What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-02-26 compared with 2025-02-26 · 244 added, 235 removed, 994 unchanged (33% of the section changed)

27 unchanged sentences

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) related to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which it relates.

Revenue Recognition on the Company’s Fixed Price Contract Revenue

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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.

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 value of work incurred to date as a percentage of the total estimated value of work and utilizes assumptions for future value of work to complete the performance obligations, and those assumptions have significant estimation uncertainty.

A significant change in the assumptions could affect both the profitability of the contract and the amount of revenue and profit recognized in an accounting period.

2 unchanged sentences

• We obtained an understanding of the relevant controls related to the existence, accuracy and completeness of fixed price contract revenue and tested such controls for design and operating effectiveness, including management review controls.

• We evaluated the reasonableness of management estimates of cost recognition by comparing costs incurred under completed contracts to the costs estimated by management at the inception of the customer agreement.

• We evaluated the reasonableness of management’s process of estimating the total value of work associated with fixed price contracts by comparing the total value of work incurred under completed contracts to the total value of work estimated by management at the inception of the customer agreement.

• We selected a sample of customer contracts and performed the following procedures:

– We reviewed the terms in the customer contract and evaluated the appropriateness of management’s application of their accounting policies, along with their use of estimates, to determine the revenue recognition conclusions are reasonable.

– 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.

– 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.

– We reviewed the terms in the customer contract and evaluated the appropriateness of management’s accounting policy application along with their use of estimates, to determine the revenue recognition conclusions are reasonable.

– We evaluated management’s estimated budget for each selection and compared the actual value of work incurred to the amount recognized.

– 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 value of work expected at completion as well as attending certain regular operational meetings to observe discussions over progress and total estimated remaining value of work.

We also held discussions with certain project leads to confirm the budgeting process and assumptions used in developing the original budget and subsequent modifications.

Valuation of Certain Intangible Assets Related to the Acquisition of Chemaxon, Kft.

As described in Note 4 to the consolidated financial statements, in 2024 the Company completed the acquisition of Chemaxon, Kft.

(“Chemaxon”) for $96.4 million which resulted in $50.2 million of intangible assets being recorded.

Those intangible assets were primarily comprised of developed technology of $36.0 million and customer relationships of $11.0 million.

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.

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.

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.

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.

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:

• 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.

• 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:

– Evaluating the reasonableness of the discount rates.

– Testing the relevance and reliability of source information underlying the determination of the discount rates.

/s/ RSM US LLP

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We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the December 31, 2025 consolidated financial statements of the Company and our report dated February 26, 2026, expressed an unqualified opinion.

As described in Management’s Annual Report on Internal Controls over Financial Reporting, management has excluded Chemaxon, Kft.

(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.

We have also excluded Chemaxon from our audit of internal control over financial reporting.

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

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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;

the company are being made only in accordance with authorizations of management and directors of the company;

(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;

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.

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.

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

15 unchanged sentences

Goodwill 773,311 757,038

Intangible assets, net of $ 338,809 and $ 273,522 , respectively

Intangible assets, net of accumulated amortization of $ 415,804 and $ 338,809 , respectively

447,476 485,214

24 unchanged sentences

Accumulated deficit ( 129,876 ) ( 128,281 )

Accumulated other comprehensive loss ( 13,424 ) ( 7,593 )

Accumulated other comprehensive income(loss) 2,040 ( 13,424 )

Treasury stock at cost, 4,865,888 and 949,698 shares at December 31, 2025 and 2024, respectively

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General and administrative 85,380 94,221 95,385

Intangible asset amortization 51,599 43,973 41,429

Depreciation and amortization expense 1,994 1,552 1,731

Depreciation and amortization 56,556 53,593 45,525

Goodwill impairment expense — — 46,984

3 unchanged sentences

Interest expense ( 19,738 ) ( 21,520 ) ( 22,916 )

Net other income (expense) 6,067 8,547 4,007

Net other income 6,338 6,067 8,547

Total other expenses ( 13,400 ) ( 15,453 ) ( 14,369 )

Income (loss) before income taxes 7,616 ( 17,184 ) ( 55,143 )

(Benefit) Provision for income taxes ( 5,133 ) 214 4,024

Net income (loss) ( 12,051 ) ( 55,357 ) 14,731

Provision (benefit) for income taxes 9,211 ( 5,133 ) 214

Net loss ( 1,595 ) ( 12,051 ) ( 55,357 )

Other comprehensive income (loss)

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COMPREHENSIVE

LOSS TREASURY STOCK TOTAL

INCOME(LOSS) TREASURY STOCK TOTAL

STOCKHOLDER’S

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Change in fair value from interest rate swap, net of tax — — — — ( 2,059 ) — — ( 2,059 )

Net income — — — 14,731 — — — 14,731

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 ) — — — — —

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 )

6 unchanged sentences

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

Common shares repurchased — — — — — ( 3,368,374 ) ( 43,036 ) ( 43,036 )

Change in fair value from interest rate swap, net of tax — — — — ( 3,396 ) — — ( 3,396 )

9 unchanged sentences

Cash flows from operating activities:

Net income (loss) $ ( 12,051 ) $ ( 55,357 ) $ 14,731

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

Depreciation and amortization of property and equipment 1,994 1,552 1,731

Amortization of intangible assets 66,039 54,519 50,739

Net loss $ ( 1,595 ) $ ( 12,051 ) $ ( 55,357 )

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

Depreciation and amortization 75,162 68,033 56,071

Amortization of debt issuance costs 568 1,035 1,527

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Cash flows from financing activities:

Common stock repurchase program ( 42,610 ) — —

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 ( 2,255 ) ( 3,045 ) ( 3,313 )

Payments on long-term debt obligations ( 2,991 ) ( 2,255 ) ( 3,045 )

Payments for business acquisition related contingent consideration ( 13,230 ) ( 15,156 ) —

Payments on financing component of interest rate swap — — ( 1,088 )

Payment of taxes on shares and units withheld for employee taxes ( 5,155 ) ( 8,688 ) ( 6,402 )

Net cash used in financing activities ( 63,986 ) ( 21,010 ) ( 9,447 )

Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash ( 2,856 ) 1,505 ( 4,279 )

Net increase (decrease) in cash, cash equivalents, and restricted cash ( 55,768 ) ( 4,737 ) 53,064

Cash, cash equivalents, and restricted cash, at beginning of year 234,951 239,688 186,624

Cash, cash equivalents, and restricted cash, at end of year $ 179,183 $ 234,951 $ 239,688

Effect of foreign exchange rate changes on cash and cash equivalents 4,426 ( 2,856 ) 1,505

Net increase (decrease) in cash, cash equivalents 10,209 ( 55,768 ) ( 4,737 )

Cash and cash equivalents at beginning of year 179,183 234,951 239,688

Cash and cash equivalents at end of year $ 189,392 $ 179,183 $ 234,951

Supplemental disclosures of cash flow information

3 unchanged sentences

Contingent liabilities established in connection with business acquisition $ — $ — $ 11,308

Stock issuance related to business acquisition contingent consideration $ 3,707 $ — $ —

Stock issuance or establish liabilities related to business acquisition contingent consideration $ 5,670 $ 3,707 $ —

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

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(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):

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

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

Early adoption is permitted.

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

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):

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 the ASU on the disclosures within our consolidated financial statements.

The ASU requires disclosure of specific categories in the rate reconciliation and provides additional information for reconciling items that meet a quantitative threshold and further disaggregation of income taxes paid for individually significant jurisdictions.

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

The Company adopted ASU 2023-09 prospectively for the period ending December 31, 2025.

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.

This ASU seeks to improve 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.

In July 2025, the FASB issued ASU 2025-05, Financial Instruments-Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets.

The ASU provides a practical expedient related to the estimation of expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under ASC 606.

In developing reasonable and supportable forecasts as part of estimating expected credit losses, all entities may elect a practical expedient that assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset.

The ASU will be effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods.

Early adoption is permitted.

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

In September 2025, the FASB issued ASU 2025-06, Intangibles-Goodwill and Other - Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software.

The ASU removes all references to prescriptive and sequential software development stages and clarifies that the threshold for when an entity is required to start capitalizing software costs is when (1) management has authorized and committed to funding the software project and (2) it is probable that the project will be completed and the software will be used to perform the function intended.

The amendments in this ASU are effective for all entities for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods.

Early adoption is permitted as of the beginning of an annual reporting period.

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

In November 2025, the FASB issued ASU 2025-09, Derivatives and Hedging (Topic 815) - Hedge Accounting Improvements, which amends certain aspects of the hedge accounting guidance in ASC 815.

The ASU enables entities to apply hedge accounting to a greater number of highly effective economic hedges in the following five areas:

similar risk assessment for cash flow hedges, hedging forecasted interest payments on choose-your-rate debt instruments, cash flow hedges of nonfinancial forecasted transactions, net written options as hedging instruments, and foreign-currency-denominated debt instrument as hedging instrument and hedged item(dual hedge).

The amendments in this ASU are effective for public business entities for annual reporting periods beginning after December 15, 2026, and interim periods within those annual reporting periods.

Early adoption is permitted.

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

In December 2025, the FASB issued ASU 2025-10, Government Grants (Topic 832):

Accounting for Government Grants Received by Business Entities, which provides recognition, measurement, and presentation guidance for government grants received by business entities.

The ASU applies to all business entities except for not-for-profit entities and employee benefit plans that receive a government grant.

This ASU is effective for public business entities for annual periods beginning after December 15, 2028, and interim periods within those annual periods.

Early adoption is permitted.

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

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270):

Narrow-Scope Improvement.

This ASU clarifies that the guidance in Topic 270 applies to all entities that provide interim financial statements and notes in accordance with GAAP.

It also establishes a comprehensive list in Topic 270 of interim disclosures that are required in interim financial statements and notes in accordance with GAAP, incorporates a disclosure principle, and improves guidance about information included in and the format of interim financial statements.

This ASU does not change the fundamental nature of interim reporting or expand or reduce current interim disclosure requirements.

The ASU is effective for public business entities for interim periods within annual periods beginning after December 15, 2027.

Early adoption is permitted.

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

19 unchanged sentences

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

The Company's estimates of fair value are based upon assumptions believed to be reasonable but which are

uncertain and involve significant judgments by management.

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

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

1 unchanged sentence

Significant inputs used in the fair value measurement of contingent consideration include:

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.

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 for the acquisitions of Vyasa Analytics, LLC (“Vyasa”).

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

LEVEL 1 LEVEL 2 LEVEL 3 TOTAL

(In thousands)

Money market funds

Interest rate swap assets — 2,213 — 2,213

Total assets $ 79,167 $ 2,213 $ — $ 81,380

Contingent liabilities

Interest rate swap liabilities —

Total liabilities

The following table sets forth the assets that were measured at fair value on a recurring and non-recurring basis by their levels in the fair value hierarchy at December 31, 2024:

LEVEL 1 LEVEL 2 LEVEL 3 TOTAL

(In thousands)

1 unchanged sentence

Interest rate swap assets

Total assets $ 147,478 $ 5,624 $ — $ 153,102

Contingent liabilities

Total liabilities

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

For the year ended December 31, 2025, there were no transfers between the levels within the fair value hierarchy.

The Company’s Level 3 liabilities that were measured at fair value on a recurring basis are acquisition related contingent consideration liabilities.

3 unchanged sentences

Beginning balance at December 31, 2024

Payments ( 18,863 )

Change in fair value

2 unchanged sentences

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

At times, cash balances held at financial institutions were in excess of the Federal Deposit Insurance Corporation’s (“FDIC”) insured limits;

At times, cash balances held at financial institutions were in excess of the Federal Deposit Insurance Corporation’s insured limits;

however, the Company primarily places its temporary cash with high-credit quality financial institutions.

The Company has never experienced losses related to these balances and believes it is not exposed to any significant credit risk on cash.

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:

As of December 31, 2025 and 2024, the carrying values reflected in the consolidated balance sheets reasonably approximated 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 reported within the consolidated balance sheets to the amounts presented in the consolidated statements of cash flows:

(In thousands)

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

Allowances for credit losses of $ 2,164 and $ 1,312 , respectively, were provided in the accompanying consolidated financial statements as of December 31, 2024 and 2023, respectively.

Allowances for credit losses of $ 2,235 and $ 2,164 , were provided in the accompanying consolidated financial statements as of December 31, 2025 and 2024, respectively.

(In thousands)

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The Company determines if a contract contains a lease at contract inception and whether its classification as either an operating or finance lease at lease commencement.

The Company’s current portfolio includes operating leases of real estate and capital leases of equipment.

The Company’s current portfolio includes operating leases of real estate.

The Company records a lease liability, as of the lease commencement date, in an amount equal to the present value of future fixed payments over the lease term.

3 unchanged sentences

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.

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.

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.

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.

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).

For the year ended December 31, 2024, the Company recorded lease abandonment expense of $ 1,219 and reduced the lease ROU assets for the same amount in connection with the evaluation of the Company's office space footprint.

For the year ended December 31, 2025, the Company

recorded a net lease abandonment gain of $ 830 , net of the associated termination fee, and derecognized the related lease liabilities in connection with the termination of a lease contract.

The abandonment gain and expense are included within the general and administrative expenses in the Company's consolidated statements of operations and comprehensive income (loss).

(i ) Software Development Costs

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(k) Goodwill and Other Intangible Assets

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.

As of December 31, 2025, 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.

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The decline in the fair value of the regulatory writing reporting unit was driven by revised revenue growth and profitability forecasts resulting from certain reductions in our financial planning assumptions.

For the years ended December 31, 2024, 2023, and 2022, the Company performed annual quantitative assessments of goodwill, with the most recent assessment was performed on October 1, 2024.

For the years ended December 31, 2025, 2024, and 2023, the Company performed annual quantitative assessments of goodwill, with the most recent assessment performed on October 1, 2025.

The annual quantitative assessments resulted in no impairment as the estimated fair value of each reporting unit exceeded its carrying value.

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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.

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.

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 gain (losses) of $ 1,952 , $( 2,344 ), and $( 638 ) for the years ended December 31, 2025, 2024, and 2023, respectively.

(m) Derivative Instruments

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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.

The swap agreement has a notional amount of $ 230,000 , a fixed rate of 2.8 % and a termination date of August 31, 2025 (“Matured Swap”).

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.

At December 31, 2024 and 2023, the interest rate swap had a fair value of $ 2,213 and $ 5,624 , respectively.

As the swap approached maturity, the Company entered into two additional interest rate swap agreements (“New Swaps”) in the second quarter of 2025, each with a notional amount of $ 115,000 , to continue hedging the interest rate risk associated with the term loan debt.

These new swaps also pay fixed interest rates and receive variable rates.

The fixed interest rates on the two swaps are 3.62 % and 3.64 %.

Both contracts became effective on August 31, 2025, and will mature on August 31, 2029.

The Company designates these swaps as cash flow hedges at hedge inception.

At December 31, 2025 and 2024, Matured Swap had a fair value of $ 0 and $ 2,213 , respectively.

New Swaps had total negative fair value of $ 2,322 at December 31, 2025.

The gross fair value recognized in accumulated other comprehensive income was $( 2,322 ) and $ 2,213 at December 31, 2025 and 2024, respectively.

2 unchanged sentences

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

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

comprehensive income (loss).

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

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

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

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

Interest rate swap derivative designated as cash flow hedging instruments:

2 unchanged sentences

Prepaid expenses and other current assets $ — $ 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 months is $ 2,213 .

Other current liabilities $ 533 $ —

Other long-term liabilities $ 1,789 $ —

The net amount of deferred loss related to derivative instruments designated as cash flow hedges that is expected to be reclassified from accumulated other comprehensive gain (loss) into earnings over the next twelve months is $ 533 .

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

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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.

The Company recognizes the effect of income tax positions only if those

positions are more likely than not of being sustained.

The Company recognizes the effect of income tax positions only if those 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.

Further, the benefit to be recorded in the consolidated financial statements is the amount most likely to be realized assuming a review by the tax authorities having all relevant information and applying current conventions.

Further, the benefit to be recorded in the consolidated

financial statements is the amount most likely to be realized assuming a review by the tax authorities having all relevant information and applying current conventions.

The Company's policy is to recognize interest and penalties related to income tax positions taken as a component of the provision for income taxes.

8 unchanged sentences

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.

Foreign income tax returns are generally subject to examination based on the tax laws of the respective jurisdictions.

Foreign income tax returns are generally subject to examination based on the tax laws of the respective jurisdiction.

(q) Revenue Recognition

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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 applying input methods to estimate progress to completion.

Revenues for fixed price services are generally recognized over time applying

input methods to estimate progress to completion.

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

24 unchanged sentences

Contract assets relate to the Company’s rights to consideration for performance obligations satisfied but not billed at the reporting date on contracts (i.e., unbilled revenue, a component of accounts receivable in the Consolidated Balance Sheets).

Contract assets are billed and transferred to customer accounts receivable when the rights become unconditional.

Contract assets are billed and transferred to customer accounts receivable when

the rights become unconditional.

The Company typically invoices customers for term licenses, subscriptions, maintenance and support fees in advance with payment due before the start of the subscription term, ranging from one to three years .

22 unchanged sentences

These grants specify 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.

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

The 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.

If these agreements involve one party nonreciprocally transferring value to another, and any benefit to the transferor is incidental to the potential public benefits, they are accounted for as contribution transactions, and revenue is recognized in accordance with ASC Topic 958.

Sources and Timing of Revenue

12 unchanged sentences

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.

For a specific group of performance stock units, a Monte Carlo simulation model was used to estimate the fair value.

For performance stock units with market-based conditions or with market-based modifiers, a Monte Carlo simulation model was used to estimate the grant date fair value.

Compensation costs for our restricted stock and restricted stock units are recognized on a straight-line basis over the requisite service period.

Performance stock units with a graded vesting schedule are recognized using graded vesting attribution approach.

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.

A performance stock unit represents a right to receive a certain number of shares of common stock based on the achievement of corporate performance or market performance goals and continued employment during the vesting period.

At each reporting period, the Company 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.

For PSUs that include a market condition and no other performance conditions, the effect of the market condition is reflected in the grant-date fair value of the award, and compensation cost attributable to the market condition is recognized regardless of whether the market condition is ultimately achieved, provided the requisite service is rendered.

Compensation costs for our legacy Class B Profits Interest Unit (the “Class B Units”), issued by former parent company, that vested based on continued service requirements and the restricted stock into which they were exchanged are recognized on a straight-line basis over the requisite service period.

5 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.

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).

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.

The components of other comprehensive income (loss) consisted of the net of tax foreign currency translation adjustments totaling $ 18,860 , $( 3,247 ) and $ 2,696 , respectively, and the changes in fair value of interest rate swap totaling $( 3,396 ), $( 2,584 ), and $( 2,059 ), respectively, for the years ended December 31, 2025, 2024, and 2023.

(t) Reclassification

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

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.

Based on the Company’s purchase price allocation, approximately $ 2,380 , $ 1,040 , $ 100 , and $ 2,910 of the purchase price was assigned to customer relationships, developed technology, non-compete agreements, and goodwill, respectively.

Vyasa Analytics, LLC (“Vyasa”)

On December 28, 2022, the Company completed the acquisition of Vyasa, a company that provides an AI powered, scalable deep learning software and analytics platform for organizations within healthcare and life sciences, higher education and state and local governments for total estimated consideration of $ 29,276 .

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

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.

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.

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.

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.

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.

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.

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")

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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.

Payments of contingent consideration were 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 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).

As of December 31, 2024, the Company no longer had any contingent consideration liabilities related to the DIDB business combination.

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

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

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

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

Formedix Limited ("Formedix")

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The fair value of the contingent consideration related to 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.

Payments of contingent consideration were 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.

1 unchanged sentence

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.

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.

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.

For the year ended December 31, 2024, the Company paid contingent consideration of $ 1,777 .

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).

In addition, as of December 31, 2024, the contingent consideration related to tax contingencies was $ 529 .

As of December 31, 2025, the Company no longer had any contingent consideration liabilities related to the Formedix business combination, except for the contingent consideration associated with tax contingencies, which amounted to $ 464 .

Applied BioMath, LLC ("ABM")

1 unchanged sentence

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

Based on the Company’s preliminary 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.

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 IRS.

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 .

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 total 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 .

Payments of contingent consideration were 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.

For the year ended December 31, 2024, the Company paid contingent consideration of $ 4,730 .

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.

the year ended December 31, 2024, the Company paid contingent consideration of $ 4,730 .

At December 31, 2024 and 2023, the contingent consideration was remeasured to zero and $ 5,380 , resulting in fair value adjustments of $( 650 ) and $ 23 , respectively.

These adjustments were recorded in G&A expenses on the accompanying consolidated statement of operations and comprehensive income (loss).

As of December 31, 2024, the Company no longer had any contingent consideration liabilities related to the ABM business combination,

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.

14 unchanged sentences

Intangible assets 50,230

Goodwill 46,483

All other assets* 6,633

5 unchanged sentences

All other liabilities include accounts payable, operating lease liabilities, accrued expense.

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 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.

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.

As of December 31, 2024, an adjustment of approximately $ 531 to finalize the purchase consideration had not yet been settled with the seller.

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.

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.

In connection with these transactions, the company recorded the following Intangible Assets.

Intangible assets (in thousands)

Trademarks $ 2,900

Non-compete agreement 330

Customer relationships 11,000

Developed technology 36,000

Total $ 50,230

** During the first half 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 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.

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.

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.

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.

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 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.

1 unchanged sentence

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.

Supplemental pro forma information

The following unaudited pro forma combined financial information assumes that the acquisition of Chemaxon occurred on January 1, 2023.

For the year ended December 31

(In thousands)

Revenue $ 401,710 $ 376,775

Net loss $ ( 21,984 ) $ ( 64,108 )

The unaudited pro forma combined results for the years ended December 31, 2024 and 2023 primarily include the following pro forma adjustment:

* Revenue was adjusted by $( 244 ) and $ 1,494 for the years ended December 31, 2024 and 2023, respectively.

* 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

10 unchanged sentences

Long-term deposits $ 1,157 $ 1,457

Interest rate swap asset - long term — 1,151

Deferred financing cost 485 574

47 unchanged sentences

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.

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 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.

6 unchanged sentences

Balance, December 31, 2023 $ 716,333

Goodwill associated with 2023 business combinations 43,223

Goodwill associated with 2024 business acquisitions 46,483

Foreign currency translation ( 5,778 )

Impairment expense ( 46,984 )

Balance, December 31, 2024 757,038

Goodwill associated with 2024 business combination 46,483

Goodwill adjustment associated with 2024 business acquisitions 2,947

Tax adjustment to goodwill associated with previous business acquisitions ( 402 )

Foreign currency translation 13,728

14 unchanged sentences

Long - term contingent consideration — 23,581

Interest rate swap liabilities- long term 1,789 —

Total other long-term liabilities $ 5,117 $ 25,299

1 unchanged sentence

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"), 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 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.

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

and (2) extended the termination date of the $ 100,000 revolving credit commitment (the “Revolving Facility”) to June 26, 2029.

On October 16, 2025, the Company entered into the Sixth Amendment to the Credit Agreement (the “Sixth Amendment”), which primarily refinanced the existing principal amount of the term loan with $ 296,250 principal amount of replacement term loans with the same maturity date of June 26, 2031 and reduced the applicable rate with respect to the term loans under the Credit Agreement.

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

1 unchanged sentence

subsidiaries and contains various financial and nonfinancial covenants.

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

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

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

Borrowings under the Credit Agreement bear interest at a rate per annum equal to, at the election of the Borrowers, either (i) the Term SOFR rate, with a floor of 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.

Borrowings under the Credit Agreement bear interest at a rate per annum equal to, at the election of the Company, either (i) the Term Secured Overnight Financing Rate (“SOFR”) rate, with a floor of 0.00 % plus an applicable margin rate of 2.75 % for the replacement 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 1.75 % for the replacement 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 (c) the Term SOFR rate plus 1.00 %.

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Interest incurred on the Credit Agreement with respect to the revolving line of credit was $ 295 , $ 303 , and $ 257 for the years ended December 31, 2025, 2024, and 2023, respectively.

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

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

Long-term debt consists of the following:

12 unchanged sentences

For the year ended December 31, 2025, the Company was not required to make a mandatory prepayment on the term loan.

The Company is required to make a quarterly principal payment of $ 750 on the term loan starting September 30, 2024.

The Company is required to make a quarterly principal payment of $ 741 on the term loan starting December 31, 2025.

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.

2 unchanged sentences

employees who are at least 21 years of age and who meet IRS requirements for plan eligibility.

Employees may contribute to the plan up to 50 % of their compensation, which may be further limited by law.

Employees may contribute/defer a salary amount between 1 % to 100 % of eligible compensation up to IRS limits or further limited by law.

In addition, based on IRS guidelines, certain employees are eligible to make an additional catch-up contribution.

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.

Catch-up contributions and guidance for eligibility are determined and set by the IRS annually.

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.

The Company also operates a Group Personal defined contribution plan (“Plan”) covering all U.K.

Employees are auto-enrolled in the plan who are at least 22 years of age and paid more than £10 a year of basic salary, up to the State Pension Age.

However, all employees who are between the ages of 16 and 75 can elect to join the Plan.

Employees may contribute to their personal pension account and then convert that account into income at retirement.

The Company contributes an additional 8 % of salary for those employees who have registered for the Plan, which exceeds their duties under U.K.

The Company operates a Group Personal defined contribution pension plan (“Plan”) covering all U.K.

Eligible employees are automatically enrolled into the Plan if they are at least 22 years of age, earn more than £10 per year, and are below State Pension Age.

Employees aged between 16 and 75 who do not meet the auto-enrollment criteria may elect to join the Plan.

Employees may contribute to their individual pension accounts and access their benefits at retirement in accordance with applicable legislation.

The Company contributes 8 % of salary for employees who are members of the Plan, which exceeds the minimum employer contribution requirements under U.K.

auto-enrollment legislation.

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Commitments and Contingencies

Contingent consideration

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.

The contingent liabilities were $ 44,468 and $ 55,238 at December 31, 2024 and 2023, respectively.

For the year ended December 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 $ 21,979 and $ 44,468 at December 31, 2025 and 2024, respectively.

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

Legal proceedings

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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.

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

As of December 31, 2025, all of the Company’s restricted stock had fully vested, and no restricted stock remained outstanding.

A summary of the restricted stock activities as of and for the year ended December 31, 2025 is shown below:

SHARES WEIGHTED-AVERAGE

WEIGHTED-AVERAGE GRANT-DATE FAIR VALUE

Non-vested restricted stock as of December 31, 2024

Granted* 16,842 17.35

Vested* ( 376,052 ) 23.03

Forfeited ( 5,123 ) 23.00

Cancelled* ( 16,842 ) 23.00

Non-vested restricted stock as of December 31, 2025

__________________________________

• 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.

• 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, 2025.

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.

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.

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.

At December 31, 2024, there was no unrecognized equity-based compensation expense related to outstanding restricted stock recognized using the straight-line attribution approach.

Equity-based compensation expense related to the restricted stock exchanged for performance-based Class B Units was $ 160 , $ 668 and $ 801 for the years ended December 31, 2025, 2024 and 2023, respectively.

As of December 31, 2025, all compensation expense related to the awards had been fully recognized.

Equity-based compensation expense related to the time-based restricted stock was $ 321 , $ 928 and $ 1,313 for the years ended December 31, 2025, 2024 and 2023, respectively.

As of December 31, 2025, all compensation expense related to the awards had been fully recognized.

2020 Incentive Plan

11 unchanged sentences

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

UNITS WEIGHTED-

WEIGHTED-AVERAGE GRANT DATE FAIR VALUE

Non-vested RSUs as of December 31, 2024

Granted* 2,322,890 17.62

Vested** ( 1,278,002 ) 24.04

Forfeited ( 386,604 ) 20.36

( 1,493,798 )

Cancelled* ( 62,381 ) 11.69

8 unchanged sentences

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.

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, market conditions, and the achievement of certain performance thresholds for individual PSU plans including year-over-year revenue growth, unlevered free cash flow growth, annual revenue, and annual EBITDA.

The PSUs granted in 2023, 2024 and 2025 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.

Equity-based compensation for the PSUs is recognized in accordance with ASC 718.

Equity-based compensation cost for PSUs with performance conditions is recognized only to the extent a threshold is probable of being achieved and is recognized using the accelerated attribution approach.

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

PSUs granted in 2023 and 2024 also contain market condition.

A summary of the Company's PSU activity as of and for the year ended December 31, 2025 is as follows:

UNITS WEIGHTED-

WEIGHTED-AVERAGE GRANT DATE FAIR VALUE

Non-vested PSUs as of December 31, 2024

Granted* 338,445 18.98

Vested** ( 106,354 ) 22.91

Forfeited ( 42,131 ) 21.23

Cancelled ( 201,138 ) 22.13

Non-vested PSUs as of December 31, 2025

* During 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 18,846 shares that were withheld on behalf of employees to satisfy the statutory tax withholding requirements.

5 unchanged sentences

Year Ended December 31,

2025 2024 2023

Expected dividend yield — — —

1 unchanged sentence

52.2 % - 54.7 %

61.4 % - 61.9 %

Expected term (years) 2.33 - 2.86

1 unchanged sentence

4.36 % - 4.64 %

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.

This change affected 12 participants at the time of the modification.

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.

3.89 % - 4.29 %

Equity-based compensation expense

9 unchanged sentences

The tax benefit related to compensation expense was $ 3,078 , $ 5,051 , and $ 3,797 for the years ended December 31, 2025, 2024, and 2023.

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

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

Operating lease ROU assets are included in other assets in the consolidated balance sheets.

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Sublease income ( 314 ) ( 217 )

Finance lease cost:

Amortization of right-of-use assets — 46

Total lease cost $ 5,937 $ 5,683

15 unchanged sentences

Lease abandonment

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.

These expenses are included within the general and administrative expenses in the Company's consolidated statements of operations and comprehensive income (loss).

For the year ended December 31, 2025, the Company recorded a net lease abandonment gain of $ 830 , net of the associated termination fee, and derecognized the related lease liabilities in connection with the termination of a lease contract.

The abandonment gain and expense 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.

41 unchanged sentences

Change in fair value of contingent consideration ( 3,597 ) 8,089 24,118

Intangible asset amortization 66,039 54,519 50,739

Depreciation expense 1,994 1,552 1,731

Depreciation and amortization expense 75,162 68,033 56,071

Goodwill impairment expense — — 46,984

28 unchanged sentences

Total provision (benefit) $ 9,211 $ ( 5,133 ) $ 214

The Company adopted ASU 2023-09 prospectively for the year ended December 31, 2025.

Following is the reconciliation of the tax provision at the U.S.

federal statutory rate to income tax expense.

Year Ended December 31, 2025

(In thousands, except for percentage)

Earnings from continuing operations, before income tax expense $ 7,616

Federal Statutory Tax Rate $ 1,599 21.0 %

United States

State and Local Income Taxes* 1,689 22.2 %

Effect of Cross-Border Tax Laws

FDII ( 1,028 ) ( 13.5 ) %

GILTI 271 3.6 %

R&D credit ( 1,296 ) ( 17.0 ) %

Foreign Tax Credit ( 9,159 ) ( 120.3 ) %

Changes in Valuation Allowances 4,217 55.4 %

Nontaxable or Nondeductible Items

Equity Compensation 2,823 37.1 %

Officers Compensation 1,315 17.3 %

Other Nontaxable or Nondeductible Items 2,935 38.5 %

Other Permanent Differences 97 1.3 %

Other Adjustments ( 338 ) ( 4.5 ) %

Investment tax credit ( 1,153 ) ( 15.1 ) %

Other ( 55 ) ( 0.7 ) %

Effect of Rates Different than Statutory 832 10.9 %

Other ( 43 ) ( 0.6 ) %

United Kingdom

Effect of Rates Different than Statutory 7,551 99.1 %

Other Nontaxable or Nondeductible Items ( 2,068 ) ( 27.2 ) %

Other ( 109 ) ( 1.4 ) %

Other Foreign Jurisdictions 613 8.0 %

Changes in Unrecognized Tax Benefits 518 6.8 %

Income Tax Expense $ 9,211 120.9 %

* State taxes in California, Maryland, Massachusetts, New Jersey, Pennsylvania made up the majority of the tax effect in this category.

The effective income tax rate was 29.87 % and ( 0.39 )% for the years ended December 31, 2024 and 2023, respectively.

The primary reconciling items between the statutory income tax rate of 21% and the effective income tax rate were as a result of the following:

2024 2023 2022

(In thousands, except for percentage)

11 unchanged sentences

Effective tax rate $ ( 5,133 ) 29.87 % $ 214 ( 0.39 ) %

Below is a summary of income taxes paid by jurisdiction for the year ended December 31, 2025:

Year Ended December 31, 2025

(Dollars in thousands)

Income tax payments( net of refunds)

United States:

Federal $ ( 1,079 )

Massachusetts 1,300

Other states 1,823

Total United States 2,044

United Kingdom 8,853

Total Foreign 10,175

Total tax payment $ 12,219

The tax effects of temporary differences that give rise to deferred tax assets and liabilities are summarized as follows:

12 unchanged sentences

Lease liability 2,692 3,362

Interest rate hedge 574 —

Section 174 20,106 16,975

8 unchanged sentences

Right-of-use (ROU) Asset ( 2,333 ) ( 2,643 )

Deferred revenue ( 34 ) —

Other liabilities ( 243 ) ( 226 )

1 unchanged sentence

Net deferred tax liability $ ( 29,123 ) $ ( 36,459 )

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 net change in the total valuation allowance resulted in an increase of $ 5,402 in 2025 compared to a decrease of $ 7,477 in 2024.

The valuation allowance is determined separately for each jurisdiction.

4 unchanged sentences

Management considered the reversal of deferred tax liabilities in making this assessment.

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.

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.

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.

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.

The Company has foreign tax credits of $ 10,977 that will expire if unused in years 2027 through 2034.

and also Canadian investment tax credits of $ 3,877 which will expire if unused in years 2032 through 2042.

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.

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, 2025.

At December 31, 2025, the Company had net operating loss carryforwards for federal income tax purposes of approximately $ 4,191 , some of which will expire if unused in years 2035 through 2036.

Additionally, the Company had net operating loss carryforwards for state income tax purposes of approximately $ 3,475 , which will expire if unused in years 2029 through 2041.

The Company had foreign net operating loss carryforwards of $ 87,341 which will expire if unused starting in tax year 2025.

December 31, 2025, the Company also had $ 148 of federal research and development credits that will expire if unused in years 2027 through 2028 and $ 250 of foreign research and development credits that will expire if unused by 2029.

Additionally, the Company had $ 20 of state research and development credits that will expire if unused by 2040.

The Company also had foreign tax credits of $ 14,617 that will expire if unused in years 2027 through 2035, and Canadian investment tax credits of $ 5,226 , which will expire if unused in years 2034 through 2044.

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.

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.

3 unchanged sentences

The Company's policy is to recognize interest and penalties as a component of the provision for income taxes.

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.

For December 31, 2025 and 2024, 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.

5 unchanged sentences

Reductions for tax positions of prior years ( 14 )

Reductions related to settlements with taxing authorities ( 1,104 )

Balance at December 31, 2024 $ 7,411

2 unchanged sentences

Reductions for tax positions of prior years ( 47 )

Reductions related to settlements with taxing authorities ( 1,104 )

Balance at December 31, 2025 $ 8,534

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.

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.

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.

Foreign income tax returns are generally subject to examination based on the tax laws of the respective jurisdictions.

2 unchanged sentences

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.

The Company does not expect this new rule to apply until the Company meets the minimum global revenue threshold.

The Company does not expect this to apply until the Company meets the minimum global revenue threshold.

On July 4, 2025, the United States enacted the One Big Beautiful Bill Act (the “OBBBA”), which includes changes to U.S.

tax law such as significant amendments to the U.S.

federal income tax code.

Key provisions include the permanent reinstatement of immediate expensing for domestic research expenditures, the restoration of full expensing for qualified machinery, equipment and other short-lived assets, and several modifications to existing international tax provisions.The Company is continuing to evaluate the impact of OBBBA.

Earnings per Share

15 unchanged sentences

* For the years ended December 31, 2025 , 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.

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.

What changed 10-K

Item 8. Financial Statements and Supplementary Data