Certara, Inc.CERT
Certara, Inc. Debt Disclosure
Long-Term Debt and Revolving Line of Credit
The Company has been a party to a Credit Agreement since August 2017 that provides for a senior secured term loan and commitments under a revolving credit facility (as amended, the “Credit Agreement”). On June 26, 2024, the Company entered into the Fifth Amendment to its Credit Agreement (the “Fifth Amendment”), which primarily (1) amended the principal amount of the term loan (the “Term Loan”) to $300,000 and its maturity date to June 26, 2031; and (2) extended the termination date of the $100,000 revolving credit commitment (the “Revolving Facility”) to June 26, 2029. On October 16, 2025, the Company entered into the Sixth Amendment to the Credit Agreement (the “Sixth Amendment”), which primarily refinanced the existing principal amount of the term loan with $296,250 principal amount of replacement term loans with the same maturity date of June 26, 2031 and reduced the applicable rate with respect to the term loans under the Credit Agreement. The Credit Agreement is collateralized by substantially all U.S. assets and stock pledges for the non-U.S. subsidiaries and contains various financial and nonfinancial covenants.
Borrowings under the Credit Agreement bear interest at a rate per annum equal to, at the election of the Company, either (i) the Term Secured Overnight Financing Rate (“SOFR”) rate, with a floor of 0.00% plus an applicable margin rate of 2.75% for the replacement Term Loans and between 3.50% and 2.75% for loans under the Revolving Facility, depending on the applicable first lien leverage ratio, or (ii) an Alternate Base Rate (“ABR”), with a floor of 1.00%, plus an applicable margin rate of 1.75% for the replacement Term Loans or between 2.50% and 1.75% for loans under the Revolving Facility, depending on the applicable first lien leverage ratio. The ABR is determined as the greatest of (a) the prime rate, (b) the federal funds effective rate, plus 0.50%, and (c) the Term SOFR rate plus 1.00%. Additionally, the Company is obligated to pay a commitment fee of the unused amount and other customary fees.
As of each of December 31, 2025 and 2024, available borrowings under the revolving lines of credits were $100,000.
The effective interest rate was 7.27% and 8.68% for the years ended December 31, 2025 and 2024, respectively, for the Credit Agreement. As discussed previously, the Company entered into interest rate swap agreements that fixed the interest rate.
Interest incurred on the Credit Agreement with respect to the term loan amounted to $21,611, $25,785, and $26,202 for the years ended December 31, 2025, 2024, and 2023, respectively. Accrued interest payable on the Credit Agreement with respect to the term loan amounted to $53 and $61 at December 31, 2025 and 2024, respectively, and is included in accrued expenses. Interest incurred on the Credit Agreement with respect to the revolving line of credit was $295, $303, and $257 for the years ended December 31, 2025, 2024, and 2023, respectively. There was $1 accrued interest payable on the revolving line of credit as of each of December 31, 2025 and 2024.
Long-term debt consists of the following:
| DECEMBER 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| (In thousands) | |||||||||||
| Term loans | $ | 295,509 | $ | 298,500 | |||||||
| Revolving line of credit | — | — | |||||||||
| Less: debt issuance costs | (2,415) | (3,075) | |||||||||
| Total | 293,094 | 295,425 | |||||||||
| Current portion of long-term debt | (2,963) | (3,000) | |||||||||
| Long-term debt, net of current portion and debt issuance costs | $ | 290,131 | $ | 292,425 | |||||||
The principal amount of long-term debt outstanding as of December 31, 2025, matures in the following years:
| 2026 | 2027 | 2028 | 2029 | 2030 | Thereafter | TOTAL | |||||||||||||||||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||||||||||||||||||||
| Maturities | $ | 2,963 | $ | 2,963 | $ | 2,963 | $ | 2,963 | $ | 2,963 | $ | 280,694 | $ | 295,509 | |||||||||||||||||||||||||||
The Credit Agreement requires the Company to make an annual mandatory prepayment as it relates to the Company’s Excess Cash Flow calculation. For the year ended December 31, 2025, the Company was not required to make a mandatory prepayment on the term loan. The Company is required to make a quarterly principal payment of $741 on the term loan starting December 31, 2025.
The fair values of the Company’s variable interest term loan and revolving line of credit are not significantly different than their carrying value because the interest rates on these instruments are subject to change with market interest rates.
About Debt Disclosures
Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.
Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.