3 unchanged sentences
Reports of Independent Registered Public Accounting Firm (PCAOB ID 0 49 )
−Removed: Report of Independent Registered Public Accounting Firm (PCAOB ID 596 )
Consolidated Balance Sheets
3 unchanged sentences
Notes to the Consolidated Financial Statements
−Removed: T able of Contents
Report of Independent Registered Public Accounting Firm
2 unchanged sentences
We have audited the accompanying consolidated balance sheets of Certara, Inc.
−Removed: and Subsidiaries (the Company) as of December 31, 2023 and 2022, the related consolidated statements of operations and comprehensive income (loss), stockholders’ equity and cash flows for the years then ended, and the related notes to the consolidated financial statements (collectively, the financial statements).
−Removed: In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.
+Added: and Subsidiaries (the Company) as of December 31, 2024 and 2023, the related consolidated statements of operations and comprehensive income (loss), stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes to the consolidated financial statements (collectively, the financial statements).
+Added: In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013, and our report dated February 26, 2025, expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.
17 unchanged sentences
For fixed price revenue contracts recognized over time, management utilizes the input method to measure estimated progress to completion.
−Removed: T able of Contents
−Removed: We identified revenue recognition for fixed contracts as a critical audit matter.
+Added: We identified revenue recognition for fixed price contracts as a critical audit matter.
The principal consideration for our determination that revenue recognition for fixed price contracts was a critical audit matter is that the measure of progress towards completion is based upon the hours incurred to date as a percentage of the total estimated hours and utilizes assumptions for future hours to complete the performance obligations, and those assumptions have significant estimation uncertainty.
7 unchanged sentences
– We evaluated management’s estimated cost budget for each selection and compared the actual costs incurred to the amount recognized in accordance with management’s accounting policies.
−Removed: Valuation of Regulatory Writing Reporting Unit for Goodwill Impairment Testing
−Removed: As described in Notes 2 (k) and 8 to the consolidated financial statements, during the year ended December 31, 2023, the Company’s recorded $47.0 million of impairment related to the Regulatory Writing reporting unit.
−Removed: The goodwill impairment test is performed at least annually at the reporting unit level.
−Removed: An interim test is performed when events or circumstances occur that may indicate that it is more likely than not that the fair value of any reporting unit may be less than its carrying value.
−Removed: The Company identified a triggering event for the Regulatory Writing reporting unit during the third quarter of 2023.
−Removed: The Company determined the fair value of the Regulatory Writing reporting unit using a combination of the income approach using the discounted cash flow method, which discounts forecasted future cash flows expected to be generated, and the market approach, using the guideline public company method, which utilizes information of comparable entities with similar operations and economic characteristics.
−Removed: To quantitatively measure goodwill impairment, the Company compared the fair value of the Regulatory Writing reporting unit to its carrying value.
−Removed: When determining the fair value of the Regulatory Writing reporting unit, management made significant estimates and assumptions, including revenue growth rates, projected operating margins, and discount rates for the income approach and comparable market data for the market approach.
−Removed: We identified the interim goodwill impairment assessment for the Regulatory Writing reporting unit as a critical audit matter given the significant estimates and assumptions used by management when estimating the fair value of the Regulatory Writing reporting unit, including assumptions related to revenue growth rates, projected
−Removed: T able of Contents
−Removed: operating margins, discount rates and comparable market data.
−Removed: Auditing the reasonableness of management’s estimates and assumptions required a high degree of auditor judgment and an increased extent of effort, including the need to involve our valuation specialists.
−Removed: Our audit procedures related to revenue growth rates, projected operating margins, discount rates and comparable market data utilized in the valuation of the Company’s Regulatory Writing reporting unit included the following, among others:
−Removed: • We obtained an understanding of the relevant controls related to the valuation of the Company’s Regulatory Writing reporting unit and tested such controls for design and operating effectiveness, including management review controls.
−Removed: • We evaluated the reasonableness of management’s forecasts of revenue growth rates by comparing the forecasts to (1) the historical results, (2) internal communications to management and the Board of Directors, (3) external communications from analysts and investors, as applicable, and (4) external market and industry data.
−Removed: • We evaluated the reasonableness of management’s forecasted expense growth rates by comparing actual results to management’s historical forecasts and internal communications to management and the Board of Directors.
−Removed: • We evaluated the reasonableness of management’s selection of comparable entities with similar operations and economic characteristics.
−Removed: • With the assistance of our valuation specialists, we evaluated the reasonableness of the Company’s valuation methodology and significant assumptions by:
−Removed: ◦ Evaluating the reasonableness of the discount rate and multiples of earnings of comparable companies by comparing the underlying source information to publicly available market data and verifying the accuracy of the calculations.
−Removed: ◦ Evaluating the appropriateness of the valuation methods used by management, testing their mathematical accuracy, and evaluating the allocation of fair value methods used in the analysis.
−Removed: Valuation of Certain Intangible Assets and Contingent Consideration Related to the Acquisitions of Drug Interaction Solutions, Formedix Limited and Applied BioMath, LLC
−Removed: As described in Note 5 to the consolidated financial statements, in 2023 the Company completed the acquisitions of Drug Interaction Solutions (DIDB), Formedix Limited (Formedix), and Applied BioMath, LLC (ABM) which resulted in $40.2 million of intangible assets being recorded.
−Removed: Those intangible assets were comprised of developed technologies and database content of $21.9 million, customer relationships of $17.2 million and other intangibles of $1.1 million.
−Removed: The fair value of the developed technologies and database content and customer relationships acquired were valued at acquisition date using forms of the income approach including the relief from royalty method and multi-period excess earnings method or the cost approach.
+Added: – We assessed the progress towards completion by performing inquiries of key financial and operational executives to evaluate the progress to date and factors impacting the estimated total contract costs expected at completion as well as attending certain regular operational meetings to observe discussions over progress and total estimated remaining costs.
+Added: We also held discussions with certain project leads to confirm the budgeting process and assumptions used in developing the original budget and subsequent modifications.
+Added: Valuation of Certain Intangible Assets Related to the Acquisition of Chemaxon, Kft.
+Added: As described in Note 4 to the consolidated financial statements, in 2024 the Company completed the acquisition of Chemaxon, Kft.
+Added: (“Chemaxon”) for $96.4 million which resulted in $50.2 million of intangible assets being recorded.
+Added: Those intangible assets were primarily comprised of developed technology of $36.0 million and customer relationships of $11.0 million.
+Added: The fair value of the developed technology and customer relationships acquired were valued at acquisition date using forms of the income approach including the multi-period excess earnings method and the distributor method.
Key inputs used in the income approaches included estimations of the future cash flows attributable to these intangible assets considering their economic lives and applying appropriate discount rates.
−Removed: The key input used in the cost approach is the estimated cost to recreate the asset.
−Removed: As a result of the Formedix and ABM acquisitions, the Company also recognized contingent consideration liabilities totaling $9.7 million.
−Removed: Future payments of contingent consideration are based on achieving certain
−Removed: T able of Contents
−Removed: eligible revenue thresholds for specific periods.
−Removed: Total potential payments resulting from the Formedix acquisition range from $0 to $9.0 million over the two-year period.
−Removed: Total potential payments resulting from the ABM acquisition range from $0 to $17.6 million over the two-year period.
−Removed: The liabilities were valued using a valuation model that reflects the use of multiple probabilities.
−Removed: Significant inputs used in the fair value measurement of contingent consideration include expected eligible revenue for the acquired businesses over the relevant measurement periods, probabilities of achieving eligible revenue thresholds, and the volatility assumptions and discount rates associated with the risk of the Company’s future liability payments.
−Removed: We identified the valuation of developed technologies and database content, customer relationships and contingent considerations related to the acquisitions as a critical audit matter given the significant judgment exercised by management.
−Removed: Determining the valuation of developed technologies and database content and customer relationships led to a high degree of auditor judgment in performing procedures relating to management’s significant assumptions related to the revenue growth rates, costs to recreate, customer attrition rates and discount rates.
−Removed: The determination of the proper valuation of the contingent consideration liabilities by management required judgment and the valuation is based, in part, on unobservable inputs that are sensitive to changes in the probability of achieving the thresholds and volatility assumptions.
−Removed: Given these factors, the related audit effort in evaluating management’s judgments in determining the valuation of such assets and liabilities was challenging, subjective, and complex and required a high degree of auditor judgment.
+Added: We identified the valuation of developed technology and customer relationships related to the acquisition as a critical audit matter given the significant judgment exercised by management.
+Added: Determining the valuation of developed technology and customer relationships led to a high degree of auditor judgment in performing procedures relating to management’s significant assumptions related to the revenue and expense growth rates, customer attrition rates, technical obsolescence rate and discount rates.
+Added: Given these factors, the related audit effort in evaluating management’s judgments in determining the valuation of such assets was challenging, subjective, and complex and required a high degree of auditor judgment.
Also, the audit effort involved the use of professionals with valuation skill and knowledge.
−Removed: Our audit procedures related to the Company’s valuation of the developed technologies and database content, customer relationships and contingent considerations in connection with the aforementioned acquisitions included the following, among others:
−Removed: • We obtained an understanding of the relevant controls related to the valuation of the contingent consideration liabilities, customer relationships and developed technologies and database content assets and tested such controls for design and operating effectiveness, including management review controls related to the development of significant assumptions.
−Removed: • We evaluated the reasonableness of management’s forecasts of revenue and customer attrition rates by comparing the forecasts to (1) the historical results, (2) internal communications to management and the Board of Directors, and (3) external market and industry data, as applicable.
−Removed: • We evaluated the reasonableness of the cost to recreate a similar asset by comparing expected compensation amounts to internal documentation.
+Added: Our audit procedures related to the Company’s valuation of the developed technology and customer relationships in connection with the aforementioned acquisition included the following, among others:
+Added: • We obtained an understanding of the relevant controls related to the valuation of the customer relationships and developed technology and tested such controls for design and operating effectiveness, including management review controls related to the development of significant assumptions.
+Added: • We evaluated the reasonableness of management’s forecasts of revenue and expenses, customer attrition rates and technical obsolescence rate by comparing the forecasts to (1) the historical results and (2) internal communications to management and the Board of Directors, as applicable.
• With the assistance of our valuation specialists, we evaluated the reasonableness of the Company’s valuation methodologies and significant assumptions by:
−Removed: – Evaluating the reasonableness of the discount rates, volatility assumptions and the probability of certain financial forecast scenarios.
−Removed: – Testing the relevance and reliability of source information underlying the determination of the discount rates and volatility assumptions.
+Added: – Evaluating the reasonableness of the discount rates.
+Added: – Testing the relevance and reliability of source information underlying the determination of the discount rates.
/s/ RSM US LLP
2 unchanged sentences
February 26, 2025
−Removed: T able of Contents
Report of Independent Registered Public Accounting Firm
5 unchanged sentences
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the December 31, 2024 consolidated financial statements of the Company and our report dated February 26, 2025, expressed an unqualified opinion.
+Added: As described in Management’s Annual Report on Internal Controls over Financial Reporting, management has excluded Chemaxon, Kft.
+Added: (Chemaxon) from its assessment of internal control over financial reporting as of December 31, 2024, because it was acquired by the Company in a purchase business combination in the fourth quarter of 2024.
+Added: We have also excluded Chemaxon from our audit of internal control over financial reporting.
+Added: Chemaxon is a wholly owned subsidiary whose total assets and total revenues represent approximately 6% and 2%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2024.
Basis for Opinion
11 unchanged sentences
A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
−Removed: (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;
+Added: (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of
+Added: the company are being made only in accordance with authorizations of management and directors of the company;
and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company's assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
−Removed: Also, projections of any evaluation of effectiveness to future periods are subject to the risk that
−Removed: T able of Contents
−Removed: controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
+Added: Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/ s/ RSM US LLP
1 unchanged sentence
February 26, 2025
−Removed: T able of Contents
−Removed: Report Of Independent Registered Public Accounting Firm
−Removed: Board of Directors and Stockholders
CERTARA, INC.
−Removed: Opinion on the Consolidated Financial Statements
−Removed: We have audited the accompanying consolidated statements of operations and comprehensive loss, stockholders’ equity, and cash flows of Certara, Inc.
−Removed: and Subsidiaries (the “Company”) for the year ended December 31, 2021, and the related notes (collectively referred to as the “consolidated financial statements”).
−Removed: In our opinion, the consolidated financial statements present fairly, in all material respects, the results of operations and cash flows of the Company for the year ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.
−Removed: Basis for Opinion
−Removed: These consolidated financial statements are the responsibility of the Company’s management.
−Removed: Our responsibility is to express an opinion on these consolidated financial statements based on our audit.
−Removed: We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.
−Removed: federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
−Removed: We conducted our audit in accordance with the standards of the PCAOB.
−Removed: Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.
−Removed: Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.
−Removed: Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.
−Removed: Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.
−Removed: We believe that our audit provides a reasonable basis for our opinion.
−Removed: /s/ CohnReznick LLP
−Removed: We served as the Company's auditor from 2019 to 2021.
−Removed: Tysons, Virginia
−Removed: March 1, 2022
−Removed: T able of Contents
−Removed: CERTARA, INC.
AND SUBSIDIARIES
5 unchanged sentences
102,189 84,857
−Removed: Restricted cash — 3,102
Prepaid expenses and other current assets 29,480 20,393
37 unchanged sentences
The accompanying notes are an integral part of the consolidated financial statements .
−Removed: T able of Contents
CERTARA, INC.
19 unchanged sentences
Income (loss) before income taxes ( 17,184 ) ( 55,143 ) 18,755
−Removed: Provision for income taxes 214 4,024 9,891
+Added: (Benefit) Provision for income taxes ( 5,133 ) 214 4,024
Net income (loss) ( 12,051 ) ( 55,357 ) 14,731
4 unchanged sentences
( 2,584 ) ( 2,059 ) 6,186
−Removed: Reclassification of fair value of interest rate swap, net of tax of $ 0 , $ 0 , $( 765 )
Total other comprehensive income (loss) ( 5,831 ) 637 ( 4,304 )
7 unchanged sentences
The accompanying notes are an integral part of the consolidated financial statements.
−Removed: T able of Contents
CERTARA, INC.
11 unchanged sentences
Restricted stock and stock units withheld for tax liabilities — — 2 — — ( 149,107 ) ( 2,962 ) ( 2,960 )
−Removed: Issuance common stock from public offerings, net 4,500,000 45 133,306 — — — — 133,351
−Removed: Common shares issued in connection with Pinnacle acquisition 2,239,717 22 72,738 — — — — 72,760
+Added: Common shares issued for employee share-based compensation 437,726 4 ( 4 ) — — — — —
Change in fair value from interest rate swap, net of tax — — — — 6,186 — — 6,186
−Removed: Reclassification of fair value of interest rate swap, net of tax — — — — 2,268 — — 2,268
−Removed: Net loss — — — ( 13,266 ) — — — ( 13,266 )
+Added: Net income — — — 14,731 — — — 14,731
Foreign currency translation adjustment, net of tax — — — — ( 10,490 ) — — ( 10,490 )
4 unchanged sentences
Change in fair value from interest rate swap, net of tax — — — — ( 2,059 ) — — ( 2,059 )
−Removed: Net income — — — 14,731 — — — 14,731
+Added: Net loss — — — ( 55,357 ) — — ( 55,357 )
Foreign currency translation adjustment, net of tax — — — — 2,696 — — 2,696
3 unchanged sentences
Common shares issued for employee share-based compensation 1,464,340 15 ( 15 ) — — — — —
+Added: Common shares issued for contingent consideration 214,692 2 3,705 — — — — 3,707
Change in fair value from interest rate swap, net of tax — — — — ( 2,584 ) — — ( 2,584 )
3 unchanged sentences
The accompanying notes are an integral part of the consolidated financial statements.
−Removed: T able of Contents
CERTARA, INC.
10 unchanged sentences
Provision for credit losses 1,464 684 1,072
−Removed: Loss on retirement of assets 65 169 351
Equity-based compensation expense 34,774 28,300 30,345
1 unchanged sentence
Goodwill impairment — 46,984 —
−Removed: Lease abandonment expense 1,602 — —
−Removed: Unrealized loss on derivative — — 1,144
Deferred income taxes ( 12,695 ) ( 16,523 ) ( 11,511 )
2 unchanged sentences
Prepaid and other assets ( 2,873 ) 711 126
−Removed: Accounts payable, accrued expenses, and other liabilities ( 5,607 ) 9,080 1,130
+Added: Accounts payable and accrued expenses, and other liabilities ( 4,765 ) ( 5,607 ) 9,080
Deferred revenue 13,834 28 9,530
+Added: Other operating activities, net 1,846 1,667 169
Net cash provided by operating activities 80,466 82,755 92,543
6 unchanged sentences
Cash flows from financing activities:
−Removed: Proceeds from issuance of common stock, net of underwriters' discounts and commissions — — 133,351
−Removed: Proceeds from borrowings on long-term debt — — 89
+Added: Proceeds from borrowings on term loan debt 6,305 — —
+Added: Payment of debt issuance costs ( 1,216 ) — —
Payments on long-term debt and finance lease obligations ( 2,255 ) ( 3,045 ) ( 3,313 )
+Added: Payments for business acquisition related contingent consideration ( 15,156 ) — —
Payments on financing component of interest rate swap — — ( 1,088 )
−Removed: Payment of deferred offering costs — — ( 1,767 )
−Removed: Payment of debt issuance costs — — ( 2,942 )
Payment of taxes on shares and units withheld for employee taxes ( 8,688 ) ( 6,402 ) ( 2,962 )
−Removed: Net cash provided by (used in) financing activities ( 9,447 ) ( 7,363 ) 123,391
+Added: Net cash used in financing activities ( 21,010 ) ( 9,447 ) ( 7,363 )
Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash ( 2,856 ) 1,505 ( 4,279 )
7 unchanged sentences
Contingent liabilities established in connection with business acquisition $ — $ 11,308 $ 19,813
−Removed: Operating right-of-use assets recognized upon adoption of ASC 842 $ — $ — $ 15,857
−Removed: Operating lease liability recognized upon adoption of ASC 842 $ — $ — $ 16,809
−Removed: Common shares issued in connections with the Pinnacle acquisition $ — $ — $ 72,760
+Added: Stock issuance related to business acquisition contingent consideration $ 3,707 $ — $ —
The accompanying notes are an integral part of the consolidated financial statements.
−Removed: T able of Contents
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.
−Removed: The Company has operations in the United States, Australia, Canada, China, France, Germany, India, Italy, Japan, Luxembourg, Netherlands, Philippines, Poland, Portugal, Spain, Switzerland, Egypt, and the United Kingdom.
+Added: The Company has operations in the United States, Australia, Canada, China, France, Germany, India, Italy, Japan, Luxembourg, Netherlands, Philippines, Poland, Portugal, Spain, Switzerland, Egypt, Hungary and the United Kingdom.
Summary of Significant Accounting Policies
4 unchanged sentences
Actual results could differ from those estimates, and such differences may be material to the consolidated financial statements.
−Removed: (b) Recently Issued Accounting Pronouncements
+Added: (b) Recently Adopted or Issued Accounting Standards
In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") ASU 2023-07, “Segment Reporting (Topic 280):
3 unchanged sentences
Upon adoption, the guidance should be applied retrospectively to all prior periods presented in the financial statements.
−Removed: The Company is currently evaluating the impact of this ASU on the disclosures within our consolidated financial statements.
+Added: As of December 31, 2024, the Company has adopted the ASU on the disclosures within its consolidated financial statements.
In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740):
1 unchanged sentence
The ASU requires disclosure of specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold and further disaggregation of income taxes paid for individually significant jurisdictions.
−Removed: The ASU will be effective for public business entities for annual periods beginning after December 15, 2024.
+Added: The ASU will be effective for public business
+Added: entities for annual periods beginning after December 15, 2024.
Early adoption is permitted.
−Removed: The Company is
−Removed: T able of Contents
−Removed: currently evaluating the impact of these amendment on the disclosures within our consolidated financial statements.
+Added: The Company is currently evaluating the impact of the ASU on the disclosures within our consolidated financial statements.
+Added: In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses.
+Added: This ASU seeks to improve of the disclosures about the types of expenses, including employee compensation, depreciation, and amortization, and costs incurred related to inventory and manufacturing activities.
+Added: ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027.
+Added: Early adoption is permitted.
+Added: The Company is currently evaluating the impact of the ASU on the disclosures within its consolidated financial statements.
(c) Principles of Consolidation
19 unchanged sentences
Contingent liabilities related to acquisitions are measured at fair value using Level 3 unobservable inputs.
−Removed: 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.
+Added: The Company's estimates of fair value are based upon assumptions believed to be reasonable but which are
+Added: uncertain and involve significant judgments by management.
Any changes in the fair value of these contingent liabilities are included in the earnings in the consolidated statements of operations and comprehensive income (loss).
1 unchanged sentence
Significant inputs used in the fair value measurement of contingent consideration include:
−Removed: expected eligible revenue for the acquired businesses over the
−Removed: T able of Contents
−Removed: 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.
+Added: 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.
At the acquisition date, the fair value of the contingent consideration liabilities related with eligible revenues was $ 19,813 , $ 790 , $ 4,380 , and $ 5,357 for the acquisitions of Vyasa Analytics, LLC (“Vyasa”), Drug Interaction Solutions, University of Washington (“DIDB”), Formedix Limited ("Formedix") , and Applied BioMath, LLC (“ABM”), respectively.
17 unchanged sentences
The Company’s Level 3 liabilities that were measured at fair value on a recurring basis are acquisition related contingent consideration liabilities.
−Removed: T able of Contents
The following table summarizes the Level 3 activity of the changes in the contingent consideration liability.
−Removed: December 31, 2023
+Added: YEAR ENDED DECEMBER 31, 2024
(In thousands)
Beginning balance at December 31, 2023 $ 54,457
−Removed: Additions 10,527
+Added: Payments ( 18,863 )
Change in fair value 8,345
Ending balance at December 31, 2024 $ 43,939
−Removed: (e) Cash and Cash Equivalents and Restricted Cash
+Added: (e) Cash and Cash Equivalents
Cash equivalents include highly-liquid investments with maturities of three months or less from the date purchased.
2 unchanged sentences
The Company has never experienced losses related to these balances and believes it is not exposed to any significant credit risk on cash.
−Removed: Restricted cash represents cash that is reserved to provide for a Company credit card program and unexpended restricted grant funds.
−Removed: The restricted cash balance was $ 0 and $ 3,102 at December 31, 2023 and 2022, respectively.
−Removed: As of December 31, 2023 and 2022, the carrying values reflected in the consolidated balance sheets reasonably approximate the fair values of cash and cash equivalents and restricted cash due to the short-term maturity of these items.
+Added: As of December 31, 2024 and 2023, the carrying values reflected in the consolidated balance sheets reasonably approximate the fair values of cash and cash equivalents due to the short-term maturity of these items.
The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the consolidated balance sheets to the amounts presented in the consolidated statements of cash flows:
1 unchanged sentence
Cash and cash equivalents $ 179,183 $ 234,951
−Removed: Restricted cash, current — 3,102
−Removed: Total cash and cash equivalents, and restricted cash $ 234,951 $ 239,688
(f) Accounts Receivable
6 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.
−Removed: Allowances for credit losses of
−Removed: T able of Contents
−Removed: $ 1,312 and $ 1,250 were provided in the accompanying consolidated financial statements as of December 31, 2023 and 2022, respectively.
+Added: Allowances for credit losses of $ 2,164 and $ 1,312 , respectively, were provided in the accompanying consolidated financial statements as of December 31, 2024 and 2023, respectively.
(In thousands)
25 unchanged sentences
The Company has elected not to recognize ROU assets and lease liabilities for short-term leases of real estate with a lease term of 12 months or less.
−Removed: T able of Contents
The Company generally uses its incremental borrowing rate in determining the present value of future payments as the rate implicit in the lease is unknown.
−Removed: The incremental borrowing rate represents the rate of interest that the Company would expect to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms.
+Added: The incremental borrowing rate represents the rate of interest that
+Added: the Company would expect to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms.
Fixed lease payments on operating leases are recognized on a straight-line basis over the lease term, while variable payments are recognized in the period incurred.
3 unchanged sentences
Lessee's ROU assets under ASC 842 are subject to the FASB ASC Subtopic 360-10 impairment guidance applicable to long-lived assets.
−Removed: In the third quarter of 2023, the Company recorded a lease abandonment expense of $ 1,602 and reduced its lease ROU assets for the same amount in connection with the evaluation of the Company's office space footprint.
+Added: For the years ended December 31, 2024 and 2023 , the Company recorded lease abandonment expenses of $ 1,219 and $ 1,602 , respectively, and reduced the lease ROU assets for the same amount in each year in connection with the evaluation of the Company's office space footprint.
The expense is included within the general and administrative expenses in the Company's consolidated statements of operations and comprehensive income (loss).
17 unchanged sentences
The amortization costs are included in interest expense within the consolidated statements of operations and comprehensive income (loss), regardless of whether there are any outstanding borrowings on the line-of-credit arrangement.
−Removed: T able of Contents
(k) Goodwill and Other Intangible Assets
−Removed: During the third quarter of 2023, the Company streamlined its Integrated Drug Development reporting unit ("IDD") and Regulatory Writing reporting unit into Certara Drug Development Solutions reporting unit (“CDDS”), resulting in aggregation of its four reporting units into three reporting units for goodwill allocation and impairment testing purposes.
−Removed: As of December 31, 2023, the Company had three reporting units – CDDS, Software reporting unit (“Software”), and SimCyp reporting unit (“SimCyp”), which are within a single operating segment of the Company.
+Added: During 2024, the Company reorganized its Certara Drug Development Solutions reporting unit (“CDDS”), Software reporting unit (“Software”), and SimCyp reporting unit (“SimCyp”) for goodwill allocation and impairment testing purposes.
+Added: As of December 31, 2024, the Company had three reporting units – Certara Data Science Software (“CDS”), the Certara Predictive Technologies reporting unit (“CPT”), and the Certara Drug Development Services reporting unit (“CDDS”), which are within a single operating segment of the Company.
Goodwill is tested for impairment at the reporting unit level, which is one level below or the same as an operating segment.
1 unchanged sentence
If the Company determines that it is not more-likely-than-not that the fair values of the reporting units are less than their carrying values, no further assessment is performed.
−Removed: If the Company determines that it is more-likely-than-not that the fair values of the report units are less than carrying value, the Company proceeds to perform a quantitative goodwill impairment test.
+Added: If the Company determines that it is more-likely-than-not that the fair values of the reporting units are less than carrying value, the Company proceeds to perform a quantitative goodwill impairment test.
If the result of the quantitative test shows that the carrying amount of reporting units exceeds its fair values, an impairment loss is recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit.
1 unchanged sentence
An interim test is performed when events or circumstances occur that may indicate that it is more likely than not that the fair value of any reporting unit may be less than its carrying value.
−Removed: During the third quarter of 2023, the Company performed interim goodwill impairment tests for Regulatory Writing reporting unit, which was integrated into the CDDS at the end of third quarter 2023.
−Removed: The fair value of Regulatory Writing reporting unit was determined to be less than its carrying value, resulting in a goodwill impairment charge of $ 46,984 for the reporting unit.
+Added: During the third quarter of 2023, the Company performed interim goodwill impairment tests for the prior regulatory writing reporting unit, which was integrated into the CDDS at the end of third quarter 2023.
+Added: The fair value of the regulatory writing reporting unit was determined to be less than its carrying value, resulting in a goodwill impairment charge of $ 46,984 for the reporting unit.
The fair value of that reporting unit was estimated using a combination of the discounted cash flow method and the guideline public company method.
3 unchanged sentences
The Company recorded a goodwill impairment charge of $ 46,984 for the year ended December 31, 2023.
−Removed: There was no impairment recorded for the years ended December 31, 2022, and 2021.
+Added: There was no goodwill impairment recorded for the years ended December 31, 2024 and 2022.
Other identifiable intangible assets with finite lives, such as software products acquired in acquisitions, non-compete agreements, trade names, customer relationship assets, and patents, are amortized over their estimated useful lives using either a straight-line method or a method based on pattern of expected economic benefit of the asset as follows:
10 unchanged sentences
There were no impairment charges related to intangible assets for the years ended December 31, 2024, 2023, and 2022.
−Removed: T able of Contents
(l) Foreign Currency Translation
6 unchanged sentences
For transactions that are not denominated in the local functional currency, the Company remeasures monetary assets and liabilities at exchange rates in effect at the end of each reporting period.
−Removed: Foreign currency transaction gains and losses are included net within comprehensive gain or loss in the consolidated statements of operations and comprehensive income (loss) and resulted in foreign currency gains (losses) of $( 638 ), $ 3,166 , and $( 175 ) for the years ended December 31, 2023, 2022, and 2021, respectively.
+Added: Foreign currency transaction gains and losses are included net within comprehensive gain or loss in the consolidated statements of operations and comprehensive income (loss) and resulted in foreign currency losses of $( 2,344 ), $( 638 ), and $( 3,166 ) for the years ended December 31, 2024, 2023, and 2022, respectively.
(m) Derivative Instruments
11 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.
−Removed: The Company had entered into an interest rate swap agreement in May 2022 that pays fixed, receives variable 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.
+Added: The Company entered into an interest rate swap agreement in May 2022 that pays fixed, receives variable 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.
−Removed: 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.
−Removed: At December 31, 2023 and 2022, the interest swap had a fair value of $ 5,624 and $ 8,374 , respectively.
−Removed: The gross fair value recognized in accumulated other comprehensive income was $ 5,624 and $ 8,374 , respectively, at December 31, 2023 and December 31, 2022.
−Removed: The Company also had an interest rate swap agreement for a notional amount of $ 230,000 that fixed the interest rate at 2.1 %, non-inclusive of the fixed credit spread through May 31, 2022.
−Removed: On August 31, 2021, the Company entered into an amendment to the interest rate swap agreement.
−Removed: The amended interest rate swap agreement does not in its entirety meet the definition of a derivative instrument because of its off market fixed rate at inception and is deemed to be a hybrid instrument with a financing component and an embedded at-the-market derivative.
−Removed: Such embedded derivative is bifurcated and accounted for separately.
−Removed: At inception, the financing component of $ 1,966 was recorded at amortized cost.
−Removed: The embedded at-the-market derivative was designated and qualified as
−Removed: T able of Contents
−Removed: a cash flow hedge of interest rate risk for a notional amount of $ 230,000 that fixed the interest rate at 1.2757 %, non-inclusive of the fixed credit spread.
−Removed: Due to an other-than-insignificant financing element on a portion of such hybrid instrument, the cash flows associated with this hybrid instrument were classified as financing activities in the consolidated statements of cash flows.
−Removed: The interest rate swap matured on May 31, 2022.
−Removed: At December 31, 2023, the Company did not record any amounts for the financing component and fair value of the interest rate swap in the consolidated balance sheets.
−Removed: The Company reclassified $ 3,033 of accumulated comprehensive loss to interest expense in the consolidated statements of operation and comprehensive loss in the second quarter of 2021 due to hedge ineffectiveness.
−Removed: Excluding the amount reclassified, interest expense (income) on derivative instruments recognized in the Company’s consolidated statements of operations and comprehensive income (loss) were $( 5,295 ), $ 25 , and $ 726 for the years ended December 31, 2023, 2022, and 2021, respectively.
+Added: During the quarter ended September 30, 2023, the Company and the counterparty amended the floating rate of the swap agreement from term LIBOR to term SOFR due to the cessation of LIBOR.
+Added: At December 31, 2024 and 2023, the interest rate swap had a fair value of $ 2,213 and $ 5,624 , respectively.
+Added: The gross fair value recognized in accumulated other comprehensive income was $ 2,213 and $ 5,624 at December 31, 2024 and 2023, respectively.
+Added: Interest expense (income) on derivative instruments recognized in the Company’s consolidated statements of operations and comprehensive income (loss) were $( 5,751 ), $( 5,295 ), and $ 25 for the years ended December 31, 2024, 2023, and 2022, respectively.
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 consolidated balance sheets.
−Removed: Changes in the fair value of derivatives designated as cash flow hedges are recorded as a component of accumulated other comprehensive income (loss).
+Added: Changes in the fair value of derivatives designated as cash flow hedges are recorded as a component of accumulated other
+Added: comprehensive income (loss).
Those amounts are reclassified into interest expenses in the same period during which the hedged transactions impact earnings.
15 unchanged sentences
Deferred tax assets also include realizable tax losses and tax credit carryforwards.
−Removed: T able of Contents
The deferred tax assets may be reduced by a valuation allowance, which is established when it is more likely than not that some portion or all of the deferred tax assets will not be realized.
6 unchanged sentences
The second step requires the Company to measure the largest amount of benefit, determined on a cumulative probability basis, that is more likely than not to be realized upon ultimate settlement with tax authority.
−Removed: The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained.
+Added: The Company recognizes the effect of income tax positions only if those
+Added: positions are more likely than not of being sustained.
Changes in recognition or measurement are reflected in the period in which the change in judgment occurs.
2 unchanged sentences
The Company assessed its uncertain tax positions and determined that a liability of $ 7,411 and $ 2,708 was required to be recorded for uncertain tax positions as of December 31, 2024 and 2023, respectively.
−Removed: Uncertain tax positions relate primarily to federal and state R&D credits and certain foreign tax assessments.
+Added: Uncertain tax positions relate primarily to federal and state R&D credits and certain net operating losses.
The Company's policy is to recognize interest and penalties as a component of the provision for income taxes.
14 unchanged sentences
The Company’s revenue consists of fees for perpetual and term licenses for its software products, post- contract customer support (referred to as maintenance), software as a service (“SaaS”), and professional services including training and other revenue.
−Removed: Revenue is recognized upon transfer of control of promised products or
−Removed: T able of Contents
−Removed: services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for promised goods or services.
+Added: Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for promised goods or services.
The following describes the nature of the Company’s primary types of revenues and the revenue recognition policies as they pertain to the types of transactions the Company enters into with its customers.
9 unchanged sentences
Software license revenue consists primarily of sales of software licenses downloaded and installed by our customers on their own hardware.
−Removed: The license period is generally 1 year or less and includes an insignificant amount of customer support to assist the customer with the software.
+Added: The license period is generally one year or less and includes an insignificant amount of customer support to assist the customer with the software.
Software license performance obligations are generally recognized upfront at the point in time when the software license has been delivered.
−Removed: Software as a Service (SaaS) Revenues
−Removed: SaaS revenues consists of subscription fees for access to, and related support for, the Company’s cloud-based solutions.
+Added: Software as a Service (SaaS) Revenue
+Added: SaaS revenue consists of subscription fees for access to, and related support for, the Company’s cloud-based solutions.
The Company typically invoices subscription fees in advance in annual installments.
9 unchanged sentences
Arrangements with Multiple Performance Obligations
−Removed: For contracts with multiple performance obligations, such as a software license plus software training, implementation, and/or maintenance/support, or in contracts where there are multiple software licenses, the Company determines if the products or services are distinct and allocates the consideration to each distinct performance obligation on a relative standalone selling price basis (“SSP”).
−Removed: The delivery of a particular type of
−Removed: T able of Contents
−Removed: software and each of the user licenses would be one performance obligation.
+Added: For contracts with multiple performance obligations, such as a software license plus software training, implementation, and/or maintenance/support, or in contracts where there are multiple software licenses, the Company determines if the products or services are distinct and allocates the consideration to each distinct performance obligation on a relative SSP basis.
+Added: 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 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.
11 unchanged sentences
YEAR ENDED DECEMBER 31,
+Added: 2024 2023 2022
(In thousands)
11 unchanged sentences
Amortization of capitalized costs are included in sales and marketing expense in our consolidated statements of operations and comprehensive income (loss).
−Removed: T able of Contents
Capitalized contract acquisition costs were $ 873 and $ 655 as of December 31, 2024 and 2023, respectively, and were included in prepaid expenses and other current assets in the consolidated balance sheets.
17 unchanged sentences
Forfeitures are recognized as they occur for all awards.
−Removed: The fair value of restricted stock, restricted stock units, performance stock units are primarily determined by market price of our common stock on the date of grant.
−Removed: For a specific group of performance stock units, the Monte Carlo simulation model was used to estimate the fair value.
+Added: The fair value of restricted stock, restricted stock units, and performance stock units are primarily determined by the market price of our common stock on the date of grant.
+Added: For a specific group of performance stock units, a Monte Carlo simulation model was used to estimate the fair value.
Compensation costs for our restricted stock and restricted stock units are recognized on a straight-line basis over the requisite service period.
−Removed: Performance stock units with graded vesting schedule are recognized using graded vesting attribution approach.
−Removed: Performance stock unit represents a right to receive a certain number of shares of common stock based on the achievement of corporate performance goals and continued employment during the vesting period.
+Added: Performance stock units with a graded vesting schedule are recognized using graded vesting attribution approach.
+Added: A performance stock unit represents a right to receive a certain number of shares of common stock based on the achievement of corporate performance goals and continued employment during the vesting period.
At each reporting period, we reassess the probability of the achievement of such corporate performance goals and any increase or decrease in equity-based compensation expense resulting from an adjustment in the estimated shares to be released is treated as a cumulative catch-up in the period of adjustment.
2 unchanged sentences
Compensation costs for our restricted stock units are recognized on a straight-line basis over the requisite service period.
−Removed: T able of Contents
(s) Comprehensive Income (Loss)
2 unchanged sentences
Comprehensive income (loss) is defined as the change in equity during a period from transactions and other events and circumstances from non-owner sources.
−Removed: Net income (loss) and other comprehensive income (loss), including foreign currency translation adjustments, and changes in fair value of derivative instruments (interest rate swap agreements) designated as cash flow hedges, shall be reported to arrive at comprehensive (loss).
+Added: Net income (loss) and other comprehensive income (loss), including foreign currency translation adjustments, and changes in fair value of derivative instruments (interest rate swap agreements) designated as cash flow hedges, shall be reported to arrive at comprehensive income (loss).
Comprehensive income (loss) is displayed in the consolidated statements of operations and comprehensive income (loss).
−Removed: The components of other comprehensive income (loss) consisted of the foreign currency translation adjustments totaling $ 2,696 , $( 10,490 ) and $( 5,154 ), respectively, and the changes in fair value of interest rate swap (excluding $ 2,268 reclassification, net of tax in 2021), totaling $( 2,059 ), $ 6,186 , and $ 547 for the years ended December 31, 2023, 2022, and 2021, respectively.
+Added: The components of other comprehensive income (loss) consisted of the net of tax foreign currency translation adjustments totaling $( 3,247 ), $ 2,696 and $( 10,490 ), respectively, and the changes in fair value of interest rate swap, totaling $( 2,584 ), $( 2,059 ), and $ 6,186 for the years ended December 31, 2024, 2023, and 2022, respectively.
(t) Reclassification
Certain previously reported amounts in the consolidated financial statements have been reclassified to conform to the current year presentation.
−Removed: Since the first quarter of 2020, the COVID-19 pandemic has posed a significant threat to public health as well as the global and U.S.
−Removed: The continued spread of variants of COVID-19 may adversely impact our business, financial condition or results of operations as a result of increased costs, negative impacts to our workforce, or a sustained economic downturn.
−Removed: Although the economy has rebounded in many areas, the outlook for containing the outbreak is still highly uncertain.
−Removed: Given its ongoing and dynamic nature, it is difficult to predict the full impact of the COVID-19 outbreak on the global and US economy and our business.
−Removed: Public Offerings and Other significant Shareholder Transactions
−Removed: The Company was party to a registration rights agreement with EQT AB and its affiliates (“EQT”) (collectively, our former controlling shareholder), Arsenal Capital Partners (“Arsenal”), and certain other stockholders, dated December 10, 2020.
−Removed: That agreement was terminated following the sale of all of EQT’s common shares in the Company to Arsenal on December 8, 2022.
−Removed: Arsenal and the Company entered into a new registration rights agreement, dated November 3, 2022 (the “Registration Rights Agreement”), which contains provisions that entitle Arsenal to certain rights to have their securities registered by the Company under the Securities Act.
−Removed: While the Registration Rights Agreement is in effect, Arsenal is entitled to (i) four “demand” registrations, (ii) one underwritten offering in any consecutive 90-day period and (iii) two underwritten offerings in any consecutive 360-day period, subject in each case to certain limitations.
−Removed: In addition, the Registration Rights Agreement provides that the Company will share certain expenses of Arsenal relating to such registrations and indemnify Arsenal against certain liabilities which may arise under the Securities Act.
−Removed: On March 29, 2021, the Company completed an underwritten secondary public offering in which certain selling stockholders, including EQT, sold 11,500,000 shares of the Company’s common stock, including 1,500,000 shares of common stock pursuant to the full exercise of the underwriters’ option to purchase additional shares.
−Removed: The Company did no t offer any common stock in this transaction and did no t receive any proceeds from the sale of the shares of common stock by the selling stockholders.
−Removed: The Company incurred costs of $ 1,100 , recorded in general and administrative expenses, in relation to the secondary public offering.
−Removed: T able of Contents
−Removed: On September 13, 2021, the Company completed another public offering, at a public offering price of $ 31.00 per share, pursuant to which the Company sold 4,500,000 shares of its common stock, and certain selling stockholders sold 18,500,000 shares of the Company’s common stock, including 3,000,000 shares of common stock pursuant to the full exercise of the underwriters’ option to purchase additional shares.
−Removed: The Company received net proceeds of $ 134,096 , after deducting underwriters' discounts and commissions.
−Removed: In addition, $ 745 of legal, accounting and other offering costs incurred in connection with the sale of the Company's common stock in the public offering, were capitalized and offset against the proceeds received.
−Removed: On November 22, 2021, the Company completed another secondary public offering in which certain selling stockholders, including EQT, sold 10,000,000 shares of the Company’s common stock.
−Removed: The Company did no t offer any common stock in this transaction and did no t receive any proceeds from the sale of the shares of common stock by the selling stockholders.
−Removed: The Company incurred costs of $ 644 , recorded in general and administrative expenses, in relation to the secondary public offering.
−Removed: On August 11, 2022, the Company completed a secondary public offering in which certain selling stockholders, including EQT, sold 7,000,000 shares of the Company’s common stock.
−Removed: The Company did no t offer any common stock in this transaction and did no t receive any proceeds from the sale of the shares of common stock by the selling stockholders.
−Removed: The Company incurred costs of $ 596 , recorded in general and administrative expenses, in relation to the secondary public offering.
−Removed: On December 8, 2022, Arsenal acquired an aggregate of 29,954,521 shares of the Company’s common stock from EQT at a price of $ 15.00 per share.
−Removed: In connection with this transaction, the Company entered into a letter agreement, effective December 8, 2022, with Arsenal providing that, subject to certain exceptions, Arsenal is prohibited from transferring the acquired shares until December 8, 2024.
−Removed: Also, in connection with the transaction, the Company entered into a stockholders agreement with Arsenal, effective December 8, 2022, which, among other things, grants certain conditional rights to Arsenal to nominate up to two directors to our Board.
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.
−Removed: At December 31, 2023 and 2022, the investments were bank deposits and overnight sweep accounts, and money market funds.
+Added: At December 31, 2024 and 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.
6 unchanged sentences
The results of operations have been included in the Company’s consolidated financial statements prospectively from the date of acquisition.
−Removed: T able of Contents
−Removed: On March 2, 2021, the Company completed a transaction which qualified as a business combination for a total consideration of $ 2,667 .
−Removed: The business combination was not material to our consolidated financial statements.
−Removed: Based on the Company’s purchase price allocation, approximately $ 1,200 , $ 100 and $ 1,200 of the purchase price was assigned to customer relationships, non-compete agreements and goodwill, respectively.
−Removed: Insight Medical Writing Limited
−Removed: On June 7, 2021, the Company completed a transaction which qualified as a business combination for a total consideration of $ 15,197 .
−Removed: The business combination was not material to our consolidated financial statements.
−Removed: Based on the Company’s purchase price allocation, approximately $ 7,400 and $ 4,700 of the purchase price was assigned to customer relationships and goodwill, respectively.
−Removed: Pinnacle 21, LLC
−Removed: On October 1, 2021, the Company acquired 100 % of the equity of Pinnacle for a total consideration of $ 339,075 , which consisted of cash $ 266,315 and 2,239,717 shares of the Company's restricted common stock.
−Removed: Pinnacle provides software and services for preparing clinical trial data for regulatory submission.
−Removed: The acquisition executes on the Company’s strategy to invest in innovation to increase the use cases of biosimulation and grow adoption of Certara’s end-to-end platform.
−Removed: The acquisition of Pinnacle was accounted for as a purchase in accordance with ASC Topic 805, “Business Combinations”, which requires allocation of the purchase price to the estimated fair values of assets acquired and liabilities assumed in the transaction.
−Removed: Based on the Company’s purchase price allocation, approximately $ 103,000 , $ 24,600 , $ 15,800 and $ 180,947 of the purchase price was assigned to acquired software, customer relationships, trademarks and goodwill, respectively.
−Removed: The Company incurred $ 7,615 of transaction costs related to this acquisition, which are included in general and administrative expenses in the consolidated statement of operations and comprehensive loss for the year ended December 31, 2021.
−Removed: The results of operations of the acquired business and the fair value of the acquired assets and liabilities assumed are included in the Company’s consolidated financial statements with effect from the date of the acquisition.
−Removed: The Company’s consolidated statement of operations and comprehensive loss for the year ended December 31, 2021 includes revenues of $ 6,129 and a net income of $ 380 which includes the effects of purchase accounting adjustments, primarily changes in amortization of intangible assets.
−Removed: Integrated Nonclinical Development Solutions, Inc.
−Removed: On January 3, 2022, the Company completed the acquisition for a total consideration of $ 8,048 , which qualified as a business combination.
+Added: On January 3, 2022, the Company completed the acquisition of INDS for a total consideration of $ 8,048 , which qualified as a business combination.
The business combination was not significant to the Company’s consolidated financial statements.
3 unchanged sentences
The business combination was not significant to the Company’s consolidated financial statements.
−Removed: T able of Contents
Based on the Company’s purchase price allocation, approximately $ 11,400 , $ 1,500 , $ 120 , $ 80 and $ 16,589 of the purchase price was assigned to developed technology, customer relationships, trademarks, non-compete agreements and goodwill, respectively.
−Removed: The total estimated consideration includes a portion of contingent consideration that is payable over the next three years in a combination of 70 % cash and 30 % Certara common stock.
−Removed: Future payments of contingent consideration are based on achieving certain eligible revenue thresholds for each of the twelve-month periods ended December 31, 2023, 2024, and 2025, respectively.
−Removed: In December 2023, the Company modified the acquisition agreement and revised thresholds for eligible revenues .
+Added: The total estimated consideration includes a portion of contingent consideration that is payable over the next three years following the acquisition in a combination of 70 % cash and 30 % Certara common stock.
+Added: Future payments of contingent consideration are based on achieving certain eligible revenue thresholds for each of the twelve-month periods ended December 31, 2023, 2024, and 2025.
+Added: In December 2023, the Company modified the acquisition agreement and revised the thresholds for eligible revenues .
Potential payments range from $ 0 to $ 60,000 over the three years period.
The fair value of the contingent consideration was estimated to be $ 19,813 as of the acquisition date.
−Removed: At December 31, 2023, the contingent consideration was remeasured to $ 45,249 , resulting in a fair value adjustment of $ 25,436 and recorded in general and administrative (“G&A”) on the accompanying consolidated statement of operations and comprehensive income (loss).
+Added: For the year ended December 31, 2024, the Company paid contingent consideration of $ 12,356 , consisting of $ 8,649 in cash and $ 3,707 in Company stock.
+Added: At December 31, 2024 and 2023, the contingent consideration was remeasured to $ 43,939 and $ 45,249 , respectively, resulting in fair value adjustments of $ 11,046 and $ 25,436 , respectively.
+Added: These adjustments were recorded in G&A expenses on the accompanying consolidated statement of operations and comprehensive income (loss).
Drug Interaction Solutions, University of Washington ("DIDB")
1 unchanged sentence
The business combination was not significant to the Company’s consolidated financial statements.
−Removed: 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 .
+Added: The total estimated consideration includes a portion of contingent consideration that is payable over the next two years following the acquisition 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.
−Removed: At December 31 2023, the contingent consideration was remeasured to $ 132 , resulting in a negative fair value adjustment of $ 658 and recorded in G&A on the accompanying consolidated statement of operations and comprehensive income (loss).
+Added: At December 31, 2024 and 2023, the contingent consideration was remeasured to zero and $ 132 , respectively, resulting in negative fair value adjustments of $ 132 and $ 658 , respectively, and recorded in G&A on the accompanying 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.
4 unchanged sentences
The business combination was not material to the Company’s consolidated financial statements.
−Removed: 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 .
+Added: The total estimated consideration includes a portion of contingent consideration that is payable over the next two years following the acquisition, 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.
2 unchanged sentences
In total, the fair value of the contingent consideration was estimated to be $ 5,161 as of the acquisition date.
−Removed: At December 31 2023, the contingent consideration related to eligible revenue was remeasured to $ 3,696 , resulting in a negative fair value adjustment of $ 684 and recorded in G&A on the accompanying consolidated statement of operations and comprehensive income (loss).
−Removed: T able of Contents
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.
−Removed: 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 IRS.
+Added: 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 IRS.
+Added: For the year ended December 31, 2024, the Company paid contingent consideration of $ 1,777 .
+Added: At December 31, 2024 and 2023, the contingent consideration related to eligible revenue was remeasured to zero and $ 3,696 , respectively, resulting in negative fair value adjustments of $ 1,919 and $ 684 , respectively, and recorded in G&A expenses on the accompanying consolidated statement of operations and comprehensive income (loss).
+Added: In addition, as of December 31, 2024, the contingent consideration related to tax contingencies was $ 529 .
Applied BioMath, LLC ("ABM")
4 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 IRS.
−Removed: 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 .
−Removed: 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.
+Added: The total estimated consideration includes a portion of contingent consideration that is payable over the next two years following the acquisition in cash, not to exceed $ 17,550 .
+Added: 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.
The fair value of the contingent consideration was estimated to be $ 5,357 as of the acquisition date.
−Removed: At December 31 2023, the contingent consideration was remeasured to $ 5,380 , resulting in fair value adjustment of $ 23 and recorded in G&A on the accompanying consolidated statement of operations and comprehensive income (loss).
+Added: For the year ended December 31, 2024, the Company paid contingent consideration of $ 4,730 .
+Added: At December 31, 2024 and 2023, the contingent consideration was remeasured to zero and $ 5,380 , respectively, resulting in fair value adjustments of $( 650 ) and $ 23 , respectively.
+Added: These adjustments were recorded in G&A expenses on the accompanying 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 consolidated balance sheet.
1 unchanged sentence
Any changes in the fair value of these contingent liabilities are included in the earnings in the consolidated statements of operations and comprehensive income (loss).
−Removed: The current purchase price allocations for acquisitions of Formedix and ABM are preliminary.
−Removed: 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.
−Removed: 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.
+Added: Chemaxon, Kft.("Chemaxon")
+Added: On October 1, 2024, the Company acquired 100 % of the equity of Chemaxon, a leading cheminformatics company that provides platforms, applications, and solutions to handle chemical entities in life sciences, biotechnology, agrochemicals, new materials, education, and other research industries.
+Added: The acquisition strategically positions Certara in the drug discovery biosimulation market at scale.
+Added: It complements Certara’s existing biosimulation portfolio which is widely used in later phases of drug development.
+Added: The acquisition of Chemaxon was accounted for as a purchase in accordance with ASC Topic 805, “Business Combinations”, which requires allocation of the purchase price to the estimated fair values of assets and liabilities acquired in the transaction.
+Added: The following table summarizes the fair value of the consideration paid as well as the fair values of the assets acquired and liabilities assumed as of the date of the acquisition:
+Added: Fair value of consideration:
+Added: Cash paid to sellers $ 87,401
+Added: Cash paid to escrow 9,000
+Added: Total consideration $ 96,401
+Added: Assets acquired and liabilities assumed:
+Added: Cash and cash equivalents $ 4,543
+Added: Intangible assets 50,230
+Added: Goodwill 46,483
+Added: All other assets 6,633
+Added: Deferred revenue ( 4,051 )
+Added: Deferred income taxes ( 3,788 )
+Added: All other liabilities ( 3,649 )
+Added: Net assets acquired $ 96,401
+Added: • All other assets includes accounts receivable, prepaid expense, operating right of use assets, etc.;
+Added: All other liabilities include accounts payable, operating lease liabilities, accrued expense.
+Added: The current purchase price allocation for Chemaxon is preliminary.
+Added: The primary areas of the preliminary purchase price allocation that are not yet finalized relate to the value of deferred taxes and residual goodwill.
+Added: The deferred tax balance and residual goodwill are not yet finalized due to the need for additional information and analysis to complete the allocation between relevant countries.
+Added: 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.
−Removed: The Company incurred $ 200 , $ 1,418 , and $ 936 of transaction costs related to DIDB, Formedix, and ABM acquisitions, which are included in general and administrative expenses in the consolidated statement of operations and comprehensive loss for the year ended December 31, 2023.
−Removed: The results of operations of the acquired businesses and the fair value of the acquired assets and liabilities assumed are included in the Company’s consolidated financial statements with effect from the date of the acquisitions.
−Removed: The Company’s consolidated statement of operations and comprehensive loss for the year ended December 31, 2023 includes revenue of $ 3,303 and a net loss of $ 412 related to the acquired businesses.
−Removed: T able of Contents
−Removed: Supplemental Pro Forma Information (unaudited)
−Removed: The following unaudited pro forma consolidated financial information assumes that the three individually immaterial acquisitions occurred on January 1, 2022.
−Removed: The pro forma financial information is presented for informational purposes only and is not necessarily indicative of what would have occurred if the three acquisitions had been made as of that date.
−Removed: YEAR ENDED DECEMBER 31
+Added: As of December 31, 2024, an adjustment of approximately $ 531 to finalize the purchase consideration had not yet been settled with the seller.
+Added: The acquisition was structured as a stock acquisition for income tax purposes, therefore the Company’s tax basis in Chemaxon’s identifiable assets reflects the historical basis in the acquired assets, which resulted in deferred taxes being recorded in purchase accounting.
+Added: 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 IRS.
+Added: In connection with these transactions, the company recorded the following Intangible Assets.
+Added: Intangible assets (in thousands)
+Added: Trademarks $ 2,900
+Added: Non-compete agreement 330
+Added: Customer relationships 11,000
+Added: Developed technology 36,000
+Added: Total $ 50,230
+Added: The fair value of the intangible assets is based on significant inputs that are not observable in the market and, therefore, represent Level 3 measurements within the fair value measurement hierarchy.
+Added: The fair value of the trademarks (Relief from Royalty Rate method), non-compete agreements (Incremental Cash Flow method), developed technology (Multi-Period Excess Earnings method) and customer relationships (Distributor method) was determined under the income approach.
+Added: Goodwill of $ 46,483 was recorded to reflect the excess of the purchase price over the estimated fair value of the net identifiable assets acquired.
+Added: The excess of the purchase prices over the fair values of the acquired business's net assets represents cost and revenue synergies specific to the Company, as well as non-capitalizable intangible assets, such as assembled and trained workforces acquired, and has been allocated to goodwill.
+Added: The Company incurred $ 1,652 of transaction costs related to this acquisition, which are included in G&A expenses in the consolidated statement of operations and comprehensive income (loss) for the year ended December 31, 2024.
+Added: The results of operations of the acquired business and the fair value of the acquired assets and liabilities assumed are included in the Company’s consolidated financial statements with effect from the date of the acquisition.
+Added: The Company’s consolidated statement of operations for the year ended December 31, 2024, includes revenues of $ 6,561 and a net loss of $ 1,127 which includes the effects of purchase accounting adjustments, primarily changes in amortization of intangible assets.
+Added: Supplemental pro forma information
+Added: The following unaudited pro forma combined financial information assumes that the acquisition of Chemaxon occurred on January 1, 2023.
+Added: For the year ended December 31
(In thousands)
−Removed: Revenues $ 374,748 $ 355,983
−Removed: Net income (loss) $ ( 57,610 ) $ 10,015
−Removed: The unaudited pro forma consolidated results for the years ended December 31, 2023 and 2022 primarily include the following pro forma adjustment:
−Removed: Incremental amortization expense, net of tax, related to purchased intangible assets for all three acquisitions in an aggregate amount of $ 3,457 and $ 4,171 for the years ended December 31, 2023 and 2022, respectively.
+Added: Revenue $ 401,710 $ 376,775
+Added: Net loss $ ( 21,984 ) $ ( 64,108 )
+Added: The unaudited pro forma combined results for the years ended December 31, 2024 and 2023 primarily include the following pro forma adjustment:
+Added: * Revenue was adjusted by $( 244 ) and $ 1,494 for the years ended December 31, 2024 and 2023, respectively.
+Added: * Incremental amortization expense, net of tax, related to Chemaxon purchased intangible assets was $ 2,317 and $ 3,712 for the years ended December 31, 2024 and 2023, respectively.
Prepaid expenses and other current assets and other long-term assets
13 unchanged sentences
Total other long-term assets $ 2,031 $ 3,053
−Removed: T able of Contents
Property and Equipment
9 unchanged sentences
Depreciation and amortization expense was $ 1,994 , $ 1,552 , and $ 1,731 for the years ended December 31, 2024, 2023, and 2022, respectively.
−Removed: Goodwill and Other Intangible Assets
+Added: Goodwill and Intangible Assets
The following table presents the Company’s intangible assets (other than goodwill) and the related amortization:
15 unchanged sentences
The remaining amortization of $ 51,599 , $ 43,973 , and $ 41,429 was recorded in operating expenses for the years ended December 31, 2024, 2023, and 2022, respectively.
−Removed: T able of Contents
Based on the current amount of intangibles subject to amortization, the estimated annual amortization expense for each of the succeeding five years and thereafter is as follows:
13 unchanged sentences
An interim test is performed when events or circumstances occur that may indicate that it is more likely than not that the fair value of any reporting unit may be less than its carrying value.
−Removed: For the years ended December 31, 2023, 2022, and 2021, the Company performed annual quantitative assessments of goodwill, with the most recent assessment was performed on October 1, 2023.
+Added: For the years ended December 31, 2024, 2023, and 2022, the Company performed annual quantitative assessments of goodwill, with the most recent assessment performed on October 1, 2024.
The annual quantitative assessments resulted in no impairment as the estimated fair value of each reporting unit exceeded its carrying value.
−Removed: During the third quarter of 2023, the Company performed interim goodwill impairment tests for Regulatory Writing reporting unit, which was integrated into the CDDS at the end of third quarter 2023.
−Removed: The fair value of Regulatory Writing reporting unit was determined to be less than its carrying value, resulting in a goodwill impairment charge of $ 46,984 for the reporting unit.
+Added: During the third quarter of 2023, the Company performed interim goodwill impairment tests for the prior regulatory writing reporting unit, which was integrated into the CDDS at the end of third quarter 2023.
+Added: value of the regulatory writing reporting unit was determined to be less than its carrying value, resulting in a goodwill impairment charge of $ 46,984 for the reporting unit.
The fair value of that reporting unit was estimated using a combination of the discounted cash flow method and the guideline public company method.
1 unchanged sentence
These reductions were primarily attributable to a decrease in demand from certain customer groups for the legacy reporting unit.
−Removed: As the result, the Company recorded impairment charges $ 46,984 for the year ended December 31, 2023.
−Removed: The Company had not recognized any impairment charges for the years ended December 31, 2022 and 2021.
+Added: As the result, the Company recorded impairment charges of $ 46,984 for the year ended December 31, 2023.
+Added: The Company did not recognize any goodwill impairment charges for the years ended December 31, 2024 and 2022.
A reconciliation of the change in the carrying value of goodwill is as follows:
3 unchanged sentences
Foreign currency translation 2,351
+Added: Impairment expense ( 46,984 )
Balance, December 31, 2023 716,333
−Removed: Goodwill associated with 2023 business combinations 43,223
+Added: Goodwill associated with 2024 business combination 46,483
Foreign currency translation ( 5,778 )
−Removed: Impairment expense ( 46,984 )
Balance, December 31, 2024 $ 757,038
−Removed: T able of Contents
Accrued Expenses and Other Long-Term Liabilities
6 unchanged sentences
Short-term contingent considerations 20,887 18,410
−Removed: Accrued business acquisition liabilities — 700
Other 1,152 2,471
3 unchanged sentences
Uncertain tax position liability $ 1,718 $ 2,381
−Removed: Contingent consideration 36,828 19,813
+Added: Long - term contingent consideration 23,581 36,828
Total other long-term liabilities $ 25,299 $ 39,209
Long-Term Debt and Revolving Line of Credit
−Removed: 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.
−Removed: 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 ).
+Added: 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”).
+Added: On June 26, 2024, the Company entered into the Fifth Amendment to its Credit Agreement (the "Amendment"), which primarily (1) amended the principal amount of the term loan to $ 300,000 and its maturity date to June 26, 2031;
+Added: and (2) extended 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 commitments.
1 unchanged sentence
assets and stock pledges for the non-U.S.
−Removed: subsidiaries and contain various financial and nonfinancial covenants.
−Removed: As of December 31, 2023 and 2022, available borrowings under the revolving lines of credits were $ 100,000 , respectively.
−Removed: Available borrowing under the revolving lines of credits of $ 100,000 as of December 31, 2022, was reduced by $ 239 standby letter of credit issued to a landlord in lieu of a security deposit.
−Removed: Borrowings under the Credit Agreement are subject to a variable interest rate at LIBOR plus a margin.
−Removed: The applicable margins were based on achieving certain levels of compliance with financial covenants.
−Removed: 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”) .
−Removed: As part of this modification, a Credit Spread Adjustment (“CSA”) was introduced to aligning SOFR with LIBOR in terms of the overall interest rate earned by lenders under the Credit Agreement.
−Removed: The CSA varied depending on the selected interest period.
−Removed: T able of Contents
+Added: subsidiaries and contains various financial and nonfinancial covenants.
+Added: As multiple lenders syndicated funds under the credit agreements, the Company assessed whether existing debt was modified or extinguished, or if new debt was issued under GAAP guidelines.
+Added: 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.
+Added: The Company either deferred and amortized debt issuance costs or recognized expenses or losses, according to the applicable accounting guidance for each category.
+Added: 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 0.00 % 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.
+Added: The ABR is determined as the greatest of (a) the prime rate, (b) the federal funds effective rate, plus 0.50 %, and (c) the Term SOFR rate plus 1.00 %.
+Added: Additionally, the Company is obligated to pay a commitment fee of the unused amount and other customary fees.
+Added: As of each of December 31, 2024 and 2023, available borrowings under the revolving lines of credits were $ 100,000 .
The effective interest rate was 8.68 % and 8.84 % for the years ended December 31, 2024 and 2023, respectively, for the Credit Agreement.
13 unchanged sentences
The principal amount of long-term debt outstanding as of December 31, 2024, matures in the following years:
−Removed: 2024 2025 2026 TOTAL
+Added: 2025 2026 2027 2028 2029 Thereafter TOTAL
(In thousands)
2 unchanged sentences
For the year ended December 31, 2024, the Company was not required to make a mandatory prepayment on the term loan.
−Removed: The Company is required to make a quarterly principal payment of $ 755 on the term loan.
+Added: The Company is required to make a quarterly principal payment of $ 750 on the term loan 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.
4 unchanged sentences
In addition, based on IRS guidelines, certain employees are eligible to make an additional catch-up contribution.
−Removed: Employees are considered catch-up eligible with respect to a plan year if the participant turns age 50 by the end of the calendar year in which the plan year ends & meets IRS guidance.
−Removed: Catch up contributions & guidance for eligibility are determined & set by the IRS annually.
+Added: Employees are considered catch-up eligible with respect to a plan year if the participant turns age 50 by the end of the calendar year in which the plan year ends and meets IRS guidance.
+Added: Catch-up contributions and guidance for eligibility are determined and set by the IRS annually.
The Company matches employee contributions for a percentage of the employee’s deferral, not to exceed the first 6 % of each employee’s compensation.
−Removed: T able of Contents
The Company also operates a Group Personal defined contribution plan (“Plan”) covering all U.K.
3 unchanged sentences
The Company contributes an additional 8 % of salary for those employees who have registered for the Plan, which exceeds their duties under U.K.
−Removed: autoenrollmentt legislation.
−Removed: The 401(K) and plan contributions made by the Company were $ 5,382 , $ 4,746 , and $ 4,138 for the years ended December 31, 2023, 2022, and 2021 respectively.
+Added: auto-enrollment legislation.
+Added: The 401(k) and plan contributions made by the Company in the aggregate were $ 5,924 , $ 5,382 , and $ 4,746 for the years ended December 31, 2024, 2023, and 2022, respectively.
Commitments and Contingencies
Contingent consideration
−Removed: In connection with the 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.
−Removed: 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.
−Removed: In addition, the Company agreed to further contingent consideration based on the resolution of certain tax contingencies related with Formedix acquisition.
+Added: In connection with certain of the Company's business acquisitions, the Company is required to pay additional consideration if the acquired businesses achieve certain eligible revenue thresholds for certain periods.
+Added: Furthermore, the Company agreed to pay additional contingent consideration related to a business acquisition, contingent on the resolution of certain tax-related contingencies.
The contingent liabilities were $ 44,468 and $ 55,238 at December 31, 2024 and 2023, respectively.
10 unchanged sentences
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 Units of EQT, which was the former parent of the Company.
+Added: Additionally, the Company granted replacement shares of restricted stock in connection with the 2021 Pinnacle acquisition, which had fully vested in 2024.
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.
−Removed: In 2021, the Company granted 87,127 replacement shares of restricted stock in connection with the Pinnacle acquisition under which equity-based awards are outstanding.
−Removed: 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
−Removed: T able of Contents
−Removed: to unregistered shares and lack of marketability.
−Removed: Total grant date fair value was $ 2,762 .
−Removed: 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 .
−Removed: A summary of the restricted stock in 2023 is shown below:
+Added: A summary of the restricted stock activities as of and for the year ended December 31, 2024 is shown below:
SHARES WEIGHTED-AVERAGE
Non-vested restricted stock as of December 31, 2023 538,661 $ 23.18
+Added: Granted* 16,842 17.35
Vested* ( 376,052 ) 23.03
Forfeited ( 5,123 ) 23.00
+Added: Cancelled* ( 16,842 ) 23.00
Non-vested restricted stock as of December 31, 2024 157,486 $ 22.94
1 unchanged sentence
• The number of the restricted stock vested includes 3,959 shares that were withheld on behalf of employees to satisfy the statutory tax withholding requirements.
+Added: • During the year ended December 31, 2024, the Company modified certain awards for recipients, resulting in 16,842 shares assumed to be granted, vested, and cancelled for accounting purposes.
The Company did not authorize or issue any restricted stock during the year ended December 31, 2024.
−Removed: Equity-based compensation expenses related to the restricted stock exchanged for performance-based Class B Units were $ 801 , $ 2,537 and $ 12,349 for the years ended December 31, 2023, 2022 and 2021, respectively.
+Added: Equity-based compensation expense related to the restricted stock exchanged for performance-based Class B Units were $ 668 , $ 801 and $ 2,537 for the years ended December 31, 2024, 2023 and 2022, respectively.
At December 31, 2024, the total unrecognized equity-based compensation expenses related to outstanding restricted stock recognized using the accelerated attribution approach was $ 160 .
The unrecognized compensation expense for the category at December 31, 2024 is expected to be recognized over a weighted-average period of 8.1 months.
−Removed: Equity-based compensation expenses related to the time-based restricted stock were $ 1,313 , $ 3,166 and $ 3,104 for the years ended December 31, 2023, 2022 and 2021, respectively.
−Removed: At December 31, 2023, the total unrecognized equity-based compensation expenses related to outstanding restricted stock recognized using the straight-line attribution approach were $ 1,170 .
+Added: Equity-based compensation expense related to the time-based restricted stock were $ 928 , $ 1,313 and $ 3,166 for the years ended December 31, 2024, 2023 and 2022, respectively.
+Added: At December 31, 2024, the total unrecognized equity-based compensation expense related to outstanding restricted stock recognized using the straight-line attribution approach was $ 321 .
The unrecognized compensation expense for the category at December 31, 2024 is expected to be recognized over a weighted-average period of 8.2 months.
Equity-based employee compensation expenses related to the time-based restricted stock for the Pinnacle acquisition were $ 318 , $ 983 , and $ 1,169 for the years ended December 31, 2024, 2023, and 2022, respectively.
−Removed: At December 31, 2023, the total unrecognized equity-based compensation expenses related to outstanding restricted stock recognized using the straight-line attribution approach was $ 318 .
−Removed: The unrecognized compensation expense for the category at December 31, 2023 is expected to be recognized over a weighted-average period of 9 months.
+Added: At December 31, 2024, there was no unrecognized equity-based compensation expense related to outstanding restricted stock recognized using the straight-line attribution approach.
2020 Incentive Plan
3 unchanged sentences
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.
−Removed: 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
−Removed: T able of Contents
−Removed: for certain awards made to a non-executive chair of our Board of Directors.
−Removed: At December 31, 2023, there was 15,454,916 shares reserved for future issuance.
+Added: 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.
+Added: At December 31, 2024, there were 13,699,466 shares reserved for future issuance.
The plan share reserve will be increased on the first day of each fiscal year beginning with the 2022 fiscal year and ending after the tenth anniversary of the effective date in an amount equal to the lesser of (i) the positive difference, if any, between (x) 4.0 % of the outstanding common stock on the last day of the immediately preceding fiscal year and (y) the plan share reserve on the last day of the immediately preceding fiscal year and (ii) a lower number of shares of our common stock as determined by our board of directors.
1 unchanged sentence
RSUs represent the right to receive shares of the Company’s common stock at a specified date in the future.
−Removed: During year ended December 2023, the Company granted 1,718,670 RSUs under the 2020 Incentive Plan that generally vest over an average three-year period.
+Added: During the year ended December 31, 2024, the Company granted 2,322,890 RSUs under the 2020 Incentive Plan that generally vest over an average three-year period.
The fair value of the RSUs is based on the fair value of the underlying shares on the date of grant.
−Removed: A summary of the Company’s RSU activity is as follows:
+Added: A summary of the Company’s RSU activity is as follow:
UNITS WEIGHTED-
3 unchanged sentences
Forfeited ( 386,604 ) 20.36
+Added: Cancelled* ( 42,098 ) $ 24.21
Non-vested RSUs as of December 31, 2024 3,204,589 $ 19.61
+Added: * The majority of shares granted during 2024 were issued under the 2020 Incentive Plan.
+Added: During the year ended December 31, 2024, the Company modified awards for recipients, resulting in 42,098 shares assumed to be granted, vested, and cancelled for accounting purposes.
+Added: ** The number of the RSUs vested included 462,339 shares that were withheld on behalf of employees to satisfy the statutory tax withholding requirements.
The weighted average grant date fair values per share of RSUs granted during 2024, 2023, and 2022 were $ 17.62 , $ 23.35 , and $ 21.98 , respectively.
2 unchanged sentences
At December 31, 2024, the total unrecognized equity-based compensation expense related to outstanding RSUs was $ 41,088 , which is expected to be recognized over a weighted-average period of 22.6 months.
−Removed: The number of RSUs vested in 2023 includes 276,992 shares that were withheld on behalf of employees to satisfy the statutory tax withholding requirements.
Performance Restricted Stock Units (“PSUs”)
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 for individual PSU plans including year-over-year revenue growth, unlevered free cash flow growth, annual revenue, and annual EBITDA.
−Removed: The PSUs granted in 2023 also contain a market condition.
+Added: The PSUs granted in 2023 and 2024 also contain market condition.
Equity-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.
−Removed: The Company will continue to assess the probability of each condition being achieved at each reporting period to determine whether and when to
−Removed: T able of Contents
−Removed: recognize compensation cost.
−Removed: The following table presents a summary of activity on the PSUs for the period ended December 31, 2023.
+Added: 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.
+Added: A summary of the Company's PSU activity as of and for the year ended December 31, 2024 is as follows:
UNITS WEIGHTED-
3 unchanged sentences
Forfeited ( 42,131 ) 21.23
+Added: Cancelled* ( 394,050 ) $ 27.09
Non-vested PSUs as of December 31, 2024 645,377 $ 20.95
+Added: * During 2024, the Company modified an award for a recipient, resulting in 6,651 shares assumed to be granted and cancelled for accounting purpose.
+Added: ** The number of the PSUs vested included 46,785 shares that were withheld on behalf of employees to satisfy the statutory tax withholding requirements.
The weighted average grant date fair values per share of PSUs granted during 2024, 2023, and 2022 were $ 18.98 and $ 27.00 , and $ 22.25 , respectively.
−Removed: The total fair values of PSUs vested were $ 5,269 and $ 305 during 2023 and 2022.
−Removed: There were no PSU shares vested during 2021.
−Removed: Equity-based compensation expense related to the PSUs was $( 1,531 ), $ 4,462 , and $ 5,481 for the years ended December 31, 2023, 2022, and 2021.
+Added: The total fair values of PSUs vested were $ 2,437 , $ 5,269 , $ 305 during 2024, 2023 and 2022, respectively.
+Added: Equity-based compensation expense related to the PSUs was $ 1,279 , $( 1,531 ), and $ 4,462 for the years ended December 31, 2024, 2023, and 2022, respectively.
At December 31, 2024, the total unrecognized equity-based compensation expense related to outstanding PSUs was $ 759 , which is expected to be recognized over a weighted-average period of 17.1 months.
−Removed: The grant date fair values for 2023 PSU were determined based on Monte Carlo price model and the valuation assumptions noted in the following table.
+Added: The grant date fair values for PSU 2023 and 2024 were determined based on Monte Carlo price model and the valuation assumptions noted in the following table.
+Added: Year Ended December 31,
Expected dividend yield — —
Volatility 52.2 % - 54.7 %
+Added: 61.4 % - 61.9 %
Expected term (years) 1.78 - 2.78
Risk-free interest rate 4.36 %- 4.64 %
+Added: 3.89 %- 4.29 %
In March 2023, the Company modified the 2022 PSU agreement to adjust criteria regarding the inclusion of merger and acquisition revenues in the second and third years of the performance period, as well as the corresponding base years.
−Removed: 12 participants were affected by this modification The incremental cost recognized related to the modification was $ 651 as of December 31, 2023.
−Removed: Additionally, in March 2022, the Company made a minor update to the 2021 PSU agreement and determined that immaterial acquisitions would not be excluded from the current measurement year's calculation of revenue.
−Removed: 17 participants were affected by this modification.
−Removed: $ 37 and $ 221 increment costs were recognized as of December 31, 2023 and 2022, respectively.
−Removed: T able of Contents
+Added: This change affected 12 participants at the time of the modification.
+Added: As of December 31, 2024, the Company did not recognize any lifetime incremental cost associated with this modification, as it will not result in the issuance of incremental shares to participants.
Equity-based compensation expense
8 unchanged sentences
Total $ 34,774 $ 28,300 $ 30,345
−Removed: The tax benefit related to compensation expense was $ 3,797 , $ 1,933 , and $ 117 for the year ended December 31, 2023, 2022, and 2021.
−Removed: The Company leases certain office facilities and equipment under non-cancelable operating leases with remaining terms from less than one to four years , excluding the leases assumed from recent acquisitions.
−Removed: Operating lease ROU assets are included in other asset while finance lease ROU assets are included in property and equipment, net in the consolidated balance sheets.
+Added: The tax benefit related to compensation expense was $ 5,051 , $ 3,797 , and $ 1,933 for the years ended December 31, 2024, 2023, and 2022.
+Added: The Company leases certain office facilities and equipment under non-cancelable operating leases with remaining terms from less than one to ten years .
+Added: Operating lease ROU assets are included in other assets in the 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 consolidated balance sheets.
−Removed: Current finance lease liabilities are included in other current liabilities and other long-term liabilities in the consolidated balance sheets.
−Removed: The following table presents information about the operating and finance lease right-of-use assets and lease liabilities as well as lease term and discount rates:
+Added: The following table presents information about the operating lease right-of-use assets and lease liabilities as well as lease term and discount rates:
Lease right-of-use assets, lease liabilities, lease term and discount rate:
3 unchanged sentences
Operating leases $ 13,841 $ 9,604
−Removed: Financing leases — 24
$ 13,841 $ 9,604
1 unchanged sentence
Operating leases $ 5,306 $ 4,375
−Removed: Financing leases — 25
Operating leases 11,166 6,955
−Removed: Financing leases — —
$ 16,472 $ 11,330
−Removed: T able of Contents
For the year ended
3 unchanged sentences
Operating leases 5.4 3.5
−Removed: Financing leases — 0.08
Weighted-average discount rate:
Operating leases 5.5 % 3.4 %
−Removed: Financing leases — % 6.19 %
The components of total lease cost were as follows:
7 unchanged sentences
Amortization of right-of-use assets — 46
−Removed: Interest on lease liabilities — 11
Total lease cost $ 5,683 $ 5,010
3 unchanged sentences
Cash paid for amounts included in the measurement of lease liabilities
−Removed: Operating cash flows from finance leases $ — $ 11
Operating cash flows from operating leases $ 4,684 $ 4,949
2 unchanged sentences
Right-of-use assets obtained through acquisition $ 2,052 $ 644
−Removed: T able of Contents
The following table summarizes by year the maturities of our minimum lease payments as of December 31, 2024.
1 unchanged sentence
Year ending December 31,
+Added: Thereafter 5,090
Total future lease payments 18,441
2 unchanged sentences
Lease abandonment
−Removed: In the third quarter of 2023, the Company recorded a lease abandonment expense of $ 1,602 and reduced its lease ROU assets for the same amount in connection with the evaluation of the Company's office space footprint.
−Removed: This expense is included within the general and administrative expenses in the Company's consolidated statements of operations and comprehensive loss.
+Added: During the years ended December 31, 2024 and 2023, the Company recorded lease abandonment expenses of $ 1,219 and $ 1,602 , respectively, and reduced its lease ROU assets for the same amount in connection with the evaluation of the Company's office space footprint.
+Added: These expenses are included within the general and administrative expenses in the Company's consolidated statements of operations and comprehensive income (loss).
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.
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The Company’s CODM allocates resources and assesses performance based upon financial information at the consolidated level.
−Removed: Since the Company operates in one operating segment, all required financial segment information can be found in the consolidated financial statements.
−Removed: T able of Contents
+Added: The accounting policies of the Company's single segment are the same as those described in the summary of significant accounting policies.
+Added: The inter-companies balances and transactions are eliminated.
+Added: As the Company operates and reports in a single reportable segment, the Company's CODM assesses performance for the segment and decides how to allocate resources based on net income that also is reported on the income statement as consolidated net income.
+Added: The measure of segment assets is reported on the balance sheet as total consolidated assets.
+Added: The CODM uses net income and other performance indicators to evaluate income generated from segment assets (return on assets) in deciding whether to reinvest profits into the segment or into other parts of the entity, such as for acquisitions.
+Added: Net income is also used to monitor budget versus actual results.
+Added: The Company manages the business activities on a consolidated basis.
+Added: The Company's operating segment provides technology-enabled services and software products to its customers.
+Added: The Company’s revenue consists of fees for its software products and services.
+Added: The revenue is primarily generated from Americas.
+Added: See item (q) - Revenue recognition under Note 2.
+Added: “Summary of Significant Accounting Policies", for a description of the Company’s revenue categories.
The following table summarizes revenue by geographic area:
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(1) Revenue is attributable to the countries based on the location of the customer
−Removed: The following table summarizes property, plant and equipment, net by geographic area as of December 31, 2023 and 2022:
+Added: Long-lived assets, defined as the net ROU assets and net Property, Plant, and Equipment, excluding goodwill and net intangible assets, by geographic area as of December 31, 2024 and 2023 are presented as follows:
(In thousands)
−Removed: Property, plant and equipment, net:
+Added: Long-Lived Assets, net:
Americas $ 9,546 $ 6,858
+Added: EMEA 5,605 3,802
Asia Pac 857 1,614
Total $ 16,008 $ 12,274
+Added: The following table presents information about reported segment revenue, segment profit or loss, and significant segment expenses.
+Added: YEAR ENDED DECEMBER 31,
+Added: 2024 2023 2022
+Added: (In thousands)
+Added: Revenues $ 385,148 $ 354,337 $ 335,644
+Added: Employee expense-non equity 221,379 187,035 170,324
+Added: Equity-based compensation expense 34,774 28,300 30,345
+Added: Equipment and software expense 13,990 11,528 9,476
+Added: Direct cost of revenues 5,310 4,399 4,242
+Added: Professional services expense 25,216 27,192 24,718
+Added: Change in fair value of contingent consideration 8,089 24,118 —
+Added: Intangible asset amortization 66,039 54,519 50,739
+Added: Depreciation expense 1,994 1,552 1,731
+Added: Goodwill impairment expense — 46,984 —
+Added: Other segment expense(a) 4,021 937 7,541
+Added: Interest expense 21,520 22,916 17,773
+Added: Income tax expense ( 5,133 ) 214 4,024
+Added: Segment net income $ ( 12,051 ) $ ( 55,357 ) $ 14,731
+Added: Reconciliation of profit or loss
+Added: Adjustments and reconciling items $ — $ — $ —
+Added: Consolidated net income $ ( 12,051 ) $ ( 55,357 ) $ 14,731
+Added: (a) Other segment expense items included in segment net income include facilities related expense, marketing, travel, insurance, foreign currency exchange gains and losses, and other overhead expense.
The components of income (loss) before income taxes were as follows:
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Total $ ( 17,184 ) $ ( 55,143 ) $ 18,755
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The components of provision for (benefit from) income taxes were as follows:
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Equity compensation 2,738 ( 15.91 ) % 1,582 ( 2.87 ) % 2,278 12.15 %
−Removed: GILTI inclusion 2,374 ( 4.30 ) % 451 2.41 % 540 ( 16.00 ) %
+Added: GIL TI inclusion 1,442 ( 8.38 ) % 2,374 ( 4.30 ) % 451 2.41 %
Tax credits ( 7,969 ) 46.34 % ( 10,031 ) 18.19 % ( 6,427 ) ( 34.27 ) %
4 unchanged sentences
Effective tax rate $ ( 5,133 ) 29.87 % $ 214 ( 0.39 ) % $ 4,024 21.46 %
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The tax effects of temporary differences that give rise to deferred tax assets and liabilities are summarized as follows:
22 unchanged sentences
Right-of-use (ROU) Asset ( 2,643 ) ( 1,847 )
+Added: Other liabilities ( 226 ) —
Total gross deferred tax liability ( 73,248 ) ( 76,431 )
Net deferred tax liability $ ( 36,459 ) $ ( 46,590 )
−Removed: The net change in the total valuation allowance resulted in an increase of $ 5,768 in 2023 compared to an increase of $ 7,497 in 2022.
+Added: The net change in the total valuation allowance resulted in a decrease of $ 7,477 in 2024 compared to an increase of $ 5,768 in 2023.
The valuation allowance is determined separately for each jurisdiction.
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Management believes it is more likely than not that the Company will realize the benefits of the deferred tax assets, net of the existing valuation allowance, at December 31, 2024.
−Removed: At December 31, 2023, the Company has net operating loss carryforwards for federal income tax purposes of approximately $ 1,626 majority of which will expire if unused in years 2035 through 2036.
−Removed: The Company has net operating loss carryforwards for state income tax purposes of approximately $ 43 , which will expire if
−Removed: T able of Contents
−Removed: unused in years 2029 through 2040.
−Removed: The Company has foreign net operating loss carryforwards of $ 81,616 which will expire if unused starting in 2024.
+Added: At December 31, 2024, the Company had net operating loss carryforwards for federal income tax purposes of approximately $ 6,154 majority of which will expire if unused in years 2035 through 2036.
+Added: The Company had net operating loss carryforwards for state income tax purposes of approximately $ 4,852 , which will expire if unused in years 2029 through 2040.
+Added: The Company had foreign net operating loss carryforwards of $ 78,623 which will expire if unused starting in 2025.
The Company has $ 336 of federal research and development credits that will expire if unused in years 2027 through 2048 and $ 292 of foreign research and development credits that will expire if unused by 2029.
−Removed: The Company has foreign tax credits of $ 13,866 that will expire if unused in years 2027 through 2033, and also Canadian investment tax credits of $ 3,872 which will expire if unused in years 2031 through 2041.
−Removed: The Company has net operating losses and tax credits that are subject to limitation under Internal Revenue Code Section 382 and Section 383 due to changes in ownership.
−Removed: The Company has analyzed the realizability of these tax attributes carried forward and have recorded deferred tax assets for the attributes that meet the more-likely-than-not realizability threshold.
+Added: The Company has foreign tax credits of $ 10,977 that will expire if unused in years 2027 through 2034.
+Added: and also Canadian investment tax credits of $ 3,877 which will expire if unused in years 2032 through 2042.
+Added: The Company had net operating losses and tax credits that are subject to limitation under Internal Revenue Code Section 382 and Section 383 due to changes in ownership.
+Added: The Company has analyzed the realizability of these tax attributes carried forward and has recorded deferred tax assets for the attributes that meet the more-likely-than-not realizability threshold.
Foreign undistributed earnings were considered permanently invested, therefore no provision for US income taxes was accrued as of December 31, 2024 and 2023, with the exception of the withholding tax liability of $ 168 on the potential repatriation from Certara Canada Corporation.
The Company assessed its uncertain tax positions and determined that a liability of $ 7,411 and $ 2,708 was required to be recorded for uncertain tax positions as of December 31, 2024 and 2023, respectively.
−Removed: Uncertain tax positions relate primarily to federal and state R&D credits and certain foreign tax assessments.
+Added: Uncertain tax positions relate primarily to federal and state R&D credits and certain net operating losses.
The Company's policy is to recognize interest and penalties as a component of the provision for income taxes.
−Removed: For December 31, 2023 and 2022, the Company recognized interest of $ 0.1 million and $ 0.1 million, respectively and no penalties.
−Removed: For December 31, 2022 the Company recognized neither interest or penalties.
+Added: For each years ended December 31, 2024 and 2023, the Company recognized interest of $ 0.1 million and $ 0.1 million, respectively and no penalties.
The Company does not anticipate any significant changes to its uncertain tax positions during the next twelve months.
4 unchanged sentences
Additions for tax positions of prior years 17
+Added: Reductions for tax positions of prior years ( 436 )
Balance at December 31, 2023 $ 2,708
2 unchanged sentences
Reductions for tax positions of prior years ( 14 )
+Added: Reductions related to settlements with taxing authorities ( 1,104 )
Balance at December 31, 2024 $ 7,411
3 unchanged sentences
State income tax returns are generally subject to examination for a period of three to six years after the filing of the respective return.
−Removed: The state impact of any federal changes remains subject to examination by various states for a period of up to one year after formal notification to the states.
+Added: The state impact of any federal changes remains subject to
+Added: examination by various states for a period of up to one year after formal notification to the states.
Foreign income tax returns are generally subject to examination based on the tax laws of the respective jurisdictions.
The Company is subject to tax on Global Intangible Low-Taxed Income (GILTI) and has elected to account for GILTI as a current period expense.
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−Removed: The Organization for Economic Co-operation and Development (“OECD”), which represents a coalition of member countries, has recommended changes to numerous longstanding tax principles.
−Removed: Changes include imposing a global minimum corporation tax of 15% and introducing new filing obligations.
−Removed: These changes are being adopted and implemented by many of the countries in which we do business.
−Removed: Specifically, in December 2022, the EU adopted a directive issued by the European Commission requiring EU members to implement the OECD's global minimum tax rules in part by January 1, 2024 and fully by January 1, 2025.
−Removed: The Company does not expect to be subject to the global minimum corporation tax.
+Added: The Organization for Economic Co-operation and Development (“OECD”) introduced Base Erosion and Profit Shifting (“BEPS”) Pillar 2 rules that impose a global minimum tax rate of 15%.
+Added: Numerous countries, including European Union member states, have enacted or are expected to enact legislation to be effective as early as January 1, 2024, with general implementation of a global minimum tax by January 1, 2025.
+Added: The Company does not expect this new rule to apply until the Company meets the minimum global revenue threshold.
Earnings per Share
14 unchanged sentences
__________________________________
−Removed: (1) For the year ended December 31, 2023 and 2021, the Company excluded the restricted stock, RSUs, and PSUs 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.
+Added: (1) For the years ended December 31, 2024 and 2023, the Company excluded the restricted stock, RSUs, and PSUs 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.
(2) For the year ended December 31, 2022 , the Company excluded certain potentially dilutive securities attributable to outstanding RSUs and restricted stock from the computation of diluted earnings per share because the securities would have had an antidilutive effect.
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Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.
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.