,451

Current operating lease liabilities

Other current liabilities

Operating lease liabilities, net of current portion

Non-current finance lease liabilities

Operating Other current liabilities $ 4,645 $ 4,968

Finance Other current liabilities — 25

Operating Operating lease liabilities, net of current portion 8,285 10,133

Total lease liabilities $ 12,930 $ 15,126

The following table summarizes by year the maturities of our minimum lease payments as of March 31, 2023.

The following table summarizes by year the maturities of our minimum lease payments as of June 30, 2023.

(In thousands)

Remainder of 2023 $ 2,820

Thereafter 706

Total future lease payments 14,035

imputed interest ( 1,105 )

Accrued Expenses and Other Current Liabilities

Total $ 12,930

Table of Content s

Accrued Expenses and Other Liabilities

Accrued expenses consist of the following:

2023 DECEMBER 31,

(In thousands)

3 unchanged sentences

Income taxes payable 6,537 2,223

Short-term contingent liabilities 7,479 —

Accrued business acquisition liabilities 700 700

Other 1,273 1,489

Total accrued expenses $ 38,654 $ 35,403

Other long-term liabilities consist of the following:

2023 DECEMBER 31,

(In thousands)

6 unchanged sentences

Restricted Stock

The majority of the Company’s restricted stock awarded to its employees was originally issued in December 10, 2020 in exchange for the Class B Profits Interest Unit (the “Class B Units”) of EQT Avatar Parent, L.P, which was the former parent of the Company.

The majority of the Company’s restricted stock awarded to its employees was originally issued on December 10, 2020 in exchange for the Class B Profits Interest Unit (the “Class B Units”) of EQT, which was the former parent of the Company.

Share-based compensation for the restricted stock exchanged for the time-based Class B Units is recognized on a straight-line basis over the requisite service period of the award, which is generally five years .

3 unchanged sentences

Total grant date fair value was $ 2,762 .

The restricted stock issued in 2021 generally has a three-year vesting period except for one holder whose shares vests equally on a monthly basis for two years .

The restricted stock issued in 2021 generally has a three-year vesting period except for one holder whose shares vest equally on a monthly basis for two years .

Table of Content s

SHARES WEIGHTED-

Non-vested restricted stock as of December 31, 2022 1,402,813 $ 23.27

Non-vested restricted stock as of March 31, 2023

The Company did no t legally authorize or issue any restricted stock during the three-month period ended March 31, 2023.

The shares of restricted stock that vested include 2,022 shares of common stock that were withheld on behalf of employees to satisfy the statutory tax withholding requirements.

Equity-based compensation expenses related to the restricted stock exchanged for performance-based Class B Units were $ 655 and $ 2,120 for the three months ended March 31, 2023 and 2022, respectively.

At March 31, 2023, the total unrecognized equity-based compensation expense related to outstanding restricted stock recognized using the accelerated attribution approach was $ 2,640 , which is expected to be recognized over a weighted-average period of 19.4 months.

Equity-based compensation expenses related to the restricted stock exchanged for time-based Class B Units were $ 498 and $ 766 for the three months ended March 31, 2023 and 2022, respectively.

At March 31, 2023, the total unrecognized

equity-based compensation expense related to outstanding restricted stock recognized using the straight-line attribution approach was $ 2,389 , which is expected to be recognized over a weighted-average period of 24.3 months.

Equity-based employee compensation expense related to the time-based restricted stock for the Pinnacle acquisition was $ 292 for both three months ended March 31, 2023 and 2022, respectively.

At March 31, 2023, the total unrecognized equity-based compensation expenses related to outstanding restricted stock recognized using the straight-line attribution approach was $ 1,009 , which is expected to be recognized over a weighted-average period of 13.6 months.

Vested* ( 412,544 ) 23.27

Forfeited ( 124,943 ) 23.00

Non-vested restricted stock as of June 30, 2023 865,326 $ 23.31

___________________________________

• The number of the restricted stock vested includes 3,726 shares that were withheld on behalf of employees to satisfy the statutory tax withholding requirements.

Equity-based compensation expenses (income) related to the restricted stock exchanged for performance-based Class B Units were $( 491 ) , $ 1,957 , $ 164 , and $ 4,077 for the three and six months ended June 30, 2023 and 2022, respectively.

At June 30, 2023, the total unrecognized equity-based compensation expense related to outstanding restricted stock recognized using the accelerated attribution approach was $ 1,694 , which is expected to be recognized over a weighted-average period of 17.4 months.

Equity-based compensation expenses related to the restricted stock exchanged for time-based Class B Units were $ 312 and $ 766 , $ 810 , and $ 1,531 for the three and six months ended June 30, 2023 and 2022, respectively.

At June 30, 2023, the total unrecognized equity-based compensation expense related to outstanding restricted stock recognized using the straight-line attribution approach was $ 1,694 , which is expected to be recognized over a weighted-average period of 22.3 months.

Equity-based employee compensation expense related to the time-based restricted stock for the Pinnacle acquisition was $ 292 , $ 292 , $ 584 , and $ 584 for the three and six months ended June 30, 2023 and 2022, respectively.

At June 30, 2023, the total unrecognized equity-based compensation expenses related to outstanding restricted stock recognized using the straight-line attribution approach was $ 717 , which is expected to be recognized over a weighted-average period of 11.9 months.

2020 Incentive Plan

7 unchanged sentences

The fair value of the RSUs is based on the fair value of the underlying shares on the date of grant.

Table of Content s

A summary of the Company’s RSU activity is as follows:

UNITS WEIGHTED-

Non-vested RSUs as of December 31, 2022 2,005,095 $ 24.71

Non-vested RSUs as of March 31, 2023

Granted* 1,602,648 24.02

Vested** ( 677,393 ) 23.80

Forfeited ( 223,230 ) 23.40

Non-vested RSUs as of June 30, 2023 2,707,120 $ 24.63

___________________________________

* The majority shares granted during 2023 were issued on April 1, 2023 under the 2020 Incentive Plan.

** The number of the RSUs vested includes 240,276 shares that were withheld on behalf of employees to satisfy the statutory tax withholding requirements.

Equity-based compensation expenses related to the RSUs were $ 4,798 and $ 3,388 for three months ended March 31, 2023 and 2022, respectively.

At March 31, 2023, the total unrecognized equity-based compensation expense related to outstanding RSUs was $ 29,925 , which is expected to be recognized over a weighted-average period of 20.4 months.

The vested shares included 9,324 shares vested but deferred in connection with our director deferral plan.

Equity-based compensation expenses related to the RSUs were $ 7,325 , $ 5,838 , $ 12,137 , and $ 9,226 for three and six months ended June 30, 2023 and 2022, respectively.

At June 30, 2023, the total unrecognized equity-based compensation expense related to outstanding RSUs was $ 56,259 , which is expected to be recognized over a weighted-average period of 26.3 months.

Performance Stock Units ("PSU")

PSUs granted in April 2021 and 2022 were issued under the 2020 Incentive Plan and represent the right to receive shares of the Company’s common stock at a specified date in the future based on the satisfaction of various service conditions and the achievement of certain performance thresholds for individual PSU plans including year over year revenue growth and unlevered free cash flow growth.

PSUs granted in April 2021, 2022, and 2023 were issued under the 2020 Incentive Plan and represent the right to receive shares of the Company’s common stock at a specified date in the future based on the satisfaction of various service conditions and the achievement of certain performance thresholds for individual PSU plans including year over year revenue growth, unlevered free cash flow growth, annual revenue, and annual EBITDA.

The PSUs granted in 2023 also contains a market condition.

Share-based compensation for the PSUs is only recognized to the extent a threshold is probable of being achieved and is recognized using the accelerated attribution approach.

The Company will continue to assess the probability of each condition being achieved at each reporting period to determine whether and when to recognize compensation cost.

A summary of the Company’s PSU activity is as follows:

A summary of the Company’s PSU activity for the period ended June 30, 2023 is as follows:

UNITS WEIGHTED-

Non-vested PSUs as of December 31, 2022 654,308 $ 23.99

Non-vested PSUs as of March 31, 2023

Equity-based compensation expenses related to the PSUs were $ 2,287 and $ 947 for the three months ended March 31, 2023 and 2022, respectively.

At March 31, 2023, the total unrecognized equity-based compensation expense related to outstanding PSUs was $ 4,499 , which is expected to be recognized over a weighted-average period of 14.3 months.

Granted 467,264 27.31

Vested ( 18,437 ) 24.83

Forfeited ( 94,054 ) 25.71

Non-vested PSUs as of June 30, 2023 1,009,081 $ 25.35

Equity-based compensation expenses related to the PSUs were $( 3,828 ) , $ 648 , $( 1,542 ) , and $ 1,595 for the three and six months ended at June 30, 2023 and 2022, respectively.

At June 30, 2023, the total unrecognized equity-based compensation expense related to outstanding PSUs was $ 1,692 , which is expected to be recognized over a weighted-average period of 12.2 months.

Table of Content s

The following table summarizes the components of total equity-based compensation expense included in the condensed consolidated statements of operations and comprehensive income (loss) for each period presented:

THREE MONTHS ENDED MARCH 31,

THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,

2023 2022 2023 2022

(In thousands)

3 unchanged sentences

General and administrative ( 1,246 ) 4,209 3,224 7,966

Total $ 3,610 $ 9,501 $ 12,153 $ 17,014

Commitments and Contingencies

Contingent consideration

In connection with the 2022 Vyasa acquisition, the Company is required to pay additional consideration if the acquired business achieves certain eligible revenue thresholds for each of the twelve-month periods ended December 31, 2023, 2024, and 2025, respectively.

The maximum contingent consideration to be earned is $ 60,000 .

The fair value of the contingent consideration was $ 21,074 and $ 19,813 at March 31, 2023 and December 31, 2022, respectively.

In connection with the Vyasa and DIDB acquisitions, the Company is required to pay additional consideration if the acquired businesses achieve certain eligible revenue thresholds for certain periods.

The maximum contingent considerations for Vyasa and DIDB to be earned are $ 60,000 and $ 2,000 , respectively.

The fair value of the contingent consideration was $ 23,162 and $ 19,813 at June 30, 2023 and December 31, 2022, respectively.

Legal proceedings

The Company does not have any pending or threatened litigation which, individually or in the aggregate, would have a material adverse effect on the condensed consolidated financial statements as of March 31, 2023.

The Company does not have any pending or threatened litigation which, individually or in the aggregate, would have a material adverse effect on its condensed consolidated financial statements as of June 30, 2023.

Assurance-type warranty

The Company includes an assurance commitment warranting that the application software products will perform in accordance with written user documentation and the agreements negotiated with customers.

Since the Company does not customize its applications software, warranty costs have historically been insignificant and expensed as incurred.

Since the Company does not customize its application software, warranty costs have historically been insignificant and expensed as incurred.

For information related to commitments for future minimum lease payments, please see Note 8 – Leases.

4 unchanged sentences

Since the Company operates in one operating segment, all required financial segment information can be found in the condensed consolidated financial statements.

The following table summarizes revenue by geographic area for the three months ended March 31, 2023 and 2022:

Table of Content s

The following table summarizes revenue by geographic area for the three and six months ended June 30, 2023 and 2022:

THREE MONTHS ENDED

JUNE 30, SIX MONTHS ENDED

2023 2022 2023 2022

(In thousands)

Revenue (1) :

Americas $ 68,167 $ 62,633 $ 135,190 $ 122,417

EMEA 15,110 13,623 32,025 29,557

Asia Pacific 7,173 6,504 13,536 12,337

Total $ 90,450 $ 82,760 $ 180,751 $ 164,311

___________________________________

(1) Revenue is attributable to the countries based on the location of the customer.

The Company generally records its interim tax provision based upon a projection of the Company's estimated annual effective tax rate ("EAETR").

This EAETR is applied to the year-to-date consolidated pre-tax income to determine the interim provision for income taxes before discrete items.

The effective tax rate ("ETR") each period is impacted by a number of factors, including the relative mix of domestic and international earnings, adjustments to the valuation allowances, and discrete items.

The currently forecasted ETR may vary from the actual year-end due to the changes in these factors.

The Company's global ETR for the three months ended March 31, 2023 and 2022 were 45 % and 41 %, respectively, including discrete tax items.

The current year increase in the ETR was principally due to the combined effect of the increase in certain foreign income tax rates and adjustments to the valuation allowance.

The Company generally records its interim tax provision based upon a projection of the Company's estimated annual effective tax rate ("EAETR").

This EAETR is applied to the year-to-date consolidated pre-tax income to determine the interim provisions for income taxes before discrete items.

The currently forecasted ETR may vary from the actual year-end due to changes in these factor.

The Company's global ETR for the three and six months ended June 30, 2023 and 2022 were 44 %, 121 %, 44 %, and 75 %, respectively, including discrete tax items.

The current year decrease in the ETR was principally due to the relative mix of domestic and international earnings.

Table of Content s

Earnings per Share

1 unchanged sentence

Diluted net income (loss) per share is computed by dividing the net income (loss) attributable to stockholders by the weighted-average number of shares and dilutive potential common shares during the period.

THREE MONTHS ENDED MARCH 31,

(In thousands, except per share and share data)

THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,

2023 2022 2023 2022

Basic earnings per share

Net income available to common shareholders

Net income (loss) available to common shareholders $ 4,706 $ ( 589 ) $ 6,064 $ 1,621

Basic weighted-average common shares outstanding 158,955,822 156,478,724 158,568,575 156,209,335

1 unchanged sentence

Diluted earnings per share

Net income available to common shares

Net income (loss) available to common shares $ 4,706 $ ( 589 ) $ 6,064 $ 1,621

Basic weighted-average common shares outstanding 158,955,822 156,478,724 158,568,575 156,209,335

2 unchanged sentences

Diluted earnings per common share $ 0.03 $ 0.00 $ 0.04 $ 0.01

Table of Content s

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements