Document and Entity Information
Document and Entity Information - USD ($) $ in Billions | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Feb. 15, 2023 | Jun. 30, 2022 | |
Document and Entity Information | ||||
Document Type | 10-K | |||
Document Annual Report | true | |||
Document Period End Date | Dec. 31, 2022 | |||
Document Transition Report | false | |||
Entity File Number | 001-39799 | |||
Entity Registrant Name | Certara, Inc. | |||
Entity Incorporation, State or Country Code | DE | |||
Entity Tax Identification Number | 82-2180925 | |||
Entity Address, Address Line One | 100 Overlook Center | |||
Entity Address, Address Line Two | Suite 101 | |||
Entity Address, City or Town | Princeton | |||
Entity Address State Or Province | NJ | |||
Entity Address, Postal Zip Code | 08540 | |||
City Area Code | 609 | |||
Local Phone Number | 716-7900 | |||
Title of 12(b) Security | Common stock, par value $0.01 per share | |||
Trading Symbol | CERT | |||
Security Exchange Name | NASDAQ | |||
Entity Well-known Seasoned Issuer | No | |||
Entity Voluntary Filers | No | |||
Entity Current Reporting Status | Yes | |||
Entity Interactive Data Current | Yes | |||
Entity Filer Category | Large Accelerated Filer | |||
Entity Small Business | false | |||
Entity Emerging Growth Company | false | |||
Entity Shell Company | false | |||
ICFR Auditor Attestation Flag | true | |||
Entity Public Float | $ 2.5 | |||
Entity Common Stock, Shares Outstanding | 159,458,375 | |||
Entity Central Index Key | 0001827090 | |||
Current Fiscal Year End Date | --12-31 | |||
Document Fiscal Year Focus | 2022 | |||
Document Fiscal Period Focus | FY | |||
Amendment Flag | false | |||
Auditor Name | RSM US LLP | CohnReznick LLP | ||
Auditor Firm ID | 49 | 596 | ||
Auditor Location | Blue Bell, Pennsylvania | Tysons, Virginia |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 236,586 | $ 185,797 |
Accounts receivable, net of allowance for credit losses of $1,250 and $262, respectively | 82,584 | 69,555 |
Restricted cash | 3,102 | 827 |
Prepaid expenses and other current assets | 19,980 | 18,548 |
Total current assets | 342,252 | 274,727 |
Other assets: | ||
Property and equipment, net | 2,400 | 2,935 |
Operating lease right-of-use assets | 14,427 | 12,634 |
Goodwill | 717,743 | 703,371 |
Intangible assets, net of $217,705 and $169,329, respectively | 486,782 | 511,823 |
Deferred income taxes | 3,703 | 4,073 |
Other long-term assets | 5,615 | 2,167 |
Total assets | 1,572,922 | 1,511,730 |
Current liabilities: | ||
Accounts payable | 7,533 | 7,458 |
Accrued expenses | 35,403 | 29,830 |
Current portion of deferred revenue | 52,209 | 45,496 |
Current portion of long-term debt | 3,020 | 3,020 |
Current operating lease liabilities | 4,968 | 5,040 |
Other current liabilities | 25 | 1,381 |
Total current liabilities | 103,158 | 92,225 |
Long-term liabilities: | ||
Deferred revenue, net of current portion | 2,815 | 1,531 |
Deferred income taxes | 65,046 | 76,098 |
Operating lease liabilities, net of current portion | 10,133 | 8,256 |
Long-term debt, net of current portion and debt discount | 289,988 | 291,746 |
Other long-term liabilities | 22,121 | 25 |
Total liabilities | 493,261 | 469,881 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred shares, $0.01 par value, 50,000,000 and no shares authorized as of December 31, 2022 and 2021, respectively, no shares issued and outstanding as of December 31, 2022 and 2021, respectively | ||
Common shares, $0.01 par value, 600,000,000 shares authorized, 159,676,150 and 159,660,048 shares issued as of December 31, 2022 and 2021, respectively, 159,525,943 and 159,658,948 shares outstanding as of December 31, 2022 and 2021, respectively | 1,596 | 1,596 |
Additional paid-in capital | 1,150,168 | 1,119,821 |
Accumulated deficit | (60,873) | (75,604) |
Accumulated other comprehensive loss | (8,230) | (3,926) |
Treasury stock at cost, 150,207 and 1,100 shares at December 31, 2022 and 2021, respectively | (3,000) | (38) |
Total stockholders' equity | 1,079,661 | 1,041,849 |
Total liabilities and stockholders' equity | $ 1,572,922 | $ 1,511,730 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
CONSOLIDATED BALANCE SHEETS | ||
Allowance for credit losses | $ 1,250 | $ 262 |
Accumulated amortization | $ 217,705 | $ 169,329 |
Preferred share, par value | $ 0.01 | $ 0.01 |
Preferred share, shares authorized | 50,000,000 | 0 |
Preferred share, shares issued | 0 | 0 |
Preferred share, shares outstanding | 0 | 0 |
Common share, par value | $ 0.01 | $ 0.01 |
Common share, shares authorized | 600,000,000 | 600,000,000 |
Common share, shares issued | 159,676,150 | 159,660,048 |
Common share, shares outstanding | 159,525,943 | 159,658,948 |
Treasury stock, shares | 150,207 | 1,100 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS | |||
Revenues | $ 335,644 | $ 286,104 | $ 243,530 |
Cost of revenues | 132,577 | 111,616 | 100,765 |
Operating expenses: | |||
Sales and marketing | 27,408 | 20,141 | 19,202 |
Research and development | 28,205 | 20,379 | 19,644 |
General and administrative | 71,773 | 79,539 | 88,482 |
Intangible asset amortization | 41,429 | 38,715 | 37,414 |
Depreciation and amortization expense | 1,731 | 2,135 | 2,443 |
Total operating expenses | 170,546 | 160,909 | 167,185 |
Income (loss) from operations | 32,521 | 13,579 | (24,420) |
Other expense: | |||
Interest expense | (17,773) | (16,837) | (25,296) |
Net other income (expense) | 4,007 | (117) | (465) |
Total other expenses | (13,766) | (16,954) | (25,761) |
Income (loss) before income taxes | 18,755 | (3,375) | (50,181) |
Provision for (benefit from) income taxes | 4,024 | 9,891 | (784) |
Net income (loss) | 14,731 | (13,266) | (49,397) |
Other comprehensive income (loss): | |||
Foreign currency translation adjustment, net of tax of $(916), $195, $(277) | (10,490) | (5,154) | 5,045 |
Change in fair value of interest rate swap, net of tax of $2,056, $(16), $(384) | 6,186 | 547 | (1,135) |
Reclassification of fair value of interest rate swap, net of tax of $0, $(765), $0 | 2,268 | ||
Total other comprehensive income (loss) | (4,304) | (2,339) | 3,910 |
Comprehensive income (loss) | $ 10,427 | $ (15,605) | $ (45,487) |
Net income (loss) per share attributable to common stockholders: | |||
Basic (in dollar per share) | $ 0.09 | $ (0.09) | $ (0.37) |
Diluted (in dollar per share) | $ 0.09 | $ (0.09) | $ (0.37) |
Weighted average common shares outstanding: | |||
Basic (in shares) | 156,876,942 | 149,842,668 | 133,247,212 |
Diluted (in shares) | 159,354,394 | 149,842,668 | 133,247,212 |
CONSOLIDATED STATEMENTS OF OP_2
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS | |||
Foreign currency translation adjustment, tax expense (benefit) | $ (916) | $ 195 | $ (277) |
Change in fair value from interest rate swap, tax expense (benefit) | 2,056 | (16) | (384) |
Reclassification of fair value of interest rate swap, tax expense (benefit) | $ 0 | $ (765) | $ 0 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | COMMON STOCK | ADDITIONAL PAID-IN CAPITAL | ACCUMULATED DEFICIT | ACCUMULATED OTHER COMPREHENSIVE LOSS | TREASURY STOCK | Total |
Beginning balance at Dec. 31, 2019 | $ 1,324 | $ 509,162 | $ (12,941) | $ (5,497) | $ 492,048 | |
Beginning balance (in shares) at Dec. 31, 2019 | 132,407,786 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Equity-based compensation expense | $ 59 | 64,448 | 64,507 | |||
Equity-based compensation expense, (in shares) | 5,941,693 | |||||
Repurchase of Parent Class B units | (1,079) | (1,079) | ||||
Capital contribution | 250 | 250 | ||||
Issuance common stock from public offering, net | $ 146 | 311,747 | 311,893 | |||
Issuance common stock from public offering, net (in shares) | 14,630,000 | |||||
Change in fair value from interest rate swap, net of tax | (1,135) | (1,135) | ||||
Net income (loss) | (49,397) | (49,397) | ||||
Foreign currency translation adjustment, net of tax | 5,045 | 5,045 | ||||
Ending balance at Dec. 31, 2020 | $ 1,529 | 884,528 | (62,338) | (1,587) | 822,132 | |
Ending balance (in shares) at Dec. 31, 2020 | 152,979,479 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Equity-based compensation expense | 29,483 | 29,483 | ||||
Equity-based compensation expense, (in shares) | (59,148) | |||||
Restricted stock withheld for tax liability and in treasury | $ (38) | (38) | ||||
Restricted stock withheld for tax liability and in treasury (in shares) | (1,100) | |||||
Issuance common stock from public offering, net | $ 45 | 133,306 | 133,351 | |||
Issuance common stock from public offering, net (in shares) | 4,500,000 | |||||
Common shares issued in connection with Pinnacle acquisition | $ 22 | 72,738 | 72,760 | |||
Common shares issued in connection with Pinnacle acquisition (in shares) | 2,239,717 | |||||
Restricted stock withheld for tax liability | (234) | (234) | ||||
Change in fair value from interest rate swap, net of tax | 547 | 547 | ||||
Reclassification of fair value of interest rate swap, net of tax | 2,268 | 2,268 | ||||
Net income (loss) | (13,266) | (13,266) | ||||
Foreign currency translation adjustment, net of tax | (5,154) | (5,154) | ||||
Ending balance at Dec. 31, 2021 | $ 1,596 | 1,119,821 | (75,604) | (3,926) | $ (38) | $ 1,041,849 |
Ending balance (in shares) at Dec. 31, 2021 | 159,660,048 | |||||
Treasury Shares Ending balance (in shares) at Dec. 31, 2021 | (1,100) | 1,100 | ||||
Increase (Decrease) in Stockholders' Equity | ||||||
Equity-based compensation expense | $ (4) | 30,349 | $ 30,345 | |||
Equity-based compensation expense, (in shares) | (421,624) | |||||
Restricted stock withheld for tax liability and in treasury | 2 | $ (2,766) | (2,764) | |||
Restricted stock withheld for tax liability and in treasury (in shares) | (138,038) | |||||
Common shares issued for employee share-based compensation | $ 4 | (4) | ||||
Common shares issued for employee share-based compensation (in shares) | 437,726 | |||||
Restricted stock withheld for tax liability | $ (196) | (196) | ||||
Restricted stock withheld for tax liability (in shares) | (11,069) | |||||
Change in fair value from interest rate swap, net of tax | 6,186 | 6,186 | ||||
Net income (loss) | 14,731 | 14,731 | ||||
Foreign currency translation adjustment, net of tax | (10,490) | (10,490) | ||||
Ending balance at Dec. 31, 2022 | $ 1,596 | $ 1,150,168 | $ (60,873) | $ (8,230) | $ (3,000) | $ 1,079,661 |
Ending balance (in shares) at Dec. 31, 2022 | 159,676,150 | |||||
Treasury Shares Ending balance (in shares) at Dec. 31, 2022 | (150,207) | 150,207 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities: | |||
Net income (loss) | $ 14,731 | $ (13,266) | $ (49,397) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Depreciation and amortization of property and equipment | 1,731 | 2,135 | 2,443 |
Amortization of intangible assets | 50,739 | 42,980 | 40,310 |
Amortization of debt issuance costs | 1,540 | 1,531 | 1,520 |
(Recovery of) provision for credit losses | 1,072 | 130 | (53) |
Loss on retirement of assets | 169 | 351 | 19 |
Equity-based compensation expense | 30,345 | 29,483 | 64,507 |
Unrealized loss on derivative | 1,144 | ||
Deferred income taxes | (11,511) | (1,184) | (7,825) |
Changes in assets and liabilities: | |||
Accounts receivable | (15,009) | (10,066) | (3,932) |
Prepaid and other assets | 126 | 585 | (8,257) |
Accounts payable and accrued expenses | 5,289 | 1,421 | 2,381 |
Deferred revenue | 9,530 | 5,435 | 3,094 |
Change in other liabilities | 3,791 | (291) | |
Net cash provided by operating activities | 92,543 | 60,388 | 44,810 |
Cash flows from investing activities: | |||
Capital expenditures | (1,430) | (1,143) | (863) |
Capitalized software development costs | (11,099) | (7,759) | (7,074) |
Business acquisitions, net of cash acquired | (15,308) | (261,020) | (675) |
Net cash used in investing activities | (27,837) | (269,922) | (8,612) |
Cash flows from financing activities: | |||
Capital contributions | 250 | ||
Unit repurchase | (1,079) | ||
Proceeds from issuance of common stock, net of underwriter's' discounts and commissions | 133,351 | 316,301 | |
Proceeds from borrowings on long-term debt | 89 | ||
Payments on long-term debt and finance lease obligations | (3,313) | (3,973) | (104,358) |
Proceeds from line of credit | 19,880 | ||
Payments on financing component of interest rate swap | (1,088) | (1,095) | |
Payments on line of credit | (19,880) | ||
Payments of deferred offering costs | (1,767) | (2,900) | |
Payment of debt issuance costs | (2,942) | ||
Payment of taxes on shares and units withheld for employee taxes | (2,962) | (272) | |
Net cash provided by (used in) financing activities | (7,363) | 123,391 | 208,214 |
Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash | (4,279) | (524) | (883) |
Net increase (decrease) in cash and cash equivalents, and restricted cash | 53,064 | (86,667) | 243,529 |
Cash and cash equivalents, and restricted cash, at beginning of year | 186,624 | 273,291 | 29,762 |
Cash and cash equivalents, and restricted cash, at end of year | 239,688 | 186,624 | 273,291 |
Supplemental disclosures of cash flow information | |||
Cash paid for interest | 17,268 | 14,169 | 27,607 |
Cash paid for taxes | 10,141 | 8,595 | 12,278 |
Supplemental schedule of non-cash investing and financing activities | |||
Contingent liabilities established in connection with business acquisition | $ 19,813 | ||
Property and equipment controlled through capital lease obligations | 831 | ||
Deferred offering costs, accrued but not paid | $ 1,767 | ||
Operating right-of-use assets recognized upon adoption of ASC 842 | 15,857 | ||
Operating lease liability recognized upon adoption of ASC 842 | $ 16,809 | ||
Common shares issued in connection with the Pinnacle acquisition | 72,760 |
Description of Business
Description of Business | 12 Months Ended |
Dec. 31, 2022 | |
Description of Business | |
Description of Business | 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. On October 1, 2020, the Company amended the certificate of incorporation of EQT Avatar Topco, Inc. to change the name of the Company to Certara, Inc. The Company has operations in the United States, Australia, Canada, China, France, Germany, India, Italy, Japan, Luxembourg, Netherlands, Philippines, Poland, Portugal, Spain, Switzerland and the United Kingdom. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 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 Issued Accounting Pronouncements There have been no recent accounting pronouncements, changes in accounting pronouncements during 2022 that are significant to us. (c) Adopted Accounting Guidance In October 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2021-08, “Business Combinations (Topic 805) - Accounting for Contract Assets and Contract Liabilities from Contracts with Customers”, which requires that at the acquisition date, an acquirer should account for the related revenue contracts in accordance with ASC Topic 606, “Revenue from Contracts with Customers” (“Topic 606”), as if it had originated the contracts. Generally, this results in an acquirer recognizing and measuring the acquired contract assets and contract liabilities consistent with how they were recognized and measured in the acquiree’s financial statements if the acquiree prepared financial statements in accordance with U. S. GAAP. For public business entities, the ASU is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption of the ASU is permitted. The Company early adopted ASU 2021-08 and has carried over the contract assets and liabilities from the 2021 business acquisitions into the Company’s 2021 consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, "Simplifying the Accounting for Income Taxes" which removes certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The Company adopted this guidance on January 1, 2021 on a prospective basis. The adoption of this guidance did not have an impact on the Company's consolidated financial statements. In January 2017, the FASB issued ASU No. In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”, which amended the existing accounting standard for the measurement of credit losses. The new standard primarily requires using the current expected credit losses approach to measure and recognize credit losses of financial assets held at amortization cost. It replaces the existing incurred loss model with an expected loss model and requires using historical data and adjusting for current economic conditions, including reasonable and supportable forecasts to estimate credit losses to be expected. The Company adopted the standard as of December 31, 2021. The adoption of this guidance did not have a material impact on the Company's consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)”, which supersedes FASB Topic 840, “Leases (Topic 840)” and requires lessees to recognize most leases on the balance sheet with a corresponding right of use asset. Leases will be classified as financing or operating which will drive the expense recognition pattern. For lessees, the income statement presentation and expense recognition pattern for financing and operating leases is similar to the current model for capital and operating leases, respectively. Companies may elect to exclude short-term leases. The update also requires additional disclosures that will better enable users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. The Company adopted the new standard as of January 1, 2021, due to its loss of emerging growth company (“EGC”) status, using the effective date transition method. As permitted under the effective date transition method, financial information and disclosure for periods prior to the date of initial application was not updated. An adjustment to opening accumulated deficits was not required in conjunction with the Company’s adoption. The Company has elected not to reassess whether expired or existing contracts contain leases, nor did the Company reassess the classification of existing leases as of the adoption date. The Company did not use hindsight in the assessment of lease terms as of the effective date. For additional information, see Note 14 - Leases. (d) 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. ( e) Fair Value Measurements The Company follows Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“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 5, 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 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, 2022: LEVEL 1 LEVEL 2 LEVEL 3 TOTAL (In thousands) Assets Money market funds $ 100,999 $ — $ — $ 100,999 Interest rate swap assets — 8,374 — 8,374 Total assets $ 100,999 $ 8,374 $ — $ 109,373 Liabilities Contingent liabilities $ — $ — $ 19,813 $ 19,813 Total liabilities $ — $ — $ 19,813 $ 19,813 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, 2021: LEVEL 1 LEVEL 2 LEVEL 3 TOTAL (In thousands) Assets Interest rate swap assets $ — $ 57 $ — $ 57 $ — $ 57 $ — $ 57 (f) Cash and Cash Equivalents and Restricted Cash Cash equivalents include highly-liquid investments with maturities of three months or less from the date purchased. At times, cash balances held at financial institutions were in excess of the Federal Deposit Insurance Corporation’s (“FDIC”) insured limits; 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. Restricted cash represents cash that is reserved to provide for a Company credit card program and unexpended restricted grant funds. The restricted cash balance was $3,102 and $827 at December 31, 2022 and 2021, respectively. As of December 31, 2022 and 2021, the carrying values reflected in the consolidated balance sheets reasonably approximate the fair values of cash and cash equivalents and restricted cash due to the short-term maturity of these items. The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the consolidated balance sheets to the amounts presented in the consolidated statements of cash flows: DECEMBER 31, 2022 2021 (In thousands) Cash and cash equivalents $ 236,586 $ 185,797 Restricted cash, current 3,102 827 Total cash and cash equivalents, and restricted cash $ 239,688 $ 186,624 (g) Accounts Receivable Accounts receivable includes current outstanding invoices billed to customers. Invoices are typically issued with net 30-days 90-days 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 $1,250 and $262 were provided in the accompanying consolidated financial statements as of December 31, 2022 and 2021, respectively. DECEMBER 31, 2022 2021 (In thousands) Trade receivables $ 72,238 $ 60,167 Unbilled receivables 11,309 9,071 Other receivables 287 579 Allowances for credit losses (1,250) (262) Accounts receivable, net $ 82,584 $ 69,555 The following is the allowance rollforward of credit losses for the Company’s accounts receivable as of December 31, 2022 and 2021. DECEMBER 31, 2022 2021 (In thousands) Beginning balance $ 262 $ 132 Provision for credit losses 1,009 215 Charge-offs, net of recoveries (21) (85) Ending balance $ 1,250 $ 262 (h) 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 one (i) 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 and capital leases of equipment. 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. (j) 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, 2022, 2021 and 2020, costs of $11,119, $7,759, and $7,074, 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, 2022, 2021, and 2020. (k) 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. (l) Goodwill and Other Intangible Assets The Company has four reporting units – Software reporting unit (“Software”), SimCyp reporting unit (“SimCyp”), Integrated Drug Development reporting unit (“IDD”), and Regulatory Writing reporting unit (“Regulatory Writing”) 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 report 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. For the years ended December 31, 2022, 2021, and 2020, the Company performed quantitative assessments of goodwill. The most recent assessment was performed on October 1, 2022. The quantitative assessments resulted in no impairment as the estimated fair value of each reporting unit exceeded its carrying value. Accordingly, no impairment loss was recorded for the years ended December 31, 2022, 2021, and 2020. Other identifiable intangible assets with finite lives, such as software products acquired in acquisitions, non-compete agreements, tradenames and customer relationship assets, 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 2 11 10 There were no impairment charges related to intangible assets for the years ended December 31, 2022, 2021, and 2020. (m) 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 gains (losses) of $3,166, $175, and $(715) for the years ended December 31, 2022, 2021, and 2020, respectively. (n) 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 had entered into an interest rate swap agreement in May 2022 that pays fixed, receives variable to modify the interest rate characteristics of term loan debt from variable to fixed in order to reduce the impact of changes in future cash flows due to market interest rate changes. The swap agreement has a notional amount of $230,000, a fixed rate of 2.8% and a termination date of August 31, 2025. At December 31, 2022, the interest swap had a fair value of $8,374 and the fair value recognized in accumulated other comprehensive income was $8,374. The Company also had an interest rate swap agreement for a notional amount of $230,000 that fixed the interest rate at 2.1%, non-inclusive of the fixed credit spread through May 31, 2022. On August 31, 2021, the Company entered into an amendment to the interest rate swap agreement. The amended interest rate swap agreement does not in its entirety meet the definition of a derivative instrument because of its off market fixed rate at inception and is deemed to be a hybrid instrument with a financing component and an embedded at-the-market derivative. Such embedded derivative is bifurcated and accounted for separately. At inception, the financing component of $1,966 was recorded at amortized cost. The embedded at-the-market derivative was designated and qualified as a cash flow hedge of interest rate risk for a notional amount of $230,000 that fixed the interest rate at 1.2757%, non-inclusive of the fixed credit spread. Due to an other-than-insignificant financing element on a portion of such hybrid instrument, the cash flows associated with this hybrid instrument were classified as financing activities in the condensed consolidated statements of cash flows. The interest rate swap matured on May 31, 2022. At December 31, 2022, the Company did not record any amounts for the financing component and fair value of the interest rate swap in the consolidated balance sheets. The Company reclassified $3,033 of accumulated comprehensive loss to interest expense in the consolidated statements of operation and comprehensive loss in the second quarter of 2021 due to hedge ineffectiveness. Excluding the amount reclassified, interest expense on derivative instruments recognized in the Company’s consolidated statements of operations and comprehensive income (loss) were $25, $726, and $1,573 for the years ended December 31, 2022, 2021, and 2020, 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. The notional amounts and fair values, locations of derivative instruments in the consolidated balance sheets as of December 31 were as follows: Interest rate swap derivative designated as cash flow hedging instruments: 2022 2021 (In thousands) Notional amounts $ 230,000 $ 230,000 Prepaid expenses and other current assets $ 4,638 $ 57 Other long-term assets $ 3,736 $ — The net amount of deferred gains related to derivative instruments designated as cash flow hedges that is expected to be reclassified from accumulated other comprehensive gains into earnings over the next twelve months is $4,670. (o) 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. (p) 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. (q) 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 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 $2,818 and $1,059 was required to be recorded for uncertain tax positions as of December 31, 2022 and 2021, respectively. Uncertain tax positions relate primarily to federal and state R&D credits. The Company's policy is to recognize interest and penalties as a component of the provision for income taxes. For December 31, 2022 and 2021, the Company recognized interest of $0.1 million of interest and no penalties. For December 31, 2021 the Company recognized neither interest or 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 jurisdictions . (r) Revenue Recognition In accordance with Accounting Standards Codification Topic 606 ("ASC Topic 606"), “Revenue from Contracts with Customers”, the Company determines revenue recognition through the following steps: i. ii. iii. iv. v. 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 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 consis |
Public Offerings and Other Sign
Public Offerings and Other Significant Shareholder Transactions | 12 Months Ended |
Dec. 31, 2022 | |
Public Offerings and Other Significant Shareholder Transactions | |
Public Offerings and Other Significant Shareholder Transactions | 3. Public Offerings and Other significant Shareholder Transactions On December 11, 2020, the Company completed our initial public offering (“IPO”), pursuant to which the Company issued and sold 14,630,000 shares of common stock and certain selling stockholders, including former controlling shareholder, EQT, sold 18,783,250 shares of our common stock (representing the full exercise of the underwriters’ option to purchase additional shares), at a public offering price of $23.00 per share. The Company received net proceeds of $316,301, after deducting underwriters' discounts and commissions. In addition, $4,408 of legal, accounting and other offering costs, net of the tax effect of $259, incurred in connection with the sale of the Company's common stock in the IPO, were capitalized and offset against the proceeds received in the IPO. The Company was party to a registration rights agreement with EQT AB and its affiliates (“EQT”), Arsenal Capital Partners, and certain other stockholders, dated December 10, 2020. That agreement was terminated following the sale of all of EQT’s common shares in the Company to Arsenal on December 8, 2022. Arsenal and the Company entered into a new registration rights agreement, dated November 3, 2022 (the “Registration Rights Agreement”), which contains provisions that entitle Arsenal to certain rights to have their securities registered by the Company under the Securities Act. While the Registration Rights Agreement is in effect, Arsenal is entitled to (i) four “demand” registrations, (ii) one underwritten offering in any consecutive 90-day period and (iii) two underwritten offerings in any consecutive 360-day period, subject in each case to certain limitations. In addition, the Registration Rights Agreement provides that the Company will share certain expenses of Arsenal relating to such registrations and indemnify Arsenal against certain liabilities which may arise under the Securities Act. On March 29, 2021, the Company completed an underwritten secondary public offering in which certain selling stockholders, including EQT, sold 11,500,000 shares of the Company’s common stock, including 1,500,000 shares of common stock pursuant to the full exercise of the underwriters’ option to purchase additional shares. The Company did not offer any common stock in this transaction and did not receive any proceeds from the sale of the shares of common stock by the selling stockholders. The Company incurred costs of $1,100, recorded in general and administrative expenses, in relation to the secondary public offering. On September 13, 2021, the Company completed another public offering, at a public offering price of $31.00 per share, pursuant to which the Company sold 4,500,000 shares of its common stock, and certain selling stockholders sold 18,500,000 shares of the Company’s common stock, including 3,000,000 shares of common stock pursuant to the full exercise of the underwriters’ option to purchase additional shares. The Company received net proceeds of $134,096, after deducting underwriters' discounts and commissions. In addition, $745 of legal, accounting and other offering costs incurred in connection with the sale of the Company's common stock in the public offering, were capitalized and offset against the proceeds received. On November 22, 2021, the Company completed another secondary public offering in which certain selling stockholders, including EQT, sold 10,000,000 shares of the Company’s common stock. The Company did not offer any common stock in this transaction and did not receive any proceeds from the sale of the shares of common stock by the selling stockholders. The Company incurred costs of $644, recorded in general and administrative expenses, in relation to the secondary public offering. On August 11, 2022, the Company completed a secondary public offering in which certain selling stockholders, including EQT, sold 7,000,000 shares of the Company’s common stock. The Company did not offer any common stock in this transaction and did not receive any proceeds from the sale of the shares of common stock by the selling stockholders. The Company incurred costs of $596, recorded in general and administrative expenses, in relation to the secondary public offering. On December 8, 2022, Arsenal acquired an aggregate of 29,954,521 shares of the Company’s common stock from EQT at a price of $15.00 per share. In connection with this transaction, the Company entered into a letter agreement, effective December 8, 2022, with Arsenal providing that, subject to certain exceptions, Arsenal is prohibited from transferring the acquired shares until December 8, 2024. Also, in connection with the transaction, the Company entered into a stockholders agreement with Arsenal, effective December 8, 2022, which, among other things, grants certain conditional rights to Arsenal to nominate up to two directors to our Board. |
Concentrations of Credit Risk
Concentrations of Credit Risk | 12 Months Ended |
Dec. 31, 2022 | |
Concentrations of Credit Risk | |
Concentrations of Credit Risk | 4. 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, 2022 and 2021, the investments were bank deposits and overnight sweep accounts. 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, 2022 and 2021, no customer accounted for more than 10% of the Company’s accounts receivable. For the years ended December 31, 2022, 2021, and 2020, |
Business Combinations
Business Combinations | 12 Months Ended |
Dec. 31, 2022 | |
Business Combinations | |
Business Combinations | 5. Business Combinations Acquisitions have been accounted for using the acquisition method of accounting pursuant to FASB ASC 805, “Business Combinations.” 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 results of operations prospectively from the date of acquisition. Author! B.V. On March 2, 2021, the Company completed a transaction which qualified as a business combination for a total consideration of $2,667 . The business combination was not material to our consolidated financial statements. Based on the Company’s purchase price allocation, approximately $1,200 , $100 and $1,200 of the purchase price was assigned to customer relationships, non-compete agreements and goodwill, respectively. Insight Medical Writing Limited On June 7, 2021, the Company completed a transaction which qualified as a business combination for a total consideration of $15,197 . The business combination was not material to our consolidated financial statements. Based on the Company’s purchase price allocation, approximately $7,400 and $4,700 of the purchase price was assigned to customer relationships and goodwill, respectively. Pinnacle 21, LLC On October 1, 2021, the Company acquired 100% of the equity of Pinnacle. Pinnacle provides software and services for preparing clinical trial data for regulatory submission. The acquisition executes on the Company’s strategy to invest in innovation to increase the use cases of biosimulation and grow adoption of Certara’s end-to-end platform. The acquisition of Pinnacle was accounted for as a purchase in accordance with ASC 805, “Business Combinations”, which requires allocation of the purchase price to the estimated fair values of assets acquired and liabilities assumed 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: Pinnacle (In thousands) Fair value of consideration: Cash paid to sellers $ 249,115 Cash paid to others and escrow 17,200 Unregistered shares of Certara, Inc. (2,239,717 shares) 72,760 Total consideration $ 339,075 Assets acquired and liabilities assumed: Cash and cash equivalents $ 19,409 Accounts receivable 2,925 Other current assets 619 Property and equipment 258 Deferred tax assets 2,907 Identifiable intangible assets: Trademark 15,800 Acquired software 103,000 Customer relationships 24,600 Goodwill 180,947 Long-term deposits 34 Current liabilities (794) Current portion of deferred revenue (10,630) Net assets acquired $ 339,075 The fair value of the unregistered shares given as part of the purchase consideration was determined based on the market price of Certara’s common stock on the closing date less a 7% discount for lack of marketability. The acquisition was structured as an asset acquisition for income tax purposes; therefore, the Company’s tax basis in Pinnacle’s identifiable assets reflects the fair value of consideration paid. However, the Company did not recognize tax basis in certain liabilities assumed at the acquisition date; resulting in deferred income taxes being recorded in purchase accounting. 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 customer relationships (distributor method), trademarks (relief from royalty method) and developed technology (multi-period excess earnings method) was determined under the income approach. Goodwill of $180,947 was recorded to reflect the excess of the purchase price over the estimated fair value of the net identifiable assets acquired, which is generally deductible for income tax purposes. The excess of the purchase prices over the fair values of the acquired business's net assets represent cost and revenue synergies specific to the Company, as well as non-capitalizable intangible assets, such as the employee workforces acquired, and has been allocated to goodwill. The Company incurred $7,615 of transaction costs related to this acquisition, which are included in general and administrative expenses in the consolidated statement of operations and comprehensive loss for the year ended December 31, 2021. 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 and comprehensive loss for the year ended December 31, 2021 includes revenues of $6,129 and a net income of $380 which includes the effects of purchase accounting adjustments, primarily changes in amortization of intangible assets. Integrated Nonclinical Development Solutions, Inc. On January 3, 2022, the Company completed the acquisition for a total consideration of $8,048, which qualified as a business combination. The business combination was not significant to the Company’s consolidated financial statements. Based on the Company’s purchase price allocation, approximately $2,380, $1,040, $100, and $2,910 of the purchase price was assigned to customer relationships, developed technology, non-compete agreements, and goodwill, respectively. Vyasa Analytics, LLC On December 28, 2022, the Company completed the acquisition of Vyasa Analytics, LLC (“Vyasa”), a company that provides an AI powered, scalable deep learning software and analytics platform for organizations within healthcare and life sciences, higher education and state and local governments for total estimated consideration of $29,276. The business combination was not significant to the Company’s consolidated financial statements. The total estimated consideration includes a portion of contingent consideration that is payable over the next three years in a combination of 70% cash and 30% Certara common stock. Future payments of contingent consideration are based on achieving certain eligible revenue thresholds for each of the twelve-month periods ended December 31, 2023, 2024, and 2025, respectively. Potential payments range from $0 to $60,000 over the three years period. The fair value of the contingent consideration was estimated to be $19,813 as of the acquisition date. Based on the Company’s purchase price allocation, approximately $11,400, $1,500, $120, $80 and $16,589 of the purchase price was assigned to developed technology, customer relationships, trademarks, non-compete agreements and goodwill, respectively. The consolidated financial statements include the operating results of each acquisition from the date of acquisition. |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets and Other Long-Term Assets | 12 Months Ended |
Dec. 31, 2022 | |
Prepaid Expenses and Other Current Assets and Other Long-Term Assets | |
Prepaid Expenses and Other Current Assets and Other Long-Term Assets | 6. Prepaid expenses and other current assets and Other long-term assets Prepaid and other current assets consisted of the following: DECEMBER 31, 2022 2021 (In thousands) Prepaid expenses $ 8,389 $ 8,973 Income tax receivable 2,014 4,800 Research and development tax credit receivable 4,207 3,951 Current portion of interest rate swap asset 4,638 57 Other current assets 732 767 Prepaid expenses and other current assets $ 19,980 $ 18,548 Other long-term assets consisted of the following: DECEMBER 31, 2022 2021 (In thousands) Long-term deposits $ 1,150 $ 1,160 Interest rate swap asset - long term 3,736 — Deferred financing cost 729 1,007 Total other long-term assets $ 5,615 $ 2,167 |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2022 | |
Property and Equipment | |
Property and Equipment | 7. Property and Equipment Property and equipment consisted of the following: DECEMBER 31, 2022 2021 (In thousands) Computer and office equipment $ 4,575 $ 5,955 Furniture 2,426 3,075 Purchased software for internal use 701 698 Leasehold improvements 1,345 1,762 Property and equipment 9,047 11,490 Less: Accumulated depreciation and amortization (6,647) (8,555) Property and equipment, net $ 2,400 $ 2,935 Depreciation and amortization expense were $1,731, $2,135, and $2,443 for the years ended December 31, 2022, 2021, and 2020, respectively. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Other Intangible Assets | |
Goodwill and Other Intangible Assets | 8. Goodwill and Other Intangible Assets The following table presents the Company’s intangible assets (other than goodwill) and the related amortization: WEIGHTED AVERAGE DECEMBER 31, 2022 DECEMBER 31, 2021 AMORTIZATION GROSS GROSS PERIOD CARRYING ACCUMULATED CARRYING ACCUMULATED (IN YEARS) AMOUNT AMORTIZATION NET AMOUNT AMORTIZATION NET (In thousands) Acquired software 13.42 $ 138,157 $ (20,441) $ 117,716 $ 127,123 $ (12,258) $ 114,865 Capitalized software development costs 2.21 41,323 (26,139) 15,184 31,477 (20,137) 11,340 Non-compete agreements 1.00 1,543 (1,339) 204 1,391 (1,247) 144 Trademarks 14.36 56,603 (12,229) 44,374 56,483 (9,142) 47,341 Customer relationships 10.05 466,861 (157,557) 309,304 464,678 (126,545) 338,133 Total $ 704,487 $ (217,705) $ 486,782 $ 681,152 $ (169,329) $ 511,823 Amortization expense for intangible assets was $50,739, $42,980, and $40,310 for the years ended December 31, 2022, 2021 and 2020, respectively. Amortization expense of $9,310, $4,265, and $2,896 was recorded in cost of revenues for the years ended December 31, 2022, 2021, and 2020, respectively. The remaining amortization of $41,429, $38,715, and $37,414 was recorded in operating expenses for the years ended December 31, 2022, 2021, and 2020, respectively. 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: CAPITALIZED SOFTWARE NON- ACQUIRED DEVELOPMENT COMPETE TRADE CUSTOMER SOFTWARE COSTS AGREEMENTS NAMES RELATIONSHIPS TOTAL (In thousands) 2023 $ 10,264 $ 6,511 $ 77 $ 3,147 $ 31,447 $ 51,446 2024 10,034 5,394 40 3,147 31,447 50,062 2025 9,879 3,279 36 3,087 31,447 47,728 2026 9,736 — 36 3,087 31,447 44,306 2027 9,272 — 15 3,087 31,447 43,821 Thereafter 68,531 — — 28,819 152,069 249,419 Total $ 117,716 $ 15,184 $ 204 $ 44,374 $ 309,304 $ 486,782 Goodwill The Company has not recognized any impairment charges for the years ended December 31, 2022, 2021, and 2020. A reconciliation of the change in the carrying value of goodwill is as follows: (In thousands) Balance, December 31, 2020 $ 518,592 Goodwill associated with 2021 business combinations 186,771 Foreign currency translation (1,992) Balance, December 31, 2021 703,371 Goodwill associated with 2022 business combinations 19,451 Foreign currency translation (5,079) Balance, December 31, 2022 $ 717,743 |
Accrued Expenses and Other Long
Accrued Expenses and Other Long-Term Liabilities | 12 Months Ended |
Dec. 31, 2022 | |
Accrued Expenses and Other Long-Term Liabilities | |
Accrued Expenses and Other Long-Term Liabilities | 9. Accrued Expenses and Other Long-Term Liabilities Accrued expenses consist of the following: DECEMBER 31, 2022 2021 (In thousands) Accrued compensation $ 29,518 $ 24,848 Legal and professional accruals 1,297 2,477 Interest payable 176 96 Income taxes payable 2,223 1,398 Accrued business acquisition liabilities 700 — Other 1,489 1,011 Total accrued expenses $ 35,403 $ 29,830 Other long-term liabilities consist of the following: DECEMBER 31, 2022 2021 (In thousands) Non-current finance lease liabilities $ — $ 25 Uncertain tax position liability 2,308 — Contingent consideration 19,813 — Total other long-term liabilities $ 22,121 $ 25 |
Long-Term Debt and Revolving Li
Long-Term Debt and Revolving Line of Credit | 12 Months Ended |
Dec. 31, 2022 | |
Long-Term Debt and Revolving Line of Credit | |
Long-Term Debt and Revolving Line of Credit | 10. Long-Term Debt and Revolving Line of Credit Effective August 14, 2017, the Company entered into a credit agreement with lenders for a $250,000 term loan (“Credit Agreement”). The Credit Agreement is a syndicated arrangement with various lenders providing the financing. The $250,000 term loan is due to mature on August 14, 2024. The Company also entered into a $20,000 revolving line of credit with lenders with a sub-commitment for issuance of letters of credit of $10,000. The Company and lenders entered into Amendment No. 1 to the Credit Agreement on January 25, 2018, where an additional tranche of $25,000 was added to the term loan. The amortization schedule of the new tranche was made coterminous with the rest of the term loan. There were no other changes to the terms of the Credit Agreement. The Company and lenders entered into Amendment No. 2 to the Credit Agreement on April 3, 2018, where an additional tranche of $40,000 was added to the term loan. The amortization schedule of the new tranche was made coterminous with the rest of the term loan. There were no other changes to the terms of the Credit Agreement. The Company and lenders entered into a third amended and restated loan agreement on June 17, 2021 (“Third Amendment”), which provides for, among other things, (i) the extension of the termination date applicable to the revolving credit commitments under the Credit Agreement to August 2025, (ii) the extension of the maturity date applicable to the term loans under the Credit Agreement to August 2026, and (iii) an increase of approximately $80,000 in commitments available under the revolving line of credit (resulting in an aggregate amount of commitments of $100,000). The term loan under the Third Amendment has substantially the same terms as the existing term loans and revolving credit commitments. The Credit Agreement is collateralized by substantially all U.S. assets and stock pledges for the non-U.S. subsidiaries and contain various financial and nonfinancial covenants. As of December 31, 2022 and 2021, available borrowings under the revolving lines of credits were $100,000, respectively. Available borrowings under the revolving lines of credits of $100,000 as of December 31, 2022 and 2021, respectively, were reduced by $120 and $239 standby letter of credit issued to a landlord in lieu of a security deposit. Borrowings under the Credit Agreement are subject to a variable interest rate at LIBOR plus a margin. The applicable margins are based on achieving certain levels of compliance with financial covenants. The effective interest rate was 5.28% and 3.65% for the years ended December 31, 2022 and 2021, 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 $15,803, $11,206, and $13,946 for the years ended December 31, 2022, 2021, and 2020, respectively. Accrued interest payable on the Credit Agreement with respect to the term loan amounted to $130 and $30 at December 31, 2022 and 2021, respectively, and is included in accrued expenses. Effective August 14, 2017, the Company entered into an unsecured credit agreement with another lender for a $100,000 term loan (“Loan Agreement”). The loan carried interest at 8.25% which was payable in semi-annual installments on January and July 15 through August 14, 2025, at which time all outstanding principal and interest were due. Under the Loan Agreement, the Company could voluntarily repay outstanding loans without premium or penalty. On July 15, 2020, the Company made a $20,000 prepayment on the loan, which reduced the amount outstanding to $80,000. On December 28, 2020, the Company repaid the remaining $80,000 aggregate principal amount owed under the Loan Agreement, including $3,000 of accrued interest. The Company's obligations under the Loan Agreement were discharged on that date. Interest incurred on the loan amounted to $0, $0, and $7,608 for the years ended December 31, 2022, 2021, and 2020, respectively. Long-term debt consists of the following: DECEMBER 31, 2022 2021 (In thousands) Term loans $ 297,470 $ 300,490 Revolving line of credit — — Less: debt issuance costs (4,462) (5,724) Total 293,008 294,766 Current portion of long-term debt (3,020) (3,020) Long-term debt, net of current portion and debt issuance costs $ 289,988 $ 291,746 The principal amount of long-term debt outstanding as of December 31, 2022, matures in the following years: 2023 2024 2025 2026 TOTAL (In thousands) Maturities $ 3,020 $ 3,020 $ 3,020 $ 288,410 $ 297,470 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, 2022, 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 $755 on the term loan each quarter starting from September 30, 2021. 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. |
Employee Benefit Plan
Employee Benefit Plan | 12 Months Ended |
Dec. 31, 2022 | |
Employee Benefit Plan | |
Employee Benefit Plan | 11. Employee Benefit Plan The Company established a defined contribution 401(k) plan covering all U.S. employees who are at least 21 years The Company also operates a Group Personal defined contribution plan (“Plan”) covering all U.K. employees. Employees are auto enrolled in the plan who are at least 22 years of age and paid more than £10 a year, up to the State Pension Age. However, all employees who are between the ages of 16 and 75 can elect to join the Plan. Employees may contribute to their personal pension account and then convert that account into income at retirement. The Company contributes an additional 8% of salary for those employees who have registered for the Plan, which exceeds their duties under U.K. auto enrolment legislation. Total 401(k) and Plan contributions made by the Company were $4,746, $4,138, and $3,342 for the years ended December 31, 2022, 2021, and 2020 respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies. | |
Commitments and Contingencies | 12. Commitments and Contingencies 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, 2022. 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 14 – Lease. |
Equity-Based Compensation
Equity-Based Compensation | 12 Months Ended |
Dec. 31, 2022 | |
Equity-Based Compensation | |
Equity-Based Compensation | 13. 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 and related Class B Plan Exchange The majority of the Company’s restricted stock awarded to its employees was originally issued in December 10, 2020 in exchange for the Class B Profits Interest Unit (the “Class B Units”) of EQT Avatar Parent, L.P, which was former parent of the Company. Prior to the Company’s IPO, the Company’s management participated in a 2017 Class B Profits Interest Unit Incentive Plan (the “Class B Plan”). The majority of the employee grant agreements for the Class B Units were comprised of 50% time-based vesting units (“Time-based Units”) and 50% performance-based vesting units (“Performance-based Units”). The fair value of the Time-based Units that vested solely upon continued employment was measured at the grant date and was recognized as cost over the employee’s requisite service period, which was generally five years. The expense related to the vesting of the Time-based Units was recorded on the Company’s books because the Company directly benefited from the services provided by Class B Unit holders. The grant date fair values of Class B Unit were determined based on the pricing models and valuation assumptions noted in the following table, shown at their weighted-average values: YEAR ENDED DECEMBER 31, 2020 Pricing model Monte Carlo Expected dividend yield 0.0 % Risk-free interest rate (1) 0.3 % Expected stock price volatility (2) 59 % Expected exercise term (in years) (3) 2.3 (1) Based on the U.S. Treasury constant maturity interest rate whose term is consistent with the expected exercise term of our incentive units (2) In projecting expected stock price volatility, we consider the historical volatility of the stock prices of comparable public companies. (3) The Company estimates the expected life of incentive units based upon the timing of a potential liquidity event. Equity-based compensation expense related to the Time-based Units was $2,776 for the years ended December 31, 2020. The Performance-based Units were not probable of vesting prior to the exchange of Class B Units for common shares, as such, no expense was recorded for these Units prior to the exchange date. As of December 31, 2020, there were no unrecognized compensation costs related to the Units as they had been exchanged for restricted stock. Based on the stock price of $23.00 per share, on December 10, 2020, the Company issued 5,941,693 shares of restricted common stock to holders of unvested Class B Units in exchange for such unvested Class B Units. The total fair value of the restricted stock was $83,260. Because the service inception date preceded the grant date of the replacement awards, a catch up-adjustment of $56,487 was recorded at the modification date, based on the portion of the requisite service period that had elapsed since the original grant date for each tranche of the award. Considering the original awards contained performance conditions necessary to vest, the accelerated attribution approach was applied. The accelerated attribution approach results in cost being allocated to each of the tranches of the awards and recognized ratably over each tranche as if they were separate awards. Separately, upon completion of the offering, $3,912 of compensation cost was recognized related to our Chief Executive Officer’s 853,001 performance-based Class B Units that automatically vested upon the IPO of the Company and were exchanged for 1,561,950 common shares of the Company. Modification accounting was not required for the time-based vesting Class B Units for which the vesting conditions, classification and fair market value did not change as a result of the shares of restricted common stock that replaced them. The original grant date fair value will continue to be recognized on a straight-line basis. Modification accounting was required for the performance-based vesting Class B Units that were exchanged for time-based vesting restricted common stock, given the vesting conditions were changed. Such performance-vesting Class B Units that were improbable of vesting were remeasured based on the modification date fair value of the shares of restricted common stock replacing such Class B Units. Restricted Stock Unvested Class B Units were exchanged for restricted stock of the Company. 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. Equity-based compensation for the restricted stock exchanged for the performance-based Class B Units is recognized using the accelerated attribution approach. In 2021, the Company granted 87,127 replacement shares of restricted stock in connection with the Pinnacle acquisition under which equity-based awards are outstanding. The fair value of the restricted stock awarded was initially determined based on the fair value of our common stock on the date of grant, then adjusted for time restrictions due to unregistered shares and lack of marketability. Total grant date fair value was $2,762. The restricted stock issued in 2021 generally has a three-year vesting period except for one holder whose shares vests equally on a monthly basis for two years. The Company exchanged 5,941,693 shares in 2020 and did not legally authorize or issue any restricted stock during the year ended December 31, 2022. The weighted average grant date or exchange date fair values per share of restricted stock granted or exchanged during 2022, 2021 and 2020 were $17.07, $31.7, and $23.0, respectively. The total fair value of restricted stock vested during 2022, 2021 and 2020 was $46,401, $45,051 and $0, respectively. A summary of the restricted stock in 2022 is shown below: WEIGHTED-AVERAGE GRANT-DATE SHARES FAIR VALUE Non-vested restricted stock as of December 31, 2021 3,910,722 $ 23.18 Granted 66,220 17.07 Vested (2,020,065) 22.97 Forfeited (487,844) 23.00 Cancelled (66,220) 23.00 Non-vested restricted stock as of December 31, 2022 1,402,813 $ 23.27 The Company did not legally authorize or issue any restricted stock during the year ended December 31, 2022. During 2022, the Company modified an award for a recipient that resulted in 66,220 shares each assumed cancelled, granted, and forfeited. Net compensation expense reversed was $146. Equity-based compensation expenses related to the restricted stock exchanged for performance-based Class B units were $2,537, $12,349 and $57,421 for the years ended December 31,2022, 2021 and 2020, respectively. At December 31, 2022, the total unrecognized equity-based compensation expenses related to outstanding restricted stock recognized using the accelerated attribution approach was $3,294. The unrecognized compensation expense for the category at December 31, 2022 is expected to be recognized over a weighted-average period of 21.0 months. Equity-based compensation expenses related to the time-based restricted stock were $3,166, $3,104 and $167 for the years ended December 31, 2022, 2021 and 2020, respectively. At December 31, 2022, the total unrecognized equity-based compensation expenses related to outstanding restricted stock recognized using the straight-line attribution approach were $2,888. The unrecognized compensation expense for the category at December 31, 2022 is expected to be recognized over a weighted-average period of 25.7 months. Equity-based employee compensation expenses related to the time-based restricted stock for the Pinnacle acquisition were $1,169 and $292 for the years ended December 31, 2022 and 2021, respectively. At December 31, 2022, the total unrecognized equity-based compensation expenses related to outstanding restricted stock recognized using the straight-line attribution approach was $1,301. The unrecognized compensation expense for the category at December 31, 2022 is expected to be recognized over a weighted-average period of 15.9 months. 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, 2022, there was 19,460,378 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 Restricted stock units (“RSUs”) represent the right to receive shares of the Company’s common stock at a specified date in the future. During year ended December 2022, the Company granted 1,437,957 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. A summary of the Company’s RSU activity is as follows: WEIGHTED- AVERAGE GRANT DATE UNITS FAIR VALUE Non-vested RSUs as of December 31, 2021 1,288,724 $ 29.28 Granted 1,437,957 21.98 Vested (432,494) 28.66 Forfeited (289,092) 25.61 Non-vested RSUs as of December 31, 2022 2,005,095 $ 24.71 The weighted average grant date fair values per share of restricted stock units granted during 2022 and 2021 were $21.98 and $29.19, respectively. The total fair value of restricted stock units vested during 2022 and 2021 were $12,395 and $569, respectively. Equity-based compensation expense related to the RSUs was $19,012, $8,257 and $81 for the years ended December 31,2022, 2021, and 2020, respectively. At December 31, 2022, the total unrecognized equity-based compensation expense related to outstanding RSUs was $35,121, which is expected to be recognized over a weighted-average period of 23.1 months. The number of RSUs vested in 2022 includes 138,038 shares that were withheld on behalf of employees to satisfy the statutory tax withholding requirements. Performance Restricted Stock Units Performance stock units (“PSUs”) are issued under the 2020 Incentive Plan and represent the right to receive shares of the Company’s common stock at a specified date in the future based on the satisfaction of various service conditions and the achievement of certain performance thresholds including year over year revenue growth and unlevered free cash flow growth. Equity-based compensation for the PSUs is only recognized to the extent a threshold is probable of being achieved and is recognized using the accelerated attribution approach. 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. The following table presents a summary of activity on the PSUs for the period ended December 31, 2022. WEIGHTED- AVERAGE GRANT DATE UNITS FAIR VALUE Non-vested PSUs as of December 31, 2021 406,575 $ 27.35 Granted 361,147 22.25 Vested (12,291) 24.83 Forfeited (101,123) 31.22 Non-vested PSUs as of December 31, 2022 654,308 $ 23.99 The weighted average grant date fair values per share of performance stock units granted during 2022 and 2021 were $22.25 and $27.36, respectively. The total fair value of performance stock units vested during 2022 was $305. There were no PSU shares vested during 2021. The total fair value of performance stock units vested were $305 and $0 for the year ended December 31, 2022, 2021. Equity-based compensation expense related to the PSUs was $4,462 and $5,481 for the year ended December 31, 2022 and 2021. At December 31, 2022, the total unrecognized equity-based compensation expense related to outstanding PSUs was $2,458, which is expected to be recognized over a weighted-average period of 15.5 months. 2020 Employee Stock Purchase Plan On December 10, 2020, stockholders approved the 2020 Employee Stock Purchase Plan (the “Employee Stock Purchase Plan”). Under the Employee Stock Purchase Plan, employees, and those of the Company’s subsidiaries, may purchase shares of common stock, during pre-specified offering periods. Named executive officers will be eligible to participate in the Employee Stock Purchase Plan on the same terms and conditions as all other participating employees. The maximum number of shares authorized for sale under the Employee Stock Purchase Plan is 1,700,000 shares. Generally, all employees and those of the Company’s subsidiaries will be eligible to participate in the Employee Stock Purchase Plan, except for employees who own 5% or more of the combined voting power or value of all issued and outstanding stock. Employees may contribute through payroll deductions of 1% to 15% of such employees’ base compensation on each payroll date that falls within an offering period. Participants may not acquire rights to purchase more than $25 of common stock under the Employee Stock Purchase Plan for any calendar year. Common stock will be available for purchase for up to 27 months. Shares will be purchased at a discounted per-share purchase price equal to 85% of the per-share closing price of the Company’s common stock on the last day of the applicable offering period. As of December 31, 2022, no shares of common stock have been purchased under the Employee Stock Purchase Plan and no offering has been made to eligible employees under the Plan. 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, 2022 2021 2020 (In thousands) Cost of revenues $ 7,494 $ 5,193 $ 8,805 Sales and marketing 2,091 2,204 7,390 Research and development 5,829 2,872 7,133 General and administrative expenses 14,931 19,214 41,179 Total $ 30,345 $ 29,483 $ 64,507 The tax benefit related to compensation expense was $1,933 and $117 for the year ended December 31, 2022, and 2021. There were no tax benefits related to compensation expense for the year ended December 31, 2020. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2022 | |
Leases | |
Leases | 14. Leases The Company leases certain office facilities and equipment under non-cancelable operating and finance leases with remaining terms from one Operating lease ROU assets are included in other asset while finance lease ROU assets are included in Property and equipment, net in the consolidated balance sheets. 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. Current and non-current finance lease liabilities are included in other current liabilities and other long-term liabilities in the consolidated balance sheets. The following table presents information about the operating and finance lease right-of-use assets and lease liabilities as well as lease term and discount rates: Lease right-of-use assets, lease liabilities, lease term and discount rate: December 31, 2022 December 31, 2021 (In thousands) Lease right of use assets Operating leases $ 14,427 $ 12,634 Financing leases 24 271 $ 14,451 $ 12,905 Lease liabilities Current Operating leases $ 4,968 $ 5,040 Financing leases 25 293 Noncurrent Operating leases 10,133 8,256 Financing leases — 25 $ 15,126 $ 13,614 For the year ended For the year ended Weighted-average remaining lease term (years): December 31, 2022 December 31, 2021 Operating leases 3.9 3.63 Financing leases 0.08 1.08 Weighted-average discount rate: Operating leases 3.45% 3.91% Financing leases 6.19% 6.19% The components of total lease cost were as follows: December 31, 2022 December 31, 2021 (In thousands) Operating lease cost $ 4,978 $ 5,815 Short-term lease cost 729 404 Variable lease cost 191 744 Sublease income (379) (490) Finance lease cost: Amortization of right-of-use assets 254 277 Interest on lease liabilities 11 29 Total lease cost $ 5,784 $ 6,779 Supplemental cash flow and non-cash flow information was as follows: December 31, 2022 December 31, 2021 (In thousands) Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from finance leases $ 11 $ 29 Operating cash flows from operating leases $ 5,360 $ 6,105 Financing cash flows from finance leases $ 293 $ 275 Right-of-use assets obtained in exchange for new and remeasured operating leases $ 2,501 $ 520 Right-of-use assets obtained through acquisition $ 129 $ 1,648 The following table summarizes by year the maturities of our minimum lease payments as of December 31, 2022. OPERATING FINANCE LEASES LEASES (In thousands) Year ending December 31, 2023 $ 4,935 $ 25 2024 4,113 — 2025 3,342 — 2026 2,129 — 2027 917 — Thereafter 595 — Total future lease payments 16,031 25 Less: imputed interest (930) — Total $ 15,101 $ 25 G |
Segment Data
Segment Data | 12 Months Ended |
Dec. 31, 2022 | |
Segment Data | |
Segment Data | 15. 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. Since the Company operates in one operating segment, all required financial segment information can be found in the consolidated financial statements. The following table summarizes revenue by geographic area: YEAR ENDED DECEMBER 31, 2022 2021 2020 (In thousands) Revenue (1) Americas $ 252,921 $ 205,377 $ 182,629 EMEA 57,002 56,410 42,844 Asia Pac 25,721 24,317 18,057 Total $ 335,644 $ 286,104 $ 243,530 (1) Revenue is attributable to the countries based on the location of the customer The following table summarizes property, plant and equipment, net by geographic area as of December 31, 2022 and 2021: DECEMBER 31, 2022 2021 (In thousands) Property, plant and equipment, net: Americas $ 1,406 $ 1,903 EMEA 732 712 Asia Pac 262 320 Total $ 2,400 $ 2,935 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Taxes | |
Income Taxes | 16. Income Taxes The components of income (loss) before income taxes were as follows: YEAR ENDED DECEMBER 31, 2022 2021 2020 (In thousands) Domestic $ 9,456 $ (10,373) $ (55,355) Foreign 9,299 6,998 5,174 Total $ 18,755 $ (3,375) $ (50,181) The components of provision for (benefit from) income taxes were as follows: DECEMBER 31, 2022 2021 2020 (In thousands) Current tax provision Federal $ 1,882 $ 451 $ 326 State and local 3,335 1,798 1,659 Foreign 10,318 8,826 4,634 Total current 15,535 11,075 6,619 Deferred tax benefit Federal (6,788) (4,416) (3,620) State and local (2,190) (1,156) 276 Foreign (2,533) 4,388 (4,059) Total deferred (11,511) (1,184) (7,403) Total provision (benefit) $ 4,024 $ 9,891 $ (784) The effective income tax rate was 21.46%, (293.06%), and 1.56% for the years ended December 31, 2022, 2021 and 2020, 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: DECEMBER 31, 2022 2021 2020 (In thousands, except for percentage) Tax at U.S. federal statutory rate $ 3,939 21.00 % $ (709) 21.00 % $ (10,538) 21.00 % State taxes, net of federal benefit 967 5.16 % 226 (6.71) % 1,125 (2.24) % Foreign rate differential 3,545 18.90 % 3,872 (114.72) % 2,296 (4.58) % Permanent items (1,227) (6.54) % (670) 19.84 % (139) 0.28 % Equity compensation 2,278 12.15 % 3,534 (104.70) % 13,562 (27.03) % GIL TI inclusion 451 2.41 % 540 (16.00) % 932 (1.86) % Tax credits (6,427) (34.27) % (7,060) 209.19 % (7,618) 15.18 % Rate change (605) (3.23) % 5,256 (155.75) % 2,076 (4.14) % Other adjustments (4,554) (24.28) % 3,131 (92.76) % 1,223 (2.43) % Return to provision adjustments (405) (2.16) % (66) 1.95 % (103) 0.21 % Valuation allowance 6,062 32.32 % 1,837 (54.40) % (3,600) 7.17 % Effective tax rate $ 4,024 21.46 % $ 9,891 (293.06) % $ (784) 1.56 % A portion of the Company's income was attributable to Madeira, Portugal which qualified for special tax programs authorized by the European Union (“EU”) and administered by the Portuguese Tax Authority (“PTA”). For the period of 2008 through 2011, the Company was subject to Madeira's income tax rate of 0%, for 2012 an income tax rate of 4% applied, for the period of 2013 through 2020 an income tax rate of 5% applied, for 2021 an income tax rate of 5% applied. During the current year, the EU disallowed the PTA’s interpretation of certain provisions of the Madeira Free Zone (“MFZ”) Regime III, with a lookback period of 10 years, which resulted in an increase to the tax rate applied to the Company’s income for the aforementioned years and for 2022. The tax effects of temporary differences that give rise to deferred tax assets and liabilities are summarized as follows: DECEMBER 31, 2022 2021 (In thousands) Deferred tax assets Accounts receivable $ 279 $ 61 Accrued compensation 4,385 3,552 Accrued expenses 529 - Deferred revenue 392 696 Net operating loss carryforwards 14,264 4,117 R&D credit carryforward 3,918 4,965 Foreign tax credits 12,131 15,054 Interest rate hedge — 253 Equity based compensation 4,752 3,015 Other assets 189 380 Interest expense 103 224 Lease liability 3,136 2,944 Section 174 9,425 — Total gross deferred tax asset 53,503 35,261 Less: Valuation allowance (25,732) (18,235) Net deferred tax asset 27,771 17,026 Deferred tax liabilities Property, equipment, and other long-lived assets (152) (272) Goodwill and intangible assets (82,100) (83,844) Prepaid expenses (1,820) (1,968) Accrued expenses — (184) Deferred revenue — — Interest rate hedge (2,085) — Right-of-use (ROU) Asset (2,957) (2,783) Total gross deferred tax liability (89,114) (89,051) Net deferred tax liability $ (61,343) $ (72,025) The net change in the total valuation allowance resulted in an increase of $7,497 in 2022 compared to an increase of $1,520 in 2021. 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 Company will realize the benefits of the deferred tax assets, net of the existing valuation allowance, at December 31, 2022. At December 31, 2022, the Company has net operating loss carryforwards for federal income tax purposes of approximately $1,805 majority of which will expire if unused in years 2024 through 2036. The Company has net operating loss carryforwards for state income tax purposes of approximately $50, which will expire if unused in years 2029 through 2040. The Company has foreign net operating loss carryforwards of $65,805 which will expire if unused starting in 2022. The Company has $395 of federal research and development credits that will expire if unused in years 2025 through 2042, $143 of California research and development credits with indefinite carryover period, and $363 of foreign research and development credits that will expire if unused starting in 2029. The Company has foreign tax credits of $10,607 that will expire if unused in years 2027 through 2031, and also Canadian investment tax credits of $3,552 which will expire if unused in years 2030 through 2040. 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 have 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 U.S. income taxes was accrued as of December 31, 2022 and 2021, 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 $2,818 and $1,059 was required to be recorded for uncertain tax positions as of December 31, 2022 and 2021, respectively. Uncertain tax positions relate primarily to federal and state R&D credits. The Company's policy is to recognize interest and penalties as a component of the provision for income taxes. For December 31, 2022 and 2021, the Company recognized interest of $0.1 million of interest and no penalties. For December 31, 2021 the Company recognized neither interest penalties . A reconciliation of the beginning and ending balance of unrecognized tax benefits is as follows: (In thousands) Balance at December 31, 2020 $ 897 Additions for tax positions related to the current year 156 Additions for tax positions of prior years 6 Balance at December 31, 2021 1,059 Additions for tax positions related to the current year 205 Additions for tax positions of prior years 1,554 Balance at December 31, 2022 $ 2,818 The uncertain tax positions, exclusive of interest and penalties, were $2,818 and $1,059 as of December 31, 2022 and December 31, 2021, respectively, which also represents potential tax benefits that if recognized, would impact the effective tax rate. 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. |
Earnings per Share
Earnings per Share | 12 Months Ended |
Dec. 31, 2022 | |
Earnings per Share | |
Earnings per Share | 17. 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, 2022 2021 2020 (In thousands, except per share and share data) Basic earnings per share Net income (loss) available to common shareholders $ 14,731 $ (13,266) $ (49,397) Basic weighted-average common shares outstanding 156,876,942 149,842,668 133,247,212 Basic earnings per common share $ 0.09 $ (0.09) $ (0.37) Diluted earnings per share Net income available to common shares $ 14,731 $ (13,266) $ (49,397) Basic weighted-average common shares outstanding 156,876,942 149,842,668 133,247,212 Dilutive potential common shares 2,477,452 (1) — (2) — (2) Diluted weighted-average common shares outstanding 159,354,394 149,842,668 133,247,212 Diluted earnings per common share $ 0.09 $ (0.09) $ (0.37) (1) For the year ended December 31, 2022, the Company excluded certain potentially dilutive securities attributable to outstanding RSUs and RSAs from the computation of diluted EPS because the securities would have had an antidilutive effect. (2) For the year ended December 31, 2021, and 2020, the Company excluded the restricted stock and restricted stock units 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. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Summary of Significant Accounting Policies | |
Basis of Presentation and Use of Estimates | (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. |
Recently Adopted Accounting Pronouncements | (b) Recently Issued Accounting Pronouncements There have been no recent accounting pronouncements, changes in accounting pronouncements during 2022 that are significant to us. (c) Adopted Accounting Guidance In October 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2021-08, “Business Combinations (Topic 805) - Accounting for Contract Assets and Contract Liabilities from Contracts with Customers”, which requires that at the acquisition date, an acquirer should account for the related revenue contracts in accordance with ASC Topic 606, “Revenue from Contracts with Customers” (“Topic 606”), as if it had originated the contracts. Generally, this results in an acquirer recognizing and measuring the acquired contract assets and contract liabilities consistent with how they were recognized and measured in the acquiree’s financial statements if the acquiree prepared financial statements in accordance with U. S. GAAP. For public business entities, the ASU is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption of the ASU is permitted. The Company early adopted ASU 2021-08 and has carried over the contract assets and liabilities from the 2021 business acquisitions into the Company’s 2021 consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, "Simplifying the Accounting for Income Taxes" which removes certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The Company adopted this guidance on January 1, 2021 on a prospective basis. The adoption of this guidance did not have an impact on the Company's consolidated financial statements. In January 2017, the FASB issued ASU No. In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”, which amended the existing accounting standard for the measurement of credit losses. The new standard primarily requires using the current expected credit losses approach to measure and recognize credit losses of financial assets held at amortization cost. It replaces the existing incurred loss model with an expected loss model and requires using historical data and adjusting for current economic conditions, including reasonable and supportable forecasts to estimate credit losses to be expected. The Company adopted the standard as of December 31, 2021. The adoption of this guidance did not have a material impact on the Company's consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)”, which supersedes FASB Topic 840, “Leases (Topic 840)” and requires lessees to recognize most leases on the balance sheet with a corresponding right of use asset. Leases will be classified as financing or operating which will drive the expense recognition pattern. For lessees, the income statement presentation and expense recognition pattern for financing and operating leases is similar to the current model for capital and operating leases, respectively. Companies may elect to exclude short-term leases. The update also requires additional disclosures that will better enable users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. The Company adopted the new standard as of January 1, 2021, due to its loss of emerging growth company (“EGC”) status, using the effective date transition method. As permitted under the effective date transition method, financial information and disclosure for periods prior to the date of initial application was not updated. An adjustment to opening accumulated deficits was not required in conjunction with the Company’s adoption. The Company has elected not to reassess whether expired or existing contracts contain leases, nor did the Company reassess the classification of existing leases as of the adoption date. The Company did not use hindsight in the assessment of lease terms as of the effective date. For additional information, see Note 14 - Leases. |
Principles of Consolidation | (d) 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. |
Fair Value Measurements | The Company follows Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“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 5, 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 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, 2022: LEVEL 1 LEVEL 2 LEVEL 3 TOTAL (In thousands) Assets Money market funds $ 100,999 $ — $ — $ 100,999 Interest rate swap assets — 8,374 — 8,374 Total assets $ 100,999 $ 8,374 $ — $ 109,373 Liabilities Contingent liabilities $ — $ — $ 19,813 $ 19,813 Total liabilities $ — $ — $ 19,813 $ 19,813 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, 2021: LEVEL 1 LEVEL 2 LEVEL 3 TOTAL (In thousands) Assets Interest rate swap assets $ — $ 57 $ — $ 57 $ — $ 57 $ — $ 57 |
Cash and Cash Equivalents, and Restricted Cash | (f) Cash and Cash Equivalents and Restricted Cash Cash equivalents include highly-liquid investments with maturities of three months or less from the date purchased. At times, cash balances held at financial institutions were in excess of the Federal Deposit Insurance Corporation’s (“FDIC”) insured limits; 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. Restricted cash represents cash that is reserved to provide for a Company credit card program and unexpended restricted grant funds. The restricted cash balance was $3,102 and $827 at December 31, 2022 and 2021, respectively. As of December 31, 2022 and 2021, the carrying values reflected in the consolidated balance sheets reasonably approximate the fair values of cash and cash equivalents and restricted cash due to the short-term maturity of these items. The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the consolidated balance sheets to the amounts presented in the consolidated statements of cash flows: DECEMBER 31, 2022 2021 (In thousands) Cash and cash equivalents $ 236,586 $ 185,797 Restricted cash, current 3,102 827 Total cash and cash equivalents, and restricted cash $ 239,688 $ 186,624 |
Accounts Receivable | (g) Accounts Receivable Accounts receivable includes current outstanding invoices billed to customers. Invoices are typically issued with net 30-days 90-days 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 $1,250 and $262 were provided in the accompanying consolidated financial statements as of December 31, 2022 and 2021, respectively. DECEMBER 31, 2022 2021 (In thousands) Trade receivables $ 72,238 $ 60,167 Unbilled receivables 11,309 9,071 Other receivables 287 579 Allowances for credit losses (1,250) (262) Accounts receivable, net $ 82,584 $ 69,555 The following is the allowance rollforward of credit losses for the Company’s accounts receivable as of December 31, 2022 and 2021. DECEMBER 31, 2022 2021 (In thousands) Beginning balance $ 262 $ 132 Provision for credit losses 1,009 215 Charge-offs, net of recoveries (21) (85) Ending balance $ 1,250 $ 262 |
Property and Equipment | (h) 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 one |
Leases | (i) 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 and capital leases of equipment. 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. |
Software Development Costs | (j) 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, 2022, 2021 and 2020, costs of $11,119, $7,759, and $7,074, 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, 2022, 2021, and 2020. |
Debt Issuance Costs | (k) 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. |
Goodwill and Other Intangible Assets | (l) Goodwill and Other Intangible Assets The Company has four reporting units – Software reporting unit (“Software”), SimCyp reporting unit (“SimCyp”), Integrated Drug Development reporting unit (“IDD”), and Regulatory Writing reporting unit (“Regulatory Writing”) 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 report 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. For the years ended December 31, 2022, 2021, and 2020, the Company performed quantitative assessments of goodwill. The most recent assessment was performed on October 1, 2022. The quantitative assessments resulted in no impairment as the estimated fair value of each reporting unit exceeded its carrying value. Accordingly, no impairment loss was recorded for the years ended December 31, 2022, 2021, and 2020. Other identifiable intangible assets with finite lives, such as software products acquired in acquisitions, non-compete agreements, tradenames and customer relationship assets, 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 2 11 10 There were no impairment charges related to intangible assets for the years ended December 31, 2022, 2021, and 2020. |
Foreign Currency Translation | (m) 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 gains (losses) of $3,166, $175, and $(715) for the years ended December 31, 2022, 2021, and 2020, respectively. |
Derivative Instruments | (n) 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 had entered into an interest rate swap agreement in May 2022 that pays fixed, receives variable to modify the interest rate characteristics of term loan debt from variable to fixed in order to reduce the impact of changes in future cash flows due to market interest rate changes. The swap agreement has a notional amount of $230,000, a fixed rate of 2.8% and a termination date of August 31, 2025. At December 31, 2022, the interest swap had a fair value of $8,374 and the fair value recognized in accumulated other comprehensive income was $8,374. The Company also had an interest rate swap agreement for a notional amount of $230,000 that fixed the interest rate at 2.1%, non-inclusive of the fixed credit spread through May 31, 2022. On August 31, 2021, the Company entered into an amendment to the interest rate swap agreement. The amended interest rate swap agreement does not in its entirety meet the definition of a derivative instrument because of its off market fixed rate at inception and is deemed to be a hybrid instrument with a financing component and an embedded at-the-market derivative. Such embedded derivative is bifurcated and accounted for separately. At inception, the financing component of $1,966 was recorded at amortized cost. The embedded at-the-market derivative was designated and qualified as a cash flow hedge of interest rate risk for a notional amount of $230,000 that fixed the interest rate at 1.2757%, non-inclusive of the fixed credit spread. Due to an other-than-insignificant financing element on a portion of such hybrid instrument, the cash flows associated with this hybrid instrument were classified as financing activities in the condensed consolidated statements of cash flows. The interest rate swap matured on May 31, 2022. At December 31, 2022, the Company did not record any amounts for the financing component and fair value of the interest rate swap in the consolidated balance sheets. The Company reclassified $3,033 of accumulated comprehensive loss to interest expense in the consolidated statements of operation and comprehensive loss in the second quarter of 2021 due to hedge ineffectiveness. Excluding the amount reclassified, interest expense on derivative instruments recognized in the Company’s consolidated statements of operations and comprehensive income (loss) were $25, $726, and $1,573 for the years ended December 31, 2022, 2021, and 2020, 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. The notional amounts and fair values, locations of derivative instruments in the consolidated balance sheets as of December 31 were as follows: Interest rate swap derivative designated as cash flow hedging instruments: 2022 2021 (In thousands) Notional amounts $ 230,000 $ 230,000 Prepaid expenses and other current assets $ 4,638 $ 57 Other long-term assets $ 3,736 $ — The net amount of deferred gains related to derivative instruments designated as cash flow hedges that is expected to be reclassified from accumulated other comprehensive gains into earnings over the next twelve months is $4,670. |
Warranty | (o) 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. |
Earnings per Share | (p) 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. |
Income Taxes | (q) 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 | 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 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 $2,818 and $1,059 was required to be recorded for uncertain tax positions as of December 31, 2022 and 2021, respectively. Uncertain tax positions relate primarily to federal and state R&D credits. The Company's policy is to recognize interest and penalties as a component of the provision for income taxes. For December 31, 2022 and 2021, the Company recognized interest of $0.1 million of interest and no penalties. For December 31, 2021 the Company recognized neither interest or 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 jurisdictions . |
Revenue Recognition | (r) Revenue Recognition In accordance with Accounting Standards Codification Topic 606 ("ASC Topic 606"), “Revenue from Contracts with Customers”, the Company determines revenue recognition through the following steps: i. ii. iii. iv. v. 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 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 1 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) Revenues SaaS revenues 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 standalone selling price basis (“SSP”). 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 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 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, 2022 and 2021 were as follows: YEAR ENDED DECEMBER 31, 2022 2021 (In thousands) Contract assets $ 11,309 $ 9,071 Contract liabilities $ 55,024 $ 47,027 During 2022, the Company recognized revenue of $45,496 related to contract liabilities at December 31, 2021. The unsatisfied performance obligation as of December 31, 2022 was approximately $120,794. We expect to recognize approximately $80,208 or 66.4% of this revenue over the next 12 months and the remainder thereafter. Deferred Contract Acquisition Costs Under ASC 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 $981 and $0 as of December 31, 2022 and 2021, 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. In these agreements, both involved parties receive and sacrifice approximately commensurate value so these are accounted for as exchange transactions and revenue is recognized according to ASC Topic 606. 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. 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, 2022 2021 2020 (In thousands) Software licenses transferred at a point in time $ 46,139 $ 40,167 $ 36,388 Software licenses transferred over time 69,327 46,658 37,075 Service revenues earned over time 220,178 199,279 170,067 Total $ 335,644 $ 286,104 $ 243,530 |
Equity -Based Compensation | (s) 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, performance stock units are determined by market price of our common stock on the date of grant. Compensation costs for our restricted stock, restricted stock units are recognized on a straight-line basis over the requisite service period. Performance stock units with graded vesting schedule are recognized using graded vesting attribution approach. Performance stock unit represents a right to receive a certain number of shares of common stock based on the achievement of corporate performance goals and continued employment during the vesting period. At each reporting period, we reassess the probability of the achievement of such corporate performance goals and any increase or decrease in equity-based compensation expense resulting from an adjustment in the estimated shares to be released is treated as a cumulative catch-up in the period of adjustment. Compensation costs for our legacy 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. |
Comprehensive Income (Loss) | (t) Comprehensive Income (Loss) FASB ASC 220, “Comprehensive Income,” establishes standards for reporting of comprehensive income and its components (revenue, gains, and losses) in a full set of general-purpose financial statements. FASB ASC 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 (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 foreign currency translation adjustments totaling $(10,490), $(5,154) and $5,045, respectively, and the changes in fair value of interest rate swap (excluding $2,268 reclassification, net of tax in 2021), totaling $6,186, $547, and $(1,135) for the years ended December 31, 2022, 2021, and 2020, respectively. |
Reclassification | (u) Reclassification Certain previously reported amounts in the consolidated financial statements have been reclassified to conform to the current year presentation. |
COVID-19 | (v) COVID-19 Since the first quarter of 2020, the COVID-19 pandemic has posed a significant threat to public health as well as the global and U.S. economies. The continued spread of variants of COVID-19 may adversely impact our business, financial condition or results of operations as a result of increased costs, negative impacts to our workforce, or a sustained economic downturn. Although the economy has rebounded in many areas, the outlook for containing the outbreak is still highly uncertain. Given its ongoing and dynamic nature, it is difficult to predict the full impact of the COVID-19 outbreak on the global and US economy and our business. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Summary of Significant Accounting Policies | |
Summary of assets that is measured at fair value on a recurring basis | 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, 2022: LEVEL 1 LEVEL 2 LEVEL 3 TOTAL (In thousands) Assets Money market funds $ 100,999 $ — $ — $ 100,999 Interest rate swap assets — 8,374 — 8,374 Total assets $ 100,999 $ 8,374 $ — $ 109,373 Liabilities Contingent liabilities $ — $ — $ 19,813 $ 19,813 Total liabilities $ — $ — $ 19,813 $ 19,813 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, 2021: LEVEL 1 LEVEL 2 LEVEL 3 TOTAL (In thousands) Assets Interest rate swap assets $ — $ 57 $ — $ 57 $ — $ 57 $ — $ 57 |
Schedule of reconciliation of cash and cash equivalents and restricted cash | DECEMBER 31, 2022 2021 (In thousands) Cash and cash equivalents $ 236,586 $ 185,797 Restricted cash, current 3,102 827 Total cash and cash equivalents, and restricted cash $ 239,688 $ 186,624 |
Schedule of accounts receivable | DECEMBER 31, 2022 2021 (In thousands) Trade receivables $ 72,238 $ 60,167 Unbilled receivables 11,309 9,071 Other receivables 287 579 Allowances for credit losses (1,250) (262) Accounts receivable, net $ 82,584 $ 69,555 |
Schedule of allowance rollforward of credit losses | DECEMBER 31, 2022 2021 (In thousands) Beginning balance $ 262 $ 132 Provision for credit losses 1,009 215 Charge-offs, net of recoveries (21) (85) Ending balance $ 1,250 $ 262 |
Schedule of derivative instruments in the Consolidated Balance Sheets | The notional amounts and fair values, locations of derivative instruments in the consolidated balance sheets as of December 31 were as follows: Interest rate swap derivative designated as cash flow hedging instruments: 2022 2021 (In thousands) Notional amounts $ 230,000 $ 230,000 Prepaid expenses and other current assets $ 4,638 $ 57 Other long-term assets $ 3,736 $ — |
Schedule of contract balances | Contract balances at December 31, 2022 and 2021 were as follows: YEAR ENDED DECEMBER 31, 2022 2021 (In thousands) Contract assets $ 11,309 $ 9,071 Contract liabilities $ 55,024 $ 47,027 |
Summary of revenue by timing of revenue recognition | YEAR ENDED DECEMBER 31, 2022 2021 2020 (In thousands) Software licenses transferred at a point in time $ 46,139 $ 40,167 $ 36,388 Software licenses transferred over time 69,327 46,658 37,075 Service revenues earned over time 220,178 199,279 170,067 Total $ 335,644 $ 286,104 $ 243,530 |
Business Combinations (Tables)
Business Combinations (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Pinnacle 21, LLC | |
Business Combinations | |
Schedule of fair values of the assets acquired and liabilities assumed | Pinnacle (In thousands) Fair value of consideration: Cash paid to sellers $ 249,115 Cash paid to others and escrow 17,200 Unregistered shares of Certara, Inc. (2,239,717 shares) 72,760 Total consideration $ 339,075 Assets acquired and liabilities assumed: Cash and cash equivalents $ 19,409 Accounts receivable 2,925 Other current assets 619 Property and equipment 258 Deferred tax assets 2,907 Identifiable intangible assets: Trademark 15,800 Acquired software 103,000 Customer relationships 24,600 Goodwill 180,947 Long-term deposits 34 Current liabilities (794) Current portion of deferred revenue (10,630) Net assets acquired $ 339,075 |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets and Other Long-Term Assets (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Prepaid Expenses and Other Current Assets and Other Long-Term Assets | |
Schedule of prepaid and other current assets | DECEMBER 31, 2022 2021 (In thousands) Prepaid expenses $ 8,389 $ 8,973 Income tax receivable 2,014 4,800 Research and development tax credit receivable 4,207 3,951 Current portion of interest rate swap asset 4,638 57 Other current assets 732 767 Prepaid expenses and other current assets $ 19,980 $ 18,548 |
Schedule of other long-term assets | DECEMBER 31, 2022 2021 (In thousands) Long-term deposits $ 1,150 $ 1,160 Interest rate swap asset - long term 3,736 — Deferred financing cost 729 1,007 Total other long-term assets $ 5,615 $ 2,167 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property and Equipment | |
Schedule of property and equipment | DECEMBER 31, 2022 2021 (In thousands) Computer and office equipment $ 4,575 $ 5,955 Furniture 2,426 3,075 Purchased software for internal use 701 698 Leasehold improvements 1,345 1,762 Property and equipment 9,047 11,490 Less: Accumulated depreciation and amortization (6,647) (8,555) Property and equipment, net $ 2,400 $ 2,935 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Other Intangible Assets | |
Schedule of intangible assets (other than goodwill) and the related amortization | WEIGHTED AVERAGE DECEMBER 31, 2022 DECEMBER 31, 2021 AMORTIZATION GROSS GROSS PERIOD CARRYING ACCUMULATED CARRYING ACCUMULATED (IN YEARS) AMOUNT AMORTIZATION NET AMOUNT AMORTIZATION NET (In thousands) Acquired software 13.42 $ 138,157 $ (20,441) $ 117,716 $ 127,123 $ (12,258) $ 114,865 Capitalized software development costs 2.21 41,323 (26,139) 15,184 31,477 (20,137) 11,340 Non-compete agreements 1.00 1,543 (1,339) 204 1,391 (1,247) 144 Trademarks 14.36 56,603 (12,229) 44,374 56,483 (9,142) 47,341 Customer relationships 10.05 466,861 (157,557) 309,304 464,678 (126,545) 338,133 Total $ 704,487 $ (217,705) $ 486,782 $ 681,152 $ (169,329) $ 511,823 |
Schedule of estimated annual amortization expense | CAPITALIZED SOFTWARE NON- ACQUIRED DEVELOPMENT COMPETE TRADE CUSTOMER SOFTWARE COSTS AGREEMENTS NAMES RELATIONSHIPS TOTAL (In thousands) 2023 $ 10,264 $ 6,511 $ 77 $ 3,147 $ 31,447 $ 51,446 2024 10,034 5,394 40 3,147 31,447 50,062 2025 9,879 3,279 36 3,087 31,447 47,728 2026 9,736 — 36 3,087 31,447 44,306 2027 9,272 — 15 3,087 31,447 43,821 Thereafter 68,531 — — 28,819 152,069 249,419 Total $ 117,716 $ 15,184 $ 204 $ 44,374 $ 309,304 $ 486,782 |
Schedule of reconciliation of the change in the carrying value of goodwill | (In thousands) Balance, December 31, 2020 $ 518,592 Goodwill associated with 2021 business combinations 186,771 Foreign currency translation (1,992) Balance, December 31, 2021 703,371 Goodwill associated with 2022 business combinations 19,451 Foreign currency translation (5,079) Balance, December 31, 2022 $ 717,743 |
Accrued Expenses and Other Lo_2
Accrued Expenses and Other Long-Term Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accrued Expenses and Other Long-Term Liabilities | |
Schedule of accrued expenses | DECEMBER 31, 2022 2021 (In thousands) Accrued compensation $ 29,518 $ 24,848 Legal and professional accruals 1,297 2,477 Interest payable 176 96 Income taxes payable 2,223 1,398 Accrued business acquisition liabilities 700 — Other 1,489 1,011 Total accrued expenses $ 35,403 $ 29,830 |
Schedule of other long-term liabilities | Other long-term liabilities consist of the following: DECEMBER 31, 2022 2021 (In thousands) Non-current finance lease liabilities $ — $ 25 Uncertain tax position liability 2,308 — Contingent consideration 19,813 — Total other long-term liabilities $ 22,121 $ 25 |
Long-Term Debt and Revolving _2
Long-Term Debt and Revolving Line of Credit (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Long-Term Debt and Revolving Line of Credit | |
Schedule of Long-term debt | DECEMBER 31, 2022 2021 (In thousands) Term loans $ 297,470 $ 300,490 Revolving line of credit — — Less: debt issuance costs (4,462) (5,724) Total 293,008 294,766 Current portion of long-term debt (3,020) (3,020) Long-term debt, net of current portion and debt issuance costs $ 289,988 $ 291,746 |
Schedule of maturity of long-term debt | The principal amount of long-term debt outstanding as of December 31, 2022, matures in the following years: 2023 2024 2025 2026 TOTAL (In thousands) Maturities $ 3,020 $ 3,020 $ 3,020 $ 288,410 $ 297,470 |
Equity-Based Compensation (Tabl
Equity-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Equity-Based Compensation | |
Schedule of Valuation Assumptions | YEAR ENDED DECEMBER 31, 2020 Pricing model Monte Carlo Expected dividend yield 0.0 % Risk-free interest rate (1) 0.3 % Expected stock price volatility (2) 59 % Expected exercise term (in years) (3) 2.3 (1) Based on the U.S. Treasury constant maturity interest rate whose term is consistent with the expected exercise term of our incentive units (2) In projecting expected stock price volatility, we consider the historical volatility of the stock prices of comparable public companies. (3) The Company estimates the expected life of incentive units based upon the timing of a potential liquidity event. |
Summary of the restricted stock | WEIGHTED-AVERAGE GRANT-DATE SHARES FAIR VALUE Non-vested restricted stock as of December 31, 2021 3,910,722 $ 23.18 Granted 66,220 17.07 Vested (2,020,065) 22.97 Forfeited (487,844) 23.00 Cancelled (66,220) 23.00 Non-vested restricted stock as of December 31, 2022 1,402,813 $ 23.27 |
Summary of the Company's RSU activity | WEIGHTED- AVERAGE GRANT DATE UNITS FAIR VALUE Non-vested RSUs as of December 31, 2021 1,288,724 $ 29.28 Granted 1,437,957 21.98 Vested (432,494) 28.66 Forfeited (289,092) 25.61 Non-vested RSUs as of December 31, 2022 2,005,095 $ 24.71 |
Schedule of nonvested Performance-based Units activity | WEIGHTED- AVERAGE GRANT DATE UNITS FAIR VALUE Non-vested PSUs as of December 31, 2021 406,575 $ 27.35 Granted 361,147 22.25 Vested (12,291) 24.83 Forfeited (101,123) 31.22 Non-vested PSUs as of December 31, 2022 654,308 $ 23.99 |
Schedule of compensation expense | YEAR ENDED DECEMBER 31, 2022 2021 2020 (In thousands) Cost of revenues $ 7,494 $ 5,193 $ 8,805 Sales and marketing 2,091 2,204 7,390 Research and development 5,829 2,872 7,133 General and administrative expenses 14,931 19,214 41,179 Total $ 30,345 $ 29,483 $ 64,507 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases | |
Schedule of operating and financing lease right of use assets and lease liabilities | Lease right-of-use assets, lease liabilities, lease term and discount rate: December 31, 2022 December 31, 2021 (In thousands) Lease right of use assets Operating leases $ 14,427 $ 12,634 Financing leases 24 271 $ 14,451 $ 12,905 Lease liabilities Current Operating leases $ 4,968 $ 5,040 Financing leases 25 293 Noncurrent Operating leases 10,133 8,256 Financing leases — 25 $ 15,126 $ 13,614 For the year ended For the year ended Weighted-average remaining lease term (years): December 31, 2022 December 31, 2021 Operating leases 3.9 3.63 Financing leases 0.08 1.08 Weighted-average discount rate: Operating leases 3.45% 3.91% Financing leases 6.19% 6.19% |
Schedule of information about leases | December 31, 2022 December 31, 2021 (In thousands) Operating lease cost $ 4,978 $ 5,815 Short-term lease cost 729 404 Variable lease cost 191 744 Sublease income (379) (490) Finance lease cost: Amortization of right-of-use assets 254 277 Interest on lease liabilities 11 29 Total lease cost $ 5,784 $ 6,779 |
Schedule of supplemental cash flow information | December 31, 2022 December 31, 2021 (In thousands) Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from finance leases $ 11 $ 29 Operating cash flows from operating leases $ 5,360 $ 6,105 Financing cash flows from finance leases $ 293 $ 275 Right-of-use assets obtained in exchange for new and remeasured operating leases $ 2,501 $ 520 Right-of-use assets obtained through acquisition $ 129 $ 1,648 |
Schedule of minimum lease payments of operating leases | The following table summarizes by year the maturities of our minimum lease payments as of December 31, 2022. OPERATING FINANCE LEASES LEASES (In thousands) Year ending December 31, 2023 $ 4,935 $ 25 2024 4,113 — 2025 3,342 — 2026 2,129 — 2027 917 — Thereafter 595 — Total future lease payments 16,031 25 Less: imputed interest (930) — Total $ 15,101 $ 25 |
Schedule of minimum lease payments of finance leases | OPERATING FINANCE LEASES LEASES (In thousands) Year ending December 31, 2023 $ 4,935 $ 25 2024 4,113 — 2025 3,342 — 2026 2,129 — 2027 917 — Thereafter 595 — Total future lease payments 16,031 25 Less: imputed interest (930) — Total $ 15,101 $ 25 |
Segment Data (Tables)
Segment Data (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Segment Data | |
Schedule of revenue by geographic area | YEAR ENDED DECEMBER 31, 2022 2021 2020 (In thousands) Revenue (1) Americas $ 252,921 $ 205,377 $ 182,629 EMEA 57,002 56,410 42,844 Asia Pac 25,721 24,317 18,057 Total $ 335,644 $ 286,104 $ 243,530 (1) Revenue is attributable to the countries based on the location of the customer |
Schedule of Disclosure on Geographic Areas, Long-Lived Assets in Individual Foreign Countries by Country | DECEMBER 31, 2022 2021 (In thousands) Property, plant and equipment, net: Americas $ 1,406 $ 1,903 EMEA 732 712 Asia Pac 262 320 Total $ 2,400 $ 2,935 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Taxes | |
Schedule of components of loss before income taxes | YEAR ENDED DECEMBER 31, 2022 2021 2020 (In thousands) Domestic $ 9,456 $ (10,373) $ (55,355) Foreign 9,299 6,998 5,174 Total $ 18,755 $ (3,375) $ (50,181) |
Schedule of components of income tax expense (benefit) | DECEMBER 31, 2022 2021 2020 (In thousands) Current tax provision Federal $ 1,882 $ 451 $ 326 State and local 3,335 1,798 1,659 Foreign 10,318 8,826 4,634 Total current 15,535 11,075 6,619 Deferred tax benefit Federal (6,788) (4,416) (3,620) State and local (2,190) (1,156) 276 Foreign (2,533) 4,388 (4,059) Total deferred (11,511) (1,184) (7,403) Total provision (benefit) $ 4,024 $ 9,891 $ (784) |
Schedule of primary reconciling items between the statutory income tax rate and the effective income tax rate | DECEMBER 31, 2022 2021 2020 (In thousands, except for percentage) Tax at U.S. federal statutory rate $ 3,939 21.00 % $ (709) 21.00 % $ (10,538) 21.00 % State taxes, net of federal benefit 967 5.16 % 226 (6.71) % 1,125 (2.24) % Foreign rate differential 3,545 18.90 % 3,872 (114.72) % 2,296 (4.58) % Permanent items (1,227) (6.54) % (670) 19.84 % (139) 0.28 % Equity compensation 2,278 12.15 % 3,534 (104.70) % 13,562 (27.03) % GIL TI inclusion 451 2.41 % 540 (16.00) % 932 (1.86) % Tax credits (6,427) (34.27) % (7,060) 209.19 % (7,618) 15.18 % Rate change (605) (3.23) % 5,256 (155.75) % 2,076 (4.14) % Other adjustments (4,554) (24.28) % 3,131 (92.76) % 1,223 (2.43) % Return to provision adjustments (405) (2.16) % (66) 1.95 % (103) 0.21 % Valuation allowance 6,062 32.32 % 1,837 (54.40) % (3,600) 7.17 % Effective tax rate $ 4,024 21.46 % $ 9,891 (293.06) % $ (784) 1.56 % |
Schedule of tax effects of temporary differences that gave rise to deferred tax assets and liabilities | DECEMBER 31, 2022 2021 (In thousands) Deferred tax assets Accounts receivable $ 279 $ 61 Accrued compensation 4,385 3,552 Accrued expenses 529 - Deferred revenue 392 696 Net operating loss carryforwards 14,264 4,117 R&D credit carryforward 3,918 4,965 Foreign tax credits 12,131 15,054 Interest rate hedge — 253 Equity based compensation 4,752 3,015 Other assets 189 380 Interest expense 103 224 Lease liability 3,136 2,944 Section 174 9,425 — Total gross deferred tax asset 53,503 35,261 Less: Valuation allowance (25,732) (18,235) Net deferred tax asset 27,771 17,026 Deferred tax liabilities Property, equipment, and other long-lived assets (152) (272) Goodwill and intangible assets (82,100) (83,844) Prepaid expenses (1,820) (1,968) Accrued expenses — (184) Deferred revenue — — Interest rate hedge (2,085) — Right-of-use (ROU) Asset (2,957) (2,783) Total gross deferred tax liability (89,114) (89,051) Net deferred tax liability $ (61,343) $ (72,025) |
Schedule of reconciliation of the beginning and ending balance of unrecognized tax benefits | (In thousands) Balance at December 31, 2020 $ 897 Additions for tax positions related to the current year 156 Additions for tax positions of prior years 6 Balance at December 31, 2021 1,059 Additions for tax positions related to the current year 205 Additions for tax positions of prior years 1,554 Balance at December 31, 2022 $ 2,818 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Earnings per Share | |
Schedule of basic and diluted earnings per share | YEAR ENDED DECEMBER 31, 2022 2021 2020 (In thousands, except per share and share data) Basic earnings per share Net income (loss) available to common shareholders $ 14,731 $ (13,266) $ (49,397) Basic weighted-average common shares outstanding 156,876,942 149,842,668 133,247,212 Basic earnings per common share $ 0.09 $ (0.09) $ (0.37) Diluted earnings per share Net income available to common shares $ 14,731 $ (13,266) $ (49,397) Basic weighted-average common shares outstanding 156,876,942 149,842,668 133,247,212 Dilutive potential common shares 2,477,452 (1) — (2) — (2) Diluted weighted-average common shares outstanding 159,354,394 149,842,668 133,247,212 Diluted earnings per common share $ 0.09 $ (0.09) $ (0.37) (1) For the year ended December 31, 2022, the Company excluded certain potentially dilutive securities attributable to outstanding RSUs and RSAs from the computation of diluted EPS because the securities would have had an antidilutive effect. (2) For the year ended December 31, 2021, and 2020, the Company excluded the restricted stock and restricted stock units 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. |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Cash and cash equivalents (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Summary of Significant Accounting Policies | ||||
Cash and cash equivalents | $ 236,586 | $ 185,797 | ||
Restricted cash, current | 3,102 | 827 | ||
Total cash and cash equivalents, and restricted cash | $ 239,688 | $ 186,624 | $ 273,291 | $ 29,762 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Accounts Receivable (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Summary of Significant Accounting Policies | ||
Accounts receivable invoices days outstanding due minimum | 30 days | |
Accounts receivable invoices days outstanding due maximum | 90 days | |
Trade receivables | $ 72,238 | $ 60,167 |
Unbilled receivables | 11,309 | 9,071 |
Other receivables | 287 | 579 |
Allowance for credit losses | (1,250) | (262) |
Accounts receivable, net | 82,584 | 69,555 |
Rollforward of credit losses | ||
Beginning Balance | 262 | 132 |
Provision for credit losses | 1,009 | 215 |
Charge-offs, net of recoveries | (21) | (85) |
Ending Balance | $ 1,250 | $ 262 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Property and equipment | |||
Impairment of Long-Lived Assets Held-for-use | $ 0 | $ 0 | $ 0 |
Capitalized software development costs | 11,119 | 7,759 | 7,074 |
Impairment of software development costs | $ 0 | $ 0 | $ 0 |
Minimum | Equipment And Furniture | |||
Property and equipment | |||
Useful Life | 3 years | ||
Minimum | Purchase software for internal use | |||
Property and equipment | |||
Useful Life | 1 year | ||
Maximum | Equipment And Furniture | |||
Property and equipment | |||
Useful Life | 10 years | ||
Maximum | Purchase software for internal use | |||
Property and equipment | |||
Useful Life | 3 years |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Goodwill and Other Intangible Assets (Details) | 12 Months Ended | ||
Dec. 31, 2022 USD ($) item | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Goodwill and Other Intangible Assets | |||
Number of reporting units | item | 4 | ||
Impairment of Goodwill | $ 0 | $ 0 | $ 0 |
Impairment of other intangibles | 0 | 0 | 0 |
Foreign Currency Transaction Gain (Loss) | $ 3,166,000 | $ 175,000 | $ (715,000) |
Acquired software | Minimum | |||
Goodwill and Other Intangible Assets | |||
Useful Life | 3 years | ||
Acquired software | Maximum | |||
Goodwill and Other Intangible Assets | |||
Useful Life | 14 years | ||
Non-compete agreements | Minimum | |||
Goodwill and Other Intangible Assets | |||
Useful Life | 2 years | ||
Non-compete agreements | Maximum | |||
Goodwill and Other Intangible Assets | |||
Useful Life | 5 years | ||
Customer relationships | Minimum | |||
Goodwill and Other Intangible Assets | |||
Useful Life | 11 years | ||
Customer relationships | Maximum | |||
Goodwill and Other Intangible Assets | |||
Useful Life | 16 years | ||
Trademarks | Minimum | |||
Goodwill and Other Intangible Assets | |||
Useful Life | 10 years | ||
Trademarks | Maximum | |||
Goodwill and Other Intangible Assets | |||
Useful Life | 17 years |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Derivatives (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||
Jun. 30, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Aug. 31, 2022 | May 31, 2022 | |
Derivative | ||||||
Accumulated other comprehensive loss | $ (8,230) | $ (3,926) | ||||
Interest expense | $ 25 | $ 726 | $ 1,573 | |||
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Interest Expense | Interest Expense | Interest Expense | |||
Designated as Hedging Instrument | Cash Flow Hedging | ||||||
Derivative | ||||||
Notional amount | $ 230,000 | $ 230,000 | ||||
Interest rate cash flow hedge gain to be reclassified during next 12 months | 4,670 | |||||
Recurring | ||||||
Derivative | ||||||
Liability measured at fair value | 19,813 | |||||
Assets measured at fair value | 109,373 | 57 | ||||
Level 1 | Recurring | ||||||
Derivative | ||||||
Assets measured at fair value | 100,999 | |||||
Level 2 | Recurring | ||||||
Derivative | ||||||
Assets measured at fair value | 8,374 | 57 | ||||
Level 3 | Recurring | ||||||
Derivative | ||||||
Liability measured at fair value | 19,813 | |||||
Money Market Funds | Recurring | ||||||
Derivative | ||||||
Assets measured at fair value | 100,999 | |||||
Money Market Funds | Level 1 | Recurring | ||||||
Derivative | ||||||
Assets measured at fair value | $ 100,999 | |||||
Interest rate swap | Designated as Hedging Instrument | Cash Flow Hedging | ||||||
Derivative | ||||||
Notional amount | $ 230,000 | $ 230,000 | ||||
Interest rate (as a percent) | 2.80% | 1.2757% | 2.10% | |||
Recorded amortized cost | $ 1,966 | |||||
Fair value of embedded derivative liability | $ 8,374 | |||||
Liability measured at fair value | 8,374 | |||||
Interest rate cash flow hedge accumulated comprehensive loss reclassified to interest expense | $ 3,033 | |||||
Interest rate swap | Recurring | ||||||
Derivative | ||||||
Assets measured at fair value | 8,374 | 57 | ||||
Interest rate swap | Level 2 | Recurring | ||||||
Derivative | ||||||
Assets measured at fair value | 8,374 | 57 | ||||
Contingent Liability | Recurring | ||||||
Derivative | ||||||
Liability measured at fair value | 19,813 | |||||
Contingent Liability | Level 3 | Recurring | ||||||
Derivative | ||||||
Liability measured at fair value | 19,813 | |||||
Prepaid expenses and other current assets | Designated as Hedging Instrument | Cash Flow Hedging | ||||||
Derivative | ||||||
Assets measured at fair value | 4,638 | 57 | ||||
Other long-term assets | Designated as Hedging Instrument | Cash Flow Hedging | ||||||
Derivative | ||||||
Assets measured at fair value | $ 3,736 | $ 0 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Income Tax Benefits (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Summary of Significant Accounting Policies | |||
Unrecognized Tax Benefits | $ 2,818 | $ 1,059 | $ 897 |
Undistributed earnings | 2,818 | 1,059 | |
Interest on uncertain tax positions | 100 | 0 | |
Penalties on uncertain tax positions | $ 0 | $ 0 |
Summary of Significant Accou_10
Summary of Significant Accounting Policies - Revenue Recognition (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Summary of Significant Accounting Policies | |||
Unsatisfied performance obligation | $ 120,794 | ||
Revenue recognition | 335,644 | $ 286,104 | $ 243,530 |
Revenue | 335,644 | 286,104 | 243,530 |
Deferred contract acquisition costs | 981 | 0 | |
Contract assets | 11,309 | 9,071 | |
Contract liabilities | 55,024 | 47,027 | |
Revenue recognized from contract liabilities | 45,496 | ||
Contract revenue to be recognized in next twelve months | $ 80,208 | ||
Contract revenue to be recognized in next twelve months (as a percent) | 66.40% | ||
Software licenses transferred at a point in time | |||
Summary of Significant Accounting Policies | |||
Revenue recognition | $ 46,139 | 40,167 | 36,388 |
Software licenses transferred over time | |||
Summary of Significant Accounting Policies | |||
Revenue recognition | 69,327 | 46,658 | 37,075 |
Service revenues earned over time | |||
Summary of Significant Accounting Policies | |||
Revenue recognition | $ 220,178 | $ 199,279 | $ 170,067 |
Software Licenses | |||
Summary of Significant Accounting Policies | |||
The software license revenue term of recognition period | 1 year | ||
Maintenance Contracts | |||
Summary of Significant Accounting Policies | |||
The software license revenue term of recognition period | 1 year | ||
Multiple Performance Obligations | |||
Summary of Significant Accounting Policies | |||
The software license revenue term of recognition period | 1 year | ||
Minimum | |||
Summary of Significant Accounting Policies | |||
Subscription Term | 1 year | ||
Contract Balances | |||
Subscription term | 1 year | ||
Maximum | |||
Summary of Significant Accounting Policies | |||
Subscription Term | 3 years | ||
Contract Balances | |||
Subscription term | 3 years |
Summary of Significant Accou_11
Summary of Significant Accounting Policies - Revenue Recognition ASC 606 (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Minimum | |
Revenue from external customers | |
Subscription term | 1 year |
Maximum | |
Revenue from external customers | |
Subscription term | 3 years |
Summary of Significant Accou_12
Summary of Significant Accounting Policies - Comprehensive (Loss) Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Summary of Significant Accounting Policies | |||
Foreign currency translation adjustment, net of tax of $(916), $195, $(277) | $ (10,490) | $ (5,154) | $ 5,045 |
Reclassification of fair value of interest rate swap, net of tax | 2,268 | ||
Change in fair value of interest rate swap, net of tax of $2,056, $(16), $(384) | $ 6,186 | $ 547 | $ (1,135) |
Public Offerings and Other Si_2
Public Offerings and Other Significant Shareholder Transactions (Details) | 12 Months Ended | ||||||||
Dec. 08, 2022 $ / shares shares | Aug. 11, 2022 USD ($) shares | Nov. 22, 2021 USD ($) shares | Sep. 13, 2021 USD ($) $ / shares shares | Mar. 29, 2021 USD ($) shares | Dec. 11, 2020 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Dec. 10, 2020 item $ / shares | |
Initial Public Offering | |||||||||
Share price (in dollar per share) | $ / shares | $ 23 | ||||||||
Legal, accounting and other offering costs | $ 1,767,000 | $ 2,900,000 | |||||||
EQT | |||||||||
Initial Public Offering | |||||||||
Number of "demand" registrations under the Registration Rights Agreement | item | 4 | ||||||||
Number of underwritten offering in any consecutive 90-day period Under Registration Rights Agreement | item | 1 | ||||||||
Number of underwritten offering in any consecutive 360-day period under Registration Rights Agreement | item | 2 | ||||||||
Arsenal | EQT | |||||||||
Initial Public Offering | |||||||||
Common stock offerings (in shares) | shares | 29,954,521 | ||||||||
Share price (in dollar per share) | $ / shares | $ 15 | ||||||||
IPO | |||||||||
Initial Public Offering | |||||||||
Common stock offerings (in shares) | shares | 14,630,000 | ||||||||
Share price (in dollar per share) | $ / shares | $ 23 | ||||||||
Net proceeds from public offering of common stock | $ 316,301,000 | ||||||||
Stock issuance costs, net of tax impact | 4,408,000 | ||||||||
Tax impact of stock issuance costs | $ 259,000 | ||||||||
IPO | EQT | |||||||||
Initial Public Offering | |||||||||
Common stock offerings (in shares) | shares | 18,783,250 | ||||||||
Secondary Public Offering | |||||||||
Initial Public Offering | |||||||||
Common stock offerings (in shares) | shares | 0 | 0 | 4,500,000 | 0 | |||||
Share price (in dollar per share) | $ / shares | $ 31 | ||||||||
Net proceeds from public offering of common stock | $ 0 | $ 0 | $ 134,096,000 | $ 0 | |||||
Legal, accounting and other offering costs | $ 745,000 | ||||||||
Stock issuance costs, net of tax impact | $ 644,000 | $ 1,100,000 | |||||||
Secondary Public Offering | EQT | |||||||||
Initial Public Offering | |||||||||
Common stock offerings (in shares) | shares | 7,000,000 | 10,000,000 | 18,500,000 | 11,500,000 | |||||
Stock issuance costs, net of tax impact | $ 596,000 | ||||||||
Underwriters' Option | |||||||||
Initial Public Offering | |||||||||
Common stock offerings (in shares) | shares | 3,000,000 | ||||||||
Underwriters' Option | EQT | |||||||||
Initial Public Offering | |||||||||
Common stock offerings (in shares) | shares | 1,500,000 |
Business Combinations - Other I
Business Combinations - Other Information (Details) - USD ($) | 12 Months Ended | |||||||
Dec. 28, 2022 | Jan. 03, 2022 | Oct. 01, 2021 | Jun. 07, 2021 | Mar. 02, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Business Combinations | ||||||||
Goodwill arising in the acquisition | $ 717,743,000 | $ 703,371,000 | $ 518,592,000 | |||||
Revenue | 335,644,000 | 286,104,000 | 243,530,000 | |||||
Net income | 14,731,000 | $ (13,266,000) | $ (49,397,000) | |||||
Author! B.V. | ||||||||
Business Combinations | ||||||||
Business consideration transferred | $ 2,667,000 | |||||||
Goodwill arising in the acquisition | 1,200,000 | |||||||
Insight Medical Writing Limited | ||||||||
Business Combinations | ||||||||
Business consideration transferred | $ 15,197,000 | |||||||
Goodwill arising in the acquisition | 4,700,000 | |||||||
Pinnacle 21, LLC | ||||||||
Business Combinations | ||||||||
Business consideration transferred | $ 339,075,000 | |||||||
Goodwill arising in the acquisition | $ 180,947,000 | |||||||
Equity acquired (as percentage) | 100% | |||||||
Discount for lack of mobility (as percentage) | 7% | |||||||
Revenue | 6,129,000 | |||||||
Net income | 380,000 | |||||||
Integrated Nonclinical Development Solutions, Inc. | ||||||||
Business Combinations | ||||||||
Business consideration transferred | $ 8,048,000 | |||||||
Goodwill arising in the acquisition | 2,910,000 | |||||||
Vyasa Analytics, LLC | ||||||||
Business Combinations | ||||||||
Business consideration transferred | $ 29,276,000 | |||||||
Goodwill arising in the acquisition | $ 16,589,000 | |||||||
Contingent consideration earn-out period | 3 years | |||||||
Contingent consideration percentage of consideration paid in cash (as a percent) | 70% | |||||||
Contingent consideration percentage of consideration paid in stock (as a percent) | 30% | |||||||
Contingent consideration | $ 19,813,000 | |||||||
Vyasa Analytics, LLC | Minimum | ||||||||
Business Combinations | ||||||||
Contingent consideration payout based on revenue threshold achievement | 0 | |||||||
Vyasa Analytics, LLC | Maximum | ||||||||
Business Combinations | ||||||||
Contingent consideration payout based on revenue threshold achievement | $ 60,000,000 | |||||||
General and administrative | Pinnacle 21, LLC | ||||||||
Business Combinations | ||||||||
Acquisition related costs | $ 7,615,000 | |||||||
Customer relationships | Author! B.V. | ||||||||
Business Combinations | ||||||||
Finite-lived intangible assets acquired | 1,200,000 | |||||||
Customer relationships | Insight Medical Writing Limited | ||||||||
Business Combinations | ||||||||
Finite-lived intangible assets acquired | $ 7,400,000 | |||||||
Customer relationships | Integrated Nonclinical Development Solutions, Inc. | ||||||||
Business Combinations | ||||||||
Finite-lived intangible assets acquired | 2,380,000 | |||||||
Customer relationships | Vyasa Analytics, LLC | ||||||||
Business Combinations | ||||||||
Finite-lived intangible assets acquired | 1,500,000 | |||||||
Non-compete agreements | Author! B.V. | ||||||||
Business Combinations | ||||||||
Finite-lived intangible assets acquired | $ 100,000 | |||||||
Non-compete agreements | Integrated Nonclinical Development Solutions, Inc. | ||||||||
Business Combinations | ||||||||
Finite-lived intangible assets acquired | 100,000 | |||||||
Non-compete agreements | Vyasa Analytics, LLC | ||||||||
Business Combinations | ||||||||
Finite-lived intangible assets acquired | 80,000 | |||||||
Developed technology | Integrated Nonclinical Development Solutions, Inc. | ||||||||
Business Combinations | ||||||||
Finite-lived intangible assets acquired | $ 1,040,000 | |||||||
Developed technology | Vyasa Analytics, LLC | ||||||||
Business Combinations | ||||||||
Finite-lived intangible assets acquired | 11,400,000 | |||||||
Trademarks | Vyasa Analytics, LLC | ||||||||
Business Combinations | ||||||||
Finite-lived intangible assets acquired | $ 120,000 |
Business Combinations - Fair Va
Business Combinations - Fair Value of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Oct. 01, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Assets acquired and liabilities assumed: | ||||
Goodwill | $ 717,743 | $ 703,371 | $ 518,592 | |
Pinnacle 21, LLC | ||||
Fair value of consideration: | ||||
Cash paid to sellers | $ 249,115 | |||
Cash paid to others and escrow | 17,200 | |||
Unregistered shares of Certara, Inc. (2,239,717 shares) | 72,760 | |||
Total consideration | $ 339,075 | |||
Unregistered shares of Certara, Inc., issued | 2,239,717 | |||
Assets acquired and liabilities assumed: | ||||
Cash and cash equivalents | $ 19,409 | |||
Accounts receivable | 2,925 | |||
Other current assets | 619 | |||
Property and equipment | 258 | |||
Deferred tax assets | 2,907 | |||
Goodwill | 180,947 | |||
Long-term deposits | 34 | |||
Current liabilities | (794) | |||
Current portion of deferred revenue | (10,630) | |||
Net assets acquired | 339,075 | |||
Pinnacle 21, LLC | Trademarks | ||||
Assets acquired and liabilities assumed: | ||||
Identifiable intangible assets | 15,800 | |||
Pinnacle 21, LLC | Developed technology | ||||
Assets acquired and liabilities assumed: | ||||
Identifiable intangible assets | 103,000 | |||
Pinnacle 21, LLC | Customer relationships | ||||
Assets acquired and liabilities assumed: | ||||
Identifiable intangible assets | $ 24,600 |
Prepaid Expenses and Other Cu_3
Prepaid Expenses and Other Current Assets and Other Long-Term Assets - Prepaid and other current assets (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Prepaid Expenses and Other Current Assets and Other Long-Term Assets | ||
Prepaid expenses | $ 8,389 | $ 8,973 |
Income tax receivable | 2,014 | 4,800 |
Research and development tax credit receivable | 4,207 | 3,951 |
Current portion of interest rate swap asset | 4,638 | 57 |
Other current assets | 732 | 767 |
Prepaid expenses and other current assets | $ 19,980 | $ 18,548 |
Prepaid Expenses and Other Cu_4
Prepaid Expenses and Other Current Assets and Other Long-Term Assets - Other long-term assets (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Prepaid Expenses and Other Current Assets and Other Long-Term Assets | ||
Long-term deposits | $ 1,150 | $ 1,160 |
Interest rate swap asset - long term | 3,736 | |
Deferred financing cost | 729 | 1,007 |
Total other long-term assets | $ 5,615 | $ 2,167 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Property and equipment | |||
Property and equipment | $ 9,047 | $ 11,490 | |
Less: Accumulated depreciation and amortization | (6,647) | (8,555) | |
Property and equipment, net | 2,400 | 2,935 | |
Depreciation and amortization expense | 1,731 | 2,135 | $ 2,443 |
Computer Equipment | |||
Property and equipment | |||
Property and equipment | 4,575 | 5,955 | |
Furniture | |||
Property and equipment | |||
Property and equipment | 2,426 | 3,075 | |
Purchase software for internal use | |||
Property and equipment | |||
Property and equipment | 701 | 698 | |
Leasehold improvements | |||
Property and equipment | |||
Property and equipment | $ 1,345 | $ 1,762 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Company's intangible assets (other than goodwill) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Goodwill and Other Intangible Assets | ||
GROSS CARRYING AMOUNT | $ 704,487 | $ 681,152 |
ACCUMULATED AMORTIZATION | (217,705) | (169,329) |
Finite-Lived Intangible Assets, Net, Total | $ 486,782 | 511,823 |
Acquired software | ||
Goodwill and Other Intangible Assets | ||
WEIGHTED AVERAGE AMORTIZATION PERIOD (IN YEARS) | 13 years 5 months 1 day | |
GROSS CARRYING AMOUNT | $ 138,157 | 127,123 |
ACCUMULATED AMORTIZATION | (20,441) | (12,258) |
Finite-Lived Intangible Assets, Net, Total | $ 117,716 | 114,865 |
Purchase software for internal use | ||
Goodwill and Other Intangible Assets | ||
WEIGHTED AVERAGE AMORTIZATION PERIOD (IN YEARS) | 2 years 2 months 15 days | |
GROSS CARRYING AMOUNT | $ 41,323 | 31,477 |
ACCUMULATED AMORTIZATION | (26,139) | (20,137) |
Finite-Lived Intangible Assets, Net, Total | $ 15,184 | 11,340 |
Non-compete agreements | ||
Goodwill and Other Intangible Assets | ||
WEIGHTED AVERAGE AMORTIZATION PERIOD (IN YEARS) | 1 year | |
GROSS CARRYING AMOUNT | $ 1,543 | 1,391 |
ACCUMULATED AMORTIZATION | (1,339) | (1,247) |
Finite-Lived Intangible Assets, Net, Total | $ 204 | 144 |
Tradename | ||
Goodwill and Other Intangible Assets | ||
WEIGHTED AVERAGE AMORTIZATION PERIOD (IN YEARS) | 14 years 4 months 9 days | |
GROSS CARRYING AMOUNT | $ 56,603 | 56,483 |
ACCUMULATED AMORTIZATION | (12,229) | (9,142) |
Finite-Lived Intangible Assets, Net, Total | $ 44,374 | 47,341 |
Customer relationships | ||
Goodwill and Other Intangible Assets | ||
WEIGHTED AVERAGE AMORTIZATION PERIOD (IN YEARS) | 10 years 18 days | |
GROSS CARRYING AMOUNT | $ 466,861 | 464,678 |
ACCUMULATED AMORTIZATION | (157,557) | (126,545) |
Finite-Lived Intangible Assets, Net, Total | $ 309,304 | $ 338,133 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Amortization (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Goodwill and Other Intangible Assets | |||
Amortization expense for intangible assets | $ 50,739 | $ 42,980 | $ 40,310 |
Amortization expenses recorded in operating expenses | 41,429 | 38,715 | 37,414 |
Cost of revenues | |||
Goodwill and Other Intangible Assets | |||
Amortization expense for intangible assets | $ 9,310 | $ 4,265 | $ 2,896 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets - Estimated amortization expense (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Goodwill and Other Intangible Assets | ||
2023 | $ 51,446 | |
2024 | 50,062 | |
2025 | 47,728 | |
2026 | 44,306 | |
2027 | 43,821 | |
Thereafter | 249,419 | |
Finite-Lived Intangible Assets, Net, Total | 486,782 | $ 511,823 |
Acquired software | ||
Goodwill and Other Intangible Assets | ||
2023 | 10,264 | |
2024 | 10,034 | |
2025 | 9,879 | |
2026 | 9,736 | |
2027 | 9,272 | |
Thereafter | 68,531 | |
Finite-Lived Intangible Assets, Net, Total | 117,716 | 114,865 |
Purchase software for internal use | ||
Goodwill and Other Intangible Assets | ||
2023 | 6,511 | |
2024 | 5,394 | |
2025 | 3,279 | |
Finite-Lived Intangible Assets, Net, Total | 15,184 | 11,340 |
Non-compete agreements | ||
Goodwill and Other Intangible Assets | ||
2023 | 77 | |
2024 | 40 | |
2025 | 36 | |
2026 | 36 | |
2027 | 15 | |
Finite-Lived Intangible Assets, Net, Total | 204 | 144 |
Tradename | ||
Goodwill and Other Intangible Assets | ||
2023 | 3,147 | |
2024 | 3,147 | |
2025 | 3,087 | |
2026 | 3,087 | |
2027 | 3,087 | |
Thereafter | 28,819 | |
Finite-Lived Intangible Assets, Net, Total | 44,374 | 47,341 |
Customer relationships | ||
Goodwill and Other Intangible Assets | ||
2023 | 31,447 | |
2024 | 31,447 | |
2025 | 31,447 | |
2026 | 31,447 | |
2027 | 31,447 | |
Thereafter | 152,069 | |
Finite-Lived Intangible Assets, Net, Total | $ 309,304 | $ 338,133 |
Goodwill and Other Intangible_6
Goodwill and Other Intangible Assets - Goodwill (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Goodwill and Other Intangible Assets | |||
Impairment of Goodwill | $ 0 | $ 0 | $ 0 |
Goodwill, Beginning Balance | 703,371,000 | 518,592,000 | |
Acquisition | 19,451,000 | 186,771,000 | |
Foreign currency translation | (5,079,000) | (1,992,000) | |
Goodwill, Ending Balance | $ 717,743,000 | $ 703,371,000 | $ 518,592,000 |
Accrued Expenses and Other Lo_3
Accrued Expenses and Other Long-Term Liabilities - Accrued expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Accrued Expenses and Other Long-Term Liabilities | ||
Accrued compensation | $ 29,518 | $ 24,848 |
Legal and professional accruals | 1,297 | 2,477 |
Interest payable | 176 | 96 |
Income taxes payable | 2,223 | 1,398 |
Accrued business acquisition liabilities | 700 | |
Other | 1,489 | 1,011 |
Total accrued expenses | $ 35,403 | $ 29,830 |
Accrued Expenses and Other Lo_4
Accrued Expenses and Other Long-Term Liabilities - Other long-term liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Accrued Expenses and Other Supplemental Liabilities Information. | ||
Non-current finance lease liabilities | $ 25 | |
Uncertain tax position liability | $ 2,308 | |
Contingent consideration | 19,813 | |
Total other long-term liabilities | $ 22,121 | $ 25 |
Long-Term Debt and Revolving _3
Long-Term Debt and Revolving Line of Credit - Other Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||||||
Dec. 28, 2020 | Jul. 15, 2020 | Apr. 03, 2018 | Jan. 25, 2018 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Jun. 17, 2021 | Aug. 14, 2017 | |
Debt Instrument | |||||||||
Accrued interest payable | $ 176 | $ 96 | |||||||
Outstanding Loan | 293,008 | 294,766 | |||||||
Amount borrowed | $ 19,880 | ||||||||
Variable Interest Term Loan | |||||||||
Debt Instrument | |||||||||
Principal amount | $ 250,000 | ||||||||
Additional borrowings | $ 40,000 | $ 25,000 | |||||||
Interest incurred | 15,803 | 11,206 | 13,946 | ||||||
Accrued interest payable | 130 | 30 | |||||||
Revolving Line of Credit | |||||||||
Debt Instrument | |||||||||
Maximum borrowing capacity of revolving line of credit | $ 100,000 | 20,000 | |||||||
Available borrowings | $ 100,000 | $ 100,000 | $ 80,000 | ||||||
Effective interest rate (as a percent) | 5.28% | 3.65% | |||||||
Interest incurred | $ 257 | $ 163 | 483 | ||||||
Accrued interest payable | 66 | 66 | |||||||
Prepayment on the loan | 755 | ||||||||
Standby letter of credit | |||||||||
Debt Instrument | |||||||||
Available borrowings | 10,000 | ||||||||
letters of credit outstanding | 120,000 | 239 | |||||||
Fixed Rate Term Loan | |||||||||
Debt Instrument | |||||||||
Principal amount | $ 100,000 | ||||||||
Interest rate (as a percent) | 8.25% | ||||||||
Interest incurred | $ 0 | $ 0 | $ 7,608 | ||||||
Accrued interest payable | $ 3,000 | ||||||||
Prepayment on the loan | $ 80,000 | $ 20,000 | |||||||
Outstanding Loan | $ 80,000 |
Long-Term Debt and Revolving _4
Long-Term Debt and Revolving Line of Credit - Long-Term Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Debt Instrument | ||
Long-term debt, Gross | $ 297,470 | |
Less: debt issuance costs | (4,462) | $ (5,724) |
Total | 293,008 | 294,766 |
Current portion of long-term debt | (3,020) | (3,020) |
Long-term debt, net of current portion and debt issuance costs | 289,988 | 291,746 |
Term Loan | ||
Debt Instrument | ||
Long-term debt, Gross | $ 297,470 | $ 300,490 |
Long-Term Debt and Revolving _5
Long-Term Debt and Revolving Line of Credit - Maturity of Long Term Debt (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Maturities | |
2023 | $ 3,020 |
2024 | 3,020 |
2025 | 3,020 |
2026 | 288,410 |
Total | $ 297,470 |
Employee Benefit Plan - Narrati
Employee Benefit Plan - Narrative (Details) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 EUR (€) item age | Dec. 31, 2022 USD ($) item age | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Employee Benefit Plan | ||||
Participation age required | age | 21 | 21 | ||
Employees contribution percentage | 50% | 50% | ||
Employer contribution matching percentage | 6% | 6% | ||
Employer additional contribution percentage | 8% | 8% | ||
Age to auto enroll in plan | item | 22 | 22 | ||
Contribution amount to auto enroll in plan | € | € 10 | |||
Contributions amount | $ | $ 4,746 | $ 4,138 | $ 3,342 |
Equity-Based Compensation - Cla
Equity-Based Compensation - Class B Plans (Details) $ / shares in Units, $ in Thousands | 11 Months Ended | 12 Months Ended | |||
Dec. 10, 2020 $ / shares shares | Nov. 30, 2020 USD ($) | Dec. 31, 2022 USD ($) shares | Dec. 31, 2021 USD ($) item | Dec. 31, 2020 USD ($) shares | |
Equity-Based Compensation | |||||
Compensation expense | $ 30,345 | $ 29,483 | $ 64,507 | ||
Share Price | $ / shares | $ 23 | ||||
Class B Units | |||||
Equity-Based Compensation | |||||
Compensation expense | $ 0 | ||||
Unrecognized share-based compensation expense | 0 | ||||
Restricted stock issued for unvested units | shares | 5,941,693 | ||||
Catchup adjustment amount | $ 56,487 | ||||
Time Based Class B Units | |||||
Equity-Based Compensation | |||||
Percentage of Time-Based Vesting Units | 50% | ||||
Vesting period | 5 years | ||||
Service period | 5 years | ||||
Compensation expense | 2,776 | ||||
Performance Based Class B Units | |||||
Equity-Based Compensation | |||||
Percentage of Performance-Based Vesting Units | 50% | ||||
Compensation expense | $ 2,537 | $ 12,349 | $ 57,421 | ||
Unrecognized share-based compensation expense | 3,294 | ||||
Performance Based Class B Units | Chief Executive Officer | |||||
Equity-Based Compensation | |||||
Compensation expense | $ 3,912 | ||||
Vested | shares | 853,001 | ||||
Exchanged | shares | 1,561,950 | ||||
Restricted Stock | |||||
Equity-Based Compensation | |||||
Vesting period | 3 years | ||||
Number of shareholders with monthly vesting period | item | 1 | ||||
Vesting period of shareholders | 2 years | ||||
Repurchases (in units) | shares | 5,941,693 | ||||
Aggregate Intrinsic Value | $ 46,401 | $ 45,051 | $ 0 | ||
Compensation expense | 3,166 | $ 3,104 | $ 167 | ||
Unrecognized share-based compensation expense | 2,888 | ||||
Fair Value of Equity Instruments | $ 83,260 | ||||
Vested | shares | 2,020,065 |
Equity-Based Compensation - Val
Equity-Based Compensation - Valuation Assumptions (Details) - Class B Units | 12 Months Ended |
Dec. 31, 2020 | |
Equity-Based Compensation | |
Expected dividend yield | 0% |
Risk-free interest rate | 0.30% |
Expected stock price volatility | 59% |
Expected exercise term (in years) | 2 years 3 months 18 days |
Equity-Based Compensation - Res
Equity-Based Compensation - Restricted Stock (Details) $ / shares in Units, $ in Thousands | 11 Months Ended | 12 Months Ended | ||
Nov. 30, 2020 USD ($) | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) item $ / shares shares | Dec. 31, 2020 USD ($) $ / shares | |
Weighted Average Grant Date Fair Value | ||||
Compensation expense | $ 30,345 | $ 29,483 | $ 64,507 | |
Class B Units | ||||
Weighted Average Grant Date Fair Value | ||||
Compensation expense | $ 0 | |||
Unrecognized share-based compensation expense | $ 0 | |||
Restricted Stock | ||||
Equity-Based Compensation | ||||
Vesting period | 3 years | |||
Cancelled | shares | 66,220 | |||
Shares | ||||
Non-vested restricted stock beginning balance | shares | 3,910,722 | |||
Granted | shares | 66,220 | |||
Vested | shares | (2,020,065) | |||
Forfeited | shares | (487,844) | |||
Cancelled | shares | (66,220) | |||
Non-vested restricted stock Ending balance | shares | 1,402,813 | 3,910,722 | ||
Weighted Average Grant Date Fair Value | ||||
Non-vested restricted stock of beginning balance (in dollars per share) | $ / shares | $ 23.18 | |||
Granted (in dollars per share) | $ / shares | 17.07 | $ 31.7 | $ 23 | |
Vested (in dollars per share) | $ / shares | 22.97 | |||
Forfeited (in dollars per share) | $ / shares | 23 | |||
Cancelled (in dollars per share) | $ / shares | 23 | |||
Non-vested restricted stock of ending balance (in dollars per share) | $ / shares | $ 23.27 | $ 23.18 | ||
Compensation expense | $ 3,166 | $ 3,104 | $ 167 | |
Unrecognized share-based compensation expense | $ 2,888 | |||
Unrecognized share-based compensation expense, recognition period | 25 months 21 days | |||
Grant date fair value | $ 2,762 | |||
Number of shareholders with monthly vesting period | item | 1 | |||
Vesting period of shareholders | 2 years | |||
Restricted Stock | Pinnacle 21, LLC | ||||
Shares | ||||
Granted | shares | 87,127 | |||
Weighted Average Grant Date Fair Value | ||||
Compensation expense | $ 1,169 | $ 292 | ||
Unrecognized share-based compensation expense | $ 1,301 | |||
Unrecognized share-based compensation expense, recognition period | 15 years 10 months 24 days | |||
Restricted Stock | Employees | ||||
Equity-Based Compensation | ||||
Cancelled | shares | 66,220 | |||
Shares | ||||
Vested | shares | (11,069) | |||
Cancelled | shares | (66,220) | |||
Weighted Average Grant Date Fair Value | ||||
Compensation expense | $ (146) | |||
Time Based Class B Units | ||||
Equity-Based Compensation | ||||
Service period | 5 years | |||
Vesting period | 5 years | |||
Weighted Average Grant Date Fair Value | ||||
Compensation expense | 2,776 | |||
Performance Based Class B Units | ||||
Weighted Average Grant Date Fair Value | ||||
Compensation expense | $ 2,537 | $ 12,349 | $ 57,421 | |
Unrecognized share-based compensation expense | $ 3,294 | |||
Unrecognized share-based compensation expense, recognition period | 21 months |
Equity-Based Compensation - 202
Equity-Based Compensation - 2020 Incentive Plans (Details) - 2020 Incentive Plan | Dec. 31, 2022 USD ($) shares |
Equity-Based Compensation | |
Number of units authorized (in units) | 20,000,000 |
Authorized amount | $ | $ 1,000,000 |
Annual Percentage | 4% |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 19,460,378 |
Equity-Based Compensation - R_2
Equity-Based Compensation - Restricted Stock Units and Performance Stock Units (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Weighted Average Grant Date Fair Value | |||
Compensation expense | $ 30,345 | $ 29,483 | $ 64,507 |
Restricted Stock Units (RSUs) | |||
Shares | |||
Non-vested restricted stock beginning balance | 1,288,724 | ||
Granted | 1,437,957 | ||
Vested | (432,494) | ||
Forfeited | (289,092) | ||
Non-vested restricted stock Ending balance | 2,005,095 | 1,288,724 | |
Weighted Average Grant Date Fair Value | |||
Non-vested restricted stock of beginning balance (in dollars per share) | $ 29.28 | ||
Granted (in dollars per share) | 21.98 | $ 29.19 | |
Vested (in dollars per share) | 28.66 | ||
Forfeited (in dollars per share) | 25.61 | ||
Non-vested restricted stock of ending balance (in dollars per share) | $ 24.71 | $ 29.28 | |
Vested shares withheld for minimum statutory tax withholding requirements | 138,038 | ||
Fair Value of Equity Instruments | $ 12,395 | $ 569 | |
Compensation expense | 19,012 | $ 8,257 | $ 81 |
Unrecognized share-based compensation expense | $ 35,121 | ||
Unrecognized share-based compensation expense, recognition period | 23 months 3 days | ||
Performance Based Common Stock Units | |||
Shares | |||
Non-vested restricted stock beginning balance | 406,575 | ||
Granted | 361,147 | ||
Vested | (12,291) | 0 | |
Forfeited | (101,123) | ||
Non-vested restricted stock Ending balance | 654,308 | 406,575 | |
Weighted Average Grant Date Fair Value | |||
Non-vested restricted stock of beginning balance (in dollars per share) | $ 27.35 | ||
Granted (in dollars per share) | 22.25 | $ 27.36 | |
Vested (in dollars per share) | 24.83 | ||
Forfeited (in dollars per share) | 31.22 | ||
Non-vested restricted stock of ending balance (in dollars per share) | $ 23.99 | $ 27.35 | |
Fair Value of Equity Instruments | $ 305 | $ 0 | |
Compensation expense | 4,462 | $ 5,481 | |
Unrecognized share-based compensation expense | $ 2,458 | ||
Unrecognized share-based compensation expense, recognition period | 15 months 15 days | ||
2020 Incentive Plan | Restricted Stock Units (RSUs) | |||
Weighted Average Grant Date Fair Value | |||
Vesting period | 3 years |
Equity-Based Compensation - 2_2
Equity-Based Compensation - 2020 Employee Stock Purchase Plan (Details) - 2020 Employee Stock Purchase Plan - shares | 12 Months Ended | |
Dec. 10, 2020 | Dec. 31, 2022 | |
Equity-Based Compensation | ||
Number of units authorized (in units) | 1,700,000 | |
Percentage of shares held | 5% | |
Rights to purchase common shares | 25,000 | |
Discounted shares price percentage | 85% | |
Stock issued | 0 | |
Minimum | ||
Equity-Based Compensation | ||
Employees contribution | 1% | |
Maximum | ||
Equity-Based Compensation | ||
Employees contribution | 15% | |
Shares available for purchase period | 27 months |
Equity-Based Compensation - Com
Equity-Based Compensation - Compensation expense (Details) - USD ($) $ in Thousands | 11 Months Ended | 12 Months Ended | ||
Nov. 30, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Equity-Based Compensation | ||||
Compensation expense | $ 30,345 | $ 29,483 | $ 64,507 | |
Compensation expense tax benefits | 1,933 | 117 | 0 | |
Cost of revenues | ||||
Equity-Based Compensation | ||||
Compensation expense | 7,494 | 5,193 | 8,805 | |
Sales and marketing | ||||
Equity-Based Compensation | ||||
Compensation expense | 2,091 | 2,204 | 7,390 | |
Research and development | ||||
Equity-Based Compensation | ||||
Compensation expense | 5,829 | 2,872 | 7,133 | |
General and administrative | ||||
Equity-Based Compensation | ||||
Compensation expense | $ 14,931 | $ 19,214 | $ 41,179 | |
Class B Units | ||||
Equity-Based Compensation | ||||
Compensation expense | $ 0 |
Leases - Lease Term and Discoun
Leases - Lease Term and Discount Rates (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Leases | ||
Operating lease right-of-use assets | $ 14,427 | $ 12,634 |
Finance lease, right of use assets | $ 24 | $ 271 |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Property, Plant and Equipment, Net | Property, Plant and Equipment, Net |
Total lease assets | $ 14,451 | $ 12,905 |
Current operating lease liabilities | 4,968 | 5,040 |
Current finance lease liabilities | $ 25 | $ 293 |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Other Liabilities, Current | Other Liabilities, Current |
Operating leases liabilities - Noncurrent | $ 10,133 | $ 8,256 |
Non-current finance lease liabilities | $ 25 | |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other Liabilities, Noncurrent | Other Liabilities, Noncurrent |
Total lease liabilities | $ 15,126 | $ 13,614 |
Operating leases - Weighted-average remaining lease term (years) | 3 years 10 months 24 days | 3 years 7 months 17 days |
Financing leases - Weighted-average remaining lease term (years) | 29 days | 1 year 29 days |
Operating leases - Weighted-average discount rate | 3.45% | 3.91% |
Financing leases - Weighted-average discount rate | 6.19% | 6.19% |
Minimum | ||
Leases | ||
Remaining operating and capital lease term | 1 year | |
Maximum | ||
Leases | ||
Remaining operating and capital lease term | 7 years |
Leases - Lease Costs (Details)
Leases - Lease Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Leases | ||
Operating lease cost | $ 4,978 | $ 5,815 |
Short-term lease cost | 729 | 404 |
Variable lease cost | 191 | 744 |
Sublease income | (379) | (490) |
Financing lease cost: | ||
Amortization of right-of-use assets | 254 | 277 |
Interest on lease obligations | 11 | 29 |
Total lease costs | $ 5,784 | $ 6,779 |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Leases | ||
Operating cash flows from finance leases | $ 11 | $ 29 |
Operating cash flows from operating leases | 5,360 | 6,105 |
Financing cash flows from finance leases | 293 | 275 |
Right-of-use assets obtained in exchange for new and remeasured operating leases | 2,501 | 520 |
Right-of-use assets obtained through acquisition | $ 129 | $ 1,648 |
Leases - Maturities of our mini
Leases - Maturities of our minimum lease payments (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
OPERATING LEASE | |
2023 | $ 4,935 |
2024 | 4,113 |
2025 | 3,342 |
2026 | 2,129 |
2027 | 917 |
Thereafter | 595 |
Total future lease payments | 16,031 |
Less: imputed interest | (930) |
Total operating lease liabilities | 15,101 |
FINANCE LEASE | |
2023 | 25 |
Total future lease payments | 25 |
Total finance lease liabilities | $ 25 |
Segment Data (Details)
Segment Data (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 USD ($) segment | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Segments | |||
Number of operating segment | segment | 1 | ||
Revenue | $ 335,644 | $ 286,104 | $ 243,530 |
Property and equipment, net | 2,400 | 2,935 | |
Americas | |||
Segments | |||
Revenue | 252,921 | 205,377 | 182,629 |
Property and equipment, net | 1,406 | 1,903 | |
EMEA | |||
Segments | |||
Revenue | 57,002 | 56,410 | 42,844 |
Property and equipment, net | 732 | 712 | |
Asia Pacific | |||
Segments | |||
Revenue | 25,721 | 24,317 | $ 18,057 |
Property and equipment, net | $ 262 | $ 320 |
Income Taxes - Components of Lo
Income Taxes - Components of Loss Before Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Taxes | |||
Domestic | $ 9,456 | $ (10,373) | $ (55,355) |
Foreign | 9,299 | 6,998 | 5,174 |
Income (loss) before income taxes | $ 18,755 | $ (3,375) | $ (50,181) |
Income Taxes - Income Tax Expen
Income Taxes - Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Current tax expense provision | |||
Federal | $ 1,882 | $ 451 | $ 326 |
State and local | 3,335 | 1,798 | 1,659 |
Foreign | 10,318 | 8,826 | 4,634 |
Total current | 15,535 | 11,075 | 6,619 |
Deferred tax benefit | |||
Federal | (6,788) | (4,416) | (3,620) |
State and local | (2,190) | (1,156) | 276 |
Foreign | (2,533) | 4,388 | (4,059) |
Total deferred | (11,511) | (1,184) | (7,403) |
Total provision (benefit) | $ 4,024 | $ 9,891 | $ (784) |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Income Tax Rates (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Taxes | |||
Effective Income Tax Rate Reconciliation, Percent | 21.46% | (293.06%) | 1.56% |
Effective Income Tax Rate Reconciliation at Federal Statutory Income Tax Rate, Amount | $ 3,939 | $ (709) | $ (10,538) |
Effective Income Tax Rate Reconciliation, Amount [Abstract] | |||
Tax at U.S. federal statutory rate | 3,939 | (709) | (10,538) |
State taxes, net of federal benefit | 967 | 226 | 1,125 |
Foreign rate differential | 3,545 | 3,872 | 2,296 |
Permanent items | (1,227) | (670) | (139) |
Equity compensation | 2,278 | 3,534 | 13,562 |
GILTI inclusion | 451 | 540 | 932 |
Tax credits | (6,427) | (7,060) | (7,618) |
Rate change | (605) | 5,256 | 2,076 |
Other adjustments | (4,554) | 3,131 | 1,223 |
Return to provision adjustments | (405) | (66) | (103) |
Valuation allowance | 6,062 | 1,837 | (3,600) |
Total provision (benefit) | $ 4,024 | $ 9,891 | $ (784) |
Reconciling items between the statutory income tax rate and the effective income tax rate (Percentage) | |||
Tax at U.S. federal statutory rate | 21% | 21% | 21% |
State taxes, net of federal benefit | 5.16% | (6.71%) | (2.24%) |
Foreign rate differential | 18.90% | (114.72%) | (4.58%) |
Permanent items | (6.54%) | 19.84% | 0.28% |
Equity compensation | 12.15% | (104.70%) | (27.03%) |
GILTI inclusion | 2.41% | (16.00%) | (1.86%) |
Tax credits | (34.27%) | 209.19% | 15.18% |
Rate change | (3.23%) | (155.75%) | (4.14%) |
Other adjustments | (24.28%) | (92.76%) | (2.43%) |
Return to provision adjustments | (2.16%) | 1.95% | 0.21% |
Valuation allowance | 32.32% | (54.40%) | 7.17% |
Effective Income Tax Rate Reconciliation, Percent, Total | 21.46% | (293.06%) | 1.56% |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Taxes | |||
Effective tax rate | 21.46% | (293.06%) | 1.56% |
Madeira, Portugal | Period of 2008 through 2011 | |||
Income Taxes | |||
Effective tax rate | 0% | ||
Madeira, Portugal | Period 2012 | |||
Income Taxes | |||
Effective tax rate | 4% | ||
Madeira, Portugal | 2013 through 2020 | |||
Income Taxes | |||
Effective tax rate | 5% |
Income Taxes - Temporary Differ
Income Taxes - Temporary Differences (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred tax assets | ||
Accounts receivable | $ 279 | $ 61 |
Accrued compensation | 4,385 | 3,552 |
Accrued expenses | 529 | |
Deferred revenue | 392 | 696 |
Net operating loss carryforwards | 14,264 | 4,117 |
R&D credit carryforward | 3,918 | 4,965 |
Foreign tax credits | 12,131 | 15,054 |
Interest rate hedge | 253 | |
Equity based compensation | 4,752 | 3,015 |
Other assets | 189 | 380 |
Interest expense | 103 | 224 |
Lease liability | 3,136 | 2,944 |
Section 174 | 9,425 | |
Total gross deferred tax asset | 53,503 | 35,261 |
Less: Valuation allowance | (25,732) | (18,235) |
Deferred Tax Assets, Net of Valuation Allowance, Total | 27,771 | 17,026 |
Deferred tax liabilities | ||
Property, equipment, and other long-lived assets | (152) | (272) |
Goodwill and intangible assets | (82,100) | (83,844) |
Prepaid expenses | (1,820) | (1,968) |
Accrued expenses | (184) | |
Interest rate hedge | (2,085) | |
Right-of-use (ROU) assets | (2,957) | (2,783) |
Total gross deferred tax liability | (89,114) | (89,051) |
Net deferred tax liability | $ (61,343) | $ (72,025) |
Income Taxes - Change in Valuat
Income Taxes - Change in Valuation Allowance (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Taxes | ||
Net change in valuation allowance | $ (7,497) | $ 1,520 |
Undistributed earnings | 2,818 | 1,059 |
Withholding tax liability | 168 | 168 |
Interest on uncertain tax positions | 100 | 0 |
Penalties on uncertain tax positions | 0 | $ 0 |
Federal | ||
Income Taxes | ||
Operating loss carryforward | 1,805 | |
State | ||
Income Taxes | ||
Operating loss carryforward | 50 | |
Foreign | ||
Income Taxes | ||
Operating loss carryforward | 65,805 | |
Research and development credits | Federal | ||
Income Taxes | ||
Tax credit carryforward | 395 | |
Research and development credits | Federal | CALIFORNIA | ||
Income Taxes | ||
Tax credit carryforward | 143 | |
Research and development credits | Foreign | ||
Income Taxes | ||
Tax credit carryforward | 363 | |
Tax credits | Foreign | ||
Income Taxes | ||
Tax credit carryforward | 10,607 | |
Investment tax credits | Foreign | ||
Income Taxes | ||
Tax credit carryforward | $ 3,552 |
Income Taxes - Reconciliation (
Income Taxes - Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Taxes | ||
Uncertain tax positions | $ 2,818 | $ 1,059 |
Reconciliation of the beginning and ending balance of unrecognized tax benefits | ||
Balance at beginning | 1,059 | 897 |
Additions for tax positions related to the current year | 205 | 156 |
Additions for tax positions of prior years | 1,554 | 6 |
Balance at end | $ 2,818 | $ 1,059 |
Earnings per Share (Details)
Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Basic earnings per share | |||
Net income (loss) available to common shareholders | $ 14,731 | $ (13,266) | $ (49,397) |
Basic weighted average common shares outstanding (in shares) | 156,876,942 | 149,842,668 | 133,247,212 |
Earnings per share, Basic (in dollars per share) | $ 0.09 | $ (0.09) | $ (0.37) |
Diluted earnings per share | |||
Net income (loss) available to common shareholders | $ 14,731 | $ (13,266) | $ (49,397) |
Basic weighted average common shares outstanding (in shares) | 156,876,942 | 149,842,668 | 133,247,212 |
Effects of dilutive securities | 2,477,452 | ||
Diluted weighted average common shares outstanding (in shares) | 159,354,394 | 149,842,668 | 133,247,212 |
Earnings per share, Diluted (in dollars per share) | $ 0.09 | $ (0.09) | $ (0.37) |