Certara, Inc. 10-K

Item 8. Financial Statements and Supplementary Data. Certara, Inc. Index to Consolidated Financial Statements PAGE Reports of Independent Registered Public Accounting Firm (PCAOB ID 0 49 ) 81 Consolidated Balance Sheets 85 Consolidated Statements of Operations and Comprehensive Income (Loss) 86 Consolidated Statements of Stockholders’ Equity 87 Consolidated Statements of Cash Flows 88 Notes to the Consolidated Financial Statements 80 Table of Contents Report of Independent Registered Public Accounting Firm To the Stockholders and the Board of Directors of Certara, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Certara, Inc. and Subsidiaries (the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations and comprehensive income (loss), stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes to the consolidated financial statements (collectively, the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013, and our report dated February 26, 2026, expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters 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 As described in Note 2 (q) to the consolidated financial statements, the Company performs professional services under fixed price contracts with the associated revenue recognized over time. For fixed price revenue contracts recognized over time, management utilizes the input method to measure estimated progress to completion. 81 Table of Contents 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 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. Given these factors, the related audit effort in evaluating management’s judgments in determining the revenue recognition for fixed price contracts was challenging, subjective, and complex and required a high degree of auditor judgment. Our audit procedures related to testing the existence, accuracy and completeness of the Company’s fixed price contract revenue included the following, among others: • 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’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 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. /s/ RSM US LLP We have served as the Company's auditor since 2022. Blue Bell, Pennsylvania February 26, 2026 82 Table of Contents Report of Independent Registered Public Accounting Firm To the Stockholders and the Board of Directors of Certara, Inc. Opinion on the Internal Control Over Financial Reporting We have audited Certara, Inc. and Subsidiaries’ (the Company) internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013. 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. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting in the accompanying Management’s Annual Report on Internal Controls over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. 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; (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 83 Table of Contents 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 Blue Bell, Pennsylvania February 26, 2026 84 Table of Contents CERTARA, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, (IN THOUSANDS, EXCEPT PER SHARE AND SHARE DATA) 2025 2024 Assets Current assets: Cash and cash equivalents $ 189,392 $ 179,183 Accounts receivable, net of allowances for credit losses of $ 2,235 and $ 2,164 , respectively 103,525 102,189 Prepaid expenses and other current assets 22,202 29,480 Total current assets 315,119 310,852 Other assets: Property and equipment, net 1,853 2,167 Operating lease right-of-use assets 11,939 13,841 Goodwill 773,311 757,038 Intangible assets, net of accumulated amortization of $ 415,804 and $ 338,809 , respectively 447,476 485,214 Deferred income taxes 5,242 3,961 Other long-term assets 1,642 2,031 Total assets $ 1,556,582 $ 1,575,104 Liabilities and stockholders' equity Current liabilities: Accounts payable $ 3,426 $ 3,502 Accrued expenses 67,131 56,451 Current portion of deferred revenue 75,412 77,829 Current portion of long-term debt 2,963 3,000 Other current liabilities 4,453 5,306 Total current liabilities 153,385 146,088 Long-term liabilities: Deferred revenue, net of current portion 2,350 1,049 Deferred income taxes 34,366 40,421 Operating lease liabilities, net of current portion 8,438 11,166 Long-term debt, net of current portion and debt discount 290,131 292,425 Other long-term liabilities 5,117 25,299 Total liabilities 493,787 516,448 Commitments and contingencies Stockholders' equity Preferred shares, $ 0.01 par value, 50,000,000 and no shares authorized, issued, and outstanding as of December 31, 2025 and 2024, respectively — — Common shares, $ 0.01 par value, 600,000,000 shares authorized, 164,005,450 and 161,958,810 shares issued as of December 31, 2025 and 2024, respectively; 159,139,562 and 161,009,112 shares outstanding as of December 31, 2025 and 2024, respectively 1,641 1,620 Additional paid-in capital 1,255,653 1,216,925 Accumulated deficit ( 129,876 ) ( 128,281 ) 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 ( 66,663 ) ( 18,184 ) Total stockholders' equity 1,062,795 1,058,656 Total liabilities and stockholders' equity $ 1,556,582 $ 1,575,104 The accompanying notes are an integral part of the consolidated financial statements . 85 Table of Contents CERTARA, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) YEAR ENDED DECEMBER 31, (IN THOUSANDS, EXCEPT PER SHARE AND SHARE DATA) 2025 2024 2023 Revenues $ 418,838 $ 385,148 $ 354,337 Cost of revenues 161,126 154,516 141,022 Operating expenses: Sales and marketing 53,720 47,444 32,022 Research and development 41,040 37,105 34,173 General and administrative 85,380 94,221 95,385 Depreciation and amortization 56,556 53,593 45,525 Goodwill impairment expense — — 46,984 Total operating expenses 236,696 232,363 254,089 Income (loss) from operations 21,016 ( 1,731 ) ( 40,774 ) Other expenses: Interest expense ( 19,738 ) ( 21,520 ) ( 22,916 ) 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 ) Provision (benefit) for income taxes 9,211 ( 5,133 ) 214 Net loss ( 1,595 ) ( 12,051 ) ( 55,357 ) Other comprehensive income (loss) Foreign currency translation adjustment, net of tax of $ 6 , $( 956 ), $( 717 ) 18,860 ( 3,247 ) 2,696 Change in fair value of interest rate swap, net of tax of $ 253 , $( 827 ), $ 1,393 ( 3,396 ) ( 2,584 ) ( 2,059 ) Total other comprehensive income (loss) 15,464 ( 5,831 ) 637 Comprehensive income (loss) $ 13,869 $ ( 17,882 ) $ ( 54,720 ) Net income (loss) per share attributable to common stockholders: Basic $ ( 0.01 ) $ ( 0.08 ) $ ( 0.35 ) Diluted $ ( 0.01 ) $ ( 0.08 ) $ ( 0.35 ) Weighted average common shares outstanding: Basic 160,394,418 160,392,805 158,936,251 Diluted 160,394,418 160,392,805 158,936,251 The accompanying notes are an integral part of the consolidated financial statements. 86 Table of Contents CERTARA, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (IN THOUSANDS, EXCEPT SHARE DATA) COMMON STOCK ADDITIONAL PAID-IN CAPITAL ACCUMULATED DEFICIT ACCUMULATED OTHER COMPREHENSIVE INCOME(LOSS) TREASURY STOCK TOTAL STOCKHOLDER’S EQUITY SHARES AMOUNT SHARES AMOUNT Balance as of December 31, 2022 159,676,150 $ 1,596 $ 1,150,168 $ ( 60,873 ) $ ( 8,230 ) $ ( 150,207 ) $ ( 3,000 ) $ 1,079,661 Equity-based compensation expense, net of forfeiture ( 201,838 ) ( 1 ) 28,301 — — — — 28,300 Restricted stock and stock units withheld for tax liabilities — — — — — ( 286,408 ) ( 6,401 ) ( 6,401 ) Common shares issued for employee share-based compensation 810,589 8 ( 8 ) — — — — — Change in fair value from interest rate swap, net of tax — — — — ( 2,059 ) — — ( 2,059 ) Net loss — — — ( 55,357 ) — — — ( 55,357 ) Foreign currency translation adjustment, net of tax — — — — 2,696 — — 2,696 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 Equity-based compensation expense, net of forfeiture ( 5,123 ) — 34,774 — — — — 34,774 Restricted stock and stock units withheld for tax liabilities — — — — — ( 513,083 ) ( 8,783 ) ( 8,783 ) 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 ) Net loss — — — ( 12,051 ) — — ( 12,051 ) Foreign currency translation adjustment, net of tax — — — — ( 3,247 ) — — ( 3,247 ) 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 — — 33,079 — — — — 33,079 Restricted stock and stock units withheld for tax liabilities — — — — — ( 547,816 ) ( 5,443 ) ( 5,443 ) Common shares issued for employee share-based compensation 1,591,296 16 ( 16 ) — — — — — 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 ) Net loss — — — ( 1,595 ) — — — ( 1,595 ) Foreign currency translation adjustment, net of tax — — — — 18,860 — — 18,860 Balance as of December 31, 2025 164,005,450 $ 1,641 $ 1,255,653 $ ( 129,876 ) $ 2,040 ( 4,865,888 ) $ ( 66,663 ) $ 1,062,795 The accompanying notes are an integral part of the consolidated financial statements. 87 Table of Contents CERTARA, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS YEAR ENDED DECEMBER 31, (IN THOUSANDS) 2025 2024 2023 Cash flows from operating activities: 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 Provision for credit losses 1,144 1,464 684 Equity-based compensation expense 33,079 34,774 28,300 Change in fair value of contingent considerations ( 3,597 ) 8,089 24,118 Goodwill impairment — — 46,984 Deferred income taxes ( 8,321 ) ( 12,695 ) ( 16,523 ) Changes in assets and liabilities Accounts receivable 428 ( 16,225 ) 152 Prepaid and other assets ( 902 ) ( 2,873 ) 711 Accounts payable and accrued expenses, and other liabilities 4,403 ( 4,765 ) ( 5,607 ) Deferred revenue ( 3,018 ) 13,834 28 Other operating activities, net ( 1,026 ) 1,846 1,667 Net cash provided by operating activities 96,325 80,466 82,755 Cash flows from investing activities: Capital expenditures ( 1,760 ) ( 1,625 ) ( 1,777 ) Capitalized software development costs ( 24,796 ) ( 19,416 ) ( 13,491 ) Investment in intangible assets — — ( 54 ) Business acquisitions, net of cash acquired — ( 91,327 ) ( 64,228 ) Net cash used in investing activities ( 26,556 ) ( 112,368 ) ( 79,550 ) 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 obligations ( 2,991 ) ( 2,255 ) ( 3,045 ) Payments for business acquisition related contingent consideration ( 13,230 ) ( 15,156 ) — 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 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 Cash paid for interest $ 19,133 $ 22,737 $ 19,089 Cash paid for taxes $ 12,219 $ 14,658 $ 19,320 Supplemental schedule of noncash investing and financing activities Contingent liabilities established in connection with business acquisition $ — $ — $ 11,308 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. 88 Table of Contents CERTARA, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (IN THOUSANDS, EXCEPT PER SHARE PERCENTAGES AND SHARE AND UNIT DATA) 1 . Description of Business Certara, Inc. and its wholly-owned subsidiaries (together, the “Company”) deliver software products and technology-driven services to customers to efficiently carry out and realize the full benefits of biosimulation in drug discovery, preclinical and clinical research, regulatory submissions and market access. The Company is a global leader in biosimulation, and the Company’s biosimulation software and technology-driven services help optimize, streamline, or even waive certain clinical trials to accelerate programs, reduce costs, and increase the probability of success. The Company’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, Canada, China, France, Germany, India, Italy, Japan, Luxembourg, Netherlands, Philippines, Poland, Portugal, Spain, Switzerland, Egypt, Hungary and the United Kingdom. 2. Summary of Significant Accounting Policies (a) Basis of Presentation and Use of Estimates The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include, among other estimates, assumptions used in the allocation of the transaction price to separate performance obligations, estimates towards the measure of progress of completion on fixed-price service contracts, the determination of fair values and useful lives of long-lived assets as well as intangible assets, goodwill, allowance for credit losses for accounts receivable, recoverability of deferred tax assets, recognition of deferred revenue, valuation of interest rate swaps, determination of fair value of equity-based awards and assumptions used in testing for impairment of long-lived assets. Actual results could differ from those estimates, and such differences may be material to the consolidated financial statements. (b) Recently Adopted or Issued Accounting Standards 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 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 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 89 Table of Contents 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. 90 Table of Contents (c) Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. (d) Fair Value Measurements The Company follows FASB ASC 820-10, “Fair Value Measurements” (“ASC 820-10”), which defines fair value, establishes a framework for measuring fair value in U.S. GAAP, and requires certain disclosures about fair value measurements. ASC 820-10 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the most advantageous market for the asset or liability in an orderly transaction. Fair value measurement is based on a hierarchy of observable or unobservable inputs. The standard describes three levels of inputs that may be used to measure fair value. Level 1 — Inputs to the valuation methodology are quoted prices available in active markets for identical securities as of the reporting date; Level 2 — Inputs to the valuation methodology are other significant observable inputs, including quoted prices for similar securities, interest rates, credit risk etc. as of the reporting date, and the fair value can be determined through the use of models or other valuation methodologies; and Level 3 — Inputs to the valuation methodology are unobservable inputs in situations where there is little, or no market activity of the securities and the reporting entity makes estimates and assumptions relating to the pricing of the securities including assumptions regarding risk. If the inputs used to measure fair value fall in different levels of the fair value hierarchy, the hierarchy is based upon the lowest level of input that is significant to the fair value measurement. For the acquisitions noted in Note 4, the fair value measurement methods used to estimate the fair value of the assets acquired and liabilities assumed at the acquisition dates utilized a number of significant unobservable inputs of Level 3 assumptions. These assumptions included, among other things, projections of future operating results, implied fair value of assets using an income approach by preparing a discounted cash flow analysis, and other subjective assumptions. Interest rate swaps are valued in the market using discounted cash flows techniques. These techniques incorporate Level 1 and Level 2 inputs. The market inputs are utilized in the discounted cash flows’ calculation considering the instrument’s term, notional amount, discount rate and credit risk. Significant inputs to the derivative instrument valuation model for interest rate swaps are observable in active markets and are classified as Level 2 in the hierarchy. 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. 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). The Company utilizes Monte Carlo or a series of Black-Scholes-Merton options models to estimate the fair value of the contingent consideration liabilities of business acquisitions. 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 91 Table of Contents 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) Assets Money market funds $ 82,496 $ — $ — $ 82,496 Total assets $ 82,496 $ — $ — $ 82,496 Liabilities Contingent liabilities $ — $ — $ 21,515 $ 21,515 Interest rate swap liabilities — 2,322 — 2,322 Total liabilities $ — $ 2,322 $ 21,515 $ 23,837 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) Assets Money market funds $ 79,167 $ — $ — $ 79,167 Interest rate swap assets — 2,213 — 2,213 Total assets $ 79,167 $ 2,213 $ — $ 81,380 Liabilities Contingent liabilities $ — $ — $ 43,939 $ 43,939 Total liabilities $ — $ — $ 43,939 $ 43,939 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. The following table summarizes the Level 3 activity of the changes in the contingent consideration liability. YEAR ENDED DECEMBER 31, 2025 (In thousands) Beginning balance at December 31, 2024 $ 43,939 Payments ( 18,900 ) Change in fair value ( 3,524 ) Ending balance at December 31, 2025 $ 21,515 92 Table of Contents (e) Cash and Cash Equivalents 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 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, 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: DECEMBER 31, 2025 2024 (In thousands) Cash and cash equivalents $ 189,392 $ 179,183 (f) Accounts Receivable Accounts receivable includes current outstanding invoices billed to customers. Invoices are typically issued with net 30-days to net 90-days terms upon delivery of product or upon achievement of billable events for service-based contracts. Unbilled receivables relate to the Company’s rights to consideration for performance obligations satisfied but not billed at the reporting date on contracts. Unbilled receivables are billed and transferred to customer accounts receivable when the rights become unconditional. The carrying amount of accounts receivable is reduced by a valuation allowance. The Company estimates the expected credit losses for accounts receivables using historical loss data adjusted for current economic conditions, including reasonable and supportable forecasts to estimate the relative size of credit losses to be expected. The Company generally writes off a receivable or records a specific allowance for credit losses if the Company determines that the receivable is not collectible. Allowances for credit losses of $ 2,235 and $ 2,164 , were provided in the accompanying consolidated financial statements as of December 31, 2025 and 2024, respectively. DECEMBER 31, 2025 2024 (In thousands) Trade receivables $ 94,556 $ 90,609 Unbilled receivables 10,909 13,454 Other receivables 295 290 Allowance for credit losses ( 2,235 ) ( 2,164 ) Accounts receivable, net $ 103,525 $ 102,189 The following is a summary of the changes to the allowance for credit losses as of December 31, 2025 and 2024. 93 Table of Contents DECEMBER 31, 2025 2024 (In thousands) Beginning balance $ 2,164 $ 1,312 Provision for credit losses 1,144 1,464 Charge-offs, net of recoveries ( 1,073 ) ( 612 ) Ending balance $ 2,235 $ 2,164 (g) Property and Equipment Property and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation and amortization is provided using the straight-line method over the estimated useful lives of the assets, which range from three to ten years for computer and office equipment, the shorter of the useful lives of the improvement or the life of the related lease term for leasehold improvements, and one to three years for purchased software. The Company seeks to match the book useful life of assets to the expected productive lives. Assets deemed to be impaired or no longer productive are written down to their net realizable value. The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. If such events or changes in circumstances are present, an impairment loss would be recognized if the sum of the expected future net cash flows is less than the carrying amount of the asset. An impairment loss would be recorded for the excess of the carrying value of the asset over the estimated fair value. There was no impairment of property and equipment for the years ended December 31, 2025, 2024, and 2023. (h) Leases 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. 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. Options to extend or terminate a lease are considered in the lease term to the extent that the option is reasonably certain of exercise. A right-of-use (“ROU”) asset is recorded in an amount equal to the corresponding lease liability adjusted for prepayments, initial directs costs and lease incentives, if applicable. The Company has elected not to recognize ROU assets and lease liabilities for short-term leases of real estate with a lease term of 12 months or less. 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. 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. Variable lease payments include real estate taxes and charges for other non-lease services due to lessors that are not dependent on an index or rate. The Company’s real estate contracts may include fixed consideration attributable to both lease and non-lease components, including non-lease services provided by the lessor, which are accounted for as a single fixed minimum payment. ROU assets under finance leases are depreciated in a manner similar to other property and equipment. 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 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 94 Table of Contents 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 Software development costs are accounted for in accordance with FASB ASC Subtopic 985-20 if the software is to be sold, leased or otherwise marketed, or by FASB ASC Subtopic 350-40 if the software is for internal use. After the technological feasibility of the software has been established (for software to be marketed), or at the beginning of application development (for internal-use software), software development costs, which include primarily salaries and related payroll costs and costs of independent contractors incurred during development, are capitalized. Research and development (“R&D”) costs incurred prior to the establishment of technological feasibility (for software to be marketed), or prior to application development (for internal-use software), are expensed as incurred. Software development costs are amortized on a product-by-product basis commencing on the date of general release of the products (for software to be marketed) or the date placed in service (for internal-use software). During the years ended December 31, 2025, 2024 and 2023, costs of $ 25,029 , $ 19,446 , and $ 13,566 , respectively, were capitalized related to software development activities. Software development costs for software to be marketed are amortized using the straight-line method over its estimated useful life, which is typically three years . The Company reviews capitalized software for impairment whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. If such events or changes in circumstances are present, an impairment loss would be recognized if the sum of the expected future net cash flows is less than the carrying amount of the asset. An impairment loss would be recorded for the excess of the carrying value of the asset over the estimated fair value. There was no impairment of software development costs for the years ended December 31, 2025, 2024, and 2023. (j) Debt Issuance Costs Debt issuance costs are capitalized and amortized over the term of the related debt using the effective interest rate method. Amortization of debt issuance costs is included in interest expense within the consolidated statements of operations and comprehensive income (loss). The unamortized amount is included as an offset against long-term debt on the consolidated balance sheets. Debt issuance costs related to line-of-credit arrangements are capitalized and are included in other long-term assets on the consolidated balance sheets. The capitalized costs are amortized ratably over the term of the line-of-credit arrangement. The amortization costs are included in interest expense within the consolidated statements of operations and comprehensive income (loss), regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. (k) Goodwill and Other Intangible Assets 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. Goodwill is tested for impairment at the reporting unit level, which is one level below or the same as an operating segment. When testing goodwill for impairment, the Company performs a qualitative assessment to determine whether events or circumstances lead to a determination that it is more-likely-than-not that the fair values of the reporting units are less than their carrying amounts. If the Company determines that it is not more-likely-than-not that the fair values of the reporting units are less than their carrying values, no further assessment is performed. If the Company determines that it is more-likely-than-not that the fair values of the reporting units are less than carrying value, the Company proceeds to perform a quantitative goodwill impairment test. If the result of the quantitative test shows that the carrying amount of reporting units exceeds its fair values, an impairment loss is recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. 95 Table of Contents The goodwill impairment test is performed at least annually at the reporting unit level. An interim test is performed when events or circumstances occur that may indicate that it is more likely than not that the fair value of any reporting unit may be less than its carrying value. 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. 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. 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, 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. The Company recorded a goodwill impairment charge of $ 46,984 for the year ended December 31, 2023. There was no goodwill impairment recorded for the years ended December 31, 2025 and 2024. Other identifiable intangible assets with finite lives, such as software products acquired in acquisitions, non-compete agreements, trade names, customer relationship assets, and patents, are amortized over their estimated useful lives using either a straight-line method or a method based on pattern of expected economic benefit of the asset as follows: acquired software — 3 to 15 years; non-compete agreements —  2 to 5 years; customer relationships — 11 to 16 years; trade names — 10 to 20 years: patents — 5 years. The fair value of the intangible assets acquired were valued at acquisition date using forms of the income approach including the relief from royalty method and multi-period excess earnings method or the cost approach. Key inputs used in the income approaches included estimations of the future cash flows attributable to certain intangible assets, considering their economic lives, and then applying appropriate discount rates. Key inputs used in the cost approaches include the cost of re-creation and appropriate returns on those re-creation efforts. The Company evaluates finite intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset might not be recoverable. An impairment loss is recognized when estimated undiscounted future cash flows expected to result from the use of the asset are less than its carrying amount. There were no impairment charges related to intangible assets for the years ended December 31, 2025, 2024, and 2023. (l) Foreign Currency Translation Generally, the functional currency of the Company’s international subsidiaries is the local currency of the country in which they operate. The Company translates the assets and liabilities of its non-U.S. dollar functional currency subsidiaries into U.S. dollars using exchange rates in effect at the end of each reporting period. Revenue and expenses for these subsidiaries are translated using average exchange rates prevailing during the period. Gains and losses from these translations are recognized as a cumulative translation adjustment and included as a separate component in accumulated other comprehensive loss within the consolidated statement of stockholders’ equity. 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 gain (losses) of $ 1,952 , $( 2,344 ), and $( 638 ) for the years ended December 31, 2025, 2024, and 2023, respectively. 96 Table of Contents (m) Derivative Instruments In the normal course of business, the Company is subject to risk from adverse fluctuations in interest rates. The Company has chosen to manage this risk through the use of derivative financial instruments that consist of interest rate swap contracts. Counterparties to these contracts are major financial institutions. The Company is exposed to credit loss in the event of nonperformance by these counterparties. The Company does not use derivative instruments for trading or speculative purposes. The objective in managing exposure to market risk is to limit the impact on cash flows. To qualify for hedge accounting, the interest rate swaps must effectively reduce the risk exposure that they are designed to hedge. In addition, at inception of a qualifying cash flow hedging relationship, the underlying transaction or transactions must be, and be expected to remain, probable of occurring in accordance with the related assertions. FASB ASC 815, “Derivatives and Hedging,” requires the Company to recognize all derivatives on the balance sheet at fair value. The Company may enter into derivative contracts such as interest rate swap contracts that effectively convert portions of the Company’s floating rate debt to a fixed rate, which serves to mitigate interest rate risk. The Company’s objectives in using interest rate swaps are to add stability to interest expense and to manage its exposure to interest rate movements. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. 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 (“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. 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. Interest expense (income) on derivative instruments recognized in the Company’s consolidated statements of operations and comprehensive income (loss) were $( 2,871 ), $( 5,751 ), and $( 5,295 ) for the years ended December 31, 2025, 2024, and 2023, respectively. The Company uses derivatives to manage certain interest exposures and designated all the derivatives as cash flow hedges. The Company records derivatives at fair value on its consolidated balance sheets. 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. 97 Table of Contents 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: 2025 2024 (In thousands) Notional amounts $ 230,000 $ 230,000 Prepaid expenses and other current assets $ — $ 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 . (n) Warranty 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. Since the Company does not customize its applications software, warranty costs are insignificant and expensed as incurred. (o) Earnings per Share Basic earnings per common share is computed by dividing the net earnings by the weighted-average number of shares outstanding during the reporting period, without consideration for potentially dilutive securities. Diluted earnings per share is computed by dividing the net earnings attributable to stockholders by the weighted-average number of shares and dilutive securities outstanding during the period. (p) Income Taxes The Company accounts for income taxes under the asset and liability method. Under this method, the amount of taxes currently payable or refundable is accrued, and deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial reporting and tax basis of existing assets and liabilities. Deferred tax assets also include realizable tax losses and tax credit carryforwards. The deferred tax assets may be reduced by a valuation allowance, which is established when it is more likely than not that some portion or all of the deferred tax assets will not be realized. In addition, management is required to evaluate all available evidence, both positive and negative, when making its judgment to determine whether to record a valuation allowance for a portion, or all, of its deferred tax assets. Deferred tax assets and liabilities are measured using enacted income tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in income tax rate is recognized in the period that includes the enactment date. Uncertainty in Income Taxes The Company accounts for uncertainty in income taxes using a two-step approach. The first step requires the Company to conclude that a tax position, based solely on its technical merits, is more likely than not to be sustained upon examination by a tax authority. 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. 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 98 Table of Contents 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. The Company assessed its uncertain tax positions and determined that a liability of $ 8,534 and $ 7,411 was required to be recorded for uncertain tax positions as of December 31, 2025 and 2024, respectively. Uncertain tax positions relate primarily to federal and state R&D credits and certain net operating losses. The Company's policy is to recognize interest and penalties as a component of the provision for income taxes. 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. U.S. federal income tax returns are generally subject to examination for a period of three years after the filing of the return. However, the Internal Revenue Service can audit the NOLs generated in respective years in the years that the NOLs are utilized. State income tax returns are generally subject to examination for a period of three to six years after the filing of the respective tax 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. Foreign income tax returns are generally subject to examination based on the tax laws of the respective jurisdiction. (q) Revenue Recognition In accordance with ASC Topic 606, “Revenue from Contracts with Customers”, the Company determines revenue recognition through the following steps: i. Identification of the contract, or contracts, with a customer ii. Identification of the performance obligations in the contract iii. Determination of the transaction price iv. Allocation of the transaction price to the performance obligations in the contract v. Recognition of revenue when, or as, the Company satisfies a performance obligation The Company’s revenue consists of fees for perpetual and term licenses for its software products, post-contract customer support (referred to as maintenance), software as a service (“SaaS”), and professional services including training and other revenue. Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for promised goods or services. The following describes the nature of the Company’s primary types of revenues and the revenue recognition policies as they pertain to the types of transactions the Company enters into with its customers. 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. Services 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 applying 99 Table of Contents 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. Software Licenses Software license revenue consists primarily of sales of software licenses downloaded and installed by our customers on their own hardware. The license period is generally one year or less and includes an insignificant amount of customer support to assist the customer with the software. Software license performance obligations are generally recognized upfront at the point in time when the software license has been delivered. Software as a Service (SaaS) Revenue SaaS revenue consists of subscription fees for access to, and related support for, the Company’s cloud-based solutions. The Company typically invoices subscription fees in advance in annual installments. The invoice is initially deferred and revenue is recognized ratably over the life of the contract. 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 Services 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. Revenue allocated to maintenance services is recognized ratably over the contract term beginning on the delivery date of each offering. Maintenance contracts generally have a term of one year . While transfer of control of the software training and implementation performance obligations are over time, the services are typically started and completed within a few days. Due to the quick nature of the performance obligation from start to finish and the insignificant amounts, the Company recognizes any software training or implementation revenue at the completion of the service. Any unrecognized portion of amounts paid in advance for licenses and services is recorded as deferred revenue. Arrangements with Multiple Performance Obligations For contracts with multiple performance obligations, such as a software license plus software training, implementation, and/or maintenance/support, or in contracts where there are multiple software licenses, the Company determines if the products or services are distinct and allocates the consideration to each distinct performance obligation on a relative SSP basis. The delivery of a particular type of software and each of the user licenses would be one performance obligation. Additionally, any training, implementation, or support and maintenance promises as part of the software license agreement would be considered separate performance obligations, as those promises are distinct and separately identifiable from the software licenses. The payment terms in these arrangements are less than one year such that there is no significant financing component to the transaction. Contract Balances The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (contract assets), and customer advances and deposits (deferred revenue, contract liabilities) on the consolidated balance sheets. Amounts are billed as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals (e.g., quarterly or monthly) or upon achievement of contractual milestones. 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 100 Table of Contents 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 . The Company records the amounts collected in advance of the satisfaction of performance obligations, usually over time, as a contract liability or deferred revenue. Invoiced amounts for non-cancelable services starting in future periods are included in contract assets and deferred revenue. 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 consolidated balance sheets. Contract balances at December 31, 2025, 2024, and 2023 were as follows: YEAR ENDED DECEMBER 31, 2025 2024 2023 (In thousands) Contract assets $ 10,909 $ 13,454 $ 10,405 Contract liabilities $ 77,762 $ 78,878 $ 61,748 During 2025, the Company recognized revenue of $ 75,412 related to contract liabilities at December 31, 2024. The unsatisfied performance obligation as of December 31, 2025 was approximately $ 147,812 . We expect to recognize approximately $ 120,743 or 81.7 % of this revenue over the next 12 months and the remainder thereafter. Deferred Contract Acquisition Costs Under ASC Topic 606, sales commissions paid to the sales force and the related employer payroll taxes, collectively deferred contract acquisition costs, are considered incremental and recoverable costs of obtaining a contract with a customer. The Company recognizes an asset for the incremental costs of obtaining a contract with a customer if the Company expects the benefit of those costs to be longer than one year. The Company has determined that certain sales incentive programs meet the requirements to be capitalized. The costs capitalized are primarily sales commissions for our sales force personnel. Capitalized costs to obtain a contract are amortized on a straight-line basis over the expected period of benefit. Amortization of capitalized costs are included in sales and marketing expense in our consolidated statements of operations and comprehensive income (loss). Capitalized contract acquisition costs were $ 1,351 and $ 873 as of December 31, 2025 and 2024, respectively, and were included in prepaid expenses and other current assets in the consolidated balance sheets. Grant Revenue The Company receives grant funding for certain specific projects from time to time. These grants specify the funds provided are to be used exclusively to satisfy the deliverables outlined in the grant agreements. 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. 101 Table of Contents Sources and Timing of Revenue The Company’s performance obligations are satisfied either over time or at a point in time. 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: YEAR ENDED DECEMBER 31, 2025 2024 2023 (In thousands) Software licenses transferred at a point in time $ 72,074 $ 54,773 $ 49,754 Software licenses transferred over time 111,201 100,923 81,923 Service revenues earned over time 235,563 229,452 222,660 Total $ 418,838 $ 385,148 $ 354,337 (r) Equity-Based Compensation The Company measures equity-based compensation at fair value and recognizes the expense over the vesting period. Forfeitures are recognized as they occur for all awards. 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 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 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. Compensation costs for our restricted stock exchanged for our legacy Class B Units with performance vesting conditions are recognized using the accelerated attribution approach. Compensation costs for our restricted stock units are recognized on a straight-line basis over the requisite service period. (s) Comprehensive Income (Loss) FASB ASC 220, “Comprehensive Income,” (“ASC Topic 220”) establishes standards for reporting of comprehensive income and its components (revenue, gains, and losses) in a full set of general-purpose financial statements. ASC Topic 220 requires that all components of comprehensive income, including net income, be reported in a financial statement that is displayed with the same prominence as other financial statements. 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 102 Table of Contents (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 $ 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 Certain previously reported amounts in the consolidated financial statements have been reclassified to conform to the current year presentation. 3. Concentrations of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk have consisted principally of cash and cash equivalent investments and trade receivables. 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 December 31, 2025 and 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 December 31, 2025 and 2024, no customer accounted for more than 10% of the Company’s accounts receivable. For the years ended December 31, 2025, 2024, and 2023, no customer accounted for more than 10% of the Company’s revenues. 4. Business Combinations Acquisitions have been accounted for using the acquisition method of accounting pursuant to FASB ASC 805, “Business Combinations” (“ASC Topic 805”). Amounts allocated to the purchased assets and liabilities assumed are based upon the total purchase price and the estimated fair values of such assets and liabilities on the effective date of the purchase as determined by an independent third party. The results of operations have been included in the Company’s consolidated financial statements prospectively from the date of acquisition. 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 estimated consideration of $ 8,340 . The business combination was not significant to the Company’s consolidated financial statements. The total estimated consideration includes a portion of contingent consideration that is payable over the next two years following the acquisition in cash, not to exceed $ 2,000 . 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. 103 Table of Contents 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. Formedix Limited ("Formedix") On October 10, 2023, the Company completed the acquisition of Formedix, a provider of clinical metadata repository and clinical trial automation software, for total estimated consideration of $ 41,389 . The business combination was not material to the Company’s consolidated financial statements. The total estimated consideration includes a portion of contingent consideration that is payable over the next two years following the acquisition, in cash, not to exceed $ 9,000 . The fair value of the contingent consideration related to revenue threshold was estimated to be $ 4,380 as of the acquisition date. 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. In total, the fair value of the contingent consideration was estimated to be $ 5,161 as of the acquisition date. Based on the Company’s purchase price allocation, approximately $ 11,700 , $ 3,100 , and $ 25,062 of the purchase price were assigned to developed technology, customer relationships and goodwill, respectively. The Company does not expect goodwill to be deductible due to the fact the Company treated the acquisition as a stock acquisition under the relevant sections of the 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). 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") On December 12, 2023, the Company completed the acquisition of ABM, an industry leader in providing model-informed drug discovery and development support to help accelerate and de-risk therapeutic research and development, for total estimated consideration of $ 36,594 . The business combination was not material to the Company’s consolidated financial statements. 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 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 104 Table of Contents 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. The contingent consideration related to eligible revenues that are remeasured on a recurring basis at fair value for each reporting period. Any changes in the fair value of these contingent liabilities are included in the earnings in the consolidated statements of operations and comprehensive income (loss). 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. 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 acquisition of Chemaxon was accounted for as a purchase in accordance with ASC Topic 805, “Business Combinations”, which requires allocation of the purchase price to the estimated fair values of assets and liabilities acquired in the transaction. The following table summarizes the fair value of the consideration paid as well as the fair values of the assets acquired and liabilities assumed as of the date of the acquisition: Fair value of consideration: Chemaxon Cash paid to sellers $ 87,401 Cash paid to escrow 9,000 Total consideration $ 96,401 Assets acquired and liabilities assumed: Cash and cash equivalents $ 4,543 Intangible assets 50,230 Goodwill ** 46,483 All other assets* 6,633 Deferred revenue ( 4,051 ) Deferred income taxes ** ( 3,788 ) All other liabilities* ( 3,649 ) Net assets acquired $ 96,401 * All other assets includes accounts receivable, prepaid expense, operating right of use assets, etc.; All other liabilities include accounts payable, operating lease liabilities, accrued expense. ** 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 105 Table of Contents 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. 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. The results of operations of the acquired business and the fair value of the acquired assets and liabilities assumed are included in the Company’s consolidated financial statements with effect from the date of the acquisition. 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. 5. Prepaid expenses and other current assets and other long-term assets Prepaid and other current assets consisted of the following: DECEMBER 31, 2025 2024 (In thousands) Prepaid expenses $ 8,335 $ 8,315 Income tax receivable 5,388 9,341 Research and development tax credit receivable 7,352 7,554 Current portion of interest rate swap asset — 2,213 Other current assets 1,127 2,057 Prepaid expenses and other current assets $ 22,202 $ 29,480 Other long-term assets consisted of the following: DECEMBER 31, 2025 2024 (In thousands) Long-term deposits $ 1,157 $ 1,457 Deferred financing cost 485 574 Total other long-term assets $ 1,642 $ 2,031 106 Table of Contents 6. Property and Equipment Property and equipment consisted of the following: DECEMBER 31, 2025 2024 (In thousands) Computer and office equipment $ 4,937 $ 5,161 Furniture 1,862 1,686 Purchased software for internal use 262 219 Leasehold improvements 495 970 Property and equipment 7,556 8,036 Less: Accumulated depreciation and amortization ( 5,703 ) ( 5,869 ) Property and equipment, net $ 1,853 $ 2,167 Depreciation and amortization expense was $ 2,163 , $ 1,994 , and $ 1,552 for the years ended December 31, 2025, 2024, and 2023, respectively. 7. Goodwill and Intangible Assets The following table presents the Company’s intangible assets (other than goodwill) and the related amortization: WEIGHTED AVERAGE AMORTIZATION PERIOD (IN YEARS) DECEMBER 31, 2025 DECEMBER 31, 2024 GROSS CARRYING AMOUNT ACCUMULATED AMORTIZATION NET GROSS CARRYING AMOUNT ACCUMULATED AMORTIZATION NET (In thousands) Acquired software 9.60 $ 200,818 $ ( 65,925 ) $ 134,893 $ 193,257 $ ( 46,261 ) $ 146,996 Capitalized software development costs 2.51 101,196 ( 64,739 ) 36,457 74,684 ( 46,756 ) 27,928 Non-compete agreements 3.17 2,748 ( 1,953 ) 795 2,634 ( 1,630 ) 1,004 Trade names 12.11 59,998 ( 21,748 ) 38,250 59,461 ( 18,472 ) 40,989 Customer relationships 7.39 498,341 ( 261,284 ) 237,057 493,815 ( 225,549 ) 268,266 Patents 2.00 179 ( 155 ) 24 172 ( 141 ) 31 Total $ 863,280 $ ( 415,804 ) $ 447,476 $ 824,023 $ ( 338,809 ) $ 485,214 Amortization expense for intangible assets was $ 73,000 , $ 66,039 , and $ 54,519 for the years ended December 31, 2025, 2024 and 2023, respectively. Amortization expense of $ 18,607 , $ 14,440 , and $ 10,546 was recorded in cost of revenues for the years ended December 31, 2025, 2024, and 2023, respectively. The remaining amortization of $ 54,393 , $ 51,599 , and $ 43,973 was recorded in operating expenses for the years ended December 31, 2025, 2024, and 2023, respectively. 107 Table of Contents Based on the current amount of intangibles subject to amortization, the estimated annual amortization expense for each of the succeeding five years and thereafter is as follows: ACQUIRED SOFTWARE CAPITALIZED SOFTWARE DEVELOPMENT COSTS NON- COMPETE AGREEMENTS TRADE NAMES PATENTS CUSTOMER RELATIONSHIPS TOTAL (In thousands) 2026 $ 18,158 $ 16,606 $ 268 $ 3,269 $ 12 $ 33,669 $ 71,982 2027 16,244 12,294 248 3,269 12 33,669 65,736 2028 16,034 7,557 224 3,269 — 33,669 60,753 2029 15,861 — 55 3,269 — 33,669 52,854 2030 15,314 — — 3,269 — 33,401 51,984 Thereafter 53,282 — — 21,905 — 68,980 144,167 Total $ 134,893 $ 36,457 $ 795 $ 38,250 $ 24 $ 237,057 $ 447,476 Goodwill The goodwill impairment test is performed at least annually at the reporting unit level. An interim test is performed when events or circumstances occur that may indicate that it is more likely than not that the fair value of any reporting unit may be less than its carrying value. 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. 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. 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. 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. These reductions were primarily attributable to a decrease in demand from certain customer groups for the legacy reporting unit. As the result, the Company recorded impairment charges of $ 46,984 for the year ended December 31, 2023. The Company did not recognize any goodwill impairment charges for the years ended December 31, 2025 and 2024. A reconciliation of the change in the carrying value of goodwill is as follows: (In thousands) Balance, December 31, 2023 $ 716,333 Goodwill associated with 2024 business acquisitions 46,483 Foreign currency translation ( 5,778 ) Balance, December 31, 2024 757,038 Goodwill adjustment associated with 2024 business acquisitions 2,947 Tax adjustment to goodwill associated with previous business acquisitions ( 402 ) Foreign currency translation 13,728 Balance, December 31, 2025 $ 773,311 108 Table of Contents 8. Accrued Expenses and Other Long-Term Liabilities Accrued expenses consist of the following: DECEMBER 31, 2025 2024 (In thousands) Accrued compensation $ 36,975 $ 31,045 Legal and professional accruals 5,608 2,886 Interest payable 54 51 Income taxes payable 1,429 430 Short-term contingent considerations 21,979 20,887 Other 1,086 1,152 Total accrued expenses $ 67,131 $ 56,451 Other long-term liabilities consist of the following : DECEMBER 31, 2025 2024 (In thousands) Uncertain tax position liability $ 3,328 $ 1,718 Long - term contingent consideration — 23,581 Interest rate swap liabilities- long term 1,789 — Total other long-term liabilities $ 5,117 $ 25,299 9. Long-Term Debt and Revolving Line of Credit The Company has been a party to a Credit Agreement since August 2017 that provides for a senior secured term loan and commitments under a revolving credit facility (as amended, the “Credit Agreement”). 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. assets and stock pledges for the non-U.S. subsidiaries and contains various financial and nonfinancial covenants. 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 %. Additionally, the Company is obligated to pay a commitment fee of the unused amount and other customary fees. 109 Table of Contents As of each of December 31, 2025 and 2024, available borrowings under the revolving lines of credits were $ 100,000 . The effective interest rate was 7.27 % and 8.68 % for the years ended December 31, 2025 and 2024, respectively, for the Credit Agreement. As discussed previously, the Company entered into interest rate swap agreements that fixed the interest rate. Interest incurred on the Credit Agreement with respect to the term loan amounted to $ 21,611 , $ 25,785 , and $ 26,202 for the years ended December 31, 2025, 2024, and 2023, respectively. Accrued interest payable on the Credit Agreement with respect to the term loan amounted to $ 53 and $ 61 at December 31, 2025 and 2024, respectively, and is included in accrued expenses. 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 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: DECEMBER 31, 2025 2024 (In thousands) Term loans $ 295,509 $ 298,500 Revolving line of credit — — Less: debt issuance costs ( 2,415 ) ( 3,075 ) Total 293,094 295,425 Current portion of long-term debt ( 2,963 ) ( 3,000 ) Long-term debt, net of current portion and debt issuance costs $ 290,131 $ 292,425 The principal amount of long-term debt outstanding as of December 31, 2025, matures in the following years: 2026 2027 2028 2029 2030 Thereafter TOTAL (In thousands) Maturities $ 2,963 $ 2,963 $ 2,963 $ 2,963 $ 2,963 $ 280,694 $ 295,509 The Credit Agreement requires the Company to make an annual mandatory prepayment as it relates to the Company’s Excess Cash Flow calculation. For the year ended December 31, 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 $ 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. 10. Employee Benefit Plan The Company established a defined contribution 401(k) plan covering all U.S. employees who are at least 21 years of age and who meet IRS requirements for plan eligibility. 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 110 Table of Contents 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 operates a Group Personal defined contribution pension plan (“Plan”) covering all U.K. employees. 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. The 401(k) and plan contributions made by the Company in the aggregate were $ 6,387 , $ 5,924 , and $ 5,382 for the years ended December 31, 2025, 2024, and 2023, respectively. 11. Commitments and Contingencies 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 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 The Company does not have any pending or threatened litigation which, individually or in the aggregate, would have a material adverse effect on the consolidated financial statements as of December 31, 2025. Assurance-type warranty 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. Since the Company does not customize its applications software, warranty costs are insignificant and expensed as incurred. For information related to commitments for future minimum lease payments, please see Note 13 – Leases. 12. Equity-Based Compensation The Company’s equity-based compensation programs are intended to attract, retain and provide incentives for employees, officers and directors. The Company has the following stock-based compensation plans and programs. Restricted Stock The majority of the Company’s restricted stock awarded to its employees was originally issued on December 10, 2020 in exchange for the Class B Units of EQT, which was the former parent of the Company. Additionally, the Company granted replacement shares of restricted stock in connection with the 2021 Pinnacle acquisition, which had fully vested in 2024. Share-based compensation for the restricted stock exchanged for the time-based Class B Units is recognized on a straight-line basis over the requisite service period of the award, which is generally five years . Share-based 111 Table of Contents 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 GRANT-DATE FAIR VALUE Non-vested restricted stock as of December 31, 2024 157,486 $ 22.94 Granted — — Vested ( 157,486 ) 22.94 Forfeited — — Non-vested restricted stock as of December 31, 2025 — $ — 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 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 In order to align the Company’s equity compensation program with public company practices, the Company’s Board of Directors adopted and stockholders approved the 2020 Incentive Plan. The 2020 Incentive Plan allows for grants of non-qualified stock options, incentive stock options, restricted stock, restricted stock units (“RSUs”), and performance stock units (“PSUs”) to employees, directors, officers, and consultants or advisors of the Company. The 2020 Incentive Plan allows for 20,000,000 shares (the “plan share reserve”) of common stock to be issued. No more than the number of shares of common stock equal to the plan share reserve may be issued in the aggregate pursuant to the exercise of incentive stock options. The maximum number of shares of common stock granted during a single fiscal year to any non-employee director, taken together with any cash fees paid to such non-employee director during the fiscal year, may not exceed $ 1,000,000 in total value, except for certain awards made to a non-executive chair of our Board of Directors. At December 31, 2025, there were 10,668,660 shares reserved for future issuance. The plan share reserve will be increased on the first day of each fiscal year beginning with the 2021 fiscal year and ending after the tenth anniversary of the effective date in an amount equal to the lesser of (i) the positive difference, if any, between (x) 4.0 % of the outstanding common stock on the last day of the immediately preceding fiscal year and (y) the plan share reserve on the last day of the immediately preceding fiscal year and (ii) a lower number of shares of our common stock as determined by our board of directors. Restricted Stock Units (“RSUs”) RSUs represent the right to receive shares of the Company’s common stock at a specified date in the future. During the year ended December 31, 2025, the Company granted 2,243,111 RSUs under the 2020 Incentive Plan that generally vest over an average three-year period. The fair value of the RSUs is based on the fair value of the underlying shares on the date of grant. 112 Table of Contents A summary of the Company’s RSU activity is as follow: UNITS WEIGHTED-AVERAGE GRANT DATE FAIR VALUE Non-vested RSUs as of December 31, 2024 3,204,589 $ 19.61 Granted* 2,243,111 11.15 Vested** ( 1,493,798 ) 19.73 Forfeited ( 533,340 ) 16.88 Cancelled* ( 62,381 ) 11.69 Non-vested RSUs as of December 31, 2025 3,358,181 $ 14.48 * The majority of shares granted during 2025 were issued under the 2020 Incentive Plan. During the year ended December 31, 2025, the Company modified awards for recipients, resulting in 62,381 shares assumed to be granted, vested, and cancelled for accounting purposes. ** The number of the RSUs vested included 528,970 shares that were withheld on behalf of employees to satisfy the statutory tax withholding requirements. The weighted-average grant date fair values per share of RSUs granted during 2025, 2024, and 2023 were $ 11.15 , $ 17.62 , and $ 23.35 , respectively. The total fair value of RSUs vested during 2025, 2024, and 2023 were $ 29,473 , $ 30,723 , and $ 20,261 , respectively. Equity-based compensation expense related to the RSUs was $ 26,043 , $ 31,582 and $ 26,734 for the years ended December 31, 2025, 2024, and 2023, respectively. At December 31, 2025, the total unrecognized equity-based compensation expense related to outstanding RSUs was $ 30,322 , which is expected to be recognized over a weighted-average period of 20.8 months. 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, 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 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. 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. 113 Table of Contents A summary of the Company's PSU activity as of and for the year ended December 31, 2025 is as follows: UNITS WEIGHTED-AVERAGE GRANT DATE FAIR VALUE Non-vested PSUs as of December 31, 2024 645,377 $ 20.95 Granted 1,193,244 9.97 Vested* ( 211,236 ) 13.46 Forfeited ( 232,059 ) 10.96 Cancelled ( 201,138 ) 22.13 Non-vested PSUs as of December 31, 2025 1,194,188 $ 13.05 * The number of the PSUs vested included 18,846 shares that were withheld on behalf of employees to satisfy the statutory tax withholding requirements. The weighted-average grant date fair values per share of PSUs granted during 2025, 2024, and 2023 were $ 9.97 and $ 18.98 , and $ 27.00 , respectively. The total fair values of PSUs vested were $ 2,843 , $ 2,437 , $ 5,269 during 2025, 2024 and 2023, respectively. Equity-based compensation expense related to the PSUs was $ 6,555 , $ 1,279 , and $( 1,531 ) for the years ended December 31, 2025, 2024, and 2023, respectively. At December 31, 2025, the total unrecognized equity-based compensation expense related to outstanding PSUs was $ 3,735 , which is expected to be recognized over a weighted-average period of 17.8 months. The grant date fair values for PSU 2023, 2024, and 2025 were determined based on Monte Carlo price model and the valuation assumptions noted in the following table. Year Ended December 31, 2025 2024 2023 Expected dividend yield — — — Volatility 50.9 % - 52.5 % 52.2 % - 54.7 % 61.4 % - 61.9 % Expected term (years) 2.33 - 2.86 1.78 - 2.78 2.54 - 2.74 Risk-free interest rate 3.51 %- 3.91 % 4.36 % - 4.64 % 3.89 % - 4.29 % Equity-based compensation expense The following table summarizes the components of total equity-based compensation expense included in the consolidated statements of operations and comprehensive income (loss) for each period presented: YEAR ENDED DECEMBER 31, 2025 2024 2023 (In thousands) Cost of revenues $ 12,205 $ 13,323 $ 11,545 Sales and marketing 4,365 3,481 1,763 Research and development 3,779 5,233 6,316 General and administrative expenses 12,730 12,737 8,676 Total $ 33,079 $ 34,774 $ 28,300 114 Table of Contents 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. 13. Leases 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. With respect to operating lease liabilities, current operating lease liabilities are included in current liabilities and non-current operating lease liabilities are included in long-term liabilities in the consolidated balance sheets. The following table presents information about the operating lease right-of-use assets and lease liabilities as well as lease term and discount rates: Lease right-of-use assets, lease liabilities, lease term and discount rate: December 31, 2025 December 31, 2024 (In thousands) Lease right of use assets Operating leases $ 11,939 $ 13,841 $ 11,939 $ 13,841 Lease liabilities Current Operating leases $ 3,920 $ 5,306 Noncurrent Operating leases 8,438 11,166 $ 12,358 $ 16,472 For the year ended December 31, 2025 For the year ended December 31, 2024 Weighted-average remaining lease term (years): Operating leases 5.8 5.4 Weighted-average discount rate: Operating leases 5.8 % 5.5 % The components of total lease cost were as follows: December 31, 2025 December 31, 2024 (In thousands) Operating lease cost $ 4,602 $ 5,454 Short-term lease cost 534 453 Variable lease cost 1,115 ( 7 ) Sublease income ( 314 ) ( 217 ) Total lease cost $ 5,937 $ 5,683 115 Table of Contents Supplemental cash flow and non-cash flow information was as follows: December 31, 2025 December 31, 2024 (In thousands) Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 4,983 $ 4,684 Financing cash flows from finance leases $ — $ — Right-of-use assets obtained in exchange for new and remeasured operating leases $ 1,037 $ 5,912 Right-of-use assets obtained through acquisition $ — $ 2,052 The following table summarizes by year the maturities of our minimum lease payments as of December 31, 2025. LEASES (In thousands) Year ending December 31, 2026 $ 4,125 2027 3,116 2028 1,301 2029 1,180 2030 1,100 Thereafter 4,108 Total future lease payments 14,930 Less: imputed interest ( 2,572 ) Total $ 12,358 Lease abandonment 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). 14. Segment data 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 (“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. 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. 116 Table of Contents 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 (q) - 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: YEAR ENDED DECEMBER 31, 2025 2024 2023 (In thousands) Revenue(1): Americas $ 291,601 $ 281,493 $ 265,063 EMEA 92,629 76,567 63,567 Asia Pac 34,608 27,088 25,707 Total $ 418,838 $ 385,148 $ 354,337 __________________________________ (1) Revenue is attributable to the countries based on the location of the customer Long-lived assets, defined as the net ROU assets and net Property, Plant, and Equipment, excluding goodwill and net intangible assets, by geographic area as of December 31, 2025 and 2024 are presented as follows: DECEMBER 31, 2025 2024 (In thousands) Long-Lived Assets, net: Americas $ 8,353 $ 9,546 EMEA 5,208 5,605 Asia Pac 231 857 Total $ 13,792 $ 16,008 117 Table of Contents The following table presents information about reported segment revenue, segment profit or loss, and significant segment expenses. YEAR ENDED DECEMBER 31, 2025 2024 2023 (In thousands) Revenues $ 418,838 $ 385,148 $ 354,337 Less: Employee expense-non equity 238,879 221,379 187,035 Equity-based compensation expense 33,079 34,774 28,300 Equipment and software expense 17,237 13,990 11,528 Direct cost of revenues 7,070 5,310 4,399 Professional services expense 29,271 25,216 27,192 Change in fair value of contingent consideration ( 3,597 ) 8,089 24,118 Depreciation and amortization expense 75,162 68,033 56,071 Goodwill impairment expense — — 46,984 Other segment expense(a) ( 5,617 ) 4,021 937 Interest expense 19,738 21,520 22,916 Income tax expense 9,211 ( 5,133 ) 214 Segment net income $ ( 1,595 ) $ ( 12,051 ) $ ( 55,357 ) Reconciliation of profit or loss Adjustments and reconciling items $ — $ — $ — Consolidated net income $ ( 1,595 ) $ ( 12,051 ) $ ( 55,357 ) (a) Other segment expense items included in segment net income include facilities related expense, marketing, travel, insurance, foreign currency exchange gains and losses, and other overhead expense. 15. Income Taxes The components of income (loss) before income taxes were as follows: YEAR ENDED DECEMBER 31, 2025 2024 2023 (In thousands) Domestic $ 7,491 $ ( 15,443 ) $ ( 60,587 ) Foreign 125 ( 1,741 ) 5,444 Total $ 7,616 $ ( 17,184 ) $ ( 55,143 ) 118 Table of Contents The components of provision for (benefit from) income taxes were as follows: DECEMBER 31, 2025 2024 2023 (In thousands) Current tax provision Federal $ 5,706 $ ( 1,675 ) $ 3,986 State and local 2,216 2,169 3,976 Foreign 9,610 7,068 8,775 Total current 17,532 7,562 16,737 Deferred tax benefit Federal ( 4,429 ) ( 6,977 ) ( 10,957 ) State and local 123 ( 2,934 ) ( 2,835 ) Foreign ( 4,015 ) ( 2,784 ) ( 2,731 ) Total deferred ( 8,321 ) ( 12,695 ) ( 16,523 ) Total provision (benefit) $ 9,211 $ ( 5,133 ) $ 214 119 Table of Contents 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 U.S. Federal Statutory Tax Rate $ 1,599 21.0 % United States State and Local Income Taxes* 1,689 22.2 % Federal Effect of Cross-Border Tax Laws FDII ( 1,028 ) ( 13.5 ) % GILTI 271 3.6 % Tax Credits 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 ) % Canada Investment tax credit ( 1,153 ) ( 15.1 ) % Other ( 55 ) ( 0.7 ) % Hungary 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: 120 Table of Contents DECEMBER 31, 2024 2023 (In thousands, except for percentage) Tax at U.S. federal statutory rate $ ( 3,611 ) 21.00 % $ ( 11,580 ) 21.00 % State taxes, net of federal benefit ( 1,201 ) 6.98 % 136 ( 0.25 ) % Foreign rate differential 4,940 ( 28.73 ) % 4,552 ( 8.26 ) % Permanent items ( 1,944 ) 11.31 % 5,205 ( 9.44 ) % Equity compensation 2,738 ( 15.91 ) % 1,582 ( 2.87 ) % GIL TI inclusion 1,442 ( 8.38 ) % 2,374 ( 4.30 ) % Tax credits ( 7,969 ) 46.34 % ( 10,031 ) 18.19 % Rate change — — % ( 237 ) 0.43 % Other adjustments 2,304 ( 13.40 ) % 4,148 ( 7.52 ) % Return to provision adjustments 820 ( 4.76 ) % ( 1,288 ) 2.34 % Valuation allowance ( 2,652 ) 15.42 % 5,353 ( 9.71 ) % 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: U.S. Federal $ ( 1,079 ) U.S. State: Massachusetts 1,300 Other states 1,823 Total U.S. State 3,123 Total United States 2,044 Foreign: United Kingdom 8,853 Other 1,322 Total Foreign 10,175 Total tax payment $ 12,219 121 Table of Contents The tax effects of temporary differences that give rise to deferred tax assets and liabilities are summarized as follows: DECEMBER 31, 2025 2024 (In thousands) Deferred tax assets Accounts receivable $ 570 $ 570 Accrued compensation 4,990 4,191 Accrued expenses 399 15 Deferred revenue — 286 Net operating loss carryforwards 13,517 12,448 R&D credit carryforward 5,476 4,171 Foreign tax credits 15,684 12,045 Equity based compensation 4,433 4,366 Other assets 2,340 1,303 Interest expense 418 1,080 Lease liability 2,692 3,362 Interest rate hedge 574 — Section 174 20,106 16,975 Total gross deferred tax asset 71,199 60,812 Less: Valuation allowance ( 29,425 ) ( 24,023 ) Net deferred tax asset 41,774 36,789 Deferred tax liabilities Property, equipment, and other long-lived assets ( 93 ) ( 146 ) Goodwill and intangible assets ( 67,238 ) ( 68,314 ) Prepaid expenses ( 956 ) ( 1,352 ) Interest rate hedge — ( 567 ) Right-of-use (ROU) Asset ( 2,333 ) ( 2,643 ) Deferred revenue ( 34 ) — Other liabilities ( 243 ) ( 226 ) Total gross deferred tax liability ( 70,897 ) ( 73,248 ) Net deferred tax liability $ ( 29,123 ) $ ( 36,459 ) 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. A U.S. valuation allowance was required against the foreign tax credit carryforward. At the foreign subsidiaries, the valuation allowance was primarily related to foreign net operating losses that, in the judgment of management, are not more likely than not to be realized. In assessing the realizability of deferred tax assets, management considered whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible and carryforward attributes can be utilized. Management considered the reversal of deferred tax liabilities in making this assessment. Management believes it is more likely than not that the 122 Table of Contents 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. Foreign undistributed earnings were considered permanently invested, therefore no provision for US income taxes was accrued as of December 31, 2025 and 2024, with the exception of the withholding tax liability of $ 168 on the potential repatriation from Certara Canada Corporation. The Company assessed its uncertain tax positions and determined that a liability of $ 8,534 and $ 7,411 was required to be recorded for uncertain tax positions as of December 31, 2025 and 2024, respectively. Uncertain tax positions relate primarily to federal and state R&D credits and certain net operating losses. The Company's policy is to recognize interest and penalties as a component of the provision for income taxes. 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. A reconciliation of the beginning and ending balance of unrecognized tax benefits is as follows: (In thousands) Balance at December 31, 2023 $ 2,708 Additions for tax positions related to the current year 509 Additions for tax positions of prior years $ 5,312 Reductions for tax positions of prior years ( 14 ) Reductions related to settlements with taxing authorities ( 1,104 ) Balance at December 31, 2024 $ 7,411 Additions for tax positions related to the current year 547 Additions for tax positions of prior years 623 Reductions for tax positions of prior years ( 47 ) Balance at December 31, 2025 $ 8,534 The uncertain tax positions, inclusive of interest and exclusive penalties, were $ 8,534 and $ 7,411 as of December 31, 2025 and December 31, 2024, respectively, which also represents potential tax benefits that if recognized, would impact the effective tax rate. 123 Table of Contents U.S. federal income tax returns are generally subject to examination for a period of three years after the filing of the return. However, the Internal Revenue Service can audit the NOLs generated in respective years in the years that the NOLs are utilized. 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. Foreign income tax returns are generally subject to examination based on the tax laws of the respective jurisdictions. The Company is subject to tax on Global Intangible Low-Taxed Income (“GILTI”) and has elected to account for GILTI as a current period expense. The Organization for Economic Co-operation and Development (“OECD”) introduced Base Erosion and Profit Shifting (“BEPS”) Pillar 2 rules that impose a global minimum tax rate of 15%. 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 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. 16. Earnings per Share Basic earnings per share is computed by dividing net income (loss) attributable to common stockholders by the weighted-average common shares outstanding for the period. Diluted net income (loss) per share is computed by dividing the net income (loss) attributable to stockholders by the weighted-average number of shares and dilutive potential common shares during the period. YEAR ENDED DECEMBER 31, 2025 2024 2023 (In thousands, except per share and share data) Basic earnings per share Net income (loss) available to common shareholders $ ( 1,595 ) $ ( 12,051 ) $ ( 55,357 ) Basic weighted-average common shares outstanding 160,394,418 160,392,805 158,936,251 Basic earnings per common share $ ( 0.01 ) $ ( 0.08 ) $ ( 0.35 ) Diluted earnings per share Net income available to common shares $ ( 1,595 ) $ ( 12,051 ) $ ( 55,357 ) Basic weighted-average common shares outstanding 160,394,418 160,392,805 158,936,251 Dilutive potential common shares* — — — Diluted weighted-average common shares outstanding 160,394,418 160,392,805 158,936,251 Diluted earnings per common share $ ( 0.01 ) $ ( 0.08 ) $ ( 0.35 ) __________________________________ * 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. 124 Table of Contents Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure. None.