Certara, Inc.
For the period ended Jun 30, 2026. Filed Aug 4, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 4, 2026
CERT$12.05-1.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-11.
0001827090-26-000019
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-04.
0001827090-26-000028
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 132 previous paragraphs and 149 current paragraphs.
88 unchanged; 32 reworded; 23 added; 11 removed; 1 previous and 6 current paragraphs rearranged.
Tables are not compared: 17 previous and 28 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (23)
Current report
Divestiture and Discontinued Operation
Current report
On April 21, 2026, the Company entered into a Purchase Agreement (the "Purchase Agreement") with Veristat, LLC to sell its global medical writing and related regulatory services business (the "Regulatory and Medical Writing business"). On May 8, 2026, the Company completed the sale of the Regulatory and Medical Writing business. The Company received cash consideration of $69.4 million, with an additional $15.0 million placed in escrow to be released to the Company upon the satisfaction of certain post-closing conditions. In addition, the Company is eligible to receive an earn-out payment of up to $35.0 million based on the financial performance (as defined in the Purchase Agreement) of such business over a specified period following closing. The transaction resulted in an estimated pretax loss on sale of $65.5 million, including an estimated after-tax loss of $48.6 million, which was recorded in loss from discontinued operations, in the condensed consolidated statement of operations for the three and six months ended June 30, 2026. The final loss recognized may differ from the amount currently recognized due to the final escrow amount realized and the ultimate settlement of the earn-out.
Current report
During the second quarter of 2026, the Company determined that the Regulatory and Medical Writing business met the accounting criteria to be classified as held for sale and discontinued operations. Accordingly, the Company has presented the results of operations and the related cash flows of the Regulatory and Medical Writing business as discontinued operations in the condensed consolidated financial statements through the date of sale. This presentation has been applied retrospectively to all periods presented.
Current report
The following results of operations present our continuing operations for the three and six months ended June 30, 2026 to the three and six months ended June 30, 2025, respectively. All results from the Regulatory and Medical Writing business are presented within income (loss) from discontinued operations for these periods.
Current report
Cost of revenues increased $0.8 million, or 2%, to $35.1 million for the three months ended June 30, 2026 as compared to the same period in 2025. The increase in cost of revenue was primarily due to a $1.0 million increase in employee-related costs and a $0.9 million increase in professional and consulting expense, partially offset by a $0.7 million decrease in stock-based compensation costs and a $0.4 million decrease in other miscellaneous expenses.
Current report
Sales and marketing expenses increased by $1.3 million, or 10%, to $15.0 million for the three months ended June 30, 2026 as compared to the same period in 2025. Sales and marketing expenses increased primarily due to a $1.0 million increase in professional and consulting expense, a $0.3 million increase in employee-related costs, and an aggregate $0.3 million increase in travel, marketing, and equipment and software expenses, partially offset by a $0.3 million decrease in stock-based compensation costs.
Current report
Research and development expenses increased by $0.7 million, or 8%, to $9.7 million for the three months ended June 30, 2026 as compared to the same period in 2025. The increase in research and development expenses was primarily due to a $0.6 million increase in employee-related costs.
Current report
Net Income (Loss) from continuing operations
Current report
Six Months Ended June 30, 2026 Versus Six Months Ended June 30, 2025
Current report
Software revenues increased by $5.5 million, or 6%, to $98.5 million for the six months ended June 30, 2026 as compared to the same period in 2025, primarily driven by increased demand from existing customers and expanded relationships with existing customers.
Current report
Services revenues decreased by $2.6 million, or 3%, to $88.8 million for the six months ended June 30, 2026 as compared to the same period in 2025.
Current report
Cost of revenues increased $0.8 million, or 1%, to $69.8 million for the six months ended June 30, 2026 as compared to the same period in 2025. The increase in cost of revenue was primarily due to a $1.4 million increase in professional and consulting expenses, a $0.9 million increase in employee-related costs, and a $0.4 million increase in cost of license, partially offset by a $0.8 million decrease in stock based compensation costs, a $0.6 million decrease in other miscellaneous expense, and a $0.5 million decrease in executive recruiting expense.
Current report
Sales and Marketing Expenses
Current report
Research and Development Expenses
Current report
General and Administrative Expenses
Current report
General and administrative expenses increased by $14.9 million, or 41%, to $50.9 million for the six months ended June 30, 2026 as compared to the same period in 2025. The increase in general and administrative expenses was primarily due to a $13.1 million increase in business acquisition contingent consideration expense, driven primarily by an additional $7.2 million recorded during the current year, as well as the favorable impact of a decrease in the contingent consideration liability recognized in the same period in 2025, a $1.6 million increase in executive recruiting and retention expenses, a $1.3 million increase in lease abandonment expense, primarily due to the absence of a non-recurring gain recognized in the prior year that reduced expenses in that period, a $1.3 million increase in equipment and software expense, and a $0.7 million increase in professional and consulting expense, partially offset by a $1.0 million decrease in stock-based compensation costs, a $0.9 million in facility-lease related expenses, a $0.7 million decrease in merger and acquisition expense and a $0.5 million decrease in provision of allowance of credit loss.
Current report
Interest Expense
Current report
Net Other Income
Current report
Provision (Benefits) from Income Taxes
Current report
Net Income (Loss) from continuing operations
Current report
Net loss was $17.9 million, representing a $20.9 million decrease in net income for the six months ended June 30, 2026 as compared to a net income of $3.0 million for the same period of 2025. The decrease in net income was primarily due to a $20.5 million increase in operating expenses, a $3.5 million increase in total other expense, and a $0.8 million increase in expense of cost of revenue, partially offset by a $2.9 million increase in revenue and a $1.0 million decrease in tax expense.
Current report
The following table presents the major categories of income (loss) from discontinued operations related to the sale of the Regulatory and Medical Writing business:
Current report
We recorded income tax expense of $1.6 million for continuing operations, a $16.2 million tax benefit for discontinued operations, and a tax benefit of $14.6 million for the Company for the six months ended June 30, 2026. We recorded income tax expense of $2.6 million for continuing operations, a tax expense $5.4 million for discontinued operations, and a tax expense $8.0 million for the Company for the six months ended June 30, 2025.
Removed paragraphs (11)
Previous report
The scientific principles underlying our work must be transparent and fully explainable during the regulatory process, so we have developed expertise in incorporating data, references and results into regulatory documents. Our software and regulatory scientific services streamline the creation of regulatory filings and speed regulatory data flow to maximize the chances of successful commercialization.
Previous report
Revenues
Previous report
Cost of Revenues
Previous report
Business Combinations or Divestiture
Previous report
On May 8, 2026, we completed the sale of our global medical writing and related regulatory services business to Veristat, LLC for cash consideration of $85.0 million, as well as an additional $15.0 million placed in escrow, which would be released to the Company upon satisfaction of certain post‑closing conditions. We are also eligible to receive cash earn-out of up to $35.0 million based on the financial performance of such business for a specified period following closing. Net proceeds from the transaction are expected to be used for general corporate purposes, including funding our ongoing operations. We expect the transaction to strengthen our focus on core operations and further our commitment to accelerating AI-integrated modeling and simulation across the entire drug development lifecycle.
Previous report
We have included the results of operations of acquired companies in our condensed consolidated results of operations from the date of their respective acquisitions, which impacts the comparability of our results of operations when comparing results for the three months ended March 31, 2026 to the three months ended March 31, 2025, respectively.
Previous report
Revenues
Previous report
Cost of Revenues
Previous report
Cost of revenues increased $0.1 million, or 0%, to $41.6 million for the three months ended March 31, 2026 as compared to the same period in 2025, and remained essentially flat compared with the same quarter in the prior year.
Previous report
Net Income (Loss)
Previous report
We recorded income tax expense of $0.8 million for the three months ended March 31, 2026 and income tax benefit of $0.2 million for the three months ended March 31, 2025.
Reworded paragraphs (32)
Previous wording
Native AI and machine learning technologies are being incorporated across our technology and consulting services portfolios, providing opportunities to expand the number of data sources utilized, better predict outcomes, and streamline reporting. For example, we are using machine learning to automate and speed the process of biosimulation, and we have created generative AI applications to aid in drafting regulatory documents from scientific analyses and clinical data.
Current wording
Native AI and machine learning technologies are being incorporated across our technology and consulting services portfolios, providing opportunities to expand the number of data sources utilized, better predict outcomes, and streamline reporting. For example, we are using machine learning to automate and speed the process of biosimulation.
Previous wording
The table below summarizes our quarterly bookings and net software retention rate trends:
Current wording
The table below summarizes our quarterly bookings and net software retention rate trends from continuing operations:
Previous wording
In connection with the transaction, we entered into a transition services agreement pursuant to which we will provide certain services, including information technology and other administrative functions, for a defined period following closing.
Current wording
In connection with the transaction, the Company entered into a transition services agreement pursuant to which it will provide certain services, including information technology and other administrative functions, for a defined period following closing.
Previous wording
Management measures operating performance based on adjusted EBITDA defined for a particular period as net income (loss) excluding interest expense, provision (benefit) for income taxes, depreciation and amortization expense, equity-based compensation expense, change in contingent consideration, acquisition expense, and other items not indicative of our ongoing operating performance. Management also measures operating performance based on adjusted net income defined for a particular period as net income (loss) excluding equity-based compensation expense, amortization of acquisition-related intangible assets, change in contingent consideration, acquisition and integration expense, and other items not indicative of our ongoing operating performance. Further, management measures operating performance based on adjusted diluted earnings per share defined for a particular period as adjusted net income divided by the weighted-average diluted common shares outstanding.
Current wording
Management measures operating performance based on adjusted EBITDA defined for a particular period as net income (loss) from continuing operations excluding interest expense, provision (benefit) for income taxes, depreciation and amortization expense, equity-based compensation expense, change in fair value of contingent consideration, acquisition expense, and other items not indicative of our ongoing operating performance. Management also measures operating performance based on adjusted net income defined for a particular period as net income (loss) from continuing operations excluding equity-based compensation expense, amortization of acquisition-related intangible assets, change in contingent consideration, acquisition and integration expense, and other items not indicative of our ongoing operating performance. Further, management measures operating performance based on adjusted diluted earnings per share defined for a particular period as adjusted net income from continuing operations divided by the weighted-average diluted common shares outstanding.
Previous wording
Adjusted EBITDA, adjusted net income, and adjusted diluted earnings per share are non-GAAP measures and are presented for supplemental purposes only and should not be considered as an alternative or substitute to financial information presented in accordance with GAAP. Adjusted EBITDA, adjusted net income, and adjusted diluted earnings per share have certain limitations in that they do not include the impact of certain expenses that are reflected in our condensed consolidated statements of operations and comprehensive income (loss) that are necessary to run our business. Other companies, including those in our industry, may not use these measures and may calculate them differently than those presented, limiting the usefulness as a comparative measure.
Current wording
Adjusted EBITDA, adjusted net income, and adjusted diluted earnings per share are non-GAAP measures and are presented for supplemental purposes only and should not be considered as an alternative or substitute to financial information presented in accordance with GAAP. Adjusted EBITDA, adjusted net income, and adjusted diluted earnings per share have certain limitations in that they do not include the impact of certain expenses that are reflected in our condensed consolidated statements of operations that are necessary to run our business. Other companies, including those in our industry, may not use these measures and may calculate them differently than those presented, limiting the usefulness as a comparative measure.
Previous wording
The following table reconciles net income (loss) to Adjusted EBITDA:
Current wording
The following table reconciles net income (loss) from continuing operations to Adjusted EBITDA:
Previous wording
The following table reconciles net income (loss) to adjusted net income:
Current wording
The following table reconciles net income (loss) from continuing operations to adjusted net income:
Previous wording
The following table reconciles diluted earnings per share to adjusted diluted earnings per share:
Current wording
The following table reconciles diluted earnings per share from continuing operations to adjusted diluted earnings per share:
Previous wording
Total revenues increased by $0.9 million, or 1%, to $106.9 million for the three months ended March 31, 2026 as compared to the same period in 2025. Overall revenue growth was primarily driven by our software product offerings, supported by strong demand from existing customers, expansion of relationships with existing customers and new customers.
Current wording
Total revenues increased by $0.9 million, or 1%, to $93.3 million for the three months ended June 30, 2026 as compared to the same period in 2025. Overall revenue growth was primarily driven by our software product offerings, supported by strong demand from existing customers and expansion of relationships with existing customers and new customers.
Previous wording
Software revenues increased by $3.4 million, or 7%, to $49.7 million for the three months ended March 31, 2026 as compared to the same period in 2025, primarily driven by increased demand from existing customers, expanded relationships with existing customers, and new customers.
Current wording
Software revenues increased by $2.1 million, or 4%, to $48.8 million for the three months ended June 30, 2026 as compared to the same period in 2025, primarily driven by increased demand from existing customers and expanded relationships with existing customers.
Previous wording
Services revenues decreased by $2.4 million, or 4%, to $57.2 million for the three months ended March 31, 2026 as compared to the same period in 2025, primarily due to lower revenue from a previously acquired business.
Current wording
Services revenues decreased by $1.2 million to $44.5 million for the three months ended June 30, 2026 as compared to the same period in 2025.
Previous wording
General and administrative expenses increased by $9.7 million, or 49%, to $29.4 million for the three months ended March 31, 2026 as compared to the same period in 2025. The increase in general and administrative expenses was primarily due to a $7.4 million increase in business acquisition contingent consideration expense, a $1.0 million increase in equipment and software expense, a $0.9 million increase in executive recruiting and retention expenses, a $0.8 million increase in lease abandonment expense, primarily due to the absence of a non-recurring gain recognized in the prior year that reduced expenses in that period, and a $0.5 million increase in professional and consulting expense, partially offset by a $0.5 million decrease in merger and acquisition expense and a $0.3 million aggregate decrease in license costs and facility lease related expenses.
Current wording
General and administrative expenses increased by $5.2 million, or 31%, to $21.9 million for the three months ended June 30, 2026 as compared to the same period in 2025. The increase in general and administrative expenses was primarily due to a $5.7 million increase related to the remeasurement of the fair value of business acquisition contingent consideration, primarily due to the absence of a non-recurring favorable change recognized in the prior year that reduced expenses in that period, a $0.6 million increase in executive recruiting expenses, a $0.5 million increase in lease abandonment expense, and a $0.3 million increase in equipment and software expense, partially offset by a $1.1 million decrease in stock-based compensation costs, and a $0.8 million decrease in facility-lease related expense.
Previous wording
Interest expense increased by $0.1 million, or 3%, to $4.9 million for the three months ended March 31, 2026, as compared to the same period in 2025. The change in interest expense was primarily due to a $0.9 million decrease in gain from our interest swap hedge activities, partially offset by a $0.7 million decrease in interest expense from our floating rate term loan debt, primarily due to a decline in market interest rates and a reduced base margin rate resulting from the refinancing of the term loan.
Current wording
Interest expense increased by $0.2 million, or 4%, to $5.0 million for the three months ended June 30, 2026, as compared to the same period in 2025. The change in interest expense was primarily due to a $0.9 million decrease in gain from our interest swap hedge activities, partially offset by a $0.7 million decrease in interest expense from our floating rate term loan debt, primarily due to a decline in market interest rates and a reduced base margin rate resulting from the refinancing of the term loan.
Previous wording
Our income tax expense was $0.8 million, resulting in an effective income tax rate of (10)% for the three months ended March 31, 2026 as compared to income tax benefit of $0.2 million, or an effective income tax rate of (4)%, for the same period in 2025. Our income tax expense for the three months ended March 31, 2026 and 2025 was primarily due to the tax effects of U.S. pre-tax income (loss), the relative mix of domestic and international earnings, the impact of non-deductible items, adjustments to the valuation allowances, the effects of tax elections made for U.K. earnings, and discrete tax items.
Current wording
Our income tax benefit was $0.3 million, resulting in an effective income tax rate of 5% for the three months ended June 30, 2026 as compared to income tax expense of $2.9 million, or an effective income tax rate of 66%, for the same period in 2025. Our income tax expense for the three months ended June 30, 2026 and 2025 was primarily due to the tax effects of U.S. pre-tax income, the relative mix of domestic and international earnings, the impact of non-deductible items, adjustments to the valuation allowances, the effects of tax elections made for U.K. earnings, and discrete tax items.
Previous wording
Net loss was $8.8 million, representing a $13.5 million decrease in net income for the three months ended March 31, 2026 as compared to a net income of $4.7 million for the same period of 2025. The decrease in net income was primarily due to a $12.7 million increase in operating expenses, a $1.0 million increase in tax expense, and a $0.6 million increase in total other expense, partially offset by a $0.9 million increase in revenue.
Current wording
Net loss was $6.1 million, representing a $7.6 million decrease in net income for the three months ended June 30, 2026 as compared to net income of $1.5 million for the same period of 2025. The decrease in net income was primarily due to a $7.9 million increase in operating expenses, a $2.9 million increase in total other expense, and a $0.8 million increase in cost of revenue, partially offset by a $3.2 million decrease in tax expense and a $0.9 million increase in revenue.
Previous wording
Sales and marketing expenses increased by $0.6 million, or 5%, to $13.4 million for the three months ended March 31, 2026 as compared to the same period in 2025. Sales and marketing expenses increased primarily due to a $0.3 million increase in employee-related costs, a $0.2 million increase in stock-based compensation costs, a $0.2 million increase in marketing expense, and a $0.2 million increase in travel expense, partially offset by a $0.1million decrease in professional and consulting expense and a $0.1 million decrease in other miscellaneous expense.
Current wording
Sales and marketing expenses increased by $1.9 million, or 7%, to $27.9 million for the six months ended June 30, 2026 as compared to the same period in 2025. Sales and marketing expenses increased primarily due to a $0.9 million increase in professional and consulting expense, a $0.6 million increase in employee-related costs, a $0.3 million increase in marketing expense, and a $0.3 increase in travel expense, partially offset by a $0.2 million decrease in stock-based compensation costs.
Previous wording
Research and development expenses increased by $1.8 million, or 17%, to $12.3 million for the three months ended March 31, 2026 as compared to the same period in 2025. The increase in research and development expenses was primarily due to a $2.2 million increase in employee-related costs mainly resulting from head count growth associated with investments in software development, including AI integration across our product portfolio, a $0.2 million increase in professional and consulting expense, a $0.2 million increase in miscellaneous expense, and a $0.1 million increase in stock-based compensation costs, partially offset by a $1.1 million increase in capitalized cost in R&D.
Current wording
Research and development expenses increased by $2.5 million, or 13%, to $22.0 million for the six months ended June 30, 2026 as compared to the same period in 2025. The increase in research and development expenses was primarily due to a $2.8 million increase in employee-related costs mainly resulting from head count growth associated with investments in software development, including AI integration across our product portfolio, a $0.5 million increase in miscellaneous expense, a $0.1 million increase in stock-based compensation costs, and a $0.1 million increase in facility-lease related expense, partially offset by a $1.2 million increase in capitalized cost in R&D.
Previous wording
Depreciation and amortization expense increased by $0.6 million, or 4%, to $14.6 million for the three months ended March 31, 2026 as compared to the same period in 2025. The increase in depreciation and amortization expense was primarily due to a $0.8 million net increase in amortization of intangible assets, primarily related to a $0.9 million increase in amortization of capitalized software. In addition, depreciation expense for fixed assets decreased $0.2 million, primarily due to a $0.2 million decrease in depreciation of computer equipment.
Current wording
Depreciation and amortization expense increased by $1.3 million, or 6%, to $23,235 for the six months ended June 30, 2026 as compared to the same period in 2025. The increase in depreciation and amortization expense was primarily due to a $0.6 million net increase in amortization of intangible assets, primarily related to a $0.7 million increase in amortization of capitalized software. In addition, depreciation expense for fixed assets increased $0.6 million, primarily due to a $0.6 million increase in depreciation of computer equipment.
Previous wording
Net other income decreased by $0.4 million to $1.3 million for the three months ended March 31, 2026 as compared to the same period in 2025. The decrease in net other income was primarily due to a $0.5 million decrease in interest income, partially offset by a $0.1 million increase in gain from remeasurement related to the fluctuation of the foreign currency rate.
Current wording
Net other income decreased by $3.1 million to $0.1 million for the six months ended June 30, 2026 as compared to the same period in 2025. The decrease in net other income was primarily due to a $2.2 million increase in loss from remeasurement related to the fluctuation of the foreign currency rate and a $0.8 million decrease in interest income.
Previous wording
We have consistently generated positive cash flow from operations, providing $11.7 million and $17.4 million as a source of funds for the three months ended March 31, 2026 and 2025, respectively. Our additional liquidity comes from several sources: maintaining adequate balances of cash and cash equivalents, issuing common stock, and accessing credit facilities and revolving lines of credit. The following table provides a summary of the major sources of liquidity for the three- and 12-month periods ended at March 31, 2026 and December 31, 2025 and as of March 31, 2026 and December 31, 2025.
Current wording
We have consistently generated positive cash flow from operations, providing $15.6 million and $23.3 million from continuing operations as a source of funds for the six months ended June 30, 2026 and 2025, respectively. Our additional liquidity comes from several sources: maintaining adequate balances of cash and cash equivalents, issuing common stock, and accessing credit facilities and revolving lines of credit. The following table provides a summary of the major sources of liquidity for the six- and 12-month periods ended at June 30, 2026 and December 31, 2025, respectively, and as of June 30, 2026 and December 31, 2025.
Previous wording
(a) Net cash from operating activities for the three months ended March 31, 2026 and twelve months ended December 31, 2025.
Current wording
(a) Net cash from operating activities for the six months ended June 30, 2026 and twelve months ended December 31, 2025.
Previous wording
(b) Cash balances as of March 31, 2026 and December 31, 2025 included $78.9 million and $76.2 million in cash and cash equivalents, respectively, held outside of the United States.
Current wording
(b) Cash balances as of June 30, 2026 and December 31, 2025 included $50.7 million and $76.2 million in cash and cash equivalents, respectively, held outside of the United States.
Previous wording
On April 11, 2025, our Board of Directors approved a stock repurchase program authorizing the Company to repurchase up to $100.0 million of its common stock. For the three months ended March 31, 2026, we repurchased 5,814,484 shares of our common stock for an aggregate purchase price and fees of $40.0 million under the authorized share repurchase program. These repurchases resulted in an increase in treasury stock and reduced weighted-average diluted shares outstanding, As of March 31, 2026, approximately $17.4 million remained available under the Company's existing share repurchase authorization program.
Current wording
On April 11, 2025, our Board of Directors approved a stock repurchase program authorizing the Company to repurchase up to $100.0 million of its common stock. For the six months ended June 30, 2026, we repurchased 9,009,459 shares of our common stock for an aggregate purchase price and fees of $57.4 million under the authorized share repurchase program. These repurchases resulted in an increase in treasury stock and reduced weighted-average diluted shares outstanding. As of June 30, 2026, no funds remained available under the Company's existing share repurchase authorization program.
Previous wording
Our other material cash requirements from known contractual obligations are principal and interest payments on long term debt. We also have future cash obligations of $14.2 million for lease contracts, which have remaining terms of one to nine years.
Current wording
Our other material cash requirements from known contractual obligations are principal and interest payments on long term debt. We also have future cash obligations of $12.5 million for lease contracts, which have remaining terms of one to nine years.
Previous wording
The following table presents a summary of our cash flows for the periods shown:
Current wording
The following table presents a summary of our cash flows from continuing operations for the periods shown:
Previous wording
Our cash flows from operating activities primarily include net income adjusted for (i) non-cash items included in net income, such as provisions (recoveries) for credit losses, depreciation and amortization, stock-based compensation, deferred taxes, and other non-cash items and (ii) changes in the balances of operating assets and liabilities. Net cash provided by operating activities in the first three months of 2026 was $11.7 million, compared to $17.4 million in the same period of 2025. The $5.7 million decrease in cash from operating activities was primarily driven by lower cash-adjusted net income, an increase in cash used for prepaid and other assets and a decrease in cash collected on accounts receivable, partially offset by lower cash outflows to settle liabilities and increased cash inflows from deferred revenues.
Current wording
Our cash flows from operating activities primarily include net income adjusted for (i) non-cash items included in net income, such as provisions (recoveries) for credit losses, depreciation and amortization, stock-based compensation, deferred taxes, and other non-cash items and (ii) changes in the balances of operating assets and liabilities. Net cash provided by operating activities in the first six months of 2026 was $15.6 million, compared to $23.3 million in the same period of 2025. The $7.7 million decrease in cash from operating activities was primarily driven by lower cash-adjusted net income, an increase in cash used for prepaid and other assets and a decrease in cash collected on accounts receivable, partially offset by higher cash inflows from deferred revenues and less cash outflows to settle liabilities.
Previous wording
Net cash used in investing activities in the first three months of 2026 was $6.8 million, an increase of $1.0 million, compared to $5.8 million in the same period of 2025. The change in investing activities was primarily due to a $1.0 million increase in cash utilized in capitalized software development costs to support our growth.
Current wording
Net cash used in investing activities in the first six months of 2026 was $14.5 million, an increase of $1.7 million, compared to $12.7 million in the same period of 2025. The change in investing activities was primarily due to a $1.0 million increase in cash utilized in capitalized software development costs to support our growth and a $0.7 million increase in cash outflow for capital expenditure.
Previous wording
Net cash used in financing activities in the first three months of 2026 was $43.7 million, compared to $14.0 million in the same period of 2025. The $29.7 million increase in cash used in financing activities was primarily due to a $40.0 million increase in cash used in connection with repurchasing the Company's common stock, partially offset by a $10.2 million decrease in cash payments related to contingent consideration for business acquisitions.
Current wording
Net cash used in financing activities in the first six months of 2026 was $82.3 million, compared to $44.7 million in the same period of 2025. The $37.6 million increase in cash used in financing activities was primarily due to a $32.4 million increase in cash used in connection with repurchasing the Company's common stock and a $6.9 million increase in cash payments related to contingent consideration for business acquisitions, partially offset by a $1.6 million decrease in cash payments associated with share awards vested and withheld for payroll tax.
Previous wording
We have been a party to the Credit Agreement since August 2017 that provides for a senior secured term loan (the “Term Loan”) and commitments under a revolving credit facility (the “Revolving Facility”). The Credit Agreement has been amended several times. Most recently, on October 16, 2025, we entered into the Sixth Amendment to the Credit Agreement to refinance our existing debt. Following the refinancing, as of October
Current wording
We have been a party to the Credit Agreement since August 2017 that provides for a senior secured term loan (the “Term Loan”) and commitments under a revolving credit facility (the “Revolving Facility”). The Credit Agreement has been amended several times. Most recently, on October 16, 2025, we entered into the Sixth Amendment to the Credit Agreement to refinance our existing debt. Following the refinancing, as of October 16, 2025, the Term Loan had an aggregate principal amount of $296.3 million and matures on June 26, 2031. We also maintain a $100.0 million revolving credit facility under the Credit Agreement, which matures on June 26, 2029.
Previous wording
As of March 31, 2026, we had $294.8 million of outstanding borrowings on the Term Loan, and $100.0 million of availability under the revolving credit facility under the Credit Agreement.
Current wording
As of June 30, 2026, we had $294.0 million of outstanding borrowings on the Term Loan, and $100.0 million of availability under the revolving credit facility under the Credit Agreement.
Previous wording
There have been no material changes to our contractual obligations during the three months ended March 31, 2026 from those disclosed in our 2025 Annual Report, except for payments made in the ordinary course of business.
Current wording
There have been no material changes to our contractual obligations during the six months ended June 30, 2026 from those disclosed in our 2025 Annual Report, except for payments made in the ordinary course of business.
Previous wording
As of March 31, 2026, we had federal and state NOLs of approximately $4.2 million and $3.5 million, respectively, which are available to reduce future taxable income, some of which expire between 2035 and 2036 and 2030 and 2041, respectively. We had federal and state R&D tax credit carryforwards of approximately $0.1 million and $0.02 million, respectively, to offset future income taxes, which expire between 2027 and 2040. We also had foreign tax credits of approximately $14.6 million, which will start to expire in 2027. These carryforwards that may be utilized in a future period may be subject to limitations based upon changes in the ownership of our stock in a future period. Additionally, we carried forward foreign NOLs of approximately $87.3 million which will start to expire in 2026, foreign research and development credits of $0.2 million which expire in 2029, and Canadian investment tax credits of approximately $5.2 million which expire between 2034 and 2044. Our carryforwards are subject to review and possible adjustment by the appropriate taxing authorities.
Current wording
As of June 30, 2026, we had federal and state NOLs of approximately $4.2 million and $3.5 million, respectively, which are available to reduce future taxable income, some of which expire between 2035 and 2036 and 2030 and 2041, respectively. We had federal and state R&D tax credit carryforwards of approximately $0.1 million and $.02 million, respectively, to offset future income taxes, which expire between 2027 and 2040. We also had foreign tax credits of approximately $14.6 million, which will start to expire in 2027. These carryforwards that may be utilized in a future period may be subject to limitations based upon changes in the ownership of our stock in a future period. Additionally, we carried forward foreign NOLs of approximately $87.3 million, which will start to expire in 2026, foreign research and development credits of $0.2, million which expire in 2029, and Canadian investment tax credits of approximately $5.2 million, which expire between 2034 and 2044. Our carryforwards are subject to review and possible adjustment by the appropriate taxing authorities.
Rearranged current paragraphs (6)
Current report — wording carried from elsewhere
Depreciation and amortization expense increased by $0.7 million, or 6%, to $11.7 million for the three months ended June 30, 2026 as compared to the same period in 2025. The increase in depreciation and amortization expense was primarily due to a $0.8 million increase in depreciation of computer equipment.
Current report — wording carried from elsewhere
Net other income decreased by $2.7 million to a net expense of $1.2 million for the three months ended June 30, 2026 as compared to the same period in 2025. The decrease in net other income was primarily due to a $2.4 million increase in loss from remeasurement related to the fluctuation of the foreign currency rate, and a $0.3 million decrease in interest income.
Current report — wording carried from elsewhere
The following table summarizes our unaudited statements of operations data for the six months ended at June 30, 2026 and 2025:
Current report — wording carried from elsewhere
Total revenues increased by $2.9 million, or 2%, to $187.4 million for the six months ended June 30, 2026 as compared to the same period in 2025. Overall revenue growth was primarily driven by our software product offerings, supported by strong demand from existing customers and expansion of relationships with existing customers.
Current report — wording carried from elsewhere
Interest expense increased by $0.3 million, or 3%, to $9.9 million for the six months ended June 30, 2026, as compared to the same period in 2025. The change in interest expense was primarily due to a $1.8 million decrease in gain from our interest swap hedge activities, partially offset by a $1.4 million decrease in interest expense from our floating rate term loan debt, primarily due to a decline in market interest rates and a reduced base margin rate resulting from the refinancing of the term loan.
Current report — wording carried from elsewhere
Our income tax expense was $1.6 million, resulting in an effective income tax rate of (10)% for the six months ended June 30, 2026 as compared to income tax expense of $2.6 million, or an effective income tax rate of 46%, for the same period in 2025. Our income tax expense for the six months ended June 30, 2026 and 2025 was primarily due to the tax effects of U.S. pre-tax income (loss), the relative mix of domestic and international earnings, the impact of non-deductible items, adjustments to the valuation allowances, the effects of tax elections made for U.K. earnings, and discrete tax items.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
16, 2025, the Term Loan had an aggregate principal amount of $296.3 million and matures on June 26, 2031. We also maintain a $100.0 million revolving credit facility under the Credit Agreement, which matures on June 26, 2029.