Definitive Healthcare (US:DH)2023-05-03 16:00Financial Performance - Revenue for the three months ended March 31, 2023, was $59,201,000, representing a 18.5% increase from $50,124,000 in the same period of 2022[18]. - Gross profit for the same period was $47,295,000, up from $38,796,000, indicating a growth of 21.8% year-over-year[18]. - Total operating expenses increased to $59,127,000 from $49,781,000, reflecting a rise of 18.7% compared to the prior year[18]. - The net loss attributable to Definitive Healthcare Corp. for Q1 2023 was $11,817,000, compared to a net loss of $8,624,000 in Q1 2022, marking a 37.8% increase in losses[18]. - The net loss for the three months ended March 31, 2023, was $15.6 million, compared to a net loss of $13.1 million for the same period in 2022, representing an increase of approximately 19.2%[26]. - Comprehensive loss attributable to Definitive Healthcare Corp. for Q1 2023 was $12,692,000, compared to $7,768,000 in Q1 2022, reflecting a 63.5% increase in comprehensive losses[20]. Cash and Investments - Cash and cash equivalents decreased to $124,961,000 as of March 31, 2023, down from $146,934,000 at the end of 2022[16]. - Total short-term investments as of March 31, 2023, were valued at $218.955 million, up from $184.939 million at the end of 2022[55]. - The total cash and cash equivalents at the end of the period were $124.96 million, down from $229.80 million at the end of Q1 2022, marking a decrease of approximately 45.5%[26]. Assets and Liabilities - Total assets as of March 31, 2023, were $2,115,236,000, slightly down from $2,120,993,000 at the end of 2022[16]. - Total liabilities increased to $645,785,000 from $633,772,000, indicating a rise of 1.8%[16]. - Accounts receivable as of March 31, 2023, was $51.801 million, down from $58.799 million as of December 31, 2022[50]. - The company’s accounts receivable decreased by $1.56 million to $6.97 million in Q1 2023, compared to $8.53 million in Q1 2022[26]. - Deferred revenues increased to $105.500 million as of March 31, 2023, compared to $99.928 million at the end of 2022[52]. Equity and Stock - The company reported a weighted average of 108,234,043 Class A Common Stock shares outstanding for the three months ended March 31, 2023, compared to 97,158,823 shares for the same period in 2022[18]. - The basic net loss per share for the first quarter of 2023 was $0.11, an increase from $0.09 in the first quarter of 2022[103]. - During the three months ended March 31, 2023, 4,771,545 LLC Units were exchanged for shares of Class A Common Stock, resulting in a net issuance of 252,847 shares[87]. Expenses - The company incurred $11.13 million in equity-based compensation in Q1 2023, compared to $6.87 million in Q1 2022, reflecting an increase of about 61.5%[26]. - The total compensation expense for product development increased to $3.011 million in Q1 2023 from $1.289 million in Q1 2022, marking a 133.3% increase[92]. - The company reported a depreciation and amortization expense of $12.94 million for Q1 2023, slightly down from $15.25 million in Q1 2022[26]. Acquisition and Goodwill - The company completed the acquisition of Analytical Wizards for a total consideration of $99.44 million, which included an initial investment of $40 million and cash consideration of approximately $58.65 million[41]. - Goodwill recognized from the acquisition was $61.659 million, which is not tax-deductible and has been allocated to the Company's single reportable segment[42]. - Customer relationships were valued at $39.4 million and will be amortized over 20 years, while developed software was valued at $6.1 million and will be amortized over 6 years[44][45]. Tax and Deferred Tax - The Company's effective tax rate was 4.4% for the three months ended March 31, 2023, compared to (0.7%) for the same period in 2022, reflecting changes in valuation allowances and tax positions[96]. - As of March 31, 2023, the Company recorded a net deferred tax liability of $78.2 million, which includes a valuation allowance against deferred tax assets[94]. - The Company recognized a Tax Receivable Agreement liability of $166.9 million as of March 31, 2023, an increase from $156.3 million as of December 31, 2022[99]. Restructuring and Charges - The company incurred restructuring charges of $2.1 million in Q1 2023, primarily for severance payments and employee benefits, with $1.8 million paid and $0.3 million remaining in accrued expenses[60]. - The company expects to incur an additional $0.5 million in expenses related to the restructuring plan through August 2023[60]. Interest and Debt - Long-term debt as of March 31, 2023, was $252,465,000, down from $255,765,000 as of December 31, 2022, after repaying $1.7 million of the 2021 Term Loan[62]. - The effective interest rate on the 2021 Term Loan was 6.66% as of March 31, 2023, following an amendment to replace the LIBO rate with Term SOFR[66]. - The total principal balance outstanding under the 2021 Term Loan was $264.7 million as of March 31, 2023[181]. Risk Management - The company manages credit risk by concentrating cash deposits with high-quality financial institutions[184]. - The company has not entered into derivative or hedging transactions for foreign currency exchange risk, as it has not been material to historical results[182]. - The company does not believe inflation has had a material effect on its business, financial condition, or results of operations[183].