Financial Data and Key Metrics Changes - Total revenue for full year 2024 was $307 million, representing a 4% year-over-year growth, while adjusted EBITDA was $26 million, reflecting a 137% increase year-over-year [17][56] - For Q4 2024, total revenue was $80 million, a 6% increase year-over-year, and adjusted EBITDA was $8 million, above the midpoint of guidance [56][61] - Technology revenue for full year 2024 was $195 million, with Q4 2024 revenue at $52 million, marking a 10% growth year-over-year for the quarter [17][56] Business Line Data and Key Metrics Changes - Technology segment revenue for full year 2024 grew by 4% year-over-year, while professional services revenue was $112 million, representing a 3% increase year-over-year [56][58] - Adjusted gross margin for the Technology segment in Q4 2024 was 65%, a decrease of approximately 200 basis points year-over-year, primarily due to initial deployment costs [58][59] - Professional services segment adjusted gross margin for Q4 2024 was 13%, an increase of approximately 170 basis points year-over-year [59] Market Data and Key Metrics Changes - Health system operating margins are stabilizing and approaching pre-pandemic levels, which is expected to positively impact client adoption of the company's applications [33] - The company anticipates approximately 40 net new platform client additions in 2025, with an average range of $300,000 to $700,000 ARR plus nonrecurring revenue [35][39] Company Strategy and Development Direction - The company is focusing on profitable growth, with an emphasis on technology revenue, which is expected to grow approximately 13% year-over-year in 2025 [69] - The company plans to exit unprofitable ambulatory operations TEMS pilots by mid-2025 to prioritize profitable growth [37][69] - The modular and flexible Ignite platform is expected to drive cross-selling opportunities and improve client retention [78][121] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism regarding the operating environment, noting improvements in health system operating margins and the potential for increased client adoption of applications [33][78] - The company expects to see improvements in bookings metrics compared to 2024, driven by the strengthening end market and continued momentum from Ignite [34][39] - Management anticipates that dollar-based retention rate will be approximately 103% under the updated definition for 2025 [36][88] Other Important Information - The company ended Q4 2024 with $392 million in cash and cash equivalents, compared to $387 million in Q3 2024 [63] - The company has made several leadership updates, including the appointment of Dr. Jill Hoggard Green to the Board of Directors [47][50] Q&A Session Summary Question: What is driving the acceleration in platform bookings in 2025? - Management highlighted improvements in the end market, the modularity and lower price point of Ignite compared to DOS, and the ability to cross-sell to existing app clients as key factors driving the expected increase in platform bookings [76][78] Question: Can you discuss the differences in the new Ignite platform versus DOS regarding annual escalators? - Management noted that Ignite contracts typically have more modest annual escalators in the low to mid-single-digit range, making them easier for clients to digest [82][84] Question: How do you control the pace of migrations to Ignite? - Management is working closely with clients to manage the migration pace responsibly, aiming to complete the majority of migrations by mid-2026 [90][92] Question: What is the visibility into growth in technology revenue after Q1? - Management indicated good visibility into technology revenue growth, estimating approximately 10% year-over-year growth for Q1 2025 [130]

Core Insights - Health Catalyst reported revenue of $79.61 million for the quarter ended December 2024, reflecting a 6% increase year-over-year, but fell short of the Zacks Consensus Estimate of $79.83 million by 0.28% [1] - The company's EPS was $0.04, an increase from $0.02 in the same quarter last year, but significantly below the consensus estimate of $0.11, resulting in an EPS surprise of -63.64% [1] Revenue Breakdown - Professional services revenue was $28.01 million, slightly below the five-analyst average estimate of $29 million, with a year-over-year change of +0.1% [4] - Technology revenue reached $51.60 million, exceeding the five-analyst average estimate of $50.83 million, marking a year-over-year increase of +9.6% [4] Profitability Metrics - Adjusted Gross Profit for Professional Services was reported at $3.78 million, slightly below the average estimate of $3.81 million from five analysts [4] - Adjusted Gross Profit for Technology was $33.35 million, surpassing the average estimate of $32.89 million from five analysts [4] Stock Performance - Over the past month, shares of Health Catalyst have returned -14.7%, compared to a -2.3% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Core Viewpoint - Health Catalyst (HCAT) reported quarterly earnings of $0.04 per share, missing the Zacks Consensus Estimate of $0.11 per share, but showing an improvement from $0.02 per share a year ago [1][2] Financial Performance - The earnings surprise for the quarter was -63.64%, with a previous quarter's earnings of $0.07 per share also missing expectations of $0.10 per share, resulting in a -30% surprise [2] - Health Catalyst's revenues for the quarter ended December 2024 were $79.61 million, slightly missing the Zacks Consensus Estimate by 0.28%, compared to $75.08 million in the same quarter last year [3] - Over the last four quarters, the company has surpassed consensus revenue estimates two times [3] Stock Performance - Health Catalyst shares have declined approximately 30% since the beginning of the year, contrasting with the S&P 500's gain of 1.3% [4] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [7] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.08 on revenues of $82.64 million, and for the current fiscal year, it is $0.38 on revenues of $338.89 million [8] - The estimate revisions trend for Health Catalyst is mixed, and changes in earnings expectations may occur following the recent earnings report [7] Industry Context - The Medical Info Systems industry, to which Health Catalyst belongs, is currently ranked in the bottom 49% of over 250 Zacks industries, suggesting potential challenges ahead [9] - The performance of Health Catalyst may be influenced by the overall outlook for the industry, as top-ranked industries tend to outperform lower-ranked ones significantly [9]

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]