Definitive Healthcare (DH) - 2025 Q1 - Quarterly Results

Definitive Healthcare Q1 2025 Earnings Release First Quarter 2025 Financial Highlights Q1 2025 results surpassed guidance despite a revenue decline, impacted by a significant goodwill impairment Q1 2025 Key Financial Metrics | Financial Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | $59.2M | $63.5M | -7% | | Net Loss | $(155.1)M | $(12.7)M | Increased Loss | | Adjusted Net Income | $7.0M | $13.0M | -46% | | Adjusted EBITDA | $14.7M | $20.0M | -26.5% | | Adjusted EBITDA Margin | 25% | 32% | -7 pts | | Cash Flow from Operations | $26.1M | $16.6M (from Q1 2024 cash flow statement) | +57% | | Unlevered Free Cash Flow | $22.9M | $28.3M (from reconciliation) | -19% | - The company recorded a goodwill impairment charge of $176.5 million in Q1 2025, the primary driver of the significant GAAP Net Loss[4] - CEO Kevin Coop stated that the results were above the high end of guidance and the company remains on track to meet full-year financial targets[4] Recent Business and Operating Highlights The company secured new customers and expanded key relationships across all end-markets in Q1 2025 - A medical device company selected the Carevoyance platform to identify high-value sales targets like ambulatory surgery centers and hospitals[5] - A regional health system is using the Populi platform to support service line expansions, physician recruitment, and telemedicine growth[5] - A leading office supply company returned as a customer, citing the superiority of Definitive Healthcare's data and Salesforce integration[5] - The company is expanding its focus on digital marketing activation by signing two leading healthcare advertising agencies[5] Business Outlook The company issued Q2 2025 guidance and raised the low end of its full-year 2025 revenue forecast - The company does not provide a quantitative reconciliation for forward-looking non-GAAP measures due to high variability in predicting certain excluded items[9] Second Quarter 2025 Guidance The company anticipates Q2 2025 revenue between $58.5M and $60.0M and Adjusted EBITDA of $15.0M to $16.0M Q2 2025 Guidance | Metric | Q2 2025 Guidance | | :--- | :--- | | Revenue | $58.5M – $60.0M | | Adjusted Operating Income | $12.0M – $13.0M | | Adjusted EBITDA | $15.0M – $16.0M | | Adjusted EBITDA Margin | 25% – 27% | | Adjusted Net Income | $6.5M – $7.5M | | Adjusted Net Income Per Diluted Share | $0.04 – $0.05 | Full Year 2025 Guidance Full-year 2025 revenue guidance was raised to $234.0M-$240.0M, with Adjusted EBITDA of $61.0M-$65.0M Full Year 2025 Guidance | Metric | Full Year 2025 Guidance | | :--- | :--- | | Revenue | $234.0M – $240.0M | | Adjusted Operating Income | $49.0M – $53.0M | | Adjusted EBITDA | $61.0M – $65.0M | | Adjusted EBITDA Margin | 26% – 28% | | Adjusted Net Income | $30.0M – $34.0M | | Adjusted Net Income Per Diluted Share | $0.20 – $0.23 | - The company raised the bottom end of its prior full-year revenue guidance range by $4.0 million[10] Financial Statements This section presents the unaudited condensed consolidated balance sheets, statements of operations, and cash flows Condensed Consolidated Balance Sheets Total assets decreased to $808.7M, primarily due to a $176.5M goodwill impairment charge Key Balance Sheet Items (in thousands) | Balance Sheet Item (in thousands) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $106,099 | $105,378 | | Goodwill | $216,752 | $393,283 | | Total Assets | $808,657 | $1,089,389 | | Total Liabilities | $372,752 | $482,195 | | Total Equity | $435,905 | $607,194 | Condensed Consolidated Statements of Operations Q1 2025 revenue was $59.2M, with a net loss of $155.1M driven by a goodwill impairment charge Key Income Statement Items (in thousands) | Income Statement Item (in thousands) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenue | $59,191 | $63,480 | | Gross Profit | $43,760 | $50,382 | | Goodwill Impairment | $176,531 | $0 | | Loss from Operations | $(184,786) | $(16,249) | | Net Loss | $(155,093) | $(12,718) | | Net Loss Per Share (Basic & Diluted) | $(0.95) | $(0.08) | Condensed Consolidated Statements of Cash Flows Net cash from operations increased to $26.1M in Q1 2025, up from $16.6M in the prior-year period Key Cash Flow Items (in thousands) | Cash Flow Item (in thousands) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $26,066 | $16,589 | | Net cash provided by (used in) investing activities | $83,545 | $(24,034) | | Net cash used in financing activities | $(109,706) | $(17,194) | | Cash and cash equivalents, end of period | $106,099 | $105,994 | - Financing activities in Q1 2025 included $21.2 million for repurchases of Class A Common Stock and net debt repayment activity[33] Non-GAAP Financial Measures and Reconciliations This section provides definitions and reconciliations for non-GAAP measures to their closest GAAP equivalents - The company uses non-GAAP measures to provide a view of performance focused on core operations, excluding non-core or non-cash items[19][22] - The goodwill impairment charge of $176.5 million was triggered by a sustained decrease in the company's stock price[44] Reconciliation of GAAP Operating Cash Flow to Unlevered Free Cash Flow Unlevered Free Cash Flow was $22.9M in Q1 2025, down from $28.3M in the prior-year quarter Reconciliation to Unlevered FCF (in thousands) | Reconciliation to Unlevered FCF (in thousands) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $26,066 | $16,589 | | Less: Purchases of property, equipment, etc. | $(7,706) | $(266) | | Add: Interest paid in cash | $2,242 | $3,642 | | Add: Transaction, integration, etc. paid in cash | $1,763 | $8,264 | | Unlevered Free Cash Flow | $22,925 | $28,303 | Reconciliation of GAAP Net Loss to Adjusted Net Income Adjusted Net Income was $7.0M in Q1 2025, reconciled from a GAAP Net Loss of $155.1M Reconciliation to Adjusted Net Income (in thousands) | Reconciliation to Adjusted Net Income (in thousands) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net loss | $(155,093) | $(12,718) | | Adjustments (Goodwill, Amortization, etc.) | $167,071 | $25,760 | | Adjusted Net Income | $6,972 | $13,042 | | Adjusted Net Income Per Share | $0.05 | $0.08 | Reconciliation of GAAP Gross Profit and Margin to Adjusted Gross Profit and Margin Adjusted Gross Profit was $47.1M (80% margin) in Q1 2025, down from $53.1M (84% margin) in Q1 2024 Gross Profit Reconciliation (in thousands) | Gross Profit Reconciliation (in thousands) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Reported gross profit | $43,760 (74%) | $50,382 (79%) | | Add: Amortization of intangible assets | $3,153 | $2,443 | | Add: Equity compensation costs | $160 | $271 | | Adjusted gross profit | $47,073 (80%) | $53,096 (84%) | Reconciliation of GAAP Net Loss and Margin to Adjusted EBITDA and Margin Adjusted EBITDA was $14.7M (25% margin) in Q1 2025, down from $20.0M (32% margin) in Q1 2024 EBITDA Reconciliation (in thousands) | EBITDA Reconciliation (in thousands) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net loss | $(155,093) | $(12,718) | | Add: Interest, Taxes, D&A | $3,812 | $11,793 | | EBITDA | $(151,274) | $(925) | | Add: Other adjustments (Goodwill, Equity Comp, etc.) | $165,980 | $20,948 | | Adjusted EBITDA | $14,706 | $20,023 | | Adjusted EBITDA Margin | 25% | 32% |