Core Insights - Definitive Healthcare Corp. reported quarterly earnings of $0.07 per share, exceeding the Zacks Consensus Estimate of $0.05 per share, but down from $0.09 per share a year ago, resulting in an earnings surprise of +40.00% [1] - The company achieved revenues of $60.75 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 2.63%, although this is a decrease from $63.74 million year-over-year [2] - Definitive Healthcare has consistently surpassed consensus EPS and revenue estimates over the last four quarters [2] Earnings Outlook - The future performance of Definitive Healthcare's stock will largely depend on management's commentary during the earnings call and the sustainability of the stock's price movement based on recent earnings and future expectations [3][4] - The current consensus EPS estimate for the upcoming quarter is $0.06 on revenues of $59.09 million, and for the current fiscal year, it is $0.21 on revenues of $237.03 million [7] Industry Context - The Internet - Software industry, to which Definitive Healthcare belongs, is currently ranked in the top 28% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Data and Key Metrics Changes - Total revenue for Q2 2025 was $60.8 million, down 5% year over year, but above the high end of guidance, driven by early signs of improvement in renewal rates [6][23] - Adjusted EBITDA was $18.7 million, representing a 31% margin, reflecting good expense discipline [7][23] - Unlevered free cash flow for the trailing twelve months was $57 million, with a conversion rate of adjusted EBITDA to unlevered free cash flow at 80% [7][27] Business Line Data and Key Metrics Changes - Subscription revenue declined 6%, while professional services revenue increased by 46% year over year, partially offsetting subscription revenue pressures [24] - The company saw a modest improvement in renewal rates, with the highest retention rate since Q2 of the previous year [8][24] Market Data and Key Metrics Changes - The company is experiencing pressures in the life sciences segment, with elongated sales cycles and a cooling effect on buying decisions due to macroeconomic conditions [36][60] - The data partnership launched earlier in the year contributed a couple of points of growth to overall revenue [24][50] Company Strategy and Development Direction - The company is focused on four strategic pillars: differentiated data, data delivery and integrations, customer success, and innovation [10][11] - The leadership team has been augmented with new talent to drive progress and improve operational efficiency [20][21] Management's Comments on Operating Environment and Future Outlook - Management remains cautious about the macro environment but is confident in the steps taken to improve customer retention and drive growth [29][30] - The company expects revenue for Q3 2025 to be between $59 million and $60 million, reflecting a decline of 4% to 6% year over year [29][30] Other Important Information - The company repurchased approximately 6 million shares for about $19 million, leaving $58 million remaining under the share repurchase authorization [28] - Current remaining performance obligations were about flat year over year at $170 million, with deferred revenue up 5% year over year [28] Q&A Session Summary Question: What are you seeing in the sales cycles for your biopharma or healthcare provider clients? - Management noted no significant change from the previous quarter, with life sciences still experiencing latency and elongated decision timelines [35] Question: Are there any macro trends influencing your go-to-market strategy? - Management highlighted ongoing pressures due to the funding environment and regulatory uncertainty, focusing on quality data and integration capabilities [36] Question: Are you seeing any particular changes impacting the retention rate? - Management reported the strongest renewal levels in over a year, attributing this to operational changes and a focus on customer success [39] Question: What operational changes are impacting renewals? - Management emphasized the importance of integrated customers renewing at a higher rate and improvements in customer engagement processes [43] Question: Are boomerang customers emerging as a broader trend? - Management confirmed that while the competitive environment remains stable, there are instances of customers returning after experiencing lower-cost alternatives [71] Question: Is the focus on stemming down sales in life sciences related to a higher touch delivery model? - Management affirmed that higher touch services and integration are crucial for retaining life sciences customers [76]

Q2 2025 Performance - Total revenue decreased by 5% year-over-year, from $63.7 million to $60.8 million[16] - Adjusted Gross Profit decreased by 6% year-over-year, from $53.1 million to $50.0 million, with Adjusted Gross Profit margin contracting by 110 bps to 82%[16] - Adjusted EBITDA decreased by 11% year-over-year, from $20.9 million to $18.7 million, with Adjusted EBITDA margin contracting by 210 bps to 31%[16,18] - Unlevered Free Cash Flow (uFCF) decreased by 47% year-over-year, from $21.5 million to $11.5 million[20] Revenue Mix - Subscription revenue mix was 96%, with a 6% year-over-year decline[17] - Professional Services revenue mix was 4%, with a 46% year-over-year growth[17] Cash Flow and Balance Sheet - Cash, cash equivalents & short-term investments decreased by 38% year-over-year, from $296.5 million to $184.2 million[20] - Total debt outstanding decreased by 32% year-over-year, from $250.9 million to $170.6 million[20] - Total remaining performance obligations increased by 1% year-over-year, from $257.6 million to $261.4 million[20] Guidance - Q3 2025 Revenue is expected to be between $59.0 million and $60.0 million, a decrease of 6%-4% year-over-year[24] - Full Year 2025 Revenue is expected to be between $237.0 million and $240.0 million, a decrease of 6%-5% year-over-year[24]

[Part I. FINANCIAL INFORMATION](index=5&type=section&id=Part%20I.%20FINANCIAL%20INFORMATION) This section covers the company's financial statements, management's discussion and analysis, market risk disclosures, and controls [Item 1. Condensed Consolidated Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) Presents unaudited condensed consolidated financial statements, including balance sheets, statements of operations, cash flows, and notes on key financial events Condensed Consolidated Balance Sheets Key Balance Sheet Items (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $80,984 | $105,378 | | Goodwill | $216,752 | $393,283 | | Total assets | $770,145 | $1,089,389 | | Term loan (current & long-term) | $169,035 | $243,118 | | Total liabilities | $358,912 | $482,195 | | Total equity | $411,233 | $607,194 | Condensed Consolidated Statements of Operations Performance Summary (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $60,750 | $63,737 | $119,941 | $127,217 | | Gross Profit | $46,613 | $50,454 | $90,373 | $100,836 | | Loss from Operations | $(4,170) | $(369,641) | $(188,956) | $(385,890) | | Goodwill Impairment | $0 | $363,641 | $176,531 | $363,641 | | Net Loss | $(9,265) | $(306,187) | $(164,358) | $(318,905) | | Net Loss per Share (Basic & Diluted) | $(0.07) | $(1.81) | $(1.05) | $(1.90) | Condensed Consolidated Statements of Cash Flows Cash Flow Summary for Six Months Ended June 30 (in thousands) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $35,370 | $30,629 | | Net cash provided by (used in) investing activities | $73,383 | $(9,100) | | Net cash used in financing activities | $(134,406) | $(31,316) | | Net decrease in cash and cash equivalents | $(25,653) | $(9,787) | Notes to the Condensed Consolidated Financial Statements - The company acquired Carevoyance for **$13.7 million** in cash, adding **$7.1 million** in goodwill and **$7.0 million** in intangible assets[40](index=40&type=chunk)[41](index=41&type=chunk) - A **$176.5 million** non-cash goodwill impairment charge was recorded in Q1 2025 due to a sustained decrease in stock price and market capitalization[59](index=59&type=chunk)[184](index=184&type=chunk) - The credit agreement was amended in January 2025, establishing a **$175.0 million** term loan and a **$50.0 million** revolving credit facility, with **$69.1 million** of principal repaid[66](index=66&type=chunk)[67](index=67&type=chunk)[73](index=73&type=chunk) - The company repurchased **11.6 million** shares for **$40.2 million** under its stock repurchase programs in H1 2025[103](index=103&type=chunk)[105](index=105&type=chunk) - TRA liability decreased from **$63.2 million** to **$31.2 million**, driven by a **$17.8 million** remeasurement and **$13.8 million** in payments[121](index=121&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=36&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance, highlighting macroeconomic headwinds, sales challenges, and lower renewal rates, leading to expected revenue decline and a significant goodwill impairment charge Recent Developments and Challenges - A **$176.5 million** non-cash goodwill impairment charge was recorded in Q1 2025 due to a sustained decrease in stock price[140](index=140&type=chunk) - Sales disruptions from go-to-market team changes in 2024 are impacting new customer acquisition and upsells, affecting 2025 results[145](index=145&type=chunk) - Macroeconomic conditions are causing longer deal cycles, deferred purchasing, and increased customer churn, especially among smaller and Life Sciences customers[151](index=151&type=chunk) - Executive transitions include a new CFO appointment and the elimination of the Chief Operating Officer role[147](index=147&type=chunk)[148](index=148&type=chunk) Key Metrics - Total customer count decreased from approximately **2,600** in June 2024 to **2,400** in June 2025[156](index=156&type=chunk) - Enterprise Customers (>$100k ARR) decreased from **537** to **510** over the same period[156](index=156&type=chunk) Remaining Performance Obligations (in thousands) | Obligation Type | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Current (cRPO) | $170,327 | $188,050 | | Non-current | $91,084 | $105,673 | | **Total** | **$261,411** | **$293,723** | Results of Operations Comparison of Results for the Three Months Ended June 30 (in thousands) | Metric | 2025 | 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | $60,750 | $63,737 | -5% | | Gross Profit | $46,613 | $50,454 | -8% | | Operating Expenses | $50,783 | $420,095 | -88% | | Loss from Operations | $(4,170) | $(369,641) | 99% | - Q2 2025 revenue decreased by **$3.0 million (5%)** year-over-year, primarily due to a **$3.8 million** decline in subscription revenue, with operating expenses significantly lower due to a non-recurring **$363.6 million** goodwill impairment charge in the prior year[189](index=189&type=chunk)[191](index=191&type=chunk) Comparison of Results for the Six Months Ended June 30 (in thousands) | Metric | 2025 | 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | $119,941 | $127,217 | -6% | | Gross Profit | $90,373 | $100,836 | -10% | | Operating Expenses | $279,329 | $486,726 | -43% | | Loss from Operations | $(188,956) | $(385,890) | 51% | - H1 2025 revenue decreased by **$7.3 million (6%)** year-over-year, with operating expenses lower due to a reduced goodwill impairment charge of **$176.5 million** compared to **$363.6 million** in the prior period[195](index=195&type=chunk)[197](index=197&type=chunk) Non-GAAP Financial Measures Adjusted EBITDA Reconciliation (in thousands) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Loss | $(9,265) | $(306,187) | $(164,358) | $(318,905) | | **Adjusted EBITDA** | **$18,656** | **$20,919** | **$33,362** | **$40,942** | | Adjusted EBITDA Margin | 31% | 33% | 28% | 32% | Liquidity and Capital Resources - As of June 30, 2025, the company held **$81.0 million** in cash, **$103.2 million** in short-term investments, and **$49.7 million** available under its Revolving Credit Facility[212](index=212&type=chunk) - Net cash from operating activities increased to **$35.4 million** in H1 2025 from **$30.6 million** in H1 2024[218](index=218&type=chunk)[219](index=219&type=chunk) - Cash used in financing activities totaled **$134.4 million** in H1 2025, primarily for **$73.4 million** in net debt repayments, **$40.2 million** in stock repurchases, and **$13.8 million** in TRA payments[221](index=221&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=59&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risks are interest rate fluctuations on variable-rate debt, mitigated by interest rate caps, with inflation and foreign currency risks deemed less material - The company faces interest rate risk on its **$170.6 million** variable-rate 2021 Term Loan, mitigated by an interest rate cap agreement[244](index=244&type=chunk) - A hypothetical **1.0%** interest rate change would impact H1 2025 interest expense by approximately **$0.9 million**[244](index=244&type=chunk) - Inflation has not materially affected the business, but significant future inflationary pressure could harm results if not offset by price increases[242](index=242&type=chunk) [Item 4. Controls and Procedures](index=60&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that disclosure controls and procedures were effective as of June 30, 2025[246](index=246&type=chunk) - No material changes to internal control over financial reporting occurred during the fiscal quarter ended June 30, 2025[247](index=247&type=chunk) [Part II. OTHER INFORMATION](index=61&type=section&id=Part%20II.%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, unregistered sales of equity securities, and other required disclosures [Item 1. Legal Proceedings](index=61&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings, but their resolution is not expected to materially affect financial position or results - The ultimate resolution of current legal proceedings is not expected to materially affect financial position, results of operations, or cash flows[251](index=251&type=chunk) [Item 1A. Risk Factors](index=61&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the company's risk factors have occurred since the filing of its 2024 Annual Report on Form 10-K - No material changes in risk factors have occurred since the filing of the 2024 Form 10-K[252](index=252&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=61&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Details the exchange of LLC Units for Class A Common Stock and the company's stock repurchases, including **5,959,137** shares bought back in Q2 2025 for **$19.0 million** - During Q2 2025, **601,827** LLC Units were exchanged for an equivalent number of Class A Common Stock shares[253](index=253&type=chunk) Issuer Purchases of Equity Securities (Q2 2025) | Period | Total Shares Purchased | Average Price Paid Per Share | Total Cost (approx.) | | :--- | :--- | :--- | :--- | | April 2025 | 2,320,497 | $2.55 | $5.9M | | May 2025 | 1,524,675 | $3.33 | $5.1M | | June 2025 | 2,113,965 | $3.76 | $7.9M | | **Total** | **5,959,137** | **$3.18** | **$19.0M** | - Approximately **$58.1 million** remained available for repurchase under the 2025 Repurchase Program as of June 30, 2025[255](index=255&type=chunk)[257](index=257&type=chunk) [Item 3. Defaults Upon Senior Securities](index=62&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities to report - None[258](index=258&type=chunk) [Item 4. Mine Safety Disclosures](index=62&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Not applicable to the company's operations - Not applicable[259](index=259&type=chunk) [Item 5. Other Information](index=62&type=section&id=Item%205.%20Other%20Information) No other material information to report - No trading arrangements to report[260](index=260&type=chunk) [Item 6. Exhibits](index=63&type=section&id=Item%206.%20Exhibits) Lists exhibits filed with the Form 10-Q, including certifications by the Principal Executive Officer and Principal Financial Officer - Lists exhibits filed with the report, including CEO and CFO certifications pursuant to Sarbanes-Oxley Act Sections 302 and 906[263](index=263&type=chunk)

[Financial Performance and Outlook](index=1&type=section&id=Financial%20Performance%20and%20Outlook) This section details Definitive Healthcare's recent financial results and updated business outlook for 2025 [Second Quarter 2025 Financial Highlights](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Highlights) Q2 2025 revenue decreased 5% to $60.8M, net loss significantly improved, and full-year guidance was raised Q2 2025 Key Financial Metrics | Metric | Q2 2025 (M) | Q2 2024 (M) | Change | | :--- | :--- | :--- | :--- | | Revenue | $60.8M | $63.7M | -5% | | Net Loss | $(9.3)M | $(306.2)M | N/A | | Adjusted Net Income | $9.7M | $14.2M | -31.7% | | Adjusted EBITDA | $18.7M | $20.9M | -10.5% | | Adjusted EBITDA Margin | 31% | 33% | -200 bps | | Cash Flow from Operations | $9.3M | N/A | N/A | | Unlevered Free Cash Flow | $11.5M | N/A | N/A | - The significant reduction in Net Loss year-over-year is primarily due to the absence of the **$363.6 million** goodwill impairment charge that was recorded in Q2 2024[4](index=4&type=chunk) - Citing progress in the first half of the year, the company is increasing the midpoint of its revenue guidance and raising its adjusted EBITDA outlook for the full year 2025[4](index=4&type=chunk) [Recent Business and Operating Highlights](index=2&type=section&id=Recent%20Business%20and%20Operating%20Highlights) The company secured new and expanded customer contracts, highlighting superior data quality and custom reporting capabilities - Definitive Healthcare continues to win new logos and expand existing relationships across all its end-markets[5](index=5&type=chunk) - Key competitive advantages highlighted in recent wins include superior data quality, custom reporting capabilities (especially for claims analytics), and seamless integration with other platforms like HubSpot[5](index=5&type=chunk) [Business Outlook](index=3&type=section&id=Business%20Outlook) The company issued Q3 2025 guidance and updated its full-year 2025 outlook, raising revenue and Adjusted EBITDA forecasts [Third Quarter 2025 Guidance](index=3&type=section&id=Third%20Quarter%202025%20Guidance) Specific financial guidance for Q3 2025, including revenue and profitability ranges, has been provided Q3 2025 Financial Guidance | Metric | Guidance Range (M) | | :--- | :--- | | Revenue | $59.0M – $60.0M | | Adjusted Operating Income | $12.5M – $13.5M | | Adjusted EBITDA | $15.5M – $16.5M | | Adjusted EBITDA Margin | 26% – 28% | | Adjusted Net Income | $7.5M – $8.5M | | Adjusted Net Income Per Diluted Share | $0.05 – $0.06 | [Full Year 2025 Guidance](index=3&type=section&id=Full%20Year%202025%20Guidance) Definitive Healthcare updated its full-year 2025 financial guidance, increasing revenue and Adjusted EBITDA projections Full Year 2025 Financial Guidance | Metric | Guidance Range (M) | | :--- | :--- | | Revenue | $237.0M – $240.0M | | Adjusted Operating Income | $52.0M – $55.0M | | Adjusted EBITDA | $64.0M – $67.0M | | Adjusted EBITDA Margin | 27% – 28% | | Adjusted Net Income | $32.5M – $34.5M | | Adjusted Net Income Per Diluted Share | $0.22 – $0.23 | - The company raised the bottom end of its prior full-year revenue range by **$3.0 million**[10](index=10&type=chunk) [Financial Statements](index=11&type=section&id=Financial%20Statements) This section presents the company's condensed consolidated balance sheets, statements of operations, and cash flows [Condensed Consolidated Balance Sheets](index=11&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to $770.1M as of June 30, 2025, primarily due to reduced goodwill, while liabilities also declined Key Balance Sheet Items (in thousands) | Account | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--- | :--- | :--- | | Cash and cash equivalents | $80,984 | $105,378 | | Goodwill | $216,752 | $393,283 | | Total assets | $770,145 | $1,089,389 | | Term loan (Current + Long term) | $169,035 | $243,118 | | Total liabilities | $358,912 | $482,195 | | Total equity | $411,233 | $607,194 | [Condensed Consolidated Statements of Operations](index=12&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q2 2025 revenue was $60.8M, with net loss significantly improving to $(9.3)M due to the absence of goodwill impairment Statement of Operations Highlights (in thousands) | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | | :--- | :--- | :--- | | Revenue | $60,750 | $63,737 | | Gross Profit | $46,613 | $50,454 | | Loss from Operations | $(4,170) | $(369,641) | | Goodwill Impairment | $0 | $363,641 | | Net Loss | $(9,265) | $(306,187) | | Net Loss per Share | $(0.07) | $(1.81) | - For the six months ended June 30, 2025, the company recorded a goodwill impairment charge of **$176.5 million**[31](index=31&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=13&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations was $9.3M in Q2 2025, with significant cash used in financing activities, leading to a net decrease Cash Flow Summary (in thousands) | Cash Flow Activity | Three Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | | :--- | :--- | :--- | | Net cash provided by operating activities | $9,304 | $35,370 | | Net cash (used in) provided by investing activities | $(10,162) | $73,383 | | Net cash used in financing activities | $(24,700) | $(134,406) | | Net (decrease) in cash | $(25,558) | $(25,653) | | Cash and cash equivalents, end of period | $80,984 | $80,984 | - Significant cash outflows in financing activities for the six-month period included repayments of the term loan (**$248.4M**), repurchases of Class A Common Stock (**$40.2M**), and payments under the tax receivable agreement (**$13.8M**), partially offset by proceeds from a new term loan (**$175.0M**)[33](index=33&type=chunk) [Non-GAAP Financial Measures and Reconciliations](index=8&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Reconciliations) This section defines and reconciles the company's non-GAAP financial measures to their most directly comparable GAAP equivalents [Explanation of Non-GAAP Financial Measures](index=8&type=section&id=Explanation%20of%20Non-GAAP%20Financial%20Measures) The company uses non-GAAP measures like Adjusted EBITDA to assess core operational performance by excluding non-recurring items - The company presents non-GAAP financial measures to help investors evaluate its core operations by excluding certain significant or unusual items[19](index=19&type=chunk) - Key non-GAAP measures include **Unlevered Free Cash Flow**, **Adjusted EBITDA**, **Adjusted Gross Profit**, **Adjusted Operating Income**, and **Adjusted Net Income**[20](index=20&type=chunk) - **Adjusted EBITDA** is a key metric used by management and the board to assess profitability, excluding items like interest, taxes, depreciation, amortization, equity-based compensation, and goodwill impairments[22](index=22&type=chunk) [Reconciliation of GAAP to Non-GAAP Measures](index=14&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Measures) Detailed tables reconcile GAAP results to non-GAAP metrics, including Unlevered Free Cash Flow, Adjusted Net Income, and EBITDA [Reconciliation of GAAP Operating Cash Flow to Unlevered Free Cash Flow](index=14&type=section&id=Reconciliation%20of%20GAAP%20Operating%20Cash%20Flow%20to%20Unlevered%20Free%20Cash%20Flow) This table reconciles GAAP net cash provided by operating activities to Unlevered Free Cash Flow (Non-GAAP) Unlevered Free Cash Flow Reconciliation (in thousands) | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | | :--- | :--- | :--- | | Net cash provided by operating activities (GAAP) | $9,304 | $14,040 | | Less: Purchases of property, equipment, etc. | $(2,293) | $(410) | | Add: Interest paid in cash | $2,959 | $3,590 | | Add: Transaction, integration, and restructuring expenses | $672 | $1,804 | | Add: Other non-core items | $836 | $2,438 | | **Unlevered Free Cash Flow (Non-GAAP)** | **$11,478** | **$21,462** | [Reconciliation of GAAP Net Loss to Adjusted Net Income](index=14&type=section&id=Reconciliation%20of%20GAAP%20Net%20Loss%20to%20Adjusted%20Net%20Income) This table reconciles the GAAP net loss to the Adjusted Net Income (Non-GAAP) by detailing various adjustments Adjusted Net Income Reconciliation (in thousands) | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | | :--- | :--- | :--- | | Net loss (GAAP) | $(9,265) | $(306,187) | | Adjustments (Amortization, Equity Comp, Goodwill, etc.) | $18,809 | $377,802 | | Adjusted Operating Income | $15,639 | $19,304 | | Less: Other adjustments (Interest, Taxes, etc.) | $(5,963) | $(5,149) | | **Adjusted Net Income (Non-GAAP)** | **$9,676** | **$14,155** | | **Adjusted Net Income Per Diluted Share** | **$0.07** | **$0.09** | [Reconciliation of GAAP Net Loss to Adjusted EBITDA](index=16&type=section&id=Reconciliation%20of%20GAAP%20Net%20Loss%20to%20Adjusted%20EBITDA) This table reconciles GAAP net loss to Adjusted EBITDA (Non-GAAP) by adding back interest, taxes, D&A, and other adjustments Adjusted EBITDA Reconciliation (in thousands) | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | | :--- | :--- | :--- | | Net loss (GAAP) | $(9,265) | $(306,187) | | Add: Interest, Taxes, D&A | $16,035 | $(8,937) | | EBITDA | $6,770 | $(315,253) | | Add: Other adjustments (Equity Comp, Goodwill, etc.) | $11,886 | $336,172 | | **Adjusted EBITDA (Non-GAAP)** | **$18,656** | **$20,919** | | **Adjusted EBITDA Margin** | **31%** | **33%** | [Other Information](index=4&type=section&id=Other%20Information) This section provides details on the upcoming conference call and important forward-looking statements [Conference Call Information](index=4&type=section&id=Conference%20Call%20Information) Definitive Healthcare will host a conference call on August 7, 2025, to discuss Q2 2025 financial results - A conference call to discuss Q2 2025 results is scheduled for August 7, 2025, at 5:00 p.m. EDT[11](index=11&type=chunk) [Forward-Looking Statements](index=5&type=section&id=Forward-Looking%20Statements) The report contains forward-looking statements regarding future performance, subject to risks that could cause actual results to differ - The report includes forward-looking statements concerning financial guidance, future prospects, and market conditions, which are not guarantees of future performance[13](index=13&type=chunk) - Key risks that could cause actual results to differ include geopolitical tension, macroeconomic conditions, inability to acquire new customers, market competition, and potential security breaches[14](index=14&type=chunk)

Core Viewpoint - Definitive Healthcare Corp. will report its financial results for the second quarter of 2025 on August 7, 2025, after market close, and will host a conference call to discuss these results [1]. Group 1 - The financial results will cover the period ended June 30, 2025 [1]. - A conference call and webcast will take place at 5:00 PM (ET) / 2:00 PM (PT) on the same day [1]. - The event will be accessible via a live audio webcast on the company's Investor Relations website [2]. Group 2 - A live dial-in option will be available for participants, with domestic and international numbers provided [2]. - A replay of the conference call will be available until September 6, 2025, with specific access numbers and a passcode [2]. Group 3 - Definitive Healthcare aims to transform data, analytics, and expertise into healthcare commercial intelligence, helping clients identify markets and opportunities [3]. - The company offers SaaS products and solutions designed to facilitate commercial success in the healthcare market [3].

Core Viewpoint - Definitive Healthcare Corp. reported quarterly earnings of $0.05 per share, exceeding the Zacks Consensus Estimate of $0.02 per share, but down from $0.08 per share a year ago, indicating a 150% earnings surprise [1][2] Financial Performance - The company achieved revenues of $59.19 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 5.71%, although this represents a decline from $63.48 million in the same quarter last year [2] - Over the last four quarters, Definitive Healthcare has exceeded consensus EPS estimates three times and topped consensus revenue estimates four times [2] Stock Performance - Definitive Healthcare shares have declined approximately 33.8% since the beginning of the year, contrasting with the S&P 500's decline of 4.3% [3] - The current consensus EPS estimate for the upcoming quarter is $0.05 on revenues of $58.14 million, and for the current fiscal year, it is $0.21 on revenues of $234.84 million [7] Industry Outlook - The Internet - Software industry, to which Definitive Healthcare belongs, is currently ranked in the top 37% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8]

Financial Data and Key Metrics Changes - Total revenue for Q1 2025 was $59.2 million, down 7% year over year, but above the high end of guidance [5][21] - Adjusted EBITDA was $14.7 million, representing a 25% margin, which was well ahead of expectations [6][21] - Unlevered free cash flow for the trailing twelve months was $67.1 million, down 12% year over year, with a 91% conversion from adjusted EBITDA [27][28] Business Line Data and Key Metrics Changes - Subscription revenue declined 7% year over year, while Professional Services revenue grew by 9% in the quarter [23] - Adjusted gross profit was $47.1 million, down 11% from Q1 2024, with an adjusted gross profit margin of 79.5% [23] - Adjusted operating income was $12 million, down 35% from Q1 2024, with an adjusted EBITDA margin of 25% [26] Market Data and Key Metrics Changes - Renewal rates stabilized in Q1 at levels observed in the second half of 2024, but retention rates remain lower than desired [8][9] - New logo activity was solid across all end markets, indicating ongoing demand for differentiated actionable data [8] Company Strategy and Development Direction - The company is focusing on four strategic pillars: differentiated data, seamless integration, customer success, and digital engagement [9][18] - The goal is to improve retention rates and return to growth by enhancing the value proposition and performance across these areas [18] - The company is committed to managing costs while identifying additional ways to drive efficiencies [19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in operational strategies despite economic uncertainties, aiming for sequential revenue growth in the near term [19] - The company is tightening its revenue guidance for 2025 to $234 million to $240 million, reflecting a 5% to 7% decline year over year [33] Other Important Information - The company repurchased approximately 5.6 million shares for a total of $21.2 million, leaving $77 million remaining under the existing authorization [29] - A goodwill impairment of $176.5 million was recorded due to stock price decline, which is a non-cash accounting charge [30] Q&A Session Summary Question: Can you elaborate on data integrations and their impact on retention? - Management indicated that data sharing and integration are crucial for enhancing customer retention, with a focus on facilitating data interactions through various platforms [37][39] Question: What is the agency strategy and its impact on the go-to-market motion? - The agency strategy is seen as applicable across all customer segments, aiming to leverage differentiated data to help customers activate their data effectively [41][43] Question: What is the expected timeframe for seeing growth inflection from operational changes? - Management expects to see signs of growth within the year as operational changes take effect, with a focus on aligning support functions and customer engagement [45][47] Question: How does the company plan to address churn and customer retention? - Management noted that while churn remains a challenge, stabilization is encouraging, and operational actions are expected to improve renewal rates later in the year [77][78] Question: What is the competitive environment like, especially against other pharma services companies? - Management acknowledged pressures in the Life Sciences sector due to macroeconomic factors but emphasized the company's focus on quality data as a competitive advantage [78][80]

Financial Data and Key Metrics Changes - Total revenue for Q1 2025 was $59.2 million, down 7% year over year, but above the high end of guidance [5][21] - Adjusted EBITDA was $14.7 million, representing a 25% margin, which was well ahead of expectations [6][21] - Unlevered free cash flow for the trailing twelve months was $67.1 million, down 12% year over year, with a 91% conversion from adjusted EBITDA [27][28] Business Line Data and Key Metrics Changes - Subscription revenue declined 7% year over year, while Professional Services revenue grew 9% in the quarter [23] - Adjusted gross profit was $47.1 million, down 11% from Q1 2024, with a gross profit margin of 79.5% [23] - Adjusted operating income was $12 million, down 35% from Q1 2024, with an operating income margin of 20% [26] Market Data and Key Metrics Changes - New logo activity was solid across all end markets, indicating ongoing demand for differentiated actionable data [7] - Renewal rates stabilized in Q1 at levels observed in the second half of 2024, but retention rates remain lower than desired [7][8] Company Strategy and Development Direction - The company is focusing on four strategic pillars: differentiated data, seamless integration, customer success, and digital engagement [9][18] - There is a commitment to improving retention rates and enhancing the value proposition through targeted investments in data quality and customer engagement [18][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in operational strategies despite lower retention rates, indicating a lag in seeing the positive impacts of changes made [8][19] - The company remains on track to meet full-year financial targets, with expectations for sequential revenue growth in the near term [19][33] Other Important Information - The company experienced a goodwill impairment of $176.5 million due to stock price decline, which is a non-cash accounting charge [29] - The company repurchased approximately 5.6 million shares for a total of $21.2 million, leaving $77 million remaining under the existing authorization [28] Q&A Session Summary Question: Can you elaborate on data integrations and challenges? - Management indicated that data sharing and integration depend on various factors, including data security and system compatibility, and they are working to facilitate these integrations [36][40] Question: What is the agency strategy and its impact on the go-to-market motion? - The agency strategy is seen as a logical next step to help customers activate data, applicable across all customer segments, with expectations for contributions this year [41][43] Question: What is the expected timeframe for seeing growth inflection? - Management anticipates seeing improvements in growth rates within the year as operational changes take effect [46][48] Question: How does the company plan to win back customers? - The company believes that high-quality data and service will create a competitive advantage, allowing them to win back former customers while also acquiring new ones [49][50] Question: What is the churn rate and competitive environment? - Churn rates were consistent with the second half of the previous year, and while there are pressures in the market, management has not observed significant changes in competitive dynamics [77][78]

Q1 2025 Performance - Total revenue decreased by 7% year-over-year to $59.2 million[16] - Adjusted EBITDA declined by 27% year-over-year, reaching $14.7 million[18] - Adjusted EBITDA margin contracted by 670 basis points year-over-year to 25%[18] - Unlevered Free Cash Flow (uFCF) was $22.9 million, a 19% decrease year-over-year[21] - Cash, cash equivalents, and short-term investments totaled $200.7 million, a 32% decrease year-over-year[21] Revenue Mix - Subscription revenue, constituting 97% of the total, experienced a 7% year-over-year decline[17] - Professional Services revenue, accounting for 3% of the total, grew by 9% year-over-year[17] Q2 and FY 2025 Guidance - The company projects Q2 2025 revenue to be between $58.5 million and $60.0 million, representing a year-over-year decrease of 8% to 6%[25] - The company anticipates full-year 2025 revenue to be between $234.0 million and $240.0 million, a year-over-year decrease of 7% to 5%[25] - The company expects full-year 2025 Adjusted EBITDA to be between $61.0 million and $65.0 million, representing 26% to 28% of revenue[25] Shareholder Statistics - Sponsor ownership (as-if converted) is 77,778,491 shares, representing 52.3% of total ownership[30] - Management, Directors & employees ownership is 25,424,644 shares, representing 17.1% of total ownership[30] - Float is 45,438,239 shares, representing 30.6% of total ownership[30]