Financial Data and Key Metrics Changes - Total revenue for full year 2024 was $307 million, representing a 4% year-over-year growth [7][33] - Adjusted EBITDA for full year 2024 was $26 million, a significant increase from $11 million in 2023, reflecting a 137% year-over-year growth [7][37] - Adjusted gross margin for full year 2024 was 49%, an increase of approximately 10 basis points year-over-year [36] Business Line Data and Key Metrics Changes - Technology segment revenue for full year 2024 was $195 million, with a 4% year-over-year growth [33] - Professional services revenue for full year 2024 was $112 million, representing a 3% year-over-year growth [34] - Adjusted technology gross margin for Q4 2024 was 65%, a decrease of approximately 200 basis points year-over-year due to initial deployment costs [35] Market Data and Key Metrics Changes - The company reported a dollar-based retention rate of 100% under the legacy definition for 2024, and 102% under the new definition focusing on technology and TEMs segments [15][19] - The company has over 1,000 total clients, combining platform and app clients, indicating a strong client base for future growth [12][13] Company Strategy and Development Direction - The company is focusing on cross-selling Ignite-enabled offerings to existing app clients, which is expected to drive future growth [12][19] - The company plans to exit unprofitable ambulatory TEMS pilots, representing approximately $9 million of annual professional services revenue, to prioritize profitable growth [21] - The company anticipates technology revenue to grow approximately 13% year-over-year in 2025, driven by the momentum of Ignite sales [42] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the operating environment, noting that health system operating margins are stabilizing and approaching pre-pandemic levels [18] - The company expects to add approximately 40 net new platform clients in 2025, with a focus on converting existing app clients [19][20] - Management highlighted the importance of the Ignite platform in driving future growth and improving client retention [24][80] Other Important Information - The company ended Q4 2024 with $392 million in cash and short-term investments, up from $387 million in Q3 2024 [38] - The company raised its expected adjusted EBITDA for 2025 by $2 million to approximately $41 million, reflecting better-than-expected integration progress from recent acquisitions [22] Q&A Session Summary Question: What is driving the acceleration in platform bookings in 2025? - Management noted improvements in the end market and the modular, flexible nature of the Ignite platform as key drivers for increased bookings [48][49] Question: Can you discuss the differences in the new Ignite platform versus DOS regarding annual escalators? - Management indicated that Ignite contracts typically have more modest annual escalators in the low to mid single-digit range compared to larger escalators with DOS [53] Question: How is the company managing the pace of migrations to Ignite? - Management is working closely with clients to manage migration pace responsibly, aiming to complete the majority of migrations by mid-2026 [60] Question: What is the visibility into growth in technology revenue after Q1? - Management expressed confidence in visibility for technology revenue growth, estimating approximately 10% year-over-year growth for Q1 [85]

Client Engagement and Growth - Health Catalyst has generated over 1,800 documented, client-verified improvements across clinical, financial, and operational domains, enabling substantial clinical improvements, financial savings, or operational efficiencies[38] - The company aims to grow its client base, targeting over 1,200 healthcare organizations, and plans to expand into international markets including Singapore, the UK, and Saudi Arabia[50] - As of December 31, 2024, the company served 130 Platform Clients and over 900 App Clients, with a focus on clients signing technology contracts with at least $100,000 of incremental total ARR and non-recurring revenue[39] - Health Catalyst's clients primarily include healthcare providers who utilize the company's solutions to manage data and derive analytical insights[19] - The company expects to derive a significant portion of revenue from the renewal of existing client contracts and sales of additional technology and services, which are critical for future growth[149] - Clients may terminate contracts before expiration for various reasons, including dissatisfaction with service levels, which could adversely affect future revenue[150] Innovation and Product Development - The company aims to expand its service offerings and develop new platform features, particularly through the rollout of Health Catalyst Ignite[16] - The Ignite Data & Analytics Platform is a healthcare-specific, cloud-based ecosystem that integrates and organizes data from disparate software systems, enabling clients to achieve measurable improvements across clinical, financial, and operational domains[39][41] - The Ignite platform supports both Health Catalyst solutions and client-developed applications, allowing for rapid product iteration and deployment[41] - The company focuses on continuous R&D to enhance usability and functionality of its solutions, responding to client feedback and market needs[78] - The company has developed a comprehensive suite of applications that leverage a data asset of over 100 million patient records to uncover actionable insights for clients[56] Financial Performance and Revenue - The recurring revenue subscription model provides high revenue visibility, with a Dollar-based Retention Rate for Platform Clients maintained at 100% for the years ended December 31, 2024, 2023, and 2022[43][50] - The company derives a significant portion of its revenue from its largest clients, with the three largest clients in 2024 accounting for 13.8% of total revenue, compared to 12.6% in 2023[174] - The company recognizes technology and professional services revenue ratably over the term of contracts, which may delay the impact of downturns in business on reported results[177] - A significant portion of operating expenses is fixed in nature, leading to potential decreases in gross margins and profitability if unexpected revenue shortfalls occur[155] Market and Competitive Environment - The company operates in a highly competitive environment, and failure to innovate could adversely affect revenue and results of operations[18] - The company faces intense competition in the healthcare solutions market, impacting its ability to maintain or expand its client base[121] - Changes in the healthcare industry could negatively affect demand for the company's solutions and complicate contract negotiations[125] - The company must continue to innovate and adapt to market changes to remain competitive, as failure to do so could negatively impact revenue and operations[146] Regulatory and Compliance Challenges - The company emphasizes compliance with evolving data privacy and security laws, which govern the handling of health-related personal information[85] - Compliance with evolving federal and state laws and regulations may require significant changes to business practices, potentially incurring substantial costs[94] - The FDA regulates certain medical software as medical devices, which may require premarket clearance or approval depending on the risk classification[95] - The company operates in a regulatory environment that may require compliance with additional laws and regulations as new services are introduced[94] - The company is subject to evolving regulatory frameworks for AI Technologies, which may require significant resources to ensure compliance and could increase operating expenses[171] Team Member Engagement and Culture - Client engagement is a priority, with a focus on attracting, developing, and retaining highly-qualified employees, which is essential for long-term success[21] - The company emphasizes the importance of team member engagement, achieving a consistent ranking in the 94th to 99th percentile as measured by Gallup[22] - The company emphasizes team member engagement as a top priority, which is foundational to its operational success and client relationships[107] - The company has received 110 recognitions as a "best place to work" from various organizations, reflecting strong team member engagement[76] Risks and Challenges - Macroeconomic challenges, including high inflation and interest rates, could impact the company's financial condition and results of operations[18] - The company may face increased software development and administrative expenses if it needs to update services to comply with changing interoperability standards[93] - Cybersecurity threats pose risks to the company’s information technology systems, potentially leading to data breaches and operational disruptions[196] - Unauthorized access or security breaches could result in loss of information, litigation, and damage to reputation[199] Acquisitions and Growth Strategy - The company has a history of acquisitions to enhance its product portfolio, including notable acquisitions such as Medicity and Vitalware, which have contributed to its growth strategy[50] - The company has acquired multiple businesses between January 1, 2020, and January 31, 2025, including Able Health, Healthfinch, and others, which may pose integration challenges and affect financial performance[182] - Future acquisitions could lead to dilutive equity issuances or increased debt, adversely impacting the company's financial condition and results of operations[184] Management and Organizational Structure - The management team consists of healthcare and data veterans with extensive experience in leading digital transformation in health systems, underpinning the company's strategic direction[48] - The company’s success is heavily dependent on its senior management team, and any loss of key executives could disrupt operations and delay business objectives[186] - The company must effectively manage organizational changes and growth to avoid operational mistakes and ensure client satisfaction[190]

Revenue Performance - Total revenue for the full year 2024 was $307 million, with a 4% increase compared to $295.9 million in 2023[2] - Total revenue for Q4 2024 reached $79.606 million, a 6.7% increase from $75.084 million in Q4 2023[20] - For the twelve months ended December 31, 2024, total revenue was $306,584,000, a 3.4% increase from $295,938,000 in 2023[34][37] Segment Performance - Technology segment revenue reached $195 million for the full year 2024, representing a 10% year-over-year growth[2] - Technology revenue increased to $51.598 million, up 9.5% from $47.100 million year-over-year[20] Profitability Metrics - Adjusted EBITDA for the full year 2024 was $26 million, a 137% increase from $11 million in 2023[2] - Adjusted EBITDA for Q4 2024 was $7,911,000, compared to $1,352,000 in Q4 2023, indicating significant operational improvement[39] - Adjusted Gross Profit for 2024 was calculated by excluding non-cash expenses, providing a clearer view of operational performance[27] - Adjusted Gross Profit for Q4 2024 was $37,121,000, representing an increase of 7.3% from Q4 2023's adjusted gross profit of $34,693,000[30][32] - Adjusted Gross Margin for Q4 2024 improved to 47%, up from 46% in Q4 2023[30][32] - Adjusted Gross Profit for the twelve months ended December 31, 2024, was $149,533,000, compared to $144,060,000 in 2023, reflecting a growth of 3.1%[34][37] - Adjusted Gross Margin for the twelve months ended December 31, 2024, was 49%, consistent with the previous year's margin[34][37] Net Loss and Improvements - The company reported a net loss of $20.7 million for Q4 2024, a 32% improvement compared to a net loss of $30.3 million in Q4 2023[3] - Net loss for Q4 2024 was $20,673,000, an improvement from a net loss of $30,312,000 in Q4 2023[20] - The net loss for the full year 2024 was $69.502 million, an improvement from a net loss of $118.147 million in 2023[42] Cash and Assets - Cash and cash equivalents as of December 31, 2024, were $249.6 million, compared to $106.3 million in 2023[18] - Total assets increased to $858.9 million in 2024, up from $701.8 million in 2023[18] - Cash and cash equivalents at the end of Q4 2024 were $249.645 million, significantly up from $106.276 million at the end of Q4 2023[26] Client and Retention Metrics - The number of Platform Clients increased to 130 in 2024, up from 109 in 2023[7] - The Dollar-based Retention Rate for Tech + TEMS was 102% as of December 31, 2024[7] Cost Management - Operating expenses decreased to $52.191 million in Q4 2024, down from $63.293 million in Q4 2023, reflecting a 17.4% reduction[20] - Stock-based compensation expense for the year 2024 totaled $40.128 million, down from $55.756 million in 2023[26] - Acquisition-related costs for Q4 2024 totaled $4,333,000, up from $2,655,000 in Q4 2023, reflecting ongoing integration efforts[39] - Restructuring costs in Q4 2024 were $0, down from $6,767,000 in Q4 2023, indicating a stabilization in workforce-related expenses[39] - Non-cash interest expense related to debt for the full year 2024 was $3.256 million, up from $1.511 million in 2023[42] Future Outlook - The company raised its 2025 Adjusted EBITDA target to approximately $41 million, an increase of $2 million from previous guidance[2] - The company plans to continue focusing on market expansion and new product development to drive future growth[20] - The company aims to improve operational performance by focusing on eliminating non-recurring charges and enhancing core business metrics[42]

Core Insights - Health Catalyst, Inc. reported strong financial performance for the full year 2024, achieving total revenue of $307 million and Adjusted EBITDA of $26 million, with expectations for continued growth in 2025 [2][4][11] - The Technology segment generated $195 million in revenue for 2024, reflecting a 10% year-over-year growth, and is anticipated to grow faster than the overall business in 2025 [2][4] - The company has made leadership changes, including the appointment of Dr. Jill Hoggard Green to the Board of Directors and promotions within the leadership team [3] Financial Performance - For Q4 2024, total revenue was $79.6 million, a 6% increase from $75.1 million in Q4 2023 [4] - Gross profit for Q4 2024 was $28.6 million, up 20% from $23.9 million in Q4 2023, resulting in a gross margin of 36% [4] - The net loss for Q4 2024 was $20.7 million, a 32% improvement compared to a net loss of $30.3 million in Q4 2023 [4] Key Metrics - The number of Platform Clients increased to 130 in 2024, up from 109 in 2023 [5] - The Dollar-based Retention Rate for the Technology segment and Tech-Enabled Managed Services (TEMS) was 102% [7] - Cash and cash equivalents at the end of 2024 were $249.6 million, significantly higher than $106.3 million at the end of 2023 [17][24] Financial Outlook - For Q1 2025, the company expects total revenue of approximately $79 million and Adjusted EBITDA of approximately $4 million [11] - For the full year 2025, total revenue is projected to be approximately $335 million, with Technology revenue expected to reach approximately $220 million and Adjusted EBITDA targeted at approximately $41 million [11]

Company Overview - Health Catalyst, Inc. is a leading provider of data and analytics technology and services for healthcare organizations [3] - The company offers a cloud-based technology ecosystem called Health Catalyst Ignite™, AI-enabled data and analytics solutions, and expert services [3] - More than 1,000 organizations globally rely on Health Catalyst's offerings to drive measurable clinical, financial, and operational improvements [3] Upcoming Financial Results - Health Catalyst will release its fourth quarter and full year 2024 operating results on February 26, 2025, after market close [1] - A conference call to review the results will be held at 5:00 pm ET on the same day [1] Conference Call Details - U.S. participants can access the conference call by dialing 800-343-5172, while international participants can call 203-518-9856, referencing conference ID "HCATQ424" [2] - A live audio webcast will be available online, with a replay accessible shortly after the call for approximately 90 days [2]

Core Viewpoint - Health Catalyst, Inc. has signed a definitive agreement to acquire Upfront Healthcare Services, Inc., aiming to enhance patient engagement and experience through the integration of Upfront's technology with Health Catalyst's existing offerings [1][6]. Company Overview - Health Catalyst is a leading provider of data and analytics technology and services for healthcare organizations, with over 1,000 clients globally relying on its solutions to drive clinical, financial, and operational improvements [7]. - Upfront Healthcare is a mission-driven company that offers a patient engagement platform, utilizing data analytics to personalize patient outreach and improve care experiences [8][9]. Acquisition Details - The acquisition is expected to close in the first quarter of 2025, with Health Catalyst planning to fund the transaction through a mix of cash and stock [1][6]. - Upfront's platform focuses on patient activation and engagement, providing automated solutions for patient acquisition and retention, which will complement Health Catalyst's existing patient engagement tools [2][3]. Strategic Benefits - The combination of Upfront's expertise in patient acquisition and scheduling with Health Catalyst's robust patient engagement portfolio is anticipated to enhance the overall patient experience [3][4]. - The integration of Upfront's technology with Health Catalyst Ignite™ Data and Analytics aims to provide healthcare clients with improved patient care through data-driven insights [5][6].

Core Insights - Health Catalyst, Inc. has announced a multi-year partnership with OrthoNebraska to enhance orthopedic care through data and analytics technology [1][5] - The partnership will utilize Health Catalyst Ignite™, a comprehensive data and analytics ecosystem designed to improve patient outcomes and operational efficiency [2][5] Company Overview - Health Catalyst is a leading provider of data and analytics technology for healthcare organizations, with over 1,000 clients globally and a focus on measurable clinical, financial, and operational improvements [6] - OrthoNebraska is the largest orthopedic provider in eastern Nebraska and southwestern Iowa, offering a wide range of services including surgical and non-surgical interventions [7] Partnership Details - OrthoNebraska will access Health Catalyst Expert Data Collections™, integrating various clinical, financial, and patient experience data into a unified model for better decision-making [3][4] - The partnership aims to simplify and personalize the healthcare experience by providing near real-time information to specialized teams [4] Operational Support - Health Catalyst will provide ongoing operational support to OrthoNebraska, including data source configuration, governance, and security administration [4][5] - The Ignite platform is designed to be scalable and purpose-built for healthcare, enabling OrthoNebraska to achieve its goals in delivering exceptional patient care [5]

Core Insights - Health Catalyst, Inc. has been recognized as a leader in innovation in the Frost Radar™: US Population Health Management, 2024 report, solidifying its position in the competitive population health management market [1][2][3] Company Overview - Health Catalyst provides data and analytics technology and services to healthcare organizations, focusing on enhancing care delivery and outcomes through its Population Health suite, which includes financial and quality benchmarking tools, administrative support, and advanced analytics [2][3] - The company has a multi-decade mission dedicated to equipping healthcare organizations with tools for data-informed healthcare improvement and operational efficiency [3][6] Innovation and Growth - The report highlights Health Catalyst's optimization efforts, including custom configuration, a pre-built rules engine, and superior data management capabilities, which contribute to the success of population health management initiatives [3][4] - Health Catalyst's proactive approach to innovation is underscored by its strategic acquisitions, such as Carevive and Lumeon, which enhance its capabilities in oncology care management and patient communication [3][5] Market Position - Analysts commend Health Catalyst's balanced focus on growth and innovation, which positions the company well to meet the needs of clients of all sizes [4][5] - The company's strategic expansion into underserved segments, including ambulatory practices and smaller healthcare organizations, further solidifies its leadership in the population health management market [5]

Investment Thesis - The company, Health Catalyst (NASDAQ: HCAT), is recommended as a buy due to expected growth acceleration driven by an improved macro environment and traction with the Ignite platform [1] - The investment is considered ideal if the company operates in a sector projected to experience structural (organic) growth exceeding GDP growth over the next 5-10 years [1] - The company should profit from sustainable competitive advantages that translate into attractive unit economics [1] - The company should be managed by competent, ethical, and long-term thinkers [1] - The company should have a fair valuation [1] Analyst's Position - The analyst has no stock, option, or similar derivative position in any of the companies mentioned and no plans to initiate any such positions within the next 72 hours [1] - The article expresses the analyst's own opinions and is not receiving compensation for it (other than from Seeking Alpha) [1] - The analyst has no business relationship with any company whose stock is mentioned in the article [1]

SALT LAKE CITY, Nov. 20, 2024 /PRNewswire/ -- Health Catalyst, Inc. ("Health Catalyst,"  Nasdaq: HCAT), a leading provider of data and analytics technology and services to healthcare organizations, today announced the launch of an AI-powered version of BluePrint Protect™ from Intraprise Health, LLC ("Intraprise Health"), a platform that empowers healthcare organizations to screen and identify risks related to cybersecurity threats through third parties.On Nov. 6, Health Catalyst announced it signed a defini ...