What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-08-04 compared with 2026-05-11 · 214 added, 107 removed, 273 unchanged (54% of the section changed)

12 unchanged sentences

On average, the pharmaceutical industry spends more than $290 billion annually on research and development (“R&D”).

Generally, companies spend an average of $6.2 billion per FDA-approved drug to develop one new medicine, including the cost of failures, according to “Analysis of pharma R&D productivity - a new perspective needed” on Drug Discovery Today.

Generally, companies spend an average of $6.2 billion per FDA-approved drug to develop one new medicine, including the cost of failures, according to “Analysis of pharma R&D productivity -

a new perspective needed” on Drug Discovery Today.

Our technology and scientists incorporate modern advances in scientific understanding, drug research and development experience, data analysis, and AI, resulting in significant opportunities to decrease the cost and increase the odds of new drug approval and commercial success.

4 unchanged sentences

For over two decades, our scientists have developed and validated our biosimulation technology using data from scientific literature, laboratory research, preclinical and clinical studies.

To do this, we have developed scientifically

based solutions for the collection, standardization, validation, storage, and analysis of the preclinical, clinical and evidence data needed for MIDD.

To do this, we have developed scientifically based solutions for the collection, standardization, validation, storage, and analysis of the preclinical, clinical and evidence data needed for MIDD.

These data solutions are used internally and industry wide by life sciences companies.

The scientific principles underlying our work must be transparent and fully explainable during the regulatory process, so we have developed expertise in incorporating data, references and results into regulatory documents.

Our software and regulatory scientific services streamline the creation of regulatory filings and speed regulatory data flow to maximize the chances of successful commercialization.

Native AI and machine learning technologies are being incorporated across our technology and consulting services portfolios, providing opportunities to expand the number of data sources utilized, better predict outcomes, and streamline reporting.

For example, we are using machine learning to automate and speed the process of biosimulation, and we have created generative AI applications to aid in drafting regulatory documents from scientific analyses and clinical data.

For example, we are using machine learning to automate and speed the process of biosimulation.

We apply AI capabilities within established modeling environments and under the supervision of experienced scientists and regulatory experts.

15 unchanged sentences

Our new bookings represent the estimated contract value of a signed contract or purchase order where there is sufficient or reasonable certainty about the customer’s ability and intent to fund and commence the software and/or services.

Bookings vary from period to period depending on numerous factors, including the overall health of the biopharmaceutical industry, regulatory

developments, industry consolidation, and sales performance.

Bookings vary from period to period depending on numerous factors, including the overall health of the biopharmaceutical industry, regulatory developments, industry consolidation, and sales performance.

Bookings have varied and will continue to vary significantly from quarter to quarter and from year to year.

1 unchanged sentence

Our net retention rates measure the percentage of recurring revenue that is retained from existing software customers over a specific period of time, inclusive of price increases and expansion, excluding revenue from acquisitions occurred within the past 12 months.

The table below summarizes our quarterly bookings and net software retention rate trends:

The table below summarizes our quarterly bookings and net software retention rate trends from continuing operations:

(in millions except percentage)

18 unchanged sentences

Additionally, changes in government leadership may also result in either stricter or more relaxed regulatory environments.

In the United States, recent executive actions and related government initiatives concerning

prescription drug pricing, together with existing statutes and implementing guidance, may create additional uncertainty in pricing frameworks.

In the United States, recent executive actions and related government initiatives concerning prescription drug pricing, together with existing statutes and implementing guidance, may create additional uncertainty in pricing frameworks.

For example, government-led initiatives to expand direct-to-consumer discount mechanisms and other pricing programs could alter market dynamics and may indirectly affect customer research and development investment levels and priorities.

5 unchanged sentences

Uncertain macroeconomic conditions, including higher inflation, rising interest rates and instability in the financial system, trade disputes, tariffs, changes in government funding, geopolitical conflicts, and pandemics or other infectious disease outbreaks, may pose challenges to our business.

Divestiture and Discontinued Operation

On April 21, 2026, the Company entered into a Purchase Agreement (the "Purchase Agreement") with Veristat, LLC to sell its global medical writing and related regulatory services business (the "Regulatory and Medical Writing business").

On May 8, 2026, the Company completed the sale of the Regulatory and Medical Writing business.

The Company received cash consideration of $69.4 million, with an additional $15.0 million placed in escrow to be released to the Company upon the satisfaction of certain post-closing conditions.

In addition, the Company is eligible to receive an earn-out payment of up to $35.0 million based on the financial performance (as defined in the Purchase Agreement) of such business over a specified period following closing.

The transaction resulted in an estimated pretax loss on sale of $65.5 million, including an estimated after-tax loss of $48.6 million, which was recorded in loss from discontinued operations, in the condensed consolidated statement of operations for the three and six months ended June 30, 2026.

The final loss recognized may differ from the amount currently recognized due to the final escrow amount realized and the ultimate settlement of the earn-out.

During the second quarter of 2026, the Company determined that the Regulatory and Medical Writing business met the accounting criteria to be classified as held for sale and discontinued operations.

Accordingly, the Company has presented the results of operations and the related cash flows of the Regulatory and Medical Writing business as discontinued operations in the condensed consolidated financial statements through the date of sale.

This presentation has been applied retrospectively to all periods presented.

In connection with the transaction, the Company entered into a transition services agreement pursuant to which it will provide certain services, including information technology and other administrative functions, for a defined period following closing.

Non-GAAP Measures

1 unchanged sentence

We believe that the presentation of the GAAP and the non-GAAP metrics in this filing will aid investors in understanding our business.

Management measures operating performance based on adjusted EBITDA defined for a particular period as net income (loss) excluding interest expense, provision (benefit) for income taxes, depreciation and amortization expense, equity-based compensation expense, change in contingent consideration, acquisition expense, and other items not indicative of our ongoing operating performance.

Management also measures operating performance based on adjusted net income defined for a particular period as net income (loss) excluding equity-based compensation expense, amortization of acquisition-related intangible assets, change in contingent consideration, acquisition and integration expense, and other items not indicative of our ongoing operating performance.

Further, management measures operating performance based on adjusted diluted earnings per share defined for a particular period as adjusted net income divided by the weighted-average diluted common shares outstanding.

Management measures operating performance based on adjusted EBITDA defined for a particular period as net income (loss) from continuing operations excluding interest expense, provision (benefit) for income taxes, depreciation and amortization expense, equity-based compensation expense, change in fair value of contingent consideration, acquisition expense, and other items not indicative of our ongoing operating performance.

Management also measures operating performance based on adjusted net income defined for a particular period as net income (loss) from continuing operations excluding equity-based compensation expense, amortization of acquisition-related intangible assets, change in contingent consideration, acquisition and integration expense, and other items not indicative of our ongoing operating performance.

Further, management measures operating performance based on adjusted diluted earnings per share defined for a particular period as adjusted net income from continuing operations divided by the weighted-average diluted common shares outstanding.

We believe adjusted EBITDA, adjusted net income, and adjusted diluted earnings per share are helpful to investors, analysts, and other interested parties because they can assist in providing a more consistent and comparable overview of our operations across our historical periods.

In addition, these measures are frequently used by analysts, investors, and other interested parties to evaluate and assess performance.

Adjusted EBITDA, adjusted net income, and adjusted diluted earnings per share are non-GAAP measures and are presented for supplemental purposes only and should not be considered as an alternative or substitute to

financial information presented in accordance with GAAP.

Adjusted EBITDA, adjusted net income, and adjusted diluted earnings per share have certain limitations in that they do not include the impact of certain expenses that are reflected in our condensed consolidated statements of operations and comprehensive income (loss) that are necessary to run our business.

Other companies, including those in our industry, may not use these measures and may calculate them differently than those presented, limiting the usefulness as a comparative measure.

The following table reconciles net income (loss) to Adjusted EBITDA:

The following table reconciles net income (loss) from continuing operations to Adjusted EBITDA:

THREE MONTHS ENDED

JUNE 30, SIX MONTHS ENDED

2026 2025 2026 2025

(in thousands)

Net income (loss)(a) $ (8,763) $ 4,743

Net income (loss) from continuing operations(a) $ (6,081) $ 1,496 $ (17,906) $ 3,001

Interest expense(a) 4,987 4,802 9,928 9,608

4 unchanged sentences

Equity-based compensation expense(b) 6,094 8,245 13,414 15,315

Change in contingent consideration(d) 7,230 (179)

Change in fair value of contingent consideration(d) — (5,722) 7,230 (5,901)

Acquisition-related expenses(e) (132) 428 (114) 1,304

3 unchanged sentences

Adjusted EBITDA $ 26,198 $ 26,969 $ 52,881 $ 55,408

The following table reconciles net income (loss) to adjusted net income:

THREE MONTHS ENDED MARCH 31,

The following table reconciles net income (loss) from continuing operations to adjusted net income:

THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED

2026 2025 2026 2025

(in thousands)

Net income (loss) (a) $ (8,763) $ 4,743

Net income (loss) from continuing operations(a) $ (6,081) $ 1,496 $ (17,906) $ 3,001

Currency (gain) loss(a) 2,358 (577) 2,418 (639)

1 unchanged sentence

Amortization of acquisition-related intangible assets(c) 10,849 10,947 21,640 21,938

Change in contingent consideration(d) 7,230 (179)

Change in fair value of contingent consideration(d) — (5,722) 7,230 (5,901)

Acquisition-related expenses(e) (132) 428 (114) 1,304

4 unchanged sentences

Adjusted net income $ 12,540 $ 12,727 $ 21,574 $ 29,450

The following table reconciles diluted earnings per share to adjusted diluted earnings per share:

THREE MONTHS ENDED MARCH 31,

Diluted earnings per share(a) (0.06) 0.03

The following table reconciles diluted earnings per share from continuing operations to adjusted diluted earnings per share:

THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED

2026 2025 2026 2025

Diluted earnings per share from continued operations (a) (0.04) 0.01 (0.11) 0.02

Currency (gain) loss(a) 0.02 — 0.02 —

1 unchanged sentence

Amortization of acquisition-related intangible assets(c) 0.07 0.07 0.13 0.14

Change in contingent consideration(d) 0.05 —

Change in fair value of contingent consideration(d) — (0.04) 0.05 (0.04)

Acquisition-related expenses(e) — — — 0.01

35 unchanged sentences

Cost of Revenues

Cost of revenues consists primarily of employee-related expenses, equity-based compensation, the costs of third-party subcontractors, travel costs, distributor fees, amortization of capitalized software, and allocated

We may add or expand computing infrastructure service providers, make additional investments in the availability and security of our solutions, or add resources to support our growth.

5 unchanged sentences

R&D expenses consist primarily of employee-related expenses, equity-based compensation, third-party consulting, software costs, and tax credits.

We plan to continue to invest in our R&D efforts to enhance and scale our software product offerings by development of new features and increased functionality.

We plan to continue to

invest in our R&D efforts to enhance and scale our software product offerings by development of new features and increased functionality.

• General and Administrative .

14 unchanged sentences

We expect income tax expense to increase over time as the Company continues to grow more profitable.

Business Combinations or Divestiture

On May 8, 2026, we completed the sale of our global medical writing and related regulatory services business to Veristat, LLC for cash consideration of $85.0 million, as well as an additional $15.0 million placed in escrow, which would be released to the Company upon satisfaction of certain post‑closing conditions.

We are also eligible to receive cash earn-out of up to $35.0 million based on the financial performance of such business for a specified period following closing.

Net proceeds from the transaction are expected to be used for general corporate purposes, including funding our ongoing operations.

We expect the transaction to strengthen our focus on core operations and further our commitment to accelerating AI-integrated modeling and simulation across the entire drug development lifecycle.

In connection with the transaction, we entered into a transition services agreement pursuant to which we will provide certain services, including information technology and other administrative functions, for a defined period following closing.

Results of Operations

We have included the results of operations of acquired companies in our condensed consolidated results of operations from the date of their respective acquisitions, which impacts the comparability of our results of operations when comparing results for the three months ended March 31, 2026 to the three months ended March 31, 2025, respectively.

Three Months Ended March 31, 2026 Versus Three Months Ended March 31, 2025

The following table summarizes our unaudited statements of operations data for the three months ended at March 31, 2026 and 2025:

THREE MONTHS ENDED MARCH 31, CHANGE

The following results of operations present our continuing operations for the three and six months ended June 30, 2026 to the three and six months ended June 30, 2025, respectively.

All results from the Regulatory and Medical Writing business are presented within income (loss) from discontinued operations for these periods.

Three Months Ended June 30, 2026 Versus Three Months Ended June 30, 2025

The following table summarizes our unaudited statements of operations data for the three months ended at June 30, 2026 and 2025:

THREE MONTHS ENDED JUNE 30, CHANGE

2026 2025 $ %

3 unchanged sentences

Total revenues $ 93,271 $ 92,356 $ 915 1 %

Total revenues increased by $0.9 million, or 1%, to $106.9 million for the three months ended March 31, 2026 as compared to the same period in 2025.

Overall revenue growth was primarily driven by our software product offerings, supported by strong demand from existing customers, expansion of relationships with existing customers and new customers.

Software revenues increased by $3.4 million, or 7%, to $49.7 million for the three months ended March 31, 2026 as compared to the same period in 2025, primarily driven by increased demand from existing customers, expanded relationships with existing customers, and new customers.

Services revenues decreased by $2.4 million, or 4%, to $57.2 million for the three months ended March 31, 2026 as compared to the same period in 2025, primarily due to lower revenue from a previously acquired business.

Total revenues increased by $0.9 million, or 1%, to $93.3 million for the three months ended June 30, 2026 as compared to the same period in 2025.

Overall revenue growth was primarily driven by our software product offerings, supported by strong demand from existing customers and expansion of relationships with existing customers and new customers.

Software revenues increased by $2.1 million, or 4%, to $48.8 million for the three months ended June 30, 2026 as compared to the same period in 2025, primarily driven by increased demand from existing customers and expanded relationships with existing customers.

Services revenues decreased by $1.2 million to $44.5 million for the three months ended June 30, 2026 as compared to the same period in 2025.

Cost of Revenues

THREE MONTHS ENDED MARCH 31, CHANGE

THREE MONTHS ENDED JUNE 30, CHANGE

2026 2025 $ %

2 unchanged sentences

% of total revenues 38 % 37 %

Cost of revenues increased $0.1 million, or 0%, to $41.6 million for the three months ended March 31, 2026 as compared to the same period in 2025, and remained essentially flat compared with the same quarter in the prior year.

Cost of revenues increased $0.8 million, or 2%, to $35.1 million for the three months ended June 30, 2026 as compared to the same period in 2025.

The increase in cost of revenue was primarily due to a $1.0 million increase in employee-related costs and a $0.9 million increase in professional and consulting expense, partially offset by a $0.7 million decrease in stock-based compensation costs and a $0.4 million decrease in other miscellaneous expenses.

Sales and Marketing Expenses

THREE MONTHS ENDED MARCH 31, CHANGE

THREE MONTHS ENDED JUNE 30, CHANGE

2026 2025 $ %

2 unchanged sentences

% of total revenues 16 % 15 %

Sales and marketing expenses increased by $0.6 million, or 5%, to $13.4 million for the three months ended March 31, 2026 as compared to the same period in 2025.

Sales and marketing expenses increased primarily due to a $0.3 million increase in employee-related costs, a $0.2 million increase in stock-based compensation costs, a $0.2 million increase in marketing expense, and a $0.2 million increase in travel expense, partially offset by a $0.1million decrease in professional and consulting expense and a $0.1 million decrease in other miscellaneous expense.

Sales and marketing expenses increased by $1.3 million, or 10%, to $15.0 million for the three months ended June 30, 2026 as compared to the same period in 2025.

Sales and marketing expenses increased primarily due to a $1.0 million increase in professional and consulting expense, a $0.3 million increase in employee-related costs, and an aggregate $0.3 million increase in travel, marketing, and equipment and software expenses, partially offset by a $0.3 million decrease in stock-based compensation costs.

Research and Development Expenses

THREE MONTHS ENDED MARCH 31, CHANGE

THREE MONTHS ENDED JUNE 30, CHANGE

2026 2025 $ %

2 unchanged sentences

% of total revenues 10 % 10 %

Research and development expenses increased by $1.8 million, or 17%, to $12.3 million for the three months ended March 31, 2026 as compared to the same period in 2025.

The increase in research and development expenses was primarily due to a $2.2 million increase in employee-related costs mainly resulting from head count growth associated with investments in software development, including AI integration across our product portfolio, a $0.2 million increase in professional and consulting expense, a $0.2 million increase in miscellaneous expense, and a $0.1 million increase in stock-based compensation costs, partially offset by a $1.1 million increase in capitalized cost in R&D.

Research and development expenses increased by $0.7 million, or 8%, to $9.7 million for the three months ended June 30, 2026 as compared to the same period in 2025.

The increase in research and development expenses was primarily due to a $0.6 million increase in employee-related costs.

General and Administrative Expenses

THREE MONTHS ENDED MARCH 31, CHANGE

THREE MONTHS ENDED JUNE 30, CHANGE

2026 2025 $ %

2 unchanged sentences

% of total revenues 24 % 18 %

General and administrative expenses increased by $9.7 million, or 49%, to $29.4 million for the three months ended March 31, 2026 as compared to the same period in 2025.

The increase in general and administrative expenses was primarily due to a $7.4 million increase in business acquisition contingent consideration expense, a $1.0 million increase in equipment and software expense, a $0.9 million increase in executive recruiting and retention expenses, a $0.8 million increase in lease abandonment expense, primarily due to the absence of a non-recurring gain recognized in the prior year that reduced expenses in that period, and a $0.5 million increase in professional and consulting expense, partially offset by a $0.5 million decrease in merger and acquisition expense and a $0.3 million aggregate decrease in license costs and facility lease related expenses.

General and administrative expenses increased by $5.2 million, or 31%, to $21.9 million for the three months ended June 30, 2026 as compared to the same period in 2025.

The increase in general and administrative expenses was primarily due to a $5.7 million increase related to the remeasurement of the fair value of business acquisition contingent consideration, primarily due to the absence of a non-recurring favorable change recognized in the prior year that reduced expenses in that period, a $0.6 million increase in executive recruiting expenses, a $0.5 million increase in lease abandonment expense, and a $0.3 million increase in equipment and software expense, partially offset by a $1.1 million decrease in stock-based compensation costs, and a $0.8 million decrease in facility-lease related expense.

THREE MONTHS ENDED JUNE 30, CHANGE

2026 2025 $ %

(in thousands)

Depreciation and amortization

THREE MONTHS ENDED MARCH 31, CHANGE

$ 11,729 $ 11,070 $ 659 6 %

% of total revenues 13 % 12 %

Depreciation and amortization expense increased by $0.7 million, or 6%, to $11.7 million for the three months ended June 30, 2026 as compared to the same period in 2025.

The increase in depreciation and amortization expense was primarily due to a $0.8 million increase in depreciation of computer equipment.

Interest Expense

THREE MONTHS ENDED JUNE 30, CHANGE

2026 2025 $ %

(in thousands)

Interest expense $ 4,987 $ 4,802 $ 185 4 %

% of total revenues 5 % 5 %

Interest expense increased by $0.2 million, or 4%, to $5.0 million for the three months ended June 30, 2026, as compared to the same period in 2025.

The change in interest expense was primarily due to a $0.9 million decrease in gain from our interest swap hedge activities, partially offset by a $0.7 million decrease in interest expense from our floating rate term loan debt, primarily due to a decline in market interest rates and a reduced base margin rate resulting from the refinancing of the term loan.

Net Other Income

THREE MONTHS ENDED JUNE 30, CHANGE

2026 2025 $ %

(in thousands)

Net other (income) expense $ 1,205 $ (1,501) $ 2,706 (180) %

% of total revenues 1 % (2) %

Net other income decreased by $2.7 million to a net expense of $1.2 million for the three months ended June 30, 2026 as compared to the same period in 2025.

The decrease in net other income was primarily due to a $2.4 million increase in loss from remeasurement related to the fluctuation of the foreign currency rate, and a $0.3 million decrease in interest income.

Provision (Benefits) from Income Taxes

THREE MONTHS ENDED JUNE 30, CHANGE

2026 2025 $ %

(in thousands)

Provision (Benefits) from Income Taxes

$ (307) $ 2,874 $ (3,181) (111) %

Effective income tax rate 5 % 66 %

Our income tax benefit was $0.3 million, resulting in an effective income tax rate of 5% for the three months ended June 30, 2026 as compared to income tax expense of $2.9 million, or an effective income tax rate of 66%, for the same period in 2025.

Our income tax expense for the three months ended June 30, 2026 and 2025 was primarily due to the tax effects of U.S.

pre-tax income, the relative mix of domestic and international earnings, the impact of non-deductible items, adjustments to the valuation allowances, the effects of tax elections made for U.K.

earnings, and discrete tax items.

Net Income (Loss) from continuing operations

THREE MONTHS ENDED JUNE 30, CHANGE

2026 2025 $ %

(in thousands)

Net income (loss)

$ (6,081) $ 1,496 $ (7,577) (506) %

Net loss was $6.1 million, representing a $7.6 million decrease in net income for the three months ended June 30, 2026 as compared to net income of $1.5 million for the same period of 2025.

The decrease in net income was primarily due to a $7.9 million increase in operating expenses, a $2.9 million increase in total other expense, and a $0.8 million increase in cost of revenue, partially offset by a $3.2 million decrease in tax expense and a $0.9 million increase in revenue.

Six Months Ended June 30, 2026 Versus Six Months Ended June 30, 2025

The following table summarizes our unaudited statements of operations data for the six months ended at June 30, 2026 and 2025:

SIX MONTHS ENDED JUNE 30, CHANGE

2026 2025 $ %

(in thousands)

Software $ 98,522 $ 93,064 $ 5,458 6 %

Services 88,841 91,391 (2,550) (3) %

Total revenues $ 187,363 $ 184,455 $ 2,908 2 %

Total revenues increased by $2.9 million, or 2%, to $187.4 million for the six months ended June 30, 2026 as compared to the same period in 2025.

Overall revenue growth was primarily driven by our software product offerings, supported by strong demand from existing customers and expansion of relationships with existing customers.

Software revenues increased by $5.5 million, or 6%, to $98.5 million for the six months ended June 30, 2026 as compared to the same period in 2025, primarily driven by increased demand from existing customers and expanded relationships with existing customers.

Services revenues decreased by $2.6 million, or 3%, to $88.8 million for the six months ended June 30, 2026 as compared to the same period in 2025.

Cost of Revenues

SIX MONTHS ENDED JUNE 30, CHANGE

2026 2025 $ %

(in thousands)

Cost of revenues $ 69,794 $ 69,005 $ 789 1 %

% of total revenues 37 % 37 %

Cost of revenues increased $0.8 million, or 1%, to $69.8 million for the six months ended June 30, 2026 as compared to the same period in 2025.

The increase in cost of revenue was primarily due to a $1.4 million increase in professional and consulting expenses, a $0.9 million increase in employee-related costs, and a $0.4 million increase in cost of license, partially offset by a $0.8 million decrease in stock based compensation costs, a $0.6 million decrease in other miscellaneous expense, and a $0.5 million decrease in executive recruiting expense.

Sales and Marketing Expenses

SIX MONTHS ENDED JUNE 30, CHANGE

2026 2025 $ %

(in thousands)

Sales and marketing $ 27,928 $ 26,044 $ 1,884 7 %

% of total revenues 15 % 14 %

Sales and marketing expenses increased by $1.9 million, or 7%, to $27.9 million for the six months ended June 30, 2026 as compared to the same period in 2025.

Sales and marketing expenses increased primarily due to a $0.9 million increase in professional and consulting expense, a $0.6 million increase in employee-related

costs, a $0.3 million increase in marketing expense, and a $0.3 increase in travel expense, partially offset by a $0.2 million decrease in stock-based compensation costs.

Research and Development Expenses

SIX MONTHS ENDED JUNE 30, CHANGE

2026 2025 $ %

(in thousands)

Research and development $ 21,991 $ 19,494 $ 2,497 13 %

% of total revenues 12 % 11 %

Research and development expenses increased by $2.5 million, or 13%, to $22.0 million for the six months ended June 30, 2026 as compared to the same period in 2025.

The increase in research and development expenses was primarily due to a $2.8 million increase in employee-related costs mainly resulting from head count growth associated with investments in software development, including AI integration across our product portfolio, a $0.5 million increase in miscellaneous expense, a $0.1 million increase in stock-based compensation costs, and a $0.1 million increase in facility-lease related expense, partially offset by a $1.2 million increase in capitalized cost in R&D.

General and Administrative Expenses

SIX MONTHS ENDED JUNE 30, CHANGE

2026 2025 $ %

(in thousands)

General and administrative $ 50,875 $ 35,985 $ 14,890 41 %

% of total revenues 27 % 20 %

General and administrative expenses increased by $14.9 million, or 41%, to $50.9 million for the six months ended June 30, 2026 as compared to the same period in 2025.

The increase in general and administrative expenses was primarily due to a $13.1 million increase in business acquisition contingent consideration expense, driven primarily by an additional $7.2 million recorded during the current year, as well as the favorable impact of a decrease in the contingent consideration liability recognized in the same period in 2025, a $1.6 million increase in executive recruiting and retention expenses, a $1.3 million increase in lease abandonment expense, primarily due to the absence of a non-recurring gain recognized in the prior year that reduced expenses in that period, a $1.3 million increase in equipment and software expense, and a $0.7 million increase in professional and consulting expense, partially offset by a $1.0 million decrease in stock-based compensation costs, a $0.9 million in facility-lease related expenses, a $0.7 million decrease in merger and acquisition expense and a $0.5 million decrease in provision of allowance of credit loss.

Depreciation and Amortization

SIX MONTHS ENDED JUNE 30, CHANGE

2026 2025 $ %

(in thousands)

Depreciation and amortization

$ 23,235 $ 21,961 $ 1,274 6 %

% of total revenues 12 % 12 %

Depreciation and amortization expense increased by $0.6 million, or 4%, to $14.6 million for the three months ended March 31, 2026 as compared to the same period in 2025.

Depreciation and amortization expense increased by $1.3 million, or 6%, to $23,235 for the six months ended June 30, 2026 as compared to the same period in 2025.

The increase in depreciation and amortization expense was primarily due to a $0.6 million net increase in amortization of intangible assets, primarily related to a $0.7 million increase in amortization of capitalized software.

In addition, depreciation expense for fixed assets decreased $0.2 million, primarily due to a $0.2 million decrease in depreciation of computer equipment.

In addition, depreciation expense for fixed assets increased $0.6 million, primarily due to a $0.6 million increase in depreciation of computer equipment.

Interest Expense

THREE MONTHS ENDED MARCH 31, CHANGE

SIX MONTHS ENDED JUNE 30, CHANGE

2026 2025 $ %

2 unchanged sentences

% of total revenues 5 % 5 %

Interest expense increased by $0.1 million, or 3%, to $4.9 million for the three months ended March 31, 2026, as compared to the same period in 2025.

Interest expense increased by $0.3 million, or 3%, to $9.9 million for the six months ended June 30, 2026, as compared to the same period in 2025.

The change in interest expense was primarily due to a $1.8 million decrease in gain from our interest swap hedge activities, partially offset by a $1.4 million decrease in interest expense from our floating rate term loan debt, primarily due to a decline in market interest rates and a reduced base margin rate resulting from the refinancing of the term loan.

Net Other Income

THREE MONTHS ENDED MARCH 31, CHANGE

SIX MONTHS ENDED JUNE 30, CHANGE

2026 2025 $ %

2 unchanged sentences

% of total revenues — % (2) %

Net other income decreased by $0.4 million to $1.3 million for the three months ended March 31, 2026 as compared to the same period in 2025.

The decrease in net other income was primarily due to a $0.5 million decrease in interest income, partially offset by a $0.1 million increase in gain from remeasurement related to the fluctuation of the foreign currency rate.

Net other income decreased by $3.1 million to $0.1 million for the six months ended June 30, 2026 as compared to the same period in 2025.

The decrease in net other income was primarily due to a $2.2 million increase in loss from remeasurement related to the fluctuation of the foreign currency rate and a $0.8 million decrease in interest income.

Provision (Benefits) from Income Taxes

THREE MONTHS ENDED MARCH 31, CHANGE

SIX MONTHS ENDED JUNE 30, CHANGE

2026 2025 $ %

1 unchanged sentence

Provision (Benefits) from Income Taxes

$ 820 $ (201) $ 1,021 nm

1,614 2,583 $ (969) (38) %

Effective income tax rate (10) % 46 %

Our income tax expense was $0.8 million, resulting in an effective income tax rate of (10)% for the three months ended March 31, 2026 as compared to income tax benefit of $0.2 million, or an effective income tax rate of (4)%, for the same period in 2025.

Our income tax expense for the three months ended March 31, 2026 and 2025 was primarily due to the tax effects of U.S.

Our income tax expense was $1.6 million, resulting in an effective income tax rate of (10)% for the six months ended June 30, 2026 as compared to income tax expense of $2.6 million, or an effective income tax rate of 46%, for the same period in 2025.

Our income tax expense for the six months ended June 30, 2026 and 2025 was primarily due to the tax effects of U.S.

pre-tax income (loss), the relative mix of domestic and international earnings, the impact of non-deductible items, adjustments to the valuation allowances, the effects of tax elections made for U.K.

earnings, and discrete tax items.

Net Income (Loss)

THREE MONTHS ENDED MARCH 31, CHANGE

Net Income (Loss) from continuing operations

SIX MONTHS ENDED JUNE 30, CHANGE

2026 2025 $ %

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(17,906) 3,001 (20,907) (697) %

Net loss was $8.8 million, representing a $13.5 million decrease in net income for the three months ended March 31, 2026 as compared to a net income of $4.7 million for the same period of 2025.

The decrease in net income was primarily due to a $12.7 million increase in operating expenses, a $1.0 million increase in tax expense, and a $0.6 million increase in total other expense, partially offset by a $0.9 million increase in revenue.

Net loss was $17.9 million, representing a $20.9 million decrease in net income for the six months ended June 30, 2026 as compared to a net income of $3.0 million for the same period of 2025.

The decrease in net income was primarily due to a $20.5 million increase in operating expenses, a $3.5 million increase in total other expense, and a $0.8 million increase in expense of cost of revenue, partially offset by a $2.9 million increase in revenue and a $1.0 million decrease in tax expense.

The following table presents the major categories of income (loss) from discontinued operations related to the sale of the Regulatory and Medical Writing business:

THREE MONTHS ENDED

JUNE 30, SIX MONTHS ENDED

2026 2025 2026 2025

(In thousands)

Total revenues $ 6,389 $ 12,214 $ 19,212 $ 26,119

Cost of Revenues 3,717 6,431 10,663 13,232

Sales and marketing 67 331 472 662

General and administrative 110 486 545 855

Depreciation and amortization 1,287 3,085 4,363 6,161

Income from discontinued operations 1,208 1,881 3,169 5,209

Pre-tax loss on the disposal of discontinued operations (65,481) — (65,481) —

Total income (loss) from discontinued operations before income taxes (64,273) 1,881 (62,312) 5,209

Income tax expense (benefit) (15,084) 5,345 (16,185) 5,435

Total loss from discontinued operations, net of tax $ (49,189) $ (3,464) $ (46,127) $ (226)

Liquidity and Capital Resources

We have consistently generated positive cash flow from operations, providing $11.7 million and $17.4 million as a source of funds for the three months ended March 31, 2026 and 2025, respectively.

We have consistently generated positive cash flow from operations, providing $15.6 million and $23.3 million from continuing operations as a source of funds for the six months ended June 30, 2026 and 2025, respectively.

Our additional liquidity comes from several sources:

maintaining adequate balances of cash and cash equivalents, issuing common stock, and accessing credit facilities and revolving lines of credit.

The following table provides a summary of the major sources of liquidity for the three- and 12-month periods ended at March 31, 2026 and December 31, 2025 and as of March 31, 2026 and December 31, 2025.

MARCH 31, 2026 DECEMBER 31,

The following table provides a summary of the major sources of liquidity for the six- and 12-month periods ended at June 30, 2026 and December 31, 2025, respectively, and as of June 30, 2026 and December 31, 2025.

JUNE 30, 2026 DECEMBER 31,

(dollars in thousands)

Net cash from operating activities (a)

Net cash from operating activities of continuing operations (a)

$ 15,584 $ 72,180

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___________________________________

(a) Net cash from operating activities for the three months ended March 31, 2026 and twelve months ended December 31, 2025.

(b) Cash balances as of March 31, 2026 and December 31, 2025 included $78.9 million and $76.2 million in cash and cash equivalents, respectively, held outside of the United States.

(a) Net cash from operating activities for the six months ended June 30, 2026 and twelve months ended December 31, 2025.

(b) Cash balances as of June 30, 2026 and December 31, 2025 included $50.7 million and $76.2 million in cash and cash equivalents, respectively, held outside of the United States.

On April 11, 2025, our Board of Directors approved a stock repurchase program authorizing the Company to repurchase up to $100.0 million of its common stock.

For the three months ended March 31, 2026, we repurchased 5,814,484 shares of our common stock for an aggregate purchase price and fees of $40.0 million under the authorized share repurchase program.

These repurchases resulted in an increase in treasury stock and reduced weighted-average diluted shares outstanding, As of March 31, 2026, approximately $17.4 million remained available under the Company's existing share repurchase authorization program.

For the six months ended June 30, 2026, we repurchased 9,009,459 shares of our common stock for an aggregate purchase price and fees of $57.4 million under the authorized share repurchase program.

These repurchases resulted in an increase in treasury stock and reduced weighted-average diluted shares outstanding.

As of June 30, 2026, no funds remained available under the Company's existing share repurchase authorization program.

Our other material cash requirements from known contractual obligations are principal and interest payments on long term debt.

We also have future cash obligations of $12.5 million for lease contracts, which have remaining terms of one to nine years.

The principal amount of long-term debt outstanding as of March 31, 2026 matures in the following years:

The principal amount of long-term debt outstanding as of June 30, 2026 matures in the following years:

Remainder of 2026 2027 2028 2029 2030 Thereafter TOTAL

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We believe we will meet short-term and long-term expected future cash requirements and obligations through a combination of cash flows from operating activities, available cash balances, and potential future equity or debt transactions.

Our future capital requirements, however, will depend on many factors, including funding for potential acquisitions, investments, common stock repurchase, and other growth and strategic opportunities, which could

increase our cash requirements.

While we believe we have, and will be able to generate, sufficient liquidity to fund our operations for the foreseeable future, our sources of liquidity could be affected by factors described under “Risk Factors” in our 2025 Annual Report.

The following table presents a summary of our cash flows for the periods shown:

THREE MONTHS ENDED MARCH 31,

The following table presents a summary of our cash flows from continuing operations for the periods shown:

SIX MONTHS ENDED JUNE 30,

(in thousands)

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Net cash used in financing activities (82,330) (44,690)

Effect of foreign exchange rate changes on cash and cash equivalents (1,080) 2,321

Net increase (decrease) in cash and cash equivalents $ (39,908) $ (97)

Cash paid for interest $ 4,872 $ 4,648

Cash paid for income taxes $ 2,292 $ 688

Operating Activities

Our cash flows from operating activities primarily include net income adjusted for (i) non-cash items included in net income, such as provisions (recoveries) for credit losses, depreciation and amortization, stock-based compensation, deferred taxes, and other non-cash items and (ii) changes in the balances of operating assets and liabilities.

Net cash provided by operating activities in the first three months of 2026 was $11.7 million, compared to $17.4 million in the same period of 2025.

The $5.7 million decrease in cash from operating activities was primarily driven by lower cash-adjusted net income, an increase in cash used for prepaid and other assets and a decrease in cash collected on accounts receivable, partially offset by lower cash outflows to settle liabilities and increased cash inflows from deferred revenues.

Net cash provided by operating activities in the first six months of 2026 was $15.6 million, compared to $23.3 million in the same period of 2025.

The $7.7 million decrease in cash from operating activities was

primarily driven by lower cash-adjusted net income, an increase in cash used for prepaid and other assets and a decrease in cash collected on accounts receivable, partially offset by higher cash inflows from deferred revenues and less cash outflows to settle liabilities.

Investing Activities

Net cash used in investing activities in the first three months of 2026 was $6.8 million, an increase of $1.0 million, compared to $5.8 million in the same period of 2025.

The change in investing activities was primarily due to a $1.0 million increase in cash utilized in capitalized software development costs to support our growth.

Net cash used in investing activities in the first six months of 2026 was $14.5 million, an increase of $1.7 million, compared to $12.7 million in the same period of 2025.

The change in investing activities was primarily due to a $1.0 million increase in cash utilized in capitalized software development costs to support our growth and a $0.7 million increase in cash outflow for capital expenditure.

Financing Activities

Net cash used in financing activities in the first three months of 2026 was $43.7 million, compared to $14.0 million in the same period of 2025.

The $29.7 million increase in cash used in financing activities was primarily due to a $40.0 million increase in cash used in connection with repurchasing the Company's common stock, partially offset by a $10.2 million decrease in cash payments related to contingent consideration for business acquisitions.

Net cash used in financing activities in the first six months of 2026 was $82.3 million, compared to $44.7 million in the same period of 2025.

The $37.6 million increase in cash used in financing activities was primarily due to a $32.4 million increase in cash used in connection with repurchasing the Company's common stock and a $6.9 million increase in cash payments related to contingent consideration for business acquisitions, partially offset by a $1.6 million decrease in cash payments associated with share awards vested and withheld for payroll tax.

We have been a party to the Credit Agreement since August 2017 that provides for a senior secured term loan (the “Term Loan”) and commitments under a revolving credit facility (the “Revolving Facility”).

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Most recently, on October 16, 2025, we entered into the Sixth Amendment to the Credit Agreement to refinance our existing debt.

Following the refinancing, as of October

16, 2025, the Term Loan had an aggregate principal amount of $296.3 million and matures on June 26, 2031.

Following the refinancing, as of October 16, 2025, the Term Loan had an aggregate principal amount of $296.3 million and matures on June 26, 2031.

We also maintain a $100.0 million revolving credit facility under the Credit Agreement, which matures on June 26, 2029.

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All obligations under the Credit Agreement, and the guarantees of those obligations, are secured on a first lien basis, subject to certain exceptions, by substantially all of our assets and the assets of the other guarantors.

As of March 31, 2026, we were in compliance with the covenants of the Credit Agreement.

As of March 31, 2026, we had $294.8 million of outstanding borrowings on the Term Loan, and $100.0 million of availability under the revolving credit facility under the Credit Agreement.

As of June 30, 2026, we were in compliance with the covenants of the Credit Agreement.

As of June 30, 2026, we had $294.0 million of outstanding borrowings on the Term Loan, and $100.0 million of availability under the revolving credit facility under the Credit Agreement.

Contractual Obligations and Commercial Commitments

There have been no material changes to our contractual obligations during the three months ended March 31, 2026 from those disclosed in our 2025 Annual Report, except for payments made in the ordinary course of business.

We recorded income tax expense of $0.8 million for the three months ended March 31, 2026 and income tax benefit of $0.2 million for the three months ended March 31, 2025.

As of March 31, 2026, we had federal and state NOLs of approximately $4.2 million and $3.5 million, respectively, which are available to reduce future taxable income, some of which expire between 2035 and 2036 and 2030 and 2041, respectively.

There have been no material changes to our contractual obligations during the six months ended June 30, 2026 from those disclosed in our 2025 Annual Report, except for payments made in the ordinary course of business.

We recorded income tax expense of $1.6 million for continuing operations, a $16.2 million tax benefit for discontinued operations, and a tax benefit of $14.6 million for the Company for the six months ended June 30, 2026.

We recorded income tax expense of $2.6 million for continuing operations, a tax expense $5.4 million for discontinued operations, and a tax expense $8.0 million for the Company for the six months ended June 30, 2025.

As of June 30, 2026, we had federal and state NOLs of approximately $4.2 million and $3.5 million, respectively, which are available to reduce future taxable income, some of which expire between 2035 and 2036 and 2030 and 2041, respectively.

We had federal and state R&D tax credit carryforwards of approximately $0.1 million and $.02 million, respectively, to offset future income taxes, which expire between 2027 and 2040.

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At the foreign subsidiaries, management has determined that it is more likely than not that we will not realize the benefits of certain NOL carryforwards.

As a result, a

valuation allowance of $29 million is recorded at December 31, 2025.

As of March 31, 2026, the valuation allowance remained unchanged from December 31, 2025.

As a result, a valuation allowance of $29 million is recorded at December 31, 2025.

As of June 30, 2026, the valuation allowance remained unchanged from December 31, 2025.

Off-Balance Sheet Arrangements

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We monitor estimates and assumptions on a continuous basis and update these estimates and assumptions as facts and circumstances change and new information is obtained.

Actual results could differ materially from those estimates and assumptions.

Actual results could differ materially from those

estimates and assumptions.

We discussed the accounting policies that we believe are most critical to the portrayal of our results of operations and financial condition and require management’s most difficult, subjective, and complex judgments in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in our 2025 Annual Report.

There were no significant changes to our critical accounting estimates during the three months ended March 31, 2026.

There were no significant changes to our critical accounting estimates during the three months ended June 30, 2026.

Recently Adopted and Issued Accounting Standards

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For information regarding our exposure to certain market risks, see “Quantitative and Qualitative Disclosures about Market Risk,” in Part II, Item 7A of the Company’s 2025 Annual Report.

There were no material changes to the Company’s market risk exposure during the three months ended March 31, 2026.

There were no material changes to the Company’s market risk exposure during the six months ended June 30, 2026.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis