Company Performance - Health Catalyst reported quarterly earnings of $0.01 per share, matching the Zacks Consensus Estimate, but down from $0.05 per share a year ago [1] - The company posted revenues of $79.41 million for the quarter ended March 2025, exceeding the Zacks Consensus Estimate by 0.21% and up from $74.72 million year-over-year [2] - Over the last four quarters, Health Catalyst has surpassed consensus revenue estimates three times [2] Stock Movement and Outlook - Health Catalyst shares have declined approximately 42.4% since the beginning of the year, compared to a 4.7% decline in the S&P 500 [3] - The company's future stock performance will largely depend on management's commentary during the earnings call and the earnings outlook [4][6] - The current consensus EPS estimate for the upcoming quarter is $0.10 on revenues of $82.87 million, and for the current fiscal year, it is $0.29 on revenues of $334.67 million [7] Industry Context - The Medical Info Systems industry, to which Health Catalyst belongs, is currently ranked in the top 27% of over 250 Zacks industries, indicating a favorable outlook compared to lower-ranked industries [8] - Another company in the same industry, Nyxoah SA, is expected to report a quarterly loss of $0.49 per share, with revenues projected to be $1.59 million, reflecting a 19.7% increase year-over-year [9]

Financial Data and Key Metrics Changes - Total revenue for Q1 2025 was $79.4 million, representing a 6% year-over-year increase [25][26] - Adjusted EBITDA for Q1 2025 was $6.3 million, exceeding guidance of approximately $4 million [26][30] - Technology revenue was $51.5 million, reflecting a 10% year-over-year growth [26][30] - Professional services revenue was $27.9 million, a 1% increase compared to Q1 2024 [26] - Total adjusted gross margin was 49%, a decrease of approximately 210 basis points year-over-year [26] - Adjusted technology gross margin was 67%, down approximately 120 basis points year-over-year [26] - Adjusted professional services gross margin was 16%, down approximately 630 basis points year-over-year [26] Business Line Data and Key Metrics Changes - The technology segment showed strong performance with a 10% revenue growth year-over-year [26] - Professional services revenue growth was modest at 1% year-over-year [26] - The shift to the Ignite platform is expected to enhance profitability, with Ignite clients showing an 80/20 revenue mix favoring technology over services [9][51] Market Data and Key Metrics Changes - The company added 10 net new platform clients in Q1 2025, with two-thirds coming from existing app clients [7][22] - The average total ARR and non-recurring revenue per net new platform client was around the midpoint of $300,000 to $700,000 [7][22] - The company anticipates achieving approximately 40 net new platform clients for the full year 2025 [22][30] Company Strategy and Development Direction - The strategic shift to the Ignite platform is aimed at providing a more flexible, lower-cost solution compared to the legacy DOS model [8][9] - Ignite's modularity allows for quicker sales cycles and a more streamlined decision-making process for clients [41] - The company is focusing on cross-selling additional applications to existing clients to offset any reductions in total client spend [12][20] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the strong operating margins in health systems, despite potential uncertainties in Medicaid and research funding [18][20] - The company expects Ignite to be more resilient than the legacy DOS model in uncertain economic conditions [20] - Management anticipates that the majority of Ignite migrations will be completed by mid-2026, which should positively impact gross margins [11][81] Other Important Information - The company executed a $5 million share repurchase in March 2025, representing approximately 1.1 million shares [23] - Cash, cash equivalents, and short-term investments at the end of Q1 2025 were $342 million, down from $392 million at year-end 2024 [29] Q&A Session Summary Question: Can you provide more color on the decision-making process with the modular strategy? - Management noted that the lower price point of Ignite reduces the number of approvals needed, leading to shorter sales cycles and increased net new platform client additions [37][41] Question: Should we expect a different cadence in adding new customers? - Management indicated that while budget alignment still matters, the flexibility of Ignite may lead to a smoother cadence throughout the year [42] Question: What is driving the higher weighting of tech versus services with Ignite? - The modular and flexible nature of Ignite allows for easier implementation and a focus on specific use cases, resulting in a higher tech revenue mix [49][51] Question: How is the average starting ARR accounted for? - The $300,000 to $700,000 average applies to new net new platform clients, with existing clients migrating to Ignite potentially impacting dollar-based retention metrics [56][58] Question: What is the expected timing for tech adjusted gross profit margin uplift? - Management expects to see improvements in tech adjusted gross profit margins in the second half of 2025 as Ignite migrations progress [80][81] Question: How will professional services revenue ramp in the second half of the year? - Delays in health information exchange deals and late-stage opportunities are expected to push some revenue into the second half of 2025 [86][89]

Financial Data and Key Metrics Changes - Total revenue for Q1 2025 was $79.4 million, representing a 6% year-over-year increase [26] - Adjusted EBITDA for Q1 2025 was $6.3 million, exceeding guidance [26] - Technology revenue for Q1 2025 was $51.5 million, reflecting a 10% year-over-year growth [27] - Professional services revenue for Q1 2025 was $27.9 million, a 1% increase compared to Q1 2024 [27] - Total adjusted gross margin was 49%, a decrease of approximately 210 basis points year-over-year [27] - Adjusted technology gross margin was 67%, a decrease of approximately 120 basis points year-over-year [27] - Adjusted professional services gross margin was 16%, a decrease of approximately 630 basis points year-over-year [27] Business Line Data and Key Metrics Changes - The technology segment showed strong performance with a 10% revenue growth year-over-year [27] - Professional services revenue growth was modest at 1% year-over-year [27] - The shift to the Ignite platform is expected to enhance profitability, with Ignite clients showing an 80/20 revenue mix favoring technology over services [52] Market Data and Key Metrics Changes - The company added 10 net new platform clients in Q1 2025, with two-thirds coming from existing app clients [6] - The average total ARR and non-recurring revenue per net new platform client was around the midpoint of $300,000 to $700,000 [6][23] - The company anticipates achieving approximately 40 net new platform clients for the full year 2025 [23] Company Strategy and Development Direction - The strategic shift to the Ignite platform is aimed at providing a more flexible, modular, and cost-effective solution compared to the legacy DOS model [8] - Ignite's lower entry price point is expected to accelerate sales cycles and enhance cross-selling opportunities [8] - The company is focusing on organic growth and capital allocation, with a recent $5 million share repurchase [24] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the resilience of Ignite in the face of macroeconomic challenges, including potential funding cuts [20] - The company expects to complete the majority of Ignite migrations by mid-2026, with two-thirds expected by the end of 2025 [11] - Management noted that the operating margins remain strong and stable, despite some uncertainties in the market [19] Other Important Information - The company ended Q1 2025 with $342 million in cash and short-term investments [30] - The face value of the term loan is $162 million, and the convertible notes were paid off in full on April 14, 2025 [30] - The company expects total revenue of approximately $80.5 million and adjusted EBITDA of approximately $8 million for Q2 2025 [31] Q&A Session Summary Question: Can you provide more color on the decision-making process with the modular strategy versus DOS? - The modularity and lower price point of Ignite allow for quicker decision-making and shorter sales cycles, making it easier to provide tangible value to clients [38][39] Question: Should we expect a different cadence in customer additions? - There may be a smoothing of customer additions throughout the year due to the flexibility of the offering, rather than being strictly aligned with budget seasons [44] Question: What is driving the higher weighting of tech versus services in Ignite? - The lower price point and specific use cases associated with Ignite lead to a higher technology-driven solution, requiring less service delivery compared to DOS [49][52] Question: How is the average starting ARR accounted for? - The $300,000 to $700,000 average applies to new net platform clients, with existing clients migrating to Ignite potentially reflecting a headwind in dollar-based retention metrics [57][59] Question: What is the expected timing for tech margins to improve? - An uplift in tech adjusted gross profit margins is expected in the second half of the year as the migration process progresses [80][81]

Financial Performance - Total revenue for Q1 2025 was $79.4 million, representing a 6% increase from $74.7 million in Q1 2024[4] - Adjusted EBITDA for Q1 2025 was $6.3 million, an 86% increase compared to $3.4 million in Q1 2024[4] - Gross profit for Q1 2025 was $28.7 million, with a gross margin of 36%, down from 39% in Q1 2024[4] - The net loss for Q1 2025 was $23.7 million, compared to a net loss of $20.6 million in Q1 2024, reflecting a 15% increase in losses[4] - For the three months ended March 31, 2025, the company reported a net loss of $23,742,000, compared to a net loss of $20,587,000 for the same period in 2024, representing an increase in loss of approximately 10.4%[22] - Total revenue for the three months ended March 31, 2025, was $79,413,000, up from $74,723,000 in the same period of 2024, indicating a year-over-year growth of about 6.5%[28] - Adjusted EBITDA for the three months ended March 31, 2025, was $6,279,000, compared to $3,377,000 in 2024, showing a significant increase of about 86.5%[33] - Adjusted Net Income for the three months ended March 31, 2025, was $328,000, compared to $2,707,000 in 2024, indicating a decrease of approximately 87.9%[34] - The company reported a net cash provided by operating activities of $280,000 for the three months ended March 31, 2025, a significant decrease from $10,266,000 in 2024[22] Client Growth - The company added 10 net new Platform Clients in Q1 2025, contributing to a target of 40 net new additions for the full year[3] Future Projections - For Q2 2025, the company expects total revenue of approximately $80.5 million and Adjusted EBITDA of approximately $8 million[6] - For the full year 2025, total revenue is projected to be approximately $335 million, with technology revenue expected to be around $220 million[6] Cash and Assets - Cash and cash equivalents as of March 31, 2025, were $342 million, up from $250 million as of December 31, 2024[13] - Total assets increased to $891.5 million as of March 31, 2025, compared to $858.9 million as of December 31, 2024[13] - The company reported a total stockholders' equity of $376.8 million as of March 31, 2025, compared to $365.2 million at the end of 2024[13] - The company’s cash and cash equivalents at the end of the period were $341,968,000, up from $201,370,000 at the end of the same period in 2024, representing a growth of approximately 69.8%[22] Cost and Expenses - Adjusted Gross Profit for the three months ended March 31, 2025, was $39,048,000, compared to $38,319,000 in 2024, reflecting an increase of approximately 1.9%[28] - The company’s Adjusted Gross Margin for the three months ended March 31, 2025, was 49%, compared to 51% in 2024, reflecting a decline of about 2 percentage points[28] - The company incurred acquisition-related costs of $3,029,000 for the three months ended March 31, 2025, compared to $813,000 in 2024, representing an increase of approximately 272.5%[34] - Stock-based compensation expense for the three months ended March 31, 2025, was $7,543,000, down from $10,838,000 in 2024, indicating a decrease of about 30.5%[33] Non-recurring Charges - Non-recurring lease-related charges include an impairment charge related to corporate office space designated for subleasing[36]

Core Insights - Health Catalyst reported strong financial results for Q1 2025, with total revenue of $79.4 million, exceeding guidance, and Adjusted EBITDA of $6.3 million, reflecting an 86% increase year-over-year [2][38] - The company added 10 net new Platform Clients in Q1 2025, contributing to confidence in achieving the target of 40 net new Platform Client additions for the year [2][38] - The financial outlook for Q2 2025 includes expected total revenue of approximately $80.5 million and Adjusted EBITDA of around $8 million [4][38] Financial Performance - Total revenue for Q1 2025 was $79.4 million, a 6% increase from $74.7 million in Q1 2024 [3][38] - Gross profit decreased slightly to $28.7 million, with a gross margin of 36%, down from 39% in the previous year [3][38] - The net loss for the quarter was $23.7 million, compared to a net loss of $20.6 million in Q1 2024, indicating a 15% increase in losses [3][38] - Adjusted Gross Profit was $39.0 million, with an Adjusted Gross Margin of 49%, down from 51% year-over-year [3][38] Client Growth and Market Position - The addition of 10 net new Platform Clients in Q1 2025 is significant, especially as Q1 is typically a quieter period for bookings [2][38] - The company anticipates achieving approximately halfway to the target of 40 net new Platform Clients by the end of Q2 2025 [38] Future Guidance - For the full year 2025, total revenue is projected to be around $335 million, reflecting a 9% increase [4][38] - The technology business unit is expected to generate approximately $220 million in revenue, a 13% increase [4][38] - Adjusted EBITDA for the full year is forecasted to be approximately $41 million, representing a 57% increase [4][38] Operational Insights - Health Catalyst's Ignite platform continues to gain traction, with recent client wins highlighting its momentum in the market [38] - The company remains confident in its ability to drive profitability despite a dynamic macroeconomic environment, with expectations for improved stock-based compensation as a percentage of revenue by 2026 [38]

Core Insights - Health Catalyst has announced a strategic partnership with Microsoft to enhance operational, clinical, and financial performance in healthcare through AI-driven innovation [1][2] - The collaboration leverages Health Catalyst's expertise with Microsoft Azure and Azure AI Foundry to provide advanced AI solutions for healthcare organizations [2][4] - The partnership aims to transform data and analytics into actionable insights, driving sustainable performance improvements for healthcare providers [4][5] Company Overview - Health Catalyst is a leading provider of data and analytics technology and services, serving over 1,000 organizations globally [5] - The company offers a cloud-based technology ecosystem, Health Catalyst Ignite™, and AI-enabled data and analytics solutions to improve clinical, financial, and operational outcomes [5] - Health Catalyst has a proven track record of delivering billions of dollars in measurable results, emphasizing its commitment to data-informed healthcare improvement [5] Product Offerings - Healthcare.AI™ and Health Catalyst Ignite™ are currently available on the Azure Marketplace, with additional solutions to be introduced [3] - These offerings enable healthcare organizations to address challenges in data analytics, cybersecurity, financial, and operational improvements [3] Strategic Goals - The partnership is designed to help healthcare organizations achieve their goals for 2025 and beyond by moving from data analytics to reliable actions and sustained outcomes [4] - The collaboration combines machine intelligence with healthcare expertise to accelerate AI-driven outcomes and optimize decision-making [4]

Core Insights - Health Catalyst, Inc. will release its first quarter 2025 operating results on May 7, 2025, after market close [1] - A conference call will be held at 5:00 pm ET on the same day to review the results [1] Conference Call Details - The conference call can be accessed by dialing 800-343-5172 for U.S. participants or 203-518-9856 for international participants, referencing conference ID "HCATQ125" [2] - A live audio webcast will be available online and a replay will be accessible for approximately 90 days [2] Company Overview - Health Catalyst is a leading provider of data and analytics technology and services aimed at improving healthcare outcomes [3] - The company serves over 1,000 organizations globally, utilizing its cloud-based technology ecosystem, Health Catalyst Ignite™, and AI-enabled solutions [3] - Health Catalyst has a proven track record of delivering billions of dollars in measurable results, focusing on transforming complex healthcare data into actionable insights [3]

Core Insights - Health Catalyst, Inc. has launched Health Catalyst Ignite Spark™, a data and analytics solution specifically designed for community health systems, regional hospitals, and multi-site practices [1][2] - Ignite Spark aims to address the challenges faced by smaller community health systems, including shrinking margins and the need for efficient data management [2][3] - The solution is built to integrate with existing systems, providing enterprise-grade analytics while reducing IT burdens and costs [3][4] Company Overview - Health Catalyst is a leading provider of data and analytics technology and services, serving over 1,000 organizations globally [5] - The company focuses on transforming complex healthcare data into actionable insights, leveraging AI-driven solutions to enhance clinical, financial, and operational outcomes [5][6] - Health Catalyst has a proven track record of delivering billions of dollars in measurable results, emphasizing its commitment to improving healthcare through data-informed strategies [5]

Core Insights - Health Catalyst (NASDAQ: HCAT) is highlighted as a valuable addition to the Bio Boom Portfolio, indicating its potential for growth and investment opportunity [1]. Company Overview - The article emphasizes the author's long-term investment in Health Catalyst, suggesting confidence in the company's future performance [2]. - The author has a background in healthcare investment, focusing on innovative companies that develop breakthrough therapies and pharmaceuticals [1]. Investment Strategy - The investment strategy includes a focus on companies with catalysts for potential acquisitions, which may enhance their market value [1].

Group 1 - The stock of Health Catalyst, Inc. (HCAT) is experiencing significant attention due to high implied volatility in the options market, particularly the Apr 17, 2025 $12.50 Call option [1] - Implied volatility indicates the market's expectation of future price movement, suggesting that investors anticipate a significant change in Health Catalyst's stock price, potentially due to an upcoming event [2] - Health Catalyst currently holds a Zacks Rank 3 (Hold) in the Medical Info Systems industry, which is in the top 17% of the Zacks Industry Rank, with no analysts increasing their estimates for the current quarter and two revising them downwards [3] Group 2 - The recent high implied volatility for Health Catalyst may indicate a trading opportunity, as options traders often seek to sell premium on options with high implied volatility, hoping the stock does not move as much as expected by expiration [4]