Definitive Healthcare (US:DH)2023-11-01 16:00Revenue and Profitability - Revenue for Q3 2023 was $65.325 million, an increase of 14% compared to $57.382 million in Q3 2022[18]. - Gross profit for Q3 2023 was $53.430 million, up from $47.658 million in Q3 2022, reflecting a gross margin improvement[18]. - For the nine months ended September 30, 2023, the total revenue was $189.697 million, compared to $166.204 million for the same period in 2022[53]. - Subscription services revenue for the nine months ended September 30, 2023, was $180.4 million, up from $159.1 million in 2022, reflecting a growth of 13%[65]. - The company anticipates continued growth in revenue and is focused on strategic initiatives to enhance market position despite current challenges[13]. Expenses and Losses - Total operating expenses surged to $348.808 million in Q3 2023, compared to $57.720 million in Q3 2022, primarily due to a goodwill impairment of $287.400 million[18]. - Net loss for Q3 2023 was $248.688 million, significantly higher than the net loss of $6.885 million in Q3 2022[20]. - The company reported a basic and diluted net loss per share of $1.50 for Q3 2023, compared to $0.03 for Q3 2022[18]. - For the nine months ended September 30, 2023, the net loss was $276,265, compared to a net loss of $30,066 for the same period in 2022[27]. - The company reported a net loss of $280.870 million for the nine months ended September 30, 2023, compared to a net loss of $36.423 million for the same period in 2022[53]. Assets and Liabilities - Total assets decreased to $1.820 billion as of September 30, 2023, down from $2.123 billion at the end of 2022[16]. - Cash and cash equivalents were $77.460 million, a decline from $146.934 million at the end of 2022[16]. - Total liabilities were $616.084 million, slightly down from $640.679 million at the end of 2022[16]. - The total equity balance at September 30, 2023, was $116,281,962, with a Class A stock amount of $39,781,940 and a Class B stock amount of $1,077,330[23]. Goodwill and Acquisitions - The company reported a goodwill impairment charge of $287,400 for the nine months ended September 30, 2023[27]. - Goodwill recognized from the Populi acquisition amounted to $36.652 million, reflecting expected synergies and the assembled workforce[47]. - The Company completed the acquisition of Populi, Inc. for a total estimated consideration of $54.1 million, including $46.4 million in cash paid at closing[45]. - The Company completed the acquisition of the remaining 65% of AW's equity for $65.0 million, with a total consideration of $99.4 million including initial investment and contingent consideration[55][56]. Equity and Compensation - The company’s additional paid-in capital increased to $1.077 billion as of September 30, 2023, from $970.207 million at the end of 2022[16]. - For the nine months ended September 30, 2023, the total equity-based compensation expense was $35.5 million, compared to $25.0 million for the same period in 2022, reflecting a 42% increase[119]. - The company reported equity-based compensation of $11,994 for the quarter ending June 30, 2023[23]. Tax and Interest - The Company's effective tax rate for the nine months ended September 30, 2023, was 6.7%, compared to 2.1% for the same period in 2022[123]. - The company incurred $10,772 in interest expenses for the nine months ended September 30, 2023, compared to $7,248 in 2022[27]. - The total principal balance outstanding under the 2021 Term Loan was $261.3 million as of September 30, 2023[217]. Cash Flow and Investments - Net cash provided by operating activities for the nine months ended September 30, 2023, was $36,481, a decrease from $39,799 in 2022[27]. - Cash and cash equivalents at the end of the period were $77,460, down from $228,828 at the end of the same period in 2022[27]. - The company paid $45,023 for acquisitions, net of cash acquired, during the nine months ended September 30, 2023[27]. Financial Instruments and Risk Management - The Company uses interest rate swaps to manage interest rate risk, with valuations determined using widely accepted techniques including discounted cash flow analysis[102]. - The derivative interest rate swaps are designated and qualify as cash flow hedges, with changes in fair value recognized in accumulated other comprehensive income[94]. - As of September 30, 2023, the fair value of the contingent consideration from the acquisition of Populi was estimated to be $7.8 million, included in other long-term liabilities[105].