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Item 1. Financial Statements

2024-08-06 compared with 2024-05-07 · 186 added, 140 removed, 517 unchanged (39% of the section changed)

3 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS, EXCEPT PER SHARE AND SHARE DATA) MARCH 31,

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

2024 DECEMBER 31,

31 unchanged sentences

Stockholders' equity

Preferred shares, $ 0.01 par value, 50,000,000 shares authorized, no shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively

Common shares, $ 0.01 par value, 600,000,000 shares authorized, 160,687,886 and 160,284,901 shares issued as of March 31, 2024 and December 31, 2023, respectively;

160,191,094 and 159,848,286 shares outstanding as of March 31, 2024 and December 31, 2023, respectively

Preferred shares, $ 0.01 par value, 50,000,000 shares authorized, no shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively

Common shares, $ 0.01 par value, 600,000,000 shares authorized, 161,764,197 and 160,284,901 shares issued as of June 30, 2024 and December 31, 2023, respectively;

160,881,314 and 159,848,286 shares outstanding as of June 30, 2024 and December 31, 2023, respectively

Additional paid-in capital 1,201,009 1,178,461

1 unchanged sentence

Accumulated other comprehensive loss ( 8,328 ) ( 7,593 )

Treasury stock at cost, 496,792 and 436,615 shares at March 31, 2024 and December 31, 2023, respectively

Treasury stock at cost, 882,883 and 436,615 shares at June 30, 2024 and December 31, 2023, respectively

( 17,411 ) ( 9,401 )

6 unchanged sentences

AND COMPREHENSIVE INCOME (LOSS)

THREE MONTHS ENDED MARCH 31,

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

(IN THOUSANDS, EXCEPT PER SHARE AND SHARE DATA) 2024 2023 2024 2023

17 unchanged sentences

Other comprehensive income (loss):

Foreign currency translation adjustment, net of tax of $ 60 , $( 182 ), respectively

Change in fair value from interest rate swap, net of tax of $ 186 , $( 588 ), respectively

Foreign currency translation adjustment, net of tax of $( 15 ), $( 104 ), $ 45 , and $( 287 ) respectively

( 701 ) 1,815 ( 708 ) 4,416

Total other comprehensive income 557 910

Change in fair value from interest rate swap, net of tax of $( 180 ), $ 762 , $ 6 , and $ 174 respectively

( 591 ) 2,332 ( 27 ) 641

Total other comprehensive income (loss) ( 1,292 ) 4,147 ( 735 ) 5,057

Comprehensive income (loss) $ ( 13,866 ) $ 8,853 $ ( 17,992 ) $ 11,121

17 unchanged sentences

SHARES AMOUNT SHARES AMOUNT

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

Balance as of April 1, 2024 160,687,886 $ 1,607 $ 1,191,237 $ ( 120,913 ) $ ( 7,036 ) ( 496,792 ) $ ( 10,537 ) $ 1,054,358

Equity-based compensation expense, net of forfeiture — 0 — 9,783 — — — — 9,783

Common shares issued for share-based compensation awards and shares withheld for tax 608,179 6 ( 4 ) — — ( 228,159 ) ( 5,419 ) ( 5,417 )

Common stock withheld for tax liabilities — 0 — — — — ( 386,091 ) ( 6,874 ) ( 6,874 )

Common shares issued for employee share-based compensation 1,081,434 0 11 ( 11 ) — — — — —

Restricted stock forfeiture ( 5,123 ) — — — — — — —

Change in fair value from interest rate swap, net of tax — — — — ( 591 ) — — ( 591 )

Net income — — — 1,358 — — — 1,358

Net loss — 0 — — ( 12,574 ) — — — ( 12,574 )

Foreign currency translation adjustment, net of tax — 0 — — — ( 701 ) — — ( 701 )

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

Balance as of December 31, 2023 160,284,901 $ 1,603 $ 1,178,461 $ ( 116,230 ) $ ( 7,593 ) ( 436,615 ) $ ( 9,401 ) $ 1,046,840

Balance as of June 30, 2024 161,764,197 0 $ 1,618 $ 1,201,009 $ ( 133,487 ) $ ( 8,328 ) ( 882,883 ) $ ( 17,411 ) $ 1,043,401

Balance as of January 1, 2024 160,284,901 $ 1,603 $ 1,178,461 $ ( 116,230 ) $ ( 7,593 ) ( 436,615 ) $ ( 9,401 ) $ 1,046,840

Equity-based compensation expense, net of forfeiture — — 18,856 — — — — 18,856

1 unchanged sentence

Common shares issued for employee share-based compensation 1,269,727 13 ( 13 ) — — — — —

Restricted stock forfeiture ( 5,123 ) — — — — — — —

Common shares issued for contingent consideration 214,692 2 3,705 — — — — 3,707

2 unchanged sentences

Foreign currency translation adjustment, net of tax — — — — ( 708 ) — — ( 708 )

Balance as of March 31, 2024 160,687,886 $ 1,607 $ 1,191,237 $ ( 120,913 ) $ ( 7,036 ) ( 496,792 ) $ ( 10,537 ) $ 1,054,358

Balance as of June 30, 2024 161,764,197 $ 1,618 $ 1,201,009 $ ( 133,487 ) $ ( 8,328 ) ( 882,883 ) $ ( 17,411 ) $ 1,043,401

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

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AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(IN THOUSANDS,

EXCEPT SHARE DATA) COMMON STOCK ADDITIONAL

CAPITAL ACCUMULATED

DEFICIT ACCUMULATED

COMPREHENSIVE

LOSS TREASURY STOCK TOTAL

STOCKHOLDERS'

SHARES AMOUNT SHARES AMOUNT

Balance as of April 1, 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 January 1, 2023 159,676,150 $ 1,596 $ 1,150,168 $ ( 60,873 ) $ ( 8,230 ) ( 150,207 ) $ ( 3,000 ) 1,079,661

Equity-based compensation awards — — 12,153 — — — — 12,153

Common shares issued for share-based compensation awards and shares withheld for tax 686,506 7 ( 6 ) — — ( 244,002 ) ( 5,762 ) ( 5,761 )

Restricted stock forfeiture ( 191,163 ) ( 2 ) 2 —

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

Net income — — — 6,064 — — 6,064

Foreign currency translation adjustment — — — — 4,416 — — 4,416

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

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

CERTARA, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

THREE MONTHS ENDED MARCH 31,

SIX MONTHS ENDED JUNE 30,

(IN THOUSANDS) 2024 2023

5 unchanged sentences

Amortization of debt issuance costs 749 765

Loss on extinguishing debt 196 —

(Recovery of) provision for credit losses 807 ( 172 )

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Investment in intangible assets — ( 54 )

Business acquisitions, net of cash acquired — ( 7,550 )

Net cash used in investing activities ( 9,697 ) ( 14,462 )

Cash flows from financing activities:

Proceeds from borrowings on term loan debt 6,305 —

Payment of debt issuance costs ( 1,216 ) —

Payments on long-term debt and finance lease obligations ( 755 ) ( 1,535 )

2 unchanged sentences

Net cash used in financing activities ( 14,102 ) ( 7,270 )

Effect of foreign exchange rate changes on cash and cash equivalents, and restricted cash ( 546 ) 1,174

Net (decrease) increase in cash and cash equivalents, and restricted cash ( 10,175 ) 7,550

Effect of foreign exchange rate on cash and cash equivalents, and restricted cash ( 663 ) 2,239

Net increase (decrease) in cash and cash equivalents, and restricted cash ( 10,352 ) 8,522

Cash and cash equivalents, and restricted cash, at beginning of period 234,951 239,688

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Supplemental schedule of noncash investing and financing activities

Issuance of common stock for business acquisition related contingent consideration $ 3,707 $ —

Stock issuance or establish liabilities related to business acquisition contingent consideration $ 3,707 $ 790

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

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and its wholly-owned subsidiaries (together, the “Company”) deliver software products and technology-driven services to customers to efficiently carry out and realize the full benefits of biosimulation in drug discovery, preclinical and clinical research, regulatory submissions and market access.

The Company is a global leader in biosimulation, and the Company’s biosimulation software and technology-driven services help optimize, streamline, or even waive certain clinical trials to accelerate programs, reduce costs, and increase the probability of success.

The Company is a global leader in model-informed drug development, and the Company’s biosimulation software and technology-enabled services help optimize, streamline, or even waive certain clinical trials to accelerate programs, reduce costs, and increase the probability of success.

The Company’s regulatory science and market access software and services are underpinned by technologies such as regulatory submissions software, natural language processing, and Bayesian analytics.

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Summary of Significant Accounting Policies

There have been no changes other than what is discussed herein to the Company’s significant accounting policies as compared to the significant accounting policies described in Note 2 to the Company’s audited consolidated financial statements included in our 2023 Annual Report.

There have been no changes other than what is discussed herein to the Company’s significant accounting policies as compared to the significant accounting policies described in Note 2.

“Summary of Significant Accounting Policies” to the Company’s audited consolidated financial statements included in the Company’s 2023 Annual Report.

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, 2023.

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(b) Unaudited Interim Financial Statements

The accompanying condensed consolidated balance sheet as of March 31, 2024, the condensed consolidated statements of operations and comprehensive income (loss) for the three months ended March 31, 2024 and 2023, the condensed consolidated statements of stockholders’ equity for the three months ended March 31,

2024 and 2023, the condensed consolidated statements of cash flows for the three months ended March 31, 2024 and 2023, and the related interim disclosures are unaudited.

The accompanying condensed consolidated balance sheet as of June 30, 2024, the condensed consolidated statements of operations and comprehensive income (loss) for the three and six months ended June 30, 2024 and

2023, the condensed consolidated statements of stockholders’ equity for the three and six months ended June 30, 2024 and 2023, the condensed consolidated statements of cash flows for the six months ended June 30, 2024 and 2023, and the related interim disclosures are unaudited.

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

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In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") ASU 2023-07, “Segment Reporting (Topic 280):

In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-07, “Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures.” The ASU requires an enhanced disclosure of significant segment expenses on an annual and interim basis.

This ASU will be effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted.

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Contingent liabilities related to acquisitions are measured at fair value using Level 3 unobservable inputs.

The Company's estimates of fair value are based upon assumptions believed to be reasonable but which are uncertain and involve significant judgments by management.

The Company's estimates of fair value are based upon assumptions believed to be reasonable but that are uncertain and involve significant judgments by management.

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).

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expected eligible revenue for the acquired businesses over the relevant measurement periods, the risk-profile of the expected eligible revenue for the acquired businesses, the uncertainty regarding the expected eligible revenue for the acquired businesses, the risk-free rate of return, the expected timing at which settlement of the contingent liabilities may occur, and the credit-adjusted discount rate associated with the risk of the Company’s future liability payments.

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, 2024:

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, 2024:

LEVEL 1 LEVEL 2 LEVEL 3 TOTAL

13 unchanged sentences

Total liabilities $ — $ — $ 54,457 $ 54,457

For the period ended March 31, 2024, there were no transfers between the levels within the fair value hierarchy.

For the period ended June 30, 2024, there were no transfers between the levels within the fair value hierarchy.

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

4 unchanged sentences

Fair value remeasurement 5,670

Ending balance at March 31, 2024

Ending balance at June 30, 2024

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

2 unchanged sentences

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

The cash and cash equivalents was $ 224,776 and $ 234,951 at March 31, 2024 and December 31, 2023, respectively.

The cash and cash equivalents was $ 224,599 and $ 234,951 at June 30, 2024 and December 31, 2023, respectively.

(g) Accounts Receivable

Accounts receivable includes current outstanding invoices billed to customers.

Accounts receivable include current outstanding invoices billed to customers.

Invoices are typically issued with net 30 days to net 90 days terms upon delivery of the product or upon achievement of billable events for service-based contracts.

Unbilled receivables relate to the Company’s rights to consideration for performance obligations satisfied but not billed at the reporting date on contracts.

Unbilled receivables are billed and

transferred to customer accounts receivable when the rights become unconditional.

Unbilled receivables are billed and transferred to customer accounts receivable when the rights become unconditional.

The carrying amount of accounts receivable is reduced by a valuation allowance.

The Company estimates the expected credit losses for accounts receivables using historical loss data adjusted for current economic conditions, including reasonable and supportable forecasts to estimate the relative size of credit losses to be expected.

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 $ 1,341 and $ 1,312 were provided in the accompanying condensed consolidated financial statements as of March 31, 2024 and December 31, 2023, respectively.

The Company estimates the expected credit losses for accounts receivable using historical loss data adjusted for current economic conditions, including reasonable and supportable forecasts to estimate the relative size of credit losses to be expected.

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

Allowances for credit losses of $ 1,968 and $ 1,312 were provided in the accompanying condensed consolidated financial statements as of June 30, 2024 and December 31, 2023, respectively.

Accounts receivable consists of the following:

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The Company is exposed to credit loss in the event of nonperformance by these counterparties.

The Company does not use derivative instruments for trading or speculative purposes.

The objective in managing exposure to market risk is to limit the impact on cash flows.

The Company does not use

derivative instruments for trading or speculative purposes.

The objective of managing exposure to market risk is to limit its impact on cash flows.

To qualify for hedge accounting, the interest rate swaps must effectively reduce the risk exposure that they are designed to hedge.

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The Company’s objectives in using interest rate swaps are to add stability to interest expense and to manage its exposure to interest rate movements.

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.

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 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.

1 unchanged sentence

During the quarter ended September 30, 2023, the Company and the counter party amended the floating rate of the swap agreement from term LIBOR to term SOFR due to LIBOR cessation.

At March 31, 2024 and December 31, 2023, the interest swap had a fair value of $ 6,374 and $ 5,624 , respectively;

The gross fair value recognized in accumulated other comprehensive income was $ 6,374 and $ 5,624 , respectively, at March 31, 2024 and December 31, 2023.

At June 30, 2024 and December 31, 2023, the interest swap had a fair value of $ 5,603 and $ 5,624 , respectively.

The gross fair value recognized in accumulated other comprehensive income was $ 5,603 and $ 5,624 , respectively, at June 30, 2024 and December 31, 2023.

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

1 unchanged sentence

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 earnings.

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 $ 1,525 and $ 986 for the three months ended March 31, 2024 and 2023, respectively.

The notional amounts, fair values, and classification of derivative instruments in the condensed consolidated balance sheets as of March 31, 2024 and December 31, 2023 were as follows:

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

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 $ 1,526 , $ 1,276 , $ 3,051 , and $ 2,262 for the three and six months ended June 30, 2024 and 2023, respectively.

The notional amounts, fair values, and classification of derivative instruments in the condensed consolidated balance sheets as of June 30, 2024 and December 31, 2023 were as follows:

Interest rate swap derivative designated as cash flow hedging instrument:

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The delivery of a particular type of software and each of the user licenses would be one performance obligation.

Additionally, any training, implementation,

or support and maintenance promises sold as part of the software license agreement would be considered separate performance obligations, as those promises are distinct and separately identifiable from the software licenses.

Additionally, any training, implementation, or support and maintenance promises sold as part of the software license agreement would be considered separate performance obligations, as those promises are distinct and separately identifiable from the software licenses.

The payment terms in these arrangements are less than one year such that there is no significant financing component.

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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, 2024 and December 31, 2023 were as follows:

Contract balances at June 30, 2024 and December 31, 2023 were as follows:

2024 DECEMBER 31,

2 unchanged sentences

Contract liabilities $ 62,179 $ 61,748

During the three months ended March 31, 2024, the Company recognized revenue of $ 29,351 related to contract liabilities at December 31, 2023.

The unsatisfied performance obligations as of March 31, 2024 were approximately $ 115,418 .

During the six months ended June 30, 2024, the Company recognized revenue of $ 45,783 related to contract liabilities at December 31, 2023.

The unsatisfied performance obligations as of June 30, 2024 were $ 120,444 .

We expect to recognize approximately $ 101,546 or 84.3 % of this revenue over the next 12 months and the remainder thereafter.

1 unchanged sentence

Under ASC Topic 606, sales commissions paid to the sales force and the related employer payroll taxes, collectively deferred contract acquisition costs, are considered incremental and recoverable costs of obtaining a contract with a customer.

The Company recognizes an asset for the incremental costs of obtaining a contract with a customer if the Company expects the benefit of those costs to be longer than one year.

The Company recognizes an asset for the incremental costs of obtaining a contract with a customer if it expects the benefit of those costs to be longer than one year.

The Company has determined that certain sales incentive programs meet the requirements to be capitalized.

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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 $ 597 and $ 655 as of March 31, 2024 and December 31, 2023, respectively, and were included in prepaid expenses and other current assets in the condensed consolidated balance sheets.

Capitalized contract acquisition costs were $ 733 and $ 655 as of June 30, 2024 and December 31, 2023, respectively, and were included in prepaid expenses and other current assets in the condensed consolidated balance sheets.

Grant Revenue

The Company receives grant funding for certain specific projects from time to time.

These grants specify the funds provided are to be used exclusively to satisfy the deliverables outlined in the grant agreements.

These grants specify that the funds provided are to be used exclusively to satisfy the deliverables outlined in the grant agreements.

In these agreements, both involved parties receive and sacrifice approximately commensurate value, so these are accounted for as exchange transactions, and revenue is recognized according to ASC Topic 606.

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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,

2024 2023 2024 2023

( In thousands)

Software licenses transferred at a point in time $ 13,449 $ 14,553 $ 28,829 $ 29,051

5 unchanged sentences

Diluted shares are calculated under the treasury stock method.

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

Diluted earnings per share is calculated by dividing the

net earnings attributable to stockholders by the weighted-average number of shares and dilutive securities outstanding during the period.

Concentrations of Credit Risk

1 unchanged sentence

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, 2024 and December 31, 2023, the investments were bank deposits, overnight sweep accounts, and money market funds.

At June 30, 2024 and December 31, 2023, 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, 2024 and December 31, 2023, 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 three months ended March 31, 2024 and 2023.

As of June 30, 2024 and December 31, 2023, 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, 2024 and 2023.

Business Combinations

1 unchanged sentence

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

Since 2013, and as of March 31, 2024, the Company has completed 20 acquisitions, of which 13 have included software or technology.

Since 2013, and as of June 30, 2024, the Company has completed 20 acquisitions, of which 13 have included software or technology.

Details of acquisitions that have closed since the beginning of fiscal year 2023 are provided below.

2 unchanged sentences

The business combination was not significant to the Company’s 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 .

The total estimated consideration included 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.

At March 31, 2024, the contingent consideration was remeasured to $ 136 , resulting in a fair value adjustment of $ 4 and recorded in general and administrative expenses (“G&A”) on the accompanying condensed consolidated statement of operations and comprehensive income (loss).

At June 30, 2024, the contingent consideration was remeasured to $ 136 , resulting in a fair value adjustment of $ 4 and recorded in general and administrative expenses (“G&A”) on the accompanying condensed consolidated statement of operations and comprehensive income (loss).

Based on the Company’s purchase price allocation, approximately $ 330 , $ 5,600 , $ 360 , and $ 2,289 of the purchase price were assigned to trademarks, database content/technology, customer relationships and goodwill, respectively.

The Company expects goodwill to be fully deductible for U.S.

federal income tax purposes due to the fact the acquisition was treated as an asset acquisition under the relevant sections of the Internal Revenue Code (“IRC”).

federal income tax purposes due to the fact that the acquisition was treated as an asset acquisition under the relevant sections of the Internal Revenue Code (“IRC”).

Formedix Limited ("Formedix")

On October 10, 2023, the Company completed the acquisition of Formedix, a provider of clinical metadata repository and clinical trial automation software, for total estimated consideration of $ 41,389 .

The business combination was not material to the Company’s 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 $ 9,000 .

The fair value of the contingent consideration related to revenue threshold was estimated to be $ 4,380 as of the acquisition date.

On October 10, 2023, the Company completed the acquisition of Formedix, a provider of clinical metadata repository and clinical trial automation software, for a total estimated consideration of $ 41,389 .

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

The total estimated consideration included a portion of contingent consideration that is payable over the next two years in cash, not to exceed $ 9,000 .

The fair value of the contingent consideration related to the revenue threshold was estimated to be $ 4,380 as of the acquisition date.

Future payments of contingent consideration are based on achieving certain eligible revenue targets for each of the twelve-month periods ended December 31, 2023 and 2024, respectively.

1 unchanged sentence

In total, the fair value of the contingent consideration was estimated to be $ 5,161 as of the acquisition date.

At March 31, 2024, the contingent consideration related to eligible revenue was remeasured to $ 3,189 , resulting in a negative fair value remeasurement and adjustment of $ 507 and recorded in G&A on the accompanying condensed consolidated statement of operations and comprehensive income (loss).

During the six months ended June 30, 2024, the Company made a payment of $ 1,777 on contingent consideration.

At June 30, 2024, the contingent consideration related to eligible revenue was remeasured to zero , resulting in a negative fair value remeasurement and adjustment of $ 1,919 and recorded in G&A on the accompanying condensed consolidated statement of operations and comprehensive income (loss).

Based on the Company’s purchase price allocation, approximately $ 11,700 , $ 3,100 , and $ 25,062 of the purchase price were assigned to developed technology, customer relationships, and goodwill, respectively.

The Company does not expect goodwill to be deductible due to the fact the Company treated the acquisition as a stock acquisition under the relevant sections of the IRC.

The Company does not expect goodwill to be deductible due to the fact that the Company treated the acquisition as a stock acquisition under the relevant sections of the IRC.

Applied BioMath, LLC ("ABM")

On December 12, 2023, the Company completed the acquisition of ABM, an industry-leader in providing model-informed drug discovery and development support to help accelerate and de-risk therapeutic research and development, for total estimated consideration of $ 36,594 .

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

2 unchanged sentences

federal income tax purposes due to the fact the Company treated the acquisition as an asset acquisition under the relevant sections of the IRC.

The total estimated consideration includes a portion of contingent consideration that is payable over the next two years in cash, not to exceed $ 17,550 .

The total estimated consideration included a portion of contingent consideration that is payable over the next two years in cash, not to exceed $ 17,550 .

Future payments of contingent consideration are based on achieving certain eligible revenue targets for each of the twelve-month periods ended December 31, 2023 and 2024, respectively.

The fair value of the contingent consideration was estimated to be $ 5,357 as of the acquisition date.

At March 31, 2024, the contingent consideration was remeasured to $ 4,442 , resulting in a negative fair value adjustment of $ 938 and recorded in G&A on the accompanying condensed consolidated statement of operations and comprehensive income (loss).

At June 30, 2024, the contingent consideration was remeasured to $ 4,730 , resulting in a negative fair value adjustment of $ 650 and recorded in G&A on the accompanying condensed consolidated statement of operations and comprehensive income (loss).

The contingent considerations for all acquisitions were classified as liability and included in accrued expense and other long-term liabilities on the Company’s condensed consolidated balance sheet.

The contingent consideration related to eligible revenues that are remeasured on a recurring basis at fair value for each reporting period.

The contingent consideration relates to eligible revenues that are remeasured on a recurring basis at fair value for each reporting period.

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).

The current purchase price allocations for the acquisitions of Formedix and ABM are preliminary.

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

The Company continues to gather information supporting the acquired assets and liabilities, including but not limited to the estimation of the fair value of the identifiable intangible assets, measurement of deferred revenue and corresponding impact on goodwill, during the measurement period.

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

During the measurement period, the Company continues to gather information supporting the acquired assets and liabilities, including but not limited to the estimation of the fair value of the identifiable intangible assets, measurement of deferred revenue, and corresponding impact on goodwill.

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.

1 unchanged sentence

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

Prepaid expense and other current assets at March 31, 2024 and December 31, 2023 consist of the following:

Prepaid expense and other current assets at June 30, 2024 and December 31, 2023 consist of the following:

2024 DECEMBER 31,

6 unchanged sentences

Prepaid expenses and other current assets $ 22,099 $ 20,393

Other long-term assets at March 31, 2024 and December 31, 2023 consisted of the following:

Other long-term assets at June 30, 2024 and December 31, 2023 consisted of the following:

2024 DECEMBER 31,

5 unchanged sentences

Long-Term Debt and Revolving Line of Credit

The Company has been a party to a Credit Agreement since August 2017 that provides for a senior secured term loan and commitments under a revolving credit facility.

The Company and the lenders most recently modified the Credit Agreement on June 17, 2021, which provides for, among other things, (i) the extension of the termination date applicable to the revolving credit commitments to August 2025, (ii) the extension of the maturity date applicable to the term loans under the Credit Agreement to August 2026, and (iii) an increase of approximately $ 80,000 in commitments available under the revolving line of credit (resulting in an aggregate amount of commitments of $ 100,000 ).

The term loan under this Amendment has substantially the same terms as the existing term loans and revolving credit commitments.

The Company has been a party to a Credit Agreement since August 2017 that provides for a senior secured term loan and commitments under a revolving credit facility (as amended, the “Credit Agreement”).

On June 26, 2024, the Company entered into the Fifth Amendment to its Credit Agreement (the "Amendment"), primarily amended (1) the principal amount of the term loan to $ 300,000 and its maturity date to June 26, 2031;

and (2) extending the termination date of the $ 100,000 revolving credit commitment to June 26, 2029.

The term loan under this Amendment has substantially the same terms as the existing term loans and revolving credit

The Credit Agreement is collateralized by substantially all U.S.

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

subsidiaries and contain various financial and nonfinancial covenants.

Borrowings under the Credit Agreement are 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.

In response to the discontinuation of LIBOR, the Company executed a LIBOR transition amendment on June 26, 2023, formalizing the replacement of LIBOR with the Secured Overnight Funding Rate (“SOFR”).

As part of this modification, a Credit Spread Adjustment (“CSA”) was introduced to align SOFR with LIBOR in terms of the overall interest rate earned by lenders under the Credit Agreement.

The CSA varied depending on the selected interest period.

As of March 31, 2024 and December 31, 2023, available borrowings under the revolving lines of credit were $ 100,000 .

The effective interest rate was 9.24 % and 8.03 % for the three months ended March 31, 2024 and 2023 for the term loan debt.

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

Interest incurred on the Credit Agreement with respect to the term loan amounted to $ 6,798 and $ 5,974 for the three months ended March 31, 2024 and 2023, respectively.

Accrued interest payable on the Credit Agreement with respect to the term loan amounted to $ 2,382 and $ 2,400 at March 31, 2024 and December 31, 2023, respectively, and is included in accrued expenses.

Interest incurred on the Credit Agreement with respect to the revolving line of credit was $ 63 for both the three months ended March 31, 2024 and 2023, respectively.

There was $ 2 accrued interest payable on the revolving line of credit each at March 31, 2024 and December 31, 2023, respectively.

subsidiaries and contains various financial and nonfinancial covenants.

As multiple lenders syndicated funds under the credit agreements, the Company assessed whether existing debt was modified, extinguished, or if new debt was issued under GAAP guidelines.

This evaluation was conducted separately for each lender's portion of the loans and commitments in the syndication, treating each lender's participation as if separate debt instruments existed.

The Company either deferred and amortize debt issuance costs or recognized expenses or losses, according to the applicable accounting guidance for each category.

Borrowings under the Credit Agreement bear interest at a rate per annum equal to, at the election of the Borrowers, either (i) the Term SOFR rate, with a floor of — % plus an applicable margin rate of 3.00 % for the Term Loans and between 3.50 % and 2.75 % for loans under the Revolving Facility, depending on the applicable first lien leverage ratio, or (ii) an Alternate Base Rate (“ABR”), with a floor of 1.00 %, plus an applicable margin rate of 2.00 % for the Term Loans or between 2.50 % and 1.75 % for loans under the Revolving Facility, depending on the applicable first lien leverage ratio.

The ABR is determined as the greatest of (a) the prime rate, (b) the federal funds effective rate, plus 0.50 %, and (iii) the Term SOFR rate plus 1.00 %.

Additionally, the Company is obligated to pay a commitment fee of the unused amount and other customary fees.

As of June 30, 2024 and December 31, 2023, available borrowings under the revolving lines of credit were $ 100,000 .

The effective interest rate was 9.2 % and 8.4 % for the six months ended June 30, 2024 and 2023 for the term loan debt.

As discussed previously, the Company entered into interest rate swap agreements and continues to use the swap to mitigate the interest risk for the Company's debt obligations under the Credit Agreement.

Interest incurred on the Credit Agreement with respect to the term loan amounted to $ 6,736 , $ 6,465 , $ 13,534 , and $ 12,439 for the three and six months ended June 30, 2024 and 2023, respectively.

Accrued interest payable on the Credit Agreement with respect to the term loan amounted to $ 348 and $ 2,400 at June 30, 2024 and December 31, 2023, respectively, and is included in accrued expenses.

Interest incurred on the Credit Agreement with respect to the revolving line of credit was $ 63 , $ 64 , $ 126 , and $ 128 for both the three and six months ended June 30, 2024 and 2023, respectively.

There was $ 2 accrued interest payable on the revolving line of credit both June 30, 2024 and December 31, 2023.

Long-term debt consists of the following:

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Long-term debt, net of current portion and debt issuance costs $ 293,683 $ 288,217

The principal amount of long-term debt outstanding as of March 31, 2024 matures in the following years:

Remainder of 2024 2025 2026 TOTAL

The principal amount of long-term debt outstanding as of June 30, 2024 matures in the following years:

Remainder of 2024 2025 2026 2027 2028 Thereafter TOTAL

(In thousands)

Maturities $ 1,500 $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 286,500 $ 300,000

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

The Credit Agreements require 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, 2023, the Company was not required to make a mandatory prepayment on the term loan.

The Company is required to make a quarterly principal payment of $ 755 on the term loan.

Under the Credit Agreement (as amended by the Amendment), the Company is required to make a quarterly principal payment of $ 750 on the term loans starting September 30, 2024.

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.

The Company leases certain office facilities and equipment under non-cancelable operating leases with remaining terms from less than one to ten years .

The Company leases certain office facilities and equipment under non-cancelable operating leases with remaining terms ranging from less than one to ten years .

Operating lease ROU assets are included in other assets.

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.

At March 31, 2024, the weighted average remaining lease terms were 6.09 years for operating leases and the weighted average discount rate was 5.47 % 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 2023 Annual Report.

The following table summarizes the lease-related assets and liabilities recorded in the condensed consolidated balance sheets at March 31, 2024 and December 31, 2023:

Lease Position Balance Sheet Classification MARCH 31, 2024 DECEMBER 31, 2023

At June 30, 2024, the weighted average remaining lease terms were 5.97 years for operating leases, and the weighted average discount rate was 5.54 % for operating leases.

For additional information on the Company's leases, see Note 14.

“Leases” to the consolidated financial statements included in the Company’s 2023 Annual Report.

The following table summarizes the lease-related assets and liabilities recorded in the condensed consolidated balance sheets at June 30, 2024 and December 31, 2023:

Lease Position Balance Sheet Classification JUNE 30, 2024 DECEMBER 31, 2023

(In thousands)

4 unchanged sentences

Total lease liabilities $ 15,870 $ 11,330

The following table summarizes by year the maturities of our minimum lease payments as of March 31, 2024:

The following table summarizes by year the maturities of our minimum lease payments as of June 30, 2024:

(In thousands)

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Restricted Stock

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 .

Share-based compensation for the restricted stock exchanged for the performance-based Class B Units is recognized using the accelerated attribution approach.

In 2021, the Company granted 87,127 replacement shares of restricted stock in connection with the Pinnacle 21 acquisition under which equity-based awards are outstanding.

In 2021, the Company granted 87,127 replacement shares of restricted stock in connection with the acquisition of Pinnacle 21, LLC under which equity-based awards are outstanding.

The fair value of the restricted stock awarded was initially based on the fair value of our common stock on the date of grant, then adjusted for time restrictions due to unregistered shares and lack of marketability.

The non-vested restricted stock at March 31, 2024 issued in 2021 has a three-year vesting period.

The non-vested restricted stock at June 30, 2024 issued in 2021 has a three-year vesting period.

SHARES WEIGHTED-

4 unchanged sentences

Cancelled* ( 16,842 ) 23.00

Non-vested restricted stock as of March 31, 2024 475,620 $ 23.20

Non-vested restricted stock as of June 30, 2024 405,447 $ 23.24

___________________________________

* The Company did not legally authorize or issue any restricted stock during the three month period ended March 31, 2024.

During the first quarter of 2024, the Company modified an award for a recipient, resulting in 16,842 shares assumed to be granted, vested, and cancelled.

Equity-based compensation expenses related to the restricted stock exchanged for performance-based Class B Units were $ 250 and $ 655 for the three months ended March 31, 2024 and 2023, respectively.

At March 31, 2024, the total unrecognized equity-based compensation expense related to outstanding restricted stock recognized using the accelerated attribution approach was $ 637 , which is expected to be recognized over a weighted-average period of 12.5 months.

Equity-based compensation expenses related to the restricted stock exchanged for time-based Class B Units were $ 377 and $ 498 for the three months ended March 31, 2024 and 2023, respectively.

At March 31, 2024, the total unrecognized equity-based compensation expense related to outstanding restricted stock recognized using the straight-line attribution approach was $ 888 , which is expected to be recognized over a weighted-average period of 14.8 months.

Equity-based employee compensation expense related to the time-based restricted stock for the Pinnacle acquisition was $ 106 and $ 292 for the three months ended March 31, 2024 and 2023, respectively.

At March 31, 2024, the total unrecognized equity-based compensation expenses related to outstanding restricted stock recognized using the straight-line attribution approach was $ 212 , which is expected to be recognized over a weighted-average period of 6 months.

* The Company did not legally authorize or issue any restricted stock during the six month period ended June 30, 2024.

During the first half of 2024, the Company modified an award for a recipient, resulting in 16,842 shares assumed to be granted, vested, and cancelled.

Equity-based compensation expenses related to the restricted stock exchanged for performance-based Class B Units were $ 156 , $( 491 ), $ 406 , and $ 164 for the three and six months ended June 30, 2024 and 2023, respectively.

At June 30, 2024, the total unrecognized equity-based compensation expense related to outstanding restricted stock recognized using the accelerated attribution approach was $ 422 , which is expected to be recognized over a weighted-average period of 10.9 months.

Equity-based compensation expenses related to the restricted stock exchanged for time-based Class B Units were $ 221 and $ 312 , $ 598 , and $ 810 for the three and six months ended June 30, 2024 and 2023, respectively.

At June 30, 2024, the total unrecognized equity-based compensation expense related to outstanding restricted stock recognized using the straight-line attribution approach was $ 651 , which is expected to be recognized over a weighted-average period of 12.8 months.

Equity-based employee compensation expense related to the time-based restricted stock for the Pinnacle 21, LLC acquisition was $ 106 , $ 292 , $ 212 , and $ 584 for the three and six months ended June 30, 2024 and 2023, respectively.

At June 30, 2024, the total unrecognized equity-based compensation expenses related to outstanding restricted stock recognized using the straight-line attribution approach was $ 106 , which is expected to be recognized over a weighted-average period of 3 months.

2020 Incentive Plan

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The 2020 Incentive Plan allows for 20,000,000 shares (the “plan share reserve”) of common stock to be issued.

No more than the number of shares of common stock equal to the plan share reserve may be issued in the aggregate pursuant to the exercise of incentive stock options.

No more than the number of shares of common stock equal to the plan share reserve may be issued in aggregate pursuant to the exercise of incentive stock options.

The maximum number of shares of common stock granted during a single fiscal year to any non-employee director, taken together with any cash fees paid to such non-employee director during the fiscal year, may not exceed $ 1,000,000 in total value, except for certain awards made to a non-executive chair of our Board of Directors.

Restricted Stock Units ("RSU")

Restricted Stock Units

RSUs represent the right to receive shares of the Company’s common stock at a specified date in the future.

7 unchanged sentences

Cancelled* ( 42,098 ) 24.21

Non-vested RSUs as of March 31, 2024 2,730,330 $ 23.30

Non-vested RSUs as of June 30, 2024 3,567,171 $ 20.16

___________________________________

* The majority of shares granted during the first quarter of 2024 were issued under the 2020 Incentive Plan.

During the first quarter of 2024, the Company modified awards for a recipient, resulting in 38,729 shares assumed to be granted, vested, and cancelled for accounting purpose.

During the first half of 2024, the Company modified awards for recipients, resulting in 42,098 shares assumed to be granted, vested, and cancelled for accounting purposes.

** The number of the RSUs vested included 399,483 shares that were withheld on behalf of employees to satisfy the statutory tax withholding requirements.

Equity-based compensation expenses related to the RSUs were $ 7,705 and $ 4,798 for three months ended March 31, 2024 and 2023, respectively.

At March 31, 2024, the total unrecognized equity-based compensation expense related to outstanding RSUs was $ 35,779 , which is expected to be recognized over a weighted-average period of 21.5 months.

Performance Stock Units ("PSU")

Equity-based compensation expenses related to the RSUs were $ 8,614 , $ 7,325 , $ 16,319 , and $ 12,137 for three and six months ended June 30, 2024 and 2023, respectively.

At June 30, 2024, the total unrecognized equity-based compensation expense related to outstanding RSUs was $ 60,461 , which is expected to be recognized over a weighted-average period of 26.6 months.

Performance Stock Units

PSUs are 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, including year over year revenue growth, unlevered free cash flow growth, annual revenue, and annual EBITDA.

1 unchanged sentence

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 for the period ended March 31, 2024 is as follows:

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 costs.

A summary of the Company’s PSU activity for the period ended June 30, 2024 is as follows:

UNITS WEIGHTED-

1 unchanged sentence

Granted* 338,445 18.98

Vested** ( 30,728 ) 24.83

Forfeited — —

Cancelled* ( 394,050 ) 27.09

Non-vested PSUs as of March 31, 2024 771,231 $ 21.33

Non-vested PSUs as of June 30, 2024 763,134 $ 21.08

___________________________________

* During the first quarter of 2024, the Company modified an award for a recipient, resulting in 6,651 shares assumed to be granted and cancelled for accounting purpose.

Equity-based compensation expenses related to the PSUs were $ 636 and $ 2,287 for the three months ended at March 31, 2024 and 2023, respectively.

At March 31, 2024, the total unrecognized equity-based compensation expense related to outstanding PSUs was $ 4,981 , which is expected to be recognized over a weighted-average period of 18.6 months.

* During the first half of 2024, the Company modified an award for a recipient, resulting in 6,651 shares assumed to be granted and cancelled for accounting purpose.

** The number of the PSUs vested included 46,785 shares that were withheld on behalf of employees to satisfy the statutory tax withholding requirements.

Equity-based compensation expenses related to the PSUs were $ 686 , $( 3,828 ), $ 1,321 , and $( 1,542 ) for the three and six months ended at June 30, 2024 and 2023, respectively.

At June 30, 2024, the total unrecognized equity-based compensation expense related to outstanding PSUs was $ 3,452 , which is expected to be recognized over a weighted-average period of 17.0 months.

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,

2024 2023 2024 2023

(In thousands)

6 unchanged sentences

Contingent consideration

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

In connection with the Vyasa Analytics LLC ("Vyasa"), DIDB, Formedix, and ABM 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 related to revenue thread for Vyasa, DIDB, Formedix, and ABM to be earned are $ 60,000 , $ 2,000 , $ 9,000 , and $ 17,550 , respectively.

Additionally, the Company agreed to further contingent consideration based on the resolution of certain tax contingencies related with Formedix acquisition.

During the quarter ended March 31, 2024, the Company made a combined payment of $ 12,356 on the contingent consideration, consisting of $ 8,649 in cash and $ 3,707 in Company's stock.

The total contingent liabilities were $ 45,764 and $ 55,238 at March 31, 2024 and December 31, 2023, respectively.

Additionally, the Company agreed to further contingent consideration based on the resolution of certain tax contingencies related to the Formedix acquisition.

During the six months ended June 30, 2024, the Company made a combined payment of $ 14,133 on the contingent consideration, consisting of $ 10,426 in cash and $ 3,707 in Company's stock.

The total contingent liabilities were $ 46,776 and $ 55,238 at June 30, 2024 and December 31, 2023, respectively.

The contingent liabilities are included in accrued expenses and other long-term liabilities in the Company's condensed consolidated balance sheet.

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 its condensed consolidated financial statements as of March 31, 2024.

Assurance-type warranty

1 unchanged sentence

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 7 – Leases.

For information related to commitments for future minimum lease payments, please see Note 7.

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”), in deciding how to allocate resources and in assessing performance.

3 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, 2024 and 2023:

The following table summarizes revenue by geographic area for the three and six months ended June 30, 2024 and 2023:

THREE MONTHS ENDED

JUNE 30, SIX MONTHS ENDED

2024 2023 2024 2023

Americas $ 69,619 $ 68,167 $ 138,784 $ 135,190

8 unchanged sentences

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 and three months ended March 31, 2024 and 2023 were 14 % and 45 %, respectively, including discrete tax items.

The Company's global ETR for the three and six months ended June 30, 2024 and 2023 were ( 2 )%, 44 %, 3 %, and 44 %, respectively, including discrete tax items.

The current year decrease in the ETR was principally due to the combined effect of the overall decrease in pre-tax book income, the impact of non-deductible items, and the tax effect of certain discrete items.

2 unchanged sentences

Diluted earnings 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,

Basic earnings per share

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

2024 2023 2024 2023

Net income (loss) available to common shareholders $ ( 12,574 ) $ 4,706 $ ( 17,257 ) $ 6,064

8 unchanged sentences

__________________________________

• For the period ended March 31, 2024, the Company excluded the restricted stock and RSUs from the calculation of diluted earnings per share that could potentially dilute earnings per share in the future because of the anti-dilutive effect of the reported net loss.

• For the period ended March 31, 2023, the Company excluded certain potentially dilutive securities attributable to outstanding RSUs and restricted stocks from the computation of diluted earnings per share because the securities would have had an antidilutive effect.

• For the period ended June 30, 2024, the Company excluded potentially dilutive securities from the calculation of diluted earnings per share that could potentially dilute earnings per share in the future because of the anti-dilutive effect of the reported net loss.

• For the period ended June 30, 2023, the Company excluded certain potentially dilutive securities attributable to outstanding RSUs and restricted stocks from the computation of diluted earnings per share because the securities would have had an antidilutive effect.

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