Definitive Healthcare (US:DH)2025-11-06 21:27Financial Performance - Total revenue for Q3 2025 was $60,046,000, a decrease of 4.2% from $62,697,000 in Q3 2024[16] - Gross profit for Q3 2025 was $45,993,000, down from $49,031,000 in Q3 2024, reflecting a gross margin of 76.5%[16] - Net loss for Q3 2025 was $17,792,000, compared to a net loss of $187,824,000 in Q3 2024, indicating a significant reduction in losses[16] - The company reported a basic and diluted net loss per share of $0.14 for Q3 2025, compared to $1.12 for Q3 2024[16] - For the nine months ended September 30, 2025, the net loss was $182,150, compared to a net loss of $506,729 for the same period in 2024, representing a 64% improvement[29] - The company reported a net loss of $9.265 million for the quarter ending March 31, 2025, with total equity at $435.905 million[22] - The company recorded a goodwill impairment charge of $176.5 million during the first quarter of 2025, impacting financial results but not liquidity[140] - The net loss for Q3 2025 was $(17,792) million, or (30)% of revenue, compared to a net loss of $(187.824) million, or (300)% of revenue in Q3 2024[206] Assets and Liabilities - Total assets decreased to $755,527,000 as of September 30, 2025, down from $1,089,389,000 at the end of 2024[14] - Total liabilities decreased to $365,857,000 as of September 30, 2025, compared to $482,195,000 at the end of 2024[14] - The company’s total equity decreased to $389,670,000 as of September 30, 2025, down from $607,194,000 at the end of 2024[14] - Long-term debt as of September 30, 2025, was $158.2 million, down from $229.4 million at the end of 2024, with $75.6 million repaid during the nine months ended September 30, 2025[69] - The company has a $175.0 million term loan facility and a $50.0 million revolving credit facility, with the latter having no outstanding balance as of September 30, 2025[71] Cash Flow and Investments - Cash and cash equivalents increased to $108,317,000 from $105,378,000 at the end of 2024[14] - Net cash provided by operating activities was $51,057 for the nine months ended September 30, 2025, slightly up from $50,061 in 2024[29] - The company reported a net cash used in financing activities of $146,877 for the nine months ended September 30, 2025, compared to $43,381 in 2024[29] - Cash and cash equivalents at the end of the period were $108,317, down from $137,609 at the end of the same period in 2024[29] - The Company’s total cash and cash equivalents, including money market funds, amounted to $28.359 million as of September 30, 2025[95] Revenue Breakdown - Subscription services revenue for the nine months ended September 30, 2025, was $173,733 thousand, down 5.9% from $184,645 thousand in 2024[49] - For the nine months ended September 30, 2025, approximately 97% of revenue was derived from subscription services, totaling $179.987 million, compared to $189.914 million in the same period of 2024[167] - Revenue from related parties was $0.3 million for both the three months ended September 30, 2025, and 2024, showing stability in related party transactions[130] - Revenue decreased by $2.7 million, or 4%, in Q3 2025 compared to Q3 2024, primarily due to lower subscription revenue[186] Expenses and Cost Management - Operating expenses for Q3 2025 totaled $54,681,000, significantly lower than $274,398,000 in Q3 2024, primarily due to reduced goodwill impairment[16] - Total cost of revenue for the nine months ended September 30, 2025, was $43,621 thousand, an increase of 8.8% from $40,047 thousand in 2024[129] - Cost of revenue increased by $0.4 million, or 3%, in Q3 2025, driven by a $1.4 million increase in amortization expense[187] - Operating expenses decreased by $427.1 million, or 56%, in the nine months ended September 30, 2025, largely due to a lower goodwill impairment charge[195] Equity and Shareholder Information - The balance of Class A shares decreased to 103,011,649 shares by September 30, 2025, reflecting a reduction in outstanding shares[22] - The Company repurchased 13.9 million shares of Class A Common Stock for an aggregate purchase price of $49.5 million during the nine months ended September 30, 2025[107] - The Company’s ownership interest in Definitive OpCo was 72.9% as of September 30, 2025, down from 74.3% as of December 31, 2024[101] - The Company’s stock repurchase program authorized up to $100.0 million in share repurchases, effective until December 31, 2025[105] Impairment and Restructuring - The company recorded goodwill impairment charges of $176,531 in 2025, a significant decrease from $591,794 in 2024, indicating improved asset valuation[29] - The company incurred restructuring charges of $0.2 million and $8.0 million for the three and nine months ended September 30, 2024, respectively, related to a workforce reduction of approximately 150 people[66] - Goodwill impairment charge of $176.5 million was recorded in the first quarter of 2025 due to a decline in market capitalization[62] Market Conditions and Future Outlook - Macroeconomic conditions have led to longer deal cycles and increased customer churn, particularly among smaller customers in the Life Sciences market[151] - The company expects a negative revenue growth rate for 2025 relative to 2024 due to macroeconomic challenges and elongating deal cycles[165] - The company anticipates that gross profit margin for 2025 will decrease due to anticipated revenue declines and fixed cost structure[173]