Definitive Healthcare Navigating Revenue Decline

 

• Total Revenue: $62.3 million, down 6% year-over-year.

• Adjusted EBITDA: $17.5 million, down 12% year-over-year.

• Adjusted EBITDA Margin: 28%.

• Unlevered Free Cash Flow: 92% conversion from adjusted EBITDA, up 6% year-over-year.

• Net Dollar Retention: 90% for enterprise customers, 85% overall.

• Enterprise Customers: 519, a decrease of 21 year-over-year.

• Total Customer Count: Approximately 2,500, down about 250 year-over-year.

• Adjusted Gross Profit Margin: 80.7%, down 400 basis points from Q4 2023.

• Adjusted Sales and Marketing Expenses: $18.9 million, down 7% from Q4 2023.

• Adjusted Product Development Expense: $7.3 million, down 8% from Q4 2023.

• Adjusted G&A Expense: $7.7 million, down 10% from Q4 2023.

• Adjusted Operating Income: $15.8 million, down 14% from Q4 2023.

• Adjusted Net Income: $12.6 million or $0.08 per diluted share.

• Operating Cash Flows: $58.2 million on a trailing 12-month basis, up 41% year-over-year.

• Deferred Revenue: $93.4 million, down 4% year-over-year.

• Guidance for Q1 2025 Revenue: $55.5 million to $57 million, a decrease of 10% to 13% year-over-year.

• Guidance for Full Year 2025 Revenue: $230 million to $240 million, a 5% to 9% decline year-over-year.

• Guidance for Full Year 2025 Adjusted EBITDA: $61 million to $65 million, margin of 26% to 28%.

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Release Date: February 27, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Definitive Healthcare Corp (NASDAQ:DH) exceeded the high end of their guidance ranges for both top and bottom line in Q4 2024.

• The company reported strong unlevered free cash flow performance with a 92% conversion from adjusted EBITDA, up 6% year-over-year.

• Definitive Healthcare Corp (NASDAQ:DH) successfully secured new business in Q4, including new logos and upsell cross-sell activities with existing customers.

• The company is focusing on enhancing their master data management capabilities, which is expected to strengthen data quality and make their solutions more integrated into customer workflows.

• Definitive Healthcare Corp (NASDAQ:DH) is investing in initiatives to improve customer success and retention, including the appointment of a new Chief Customer Officer and aligning compensation incentives with sales.

Negative Points

• Total revenue for Q4 2024 was $62.3 million, down 6% year-over-year, reflecting customer retention challenges.

• Churn rates remained elevated, particularly in the life sciences sector, with net dollar retention at 90% for enterprise customers and 85% overall.

• The company experienced a decrease in enterprise customers, with a reduction of 21 year-over-year and 11 quarter-over-quarter.

• Adjusted EBITDA for Q4 2024 was $17.5 million, down 12% year-over-year, indicating pressure from declining revenue.

• Definitive Healthcare Corp (NASDAQ:DH) provided guidance for Q1 2025 with an expected revenue decline of 10% to 13% year-over-year, citing continued pressure on renewals.

• https://finance.yahoo.com/news/definitive-healthcare-corp-dh-q4-074513701.html