What changed in this filing

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Item 1. Financial Statements

2025-05-05 compared with 2024-11-06 · 171 added, 226 removed, 477 unchanged (45% of the section changed)

3 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

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

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

2025 DECEMBER 31,

31 unchanged sentences

Stockholders' equity

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

Common shares, $ 0.01 par value, 600,000,000 shares authorized, 161,791,989 and 160,284,901 shares issued, 160,900,211 and 159,848,286 shares outstanding as of September 30, 2024 and December 31, 2023, respectively

Preferred shares, $ 0.01 par value, 50,000,000 shares authorized, no shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively

Common shares, $ 0.01 par value, 600,000,000 shares authorized, 162,426,898 and 161,958,810 shares issued, 161,475,707 and 161,009,112 shares outstanding as of March 31, 2025 and December 31, 2024, respectively

Additional paid-in capital 1,229,660 1,216,925

1 unchanged sentence

Accumulated other comprehensive loss ( 5,268 ) ( 13,424 )

Treasury stock at cost, 891,778 and 436,615 shares at September 30, 2024 and December 31, 2023, respectively

Treasury stock at cost, 951,191 and 949,698 shares at March 31, 2025 and December 31, 2024, respectively

( 18,200 ) ( 18,184 )

6 unchanged sentences

AND COMPREHENSIVE INCOME (LOSS)

THREE MONTHS ENDED SEPTEMBER 30, NINE MONTHS ENDED SEPTEMBER 30,

THREE MONTHS ENDED MARCH 31,

(IN THOUSANDS, EXCEPT PER SHARE AND SHARE DATA) 2025 2024

7 unchanged sentences

Depreciation and amortization expense 873 432

Goodwill impairment expense — 46,984 — 46,984

Total operating expenses 56,860 58,686

4 unchanged sentences

Total other expenses ( 3,081 ) ( 4,147 )

Loss before income taxes ( 1,661 ) ( 53,609 ) ( 19,364 ) ( 42,759 )

Provision (benefit) for income taxes ( 290 ) ( 4,644 ) ( 736 ) 142

Net loss ( 1,371 ) ( 48,965 ) ( 18,628 ) ( 42,901 )

Income (loss) before income taxes 4,542 ( 5,434 )

Benefit for income taxes ( 201 ) ( 751 )

Net income (loss) 4,743 ( 4,683 )

Other comprehensive income (loss):

Foreign currency translation adjustment, net of tax of $( 110 ) and $ 60 , respectively

5,700 ( 4,658 ) 4,992 ( 242 )

Change in fair value from interest rate swap, net of tax of $( 208 ) and $ 186 respectively

( 2,385 ) 117 ( 2,412 ) 758

Total other comprehensive income (loss) 3,315 ( 4,541 ) 2,580 516

Total other comprehensive income 8,156 557

Comprehensive income (loss) $ 12,899 $ ( 4,126 )

17 unchanged sentences

SHARES AMOUNT SHARES AMOUNT

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

Balance as of December 31, 2024 161,958,810 $ 1,620 $ 1,216,925 $ ( 128,281 ) $ ( 13,424 ) ( 949,698 ) $ ( 18,184 ) $ 1,058,656

Equity-based compensation expense, net of forfeiture — — 7,070 — — — — 7,070

1 unchanged sentence

Common shares issued for employee share-based compensation 12,744 — — — — — — —

Common shares issued for contingent consideration 455,344 5 5,665 — — — — 5,670

Change in fair value from interest rate swap, net of tax — — — — ( 586 ) — — ( 586 )

Net loss — 0 — — ( 1,371 ) — — — ( 1,371 )

Net income — — — 4,743 — — — 4,743

Foreign currency translation adjustment, net of tax — — — — 8,742 — — 8,742

Balance as of September 30, 2024 161,791,989 0 $ 1,618 $ 1,209,196 $ ( 134,858 ) $ ( 5,013 ) ( 891,778 ) $ ( 17,538 ) $ 1,053,405

Balance as of March 31, 2025 162,426,898 $ 1,625 $ 1,229,660 $ ( 123,538 ) $ ( 5,268 ) ( 951,191 ) $ ( 18,200 ) $ 1,084,279

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

2 unchanged sentences

Common shares issued for employee share-based compensation 188,293 2 ( 2 ) — — — — —

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

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

2 unchanged sentences

Foreign currency translation adjustment, net of tax — — — — ( 7 ) — — ( 7 )

Balance as of September 30, 2024 161,791,989 $ 1,618 $ 1,209,196 $ ( 134,858 ) $ ( 5,013 ) ( 891,778 ) $ ( 17,538 ) $ 1,053,405

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

CERTARA, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(IN THOUSANDS,

EXCEPT SHARE DATA) COMMON STOCK ADDITIONAL

CAPITAL ACCUMULATED

DEFICIT ACCUMULATED

COMPREHENSIVE

LOSS TREASURY STOCK TOTAL

STOCKHOLDERS'

SHARES AMOUNT SHARES AMOUNT

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

Equity-based compensation expense, net of forfeiture — — 8,645 — — — 8,645

Common shares issued for share-based compensation awards and shares withheld for tax 119,101 1 ( 2 ) — — ( 36,944 ) ( 561 ) ( 562 )

Restricted stock forfeiture ( 10,675 ) — — — — — — —

Change in fair value from interest rate swap, net of tax — — — 117 — — 117

Net loss — — — ( 48,965 ) — — — ( 48,965 )

Foreign currency translation adjustment, net of tax — — — — ( 4,658 ) — — ( 4,658 )

Balance as of September 30, 2023 160,279,919 $ 1,602 $ 1,170,960 $ ( 103,774 ) $ ( 7,714 ) ( 431,153 ) $ ( 9,323 ) $ 1,051,751

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

Equity-based compensation awards — — 20,798 — — — — 20,798

Common shares issued for share-based compensation awards and shares withheld for tax 805,607 8 ( 8 ) — — ( 280,946 ) ( 6,323 ) ( 6,323 )

Restricted stock forfeiture ( 201,838 ) ( 2 ) 2 — — — — —

Change in fair value from interest rate swap, net of tax — — — — 758 — — 758

Net loss — — — ( 42,901 ) — — ( 42,901 )

Foreign currency translation adjustment — — — — ( 242 ) — — ( 242 )

Balance as of September 30, 2023 160,279,919 $ 1,602 $ 1,170,960 $ ( 103,774 ) $ ( 7,714 ) ( 431,153 ) $ ( 9,323 ) $ 1,051,751

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

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

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

NINE MONTHS ENDED SEPTEMBER 30,

THREE MONTHS ENDED MARCH 31,

(IN THOUSANDS) 2025 2024

Cash flows from operating activities:

Net loss $ ( 18,628 ) $ ( 42,901 )

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

Net income (loss) $ 4,743 $ ( 4,683 )

Adjustments to reconcile net income (loss ) to net cash provided by operating activities:

Depreciation and amortization of property and equipment 873 432

1 unchanged sentence

Amortization of debt issuance costs 144 380

(Recovery of) provision for credit losses 393 52

Provision for credit losses 322 59

Equity-based compensation expense 7,070 9,073

12 unchanged sentences

Capitalized software development costs ( 5,174 ) ( 2,959 )

Investment in intangible assets — ( 54 )

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

Net cash used in investing activities ( 5,774 ) ( 3,578 )

Cash flows from financing activities:

Proceeds from borrowings on term loan debt 6,305 —

Payment of debt issuance costs ( 1,216 ) —

Payments on long-term debt and finance lease obligations ( 1,505 ) ( 2,290 )

Payments on long-term debt ( 750 ) ( 755 )

Payments for business acquisition related contingent consideration ( 13,230 ) ( 8,649 )

1 unchanged sentence

Net cash used in financing activities ( 13,996 ) ( 10,347 )

Effect of foreign exchange rate on cash and cash equivalents, and restricted cash 1,887 ( 107 )

Net increase (decrease) in cash and cash equivalents, and restricted cash ( 1,928 ) 32,624

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

Cash and cash equivalents, and restricted cash, at end of period $ 233,023 $ 272,312

Effect of foreign exchange rate on cash and cash equivalents 2,321 ( 546 )

Net decrease in cash and cash equivalents, and restricted cash ( 97 ) ( 10,175 )

Cash and cash equivalents at beginning of period 179,183 234,951

Cash and cash equivalents at end of period $ 179,086 $ 224,776

Supplemental disclosures of cash flow information

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

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

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

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

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

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

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

Summary of Significant Accounting Policies

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(b) Unaudited Interim Financial Statements

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

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

The accompanying condensed consolidated balance sheet as of March 31, 2025, the condensed consolidated statements of operations and comprehensive income (loss) for the three months ended March 31, 2025 and

2024, the condensed consolidated statements of stockholders’ equity for the three months ended March 31, 2025 and 2024, the condensed consolidated statements of cash flows for the three months ended March 31, 2025 and 2024, and the related interim disclosures are unaudited.

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

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

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

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

Early adoption is permitted.

Upon adoption, the guidance should be applied retrospectively to all prior periods presented in the financial statements.

The Company is currently evaluating the impact of this ASU on the disclosures in our consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740):

Improvements to Income Tax Disclosures".

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.

In December 2023, the Financial Accounting Standards Board “FASB”) issued Accounting Standards Update (“ASU”) 2023-09, “Income Taxes (Topic 740):

Improvements to Income Tax Disclosures.” 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.

The ASU will be effective for public business entities for annual periods beginning after December 15, 2024.

Early adoption is permitted.

The Company is currently evaluating the impact of this ASU on the disclosures in our consolidated financial statements.

The Company is currently evaluating the impact of the ASU on the disclosures within our consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses.

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.

ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027.

Early adoption is permitted.

In January 2025, the FASB also issued ASU 2025-01 to clarify the effective date.

The Company is currently evaluating the impact of the ASU on the disclosures within its consolidated financial statements.

(d) Principles of Consolidation

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

The following table sets forth the assets and liabilities that were measured at fair value on a recurring and non-recurring basis by their levels in the fair value hierarchy at September 30, 2024:

The following table sets forth the assets and liabilities that were measured at fair value on a recurring and non-recurring basis by their levels in the fair value hierarchy at March 31, 2025:

LEVEL 1 LEVEL 2 LEVEL 3 TOTAL

13 unchanged sentences

Total liabilities $ — $ — $ 43,939 $ 43,939

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

For the three month period ended March 31, 2025, there were no transfers between the levels within the fair value hierarchy.

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

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

SEPTEMBER 30, 2024

MARCH 31, 2025

(In thousands)

2 unchanged sentences

Fair value remeasurement ( 179 )

Ending balance at September 30, 2024

Ending balance at March 31, 2025

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

2 unchanged sentences

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

The cash and cash equivalents was $ 233,023 and $ 234,951 at September 30, 2024 and December 31, 2023, respectively.

The cash and cash equivalents was $ 179,086 and $ 179,183 at March 31, 2025 and December 31, 2024, respectively.

(g) Accounts Receivable

6 unchanged sentences

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

Allowances for credit losses of $ 1,556 and $ 1,312 were provided in the accompanying condensed consolidated financial statements as of September 30, 2024 and December 31, 2023, respectively.

Allowances for credit losses of $ 2,244 and $ 2,164 were provided in the accompanying condensed consolidated financial statements as of March 31, 2025 and December 31, 2024, respectively.

Accounts receivable consists of the following:

SEPTEMBER 30, 2024 DECEMBER 31,

MARCH 31, 2025 DECEMBER 31,

(In thousands)

5 unchanged sentences

The following table presents the information regarding the allowance for credit losses:

SEPTEMBER 30, 2024 DECEMBER 31,

MARCH 31, 2025 DECEMBER 31,

(In thousands)

2 unchanged sentences

Charge-offs, net of recoveries ( 242 ) ( 612 )

Ending balance $ 1,556 $ 1,312

Ending balance of allowances for credit losses $ 2,244 $ 2,164

(h) Derivative Instruments

15 unchanged sentences

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

At September 30, 2024 and December 31, 2023, the interest swap had a fair value of $ 2,424 and $ 5,624 , respectively.

The gross fair value recognized in accumulated other comprehensive income (loss) was $ 2,424 and $ 5,624 , respectively, at September 30, 2024 and December 31, 2023.

At March 31, 2025 and December 31, 2024, the interest swap had a fair value of $ 1,420 and $ 2,213 , respectively.

The gross fair value recognized in accumulated other comprehensive income (loss) was $ 1,420 and $ 2,213 , at March 31, 2025 and December 31, 2024, respectively.

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

2 unchanged sentences

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

The amount of derivative gains reclassified from accumulated other comprehensive income on derivative instruments recognized in the Company’s condensed consolidated statements of operations and comprehensive income (loss) was $ 1,529 , $ 1,489 , $ 4,580 , and $ 3,751 for the three and nine months ended September 30, 2024 and 2023, respectively.

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

The amount of derivative gains reclassified from accumulated other comprehensive income on derivative instruments recognized in the Company’s condensed consolidated statements of operations and comprehensive income (loss) was $ 942 and $ 1,525 for the three months ended March 31, 2025 and 2024, respectively.

The notional amounts, fair values, and classification of derivative instruments in the condensed consolidated balance sheets as of March 31, 2025 and December 31, 2024 were as follows:

Interest rate swap derivative designated as cash flow hedging instrument:

SEPTEMBER 30, 2024 DECEMBER 31,

MARCH 31, 2025 DECEMBER 31,

(In thousands)

1 unchanged sentence

Prepaid expenses and other current assets $ 1,420 $ 2,213

Other long-term assets $ — $ 1,151

The net amount of deferred gains related to derivative instruments designated as cash flow hedges that is expected to be reclassified from accumulated other comprehensive gains into earnings over the next twelve month s is $ 1,420 .

9 unchanged sentences

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.

Software Licenses Revenues

Consulting Service Revenues

The Company’s primary professional services offering includes consulting services, which may be either strategic consulting services, reporting and analysis services, regulatory writing services, or any combination of the three.

The Company’s professional services contracts are either time-and-materials or fixed fee.

Service revenues are generally recognized over time as the services are performed.

Generally, these services are delivered to customers electronically.

Revenue from time-and-material contracts is recognized on an output basis as labor hours are delivered and/or direct expenses are incurred.

Revenues for fixed-price services are generally recognized over time by applying input methods to estimate progress to completion.

Accordingly, the number of resources being paid for and the varying lengths of time they are being paid for determine the measure of progress.

Software Licenses

Software license revenue consists primarily of sales of software licenses downloaded and installed by our customers on their own hardware.

6 unchanged sentences

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

Software Service Revenues

Software Service

Maintenance services agreements on perpetual software consist of fees for providing software updates and for providing technical support for software products for a specified term.

4 unchanged sentences

Any unrecognized portion of amounts paid in advance for licenses and services is recorded as deferred revenue.

Consulting Service Revenues

The Company’s professional services contracts are either time-and-materials or fixed fee.

Service revenues are generally recognized over time as the services are performed.

Generally, these services are delivered to customers electronically.

Revenue from time-and-material contracts is recognized on an output basis as labor hours are delivered and/or direct expenses are incurred.

Revenues for fixed-price services are generally recognized over time by applying input methods to estimate progress to completion.

Accordingly, the number of resources being paid for and the varying lengths of time they are being paid for determine the measure of progress.

Arrangements with Multiple Performance Obligations

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

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

SEPTEMBER 30, 2024 DECEMBER 31,

Contract balances at March 31, 2025 and December 31, 2024 were as follows:

MARCH 31, 2025 DECEMBER 31,

2024 DECEMBER 31,

(In thousands)

1 unchanged sentence

Contract liabilities $ 73,312 $ 78,878 $ 61,748

During the nine months ended September 30, 2024, the Company recognized revenue of $ 55,782 related to contract liabilities at December 31, 2023.

The unsatisfied performance obligations as of September 30, 2024 were $ 123,447 .

During the three months ended March 31, 2025, the Company recognized revenue of $ 37,040 related to contract liabilities at December 31, 2024.

The unsatisfied performance obligations as of March 31, 2025 were $ 139,205 .

We expect to recognize approximately $ 115,330 or 82.8 % of this revenue over the next 12 months and the remainder thereafter.

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

Capitalized contract acquisition costs were $ 639 and $ 655 as of September 30, 2024 and December 31, 2023, respectively, and were included in prepaid expenses and other current assets in the condensed consolidated balance sheets.

Grant Revenue

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

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

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

Grant funding is generally provided near contract inception, so a contract liability is initially recorded and revenue is recognized as the performance obligations are satisfied over time.

Capitalized contract acquisition costs were $ 1,027 and $ 873 as of March 31, 2025 and December 31, 2024, respectively, and were included in prepaid expenses and other current assets in the condensed consolidated balance sheets.

Sources and Timing of Revenue

1 unchanged sentence

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

THREE MONTHS ENDED SEPTEMBER 30, NINE MONTHS ENDED SEPTEMBER 30,

2024 2023 2024 2023

THREE MONTHS ENDED MARCH 31,

(In thousands)

6 unchanged sentences

Diluted shares are calculated under the treasury stock method.

Diluted earnings per share is calculated by dividing the

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

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

Concentrations of Credit Risk

1 unchanged sentence

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

At September 30, 2024 and December 31, 2023, the investments were bank deposits, overnight sweep accounts, and money market funds.

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

At March 31, 2025 and December 31, 2024, the investments were bank deposits, overnight sweep accounts, and money market funds.

The Company has

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

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

As of September 30, 2024 and December 31, 2023, no single customer accounted for more than 10% of the Company’s accounts receivable.

No single customer accounted for more than 10% of the Company’s revenues during the nine months ended September 30, 2024 and 2023.

As of March 31, 2025 and December 31, 2024, no single customer accounted for more than 10% of the Company’s accounts receivable.

No single customer accounted for more than 10% of the Company’s revenues during the three months ended March 31, 2025 and 2024.

Business Combinations

1 unchanged sentence

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

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

Since 2013, and as of March 31, 2025, the Company has completed 21 acquisitions, of which 14 have included software or technology.

Details of acquisitions that have closed since the beginning of fiscal year 2024 are provided below.

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

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

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

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

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

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

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

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

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

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

Formedix Limited ("Formedix")

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

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

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

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

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

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

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

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

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

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

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

Applied BioMath, LLC ("ABM")

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

Chemaxon, Kft.("Chemaxon")

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, for total estimated consideration of $ 96,401 .

The acquisition strategically positions Certara in the drug discovery biosimulation market at scale.

It complements Certara’s existing biosimulation portfolio which is widely used in later phases of drug development.

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

Based on the Company’s purchase price allocation, approximately $ 4,600 , $ 800 , $ 13,700 , and $ 15,872 of the purchase price were assigned to developed technology, non-compete agreements, customer relationships, and goodwill, respectively.

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

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

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

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

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

During the nine months ended September 30, 2024, the Company made a payment of $ 4,730 on contingent consideration.

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

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

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

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

During the first quarter of 2025, the Company recorded a $ 2,947 adjustment to goodwill and deferred tax balances related to the Chemaxon acquisition, reflecting updates to the purchase price allocation.

Based on the Company’s purchase price allocation, approximately $ 36,000 , $ 11,000 , $ 2,900 , $ 330 and $ 49,430 of the purchase price were assigned to developed technology, customer relationship, trademark, non-compete agreements, and goodwill, respectively.

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

The current purchase price allocation for Chemaxon is preliminary.

The primary areas of the preliminary purchase price allocation that are not yet finalized relate to the value of deferred taxes and residual goodwill.

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

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

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 condensed consolidated financial statements with effect from the date of the acquisitions.

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

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

SEPTEMBER 30, 2024 DECEMBER 31,

Prepaid expense and other current assets at March 31, 2025 and December 31, 2024 consisted of the following:

MARCH 31, 2025 DECEMBER 31,

(In thousands)

5 unchanged sentences

Prepaid expenses and other current assets $ 27,651 $ 29,480

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

SEPTEMBER 30, 2024 DECEMBER 31,

Other long-term assets at March 31, 2025 and December 31, 2024 consisted of the following:

MARCH 31, 2025 DECEMBER 31,

(In thousands)

Long-term deposits $ 1,462 $ 1,457

Interest rate swap asset - long-term — 1,151

Deferred financing cost 551 574

2 unchanged sentences

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

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

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

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;

and (2) extended the termination date associated with 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.

6 unchanged sentences

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.

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

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 %.

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

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

The effective interest rate was 8.96 % and 8.67 % for the nine months ended September 30, 2024 and 2023 for the term loan debt.

As of each of March 31, 2025 and December 31, 2024, available borrowings under the revolving lines of credit were $ 100,000 .

The effective interest rate was 7.33 % and 9.24 % for the three months ended March 31, 2025 and 2024, respectively, for the term loan debt.

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

Interest incurred on the Credit Agreement with respect to the term loan amounted to $ 6,366 , $ 6,844 , $ 19,900 , and $ 19,283 for the three and nine months ended September 30, 2024 and 2023, respectively.

Accrued interest payable on the Credit Agreement with respect to the term loan amounted to $ 65 and $ 2,400 at September 30, 2024 and December 31, 2023, respectively, and is included in accrued expenses.

Interest incurred on the Credit Agreement with respect to the revolving line of credit was $ 81 , $ 65 , $ 207 , and $ 193 for the three and nine months ended September 30, 2024 and 2023, respectively.

There was $ 1 and $ 2 accrued interest payable on the revolving line of credit September 30, 2024 and December 31, 2023.

Interest incurred on the Credit Agreement with respect to the term loan amounted to $ 5,470 and $ 6,798 for the three months ended March 31, 2025 and 2024, respectively.

Accrued interest payable on the Credit Agreement with respect to the term loan amounted to $ 60 and $ 61 at March 31, 2025 and December 31, 2024, respectively, and is included in accrued expenses.

Commitment fees incurred for the undrawn balance of the revolving line of credit was $ 94 and $ 63 for the three months ended March 31, 2025 and 2024, respectively.

There was $ 1 accrued interest payable on the revolving line of credit as of March 31, 2025 and December 31, 2024.

Long-term debt consists of the following:

SEPTEMBER 30, 2024 DECEMBER 31,

MARCH 31, 2025 DECEMBER 31,

(In thousands)

5 unchanged sentences

Long-term debt, net of current portion and debt issuance costs $ 291,798 $ 292,425

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

The principal amount of long-term debt outstanding as of March 31, 2025 matures in the following years:

Remainder of 2025 2026 2027 2028 2029 Thereafter TOTAL

8 unchanged sentences

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

At September 30, 2024, the weighted average remaining lease terms were 5.76 years for operating leases, and the weighted average discount rate was 5.54 % for operating leases.

At March 31, 2025, the weighted average remaining lease terms were 5.75 years for operating leases, and the weighted average discount rate was 5.57 % for operating leases.

For additional information on the Company's leases, see Note 13.

“Leases” to the consolidated financial statements included in the Company’s 2024 Annual Report.

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

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

The following table summarizes the lease-related assets and liabilities recorded in the condensed consolidated balance sheets at March 31, 2025 and December 31, 2024:

Lease Position Balance Sheet Classification MARCH 31, 2025 DECEMBER 31, 2024

(In thousands)

4 unchanged sentences

Total lease liabilities $ 14,370 $ 16,472

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

The following table summarizes by year the maturities of our minimum lease payments as of March 31, 2025:

(In thousands)

6 unchanged sentences

Accrued expenses consist of the following:

SEPTEMBER 30, 2024 DECEMBER 31,

MARCH 31, 2025 DECEMBER 31,

(In thousands)

7 unchanged sentences

Other long-term liabilities consist of the following:

SEPTEMBER 30, 2024 DECEMBER 31,

MARCH 31, 2025 DECEMBER 31,

(In thousands)

9 unchanged sentences

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

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

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

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

SHARES WEIGHTED-

Non-vested restricted stock as of December 31, 2024 157,486 $ 22.94

Granted* 16,842 17.35

Vested ( 23,762 ) 23.00

Forfeited — —

Cancelled* ( 16,842 ) 23.00

Non-vested restricted stock as of September 30, 2024 241,296 $ 23.41

Non-vested restricted stock as of March 31, 2025 133,724 $ 22.93

___________________________________

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

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

Equity-based compensation expenses related to the restricted stock exchanged for performance-based Class B Units were $ 173 , $ 333 , $ 579 , and $ 497 for the three and nine months ended September 30, 2024 and 2023, respectively.

At September 30, 2024, the total unrecognized equity-based compensation expense related to outstanding restricted stock recognized using the accelerated attribution approach was $ 249 , which is expected to be recognized over a weighted-average period of 10.2 months.

Equity-based compensation expenses related to the restricted stock exchanged for time-based Class B Units were $ 196 and $ 252 , $ 794 , and $ 1,062 for the three and nine months ended September 30, 2024 and 2023, respectively.

At September 30, 2024, the total unrecognized equity-based compensation expense related to outstanding restricted stock recognized using the straight-line attribution approach was $ 455 , which is expected to be recognized over a weighted-average period of 11 months.

Equity-based employee compensation expense related to the time-based restricted stock for the Pinnacle 21, LLC acquisition was $ 106 , $ 292 , $ 318 , and $ 877 for the three and nine months ended September 30, 2024 and 2023, respectively.

At September 30, 2024, there is no unrecognized equity-based compensation expenses related to outstanding restricted stock recognized using the straight-line attribution approach.

Equity-based compensation expenses related to the restricted stock exchanged for performance-based Class B Units were $ 66 and $ 250 for the three months ended March 31, 2025 and 2024, respectively.

At March 31, 2025, the total unrecognized equity-based compensation expense related to outstanding restricted stock recognized using the accelerated attribution approach was $ 94 , which is expected to be recognized over a weighted-average period of 5.5 months.

Equity-based compensation expenses related to the restricted stock exchanged for time-based Class B Units were $ 124 and $ 377 for the three months ended March 31, 2025 and 2024, respectively.

At March 31, 2025, the total unrecognized equity-based compensation expense related to outstanding restricted stock recognized using the straight-line attribution approach was $ 197 , which is expected to be recognized over a weighted-average period of 5.3 months.

2020 Incentive Plan

10 unchanged sentences

Non-vested RSUs as of December 31, 2024 3,204,589 $ 19.61

Granted* 2,252,411 17.84

Vested* ( 4,081 ) 21.08

Forfeited ( 93,840 ) 18.34

Cancelled* ( 42,098 ) 24.21

Non-vested RSUs as of September 30, 2024 3,408,009 $ 20.10

Non-vested RSUs as of March 31, 2025 3,106,668 $ 19.65

___________________________________

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

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

* The number of the RSUs vested included 1,493 shares that were withheld on behalf of employees to satisfy the statutory tax withholding requirements.

Equity-based compensation expenses related to the RSUs were $ 8,069 , $ 7,260 , $ 24,388 , and $ 19,397 for three and nine months ended September 30, 2024 and 2023, respectively.

At September 30, 2024, the total unrecognized equity-based compensation expense related to outstanding RSUs was $ 49,584 , which is expected to be recognized over a weighted-average period of 24.6 months.

Equity-based compensation expenses related to the RSUs were $ 6,733 and $ 7,705 for three months ended March 31, 2025 and 2024, respectively.

At March 31, 2025, the total unrecognized equity-based compensation expense related to outstanding RSUs was $ 32,634 , which is expected to be recognized over a weighted-average period of 20.8 months.

Performance Stock Units

3 unchanged sentences

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

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

A summary of the Company’s PSU activity for the period ended March 31, 2025 is as follows:

UNITS WEIGHTED-

Non-vested PSUs as of December 31, 2024 645,377 $ 20.95

Granted* 338,445 18.98

Vested** ( 30,728 ) 24.83

Forfeited — —

Cancelled* ( 201,138 ) 22.13

Non-vested PSUs as of September 30, 2024 743,092 $ 21.07

Non-vested PSUs as of March 31, 2025 444,239 $ 20.42

__________________________________

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

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

Equity-based compensation expenses related to the PSUs were $( 358 ), $ 506 , $ 964 , and $( 1,035 ) for the three and nine months ended at September 30, 2024 and 2023, respectively.

At September 30, 2024, the total unrecognized equity-based compensation expense related to outstanding PSUs was $ 1,335 , which is expected to be recognized over a weighted-average period of 15.7 months.

* During the first quarter of 2025, the Company cancelled 201,138 PSU shares that did not meet the required performance conditions for vesting.

Equity-based compensation expenses related to the PSUs were $ 148 and $ 636 for the three months ended March 31, 2025 and 2024, respectively.

At March 31, 2025, the total unrecognized equity-based compensation expense related to outstanding PSUs was $ 611 , which is expected to be recognized over a weighted-average period of 14.5 months.

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

THREE MONTHS ENDED SEPTEMBER 30, NINE MONTHS ENDED SEPTEMBER 30,

2024 2023 2024 2023

THREE MONTHS ENDED MARCH 31,

(In thousands)

6 unchanged sentences

Contingent consideration

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

The maximum contingent considerations related to revenue thread to be earned are $ 88,550 .

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

During the nine months ended September 30, 2024, the Company made a combined payment of $ 18,863 on the contingent consideration, consisting of $ 15,156 in cash and $ 3,707 in Company's stock.

The total contingent liabilities were $ 44,477 and $ 55,238 at September 30, 2024 and December 31, 2023, respectively.

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.

Furthermore, the Company agreed to pay additional contingent consideration related to a business acquisition, contingent on the resolution of certain tax-related contingencies.

For the three months ended March 31, 2025, the Company paid contingent consideration of $ 18,900 , consisting of $ 13,230 in cash and $ 5,670 in Company stock.

The total contingent liabilities were $ 25,405 and $ 44,468 at March 31, 2025 and December 31, 2024, respectively.

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

Legal proceedings

The Company does not have any pending or threatened litigation which, individually or in the aggregate, would have a material adverse effect on its condensed consolidated financial statements as of September 30, 2024.

Assurance-type warranty

3 unchanged sentences

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.

The Company has determined that its chief executive officer is its CODM.

The Company manages its operations as a single segment for the purposes of assessing and making operating decisions.

The Company has determined that its chief executive officer (“CEO”) is its CODM.

The Company manages its operations as a single segment for the purpose of assessing and making operating decisions.

The Company’s CODM allocates resources and assesses performance based upon financial information at the consolidated level.

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

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

THREE MONTHS ENDED

SEPTEMBER 30, NINE MONTHS ENDED

SEPTEMBER 30,

2024 2023 2024 2023

The accounting policies of the Company's single segment are the same as those described in the summary of significant accounting policies.

The inter-companies balances and transactions are eliminated.

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.

The measure of segment assets is reported on the balance sheet as total consolidated assets.

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.

Net income is also used to monitor budget versus actual results.

The Company manages the business activities on a consolidated basis.

The Company's operating segment provides technology-enabled services and software products to its customers.

The Company’s revenue consists of fees for its software products and services.

The revenue is primarily generated from Americas.

See item (i) - Revenue recognition under Note 2.

“Summary of Significant Accounting Policies", for a description of the Company’s revenue categories.

The following table summarizes revenue by geographic area for the three months ended March 31, 2025 and 2024:

THREE MONTHS ENDED MARCH 31,

(In thousands)

Americas $ 71,953 $ 69,165

4 unchanged sentences

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

The following table presents information about reported segment revenue, segment profit or loss, and significant segment expenses.

THREE MONTHS ENDED

(In thousands)

Revenues $ 106,004 $ 96,654

Employee expense-non equity 59,565 55,031

Equity-based compensation expense 7,070 9,073

Equipment and software expense 3,820 3,450

Direct cost of revenues 1,717 1,210

Professional services expense 7,303 6,654

Change in fair value of contingent consideration ( 179 ) 2,878

Intangible asset amortization 17,741 15,996

Depreciation expense 873 432

Other segment expense* ( 1,254 ) 1,613

Interest expense 4,806 5,751

Income tax benefit ( 201 ) ( 751 )

Segment net income $ 4,743 $ ( 4,683 )

Reconciliation of profit or loss

Adjustments and reconciling items — —

Consolidated net income $ 4,743 $ ( 4,683 )

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

2 unchanged sentences

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

The Company's global ETR for the three and nine months ended September 30, 2024 and 2023 were 17 % , 9 % , 4 % , and ( 0.3 )%, respectively, including discrete tax items.

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

The Company's global ETR for the three months ended March 31, 2025 and 2024 were ( 4 )% and 14 %, respectively, including discrete tax items.

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

Earnings per Share

1 unchanged sentence

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

THREE MONTHS ENDED SEPTEMBER 30, NINE MONTHS ENDED SEPTEMBER 30,

2024 2023 2024 2023

THREE MONTHS ENDED MARCH 31,

Net income (loss) available to common shareholders $ 4,743 $ ( 4,683 )

8 unchanged sentences

__________________________________

• For the period ended September 30, 2024 and 2023, the Company excluded potentially dilutive securities from the calculation of diluted earnings per share that could potentially dilute earnings per share in the future because of the anti-dilutive effect of the reported net loss.

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

Subsequent Event

On October 1, 2024, the Company completed the acquisition of Chemaxon, a leading provider of scientific informatics software products.

The total cash consideration paid for this acquisition is $ 90,000 .

The Company will finalize the initial accounting for the acquisition of Chemaxon, including the allocation of the purchase consideration, in the fourth quarter of 2024.

On April 14, 2025, the Company issued a press release announcing that its Board of Directors had approved a $ 100,000 thousand share repurchase program for its outstanding common shares.

On the same day, the Company also announced that Arsenal Capital Partners, its largest shareholder, had agreed to a one-year lock-up on the sale of shares acquired by Arsenal and affiliates from EQT, the Company's former parent, in a December 2022 transaction.

Repurchases of shares of the Company’s common stock may be conducted through open market purchases or privately negotiated transactions in compliance with Rule 10b-18 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), including through trading plans pursuant to Rule 10b5-1 under the Exchange Act.

The actual timing and amount of future repurchases are subject to business and market conditions, corporate and regulatory requirements, stock price, acquisition opportunities and other factors.

The stock repurchase program does not obligate the Company to acquire any particular amount of common stock, and the program may be suspended or terminated at any time by the Company at its discretion without prior notice.

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

What changed 10-Q

Item 1. Financial Statements