Core Viewpoint - Health Catalyst (HCAT) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive outlook on its earnings estimates, which significantly influence stock prices [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system emphasizes the correlation between changes in earnings estimates and stock price movements, driven by institutional investors who adjust their valuations based on these estimates [4][6]. - Rising earnings estimates for Health Catalyst suggest an improvement in the company's underlying business, which could lead to an increase in stock price as investors respond positively [5][10]. Recent Performance and Projections - Health Catalyst is projected to earn $0.25 per share for the fiscal year ending December 2025, with no year-over-year change expected [8]. - Over the past three months, the Zacks Consensus Estimate for Health Catalyst has increased by 32.4%, reflecting a positive trend in earnings estimates [8]. Zacks Rating System Overview - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with only the top 20% receiving a "Strong Buy" or "Buy" rating, indicating superior earnings estimate revisions [9][10]. - The Zacks Rank 2 upgrade for Health Catalyst places it in the top 20% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [10].

Financial Performance & Targets - Health Catalyst's Q1 2025 total revenue reached $79.4 million, a 6% increase year-over-year, exceeding the guidance of approximately $79 million[48] - The company's Q1 2025 Adjusted EBITDA was $6.3 million, representing an 8% margin and an 86% increase, surpassing the guidance of around $4 million[48] - Health Catalyst anticipates a 2025 Adjusted EBITDA of approximately $41 million, a 57% increase, resulting in a 12% margin[15, 48] - The company targets approximately $500 million in revenue and $100 million in Adjusted EBITDA by 2028[15] Client Base & Retention - Health Catalyst has over 1,000 platform and app clients, including academic medical centers, integrated delivery networks, and health insurers[17] - The company added 10 net new platform clients in Q1 2025, with an aggregated average total ARR plus non-recurring revenue of approximately $500,000[48] - Health Catalyst aims to add approximately 40 net new platform clients in 2025, with an average ARR plus non-recurring revenue ranging from $300,000 to $700,000[48] - The dollar-based retention rate for Tech + TEMS is targeted at approximately 103% for 2025[48] Solutions & Improvements - Health Catalyst solutions focus on five core areas: Clinical Improvement, Revenue & Cost Improvement, Ambulatory Operations, Measures & Registries, and Data & Analytics[20, 21] - The company highlights examples of client improvements, such as $22 million in cost savings and $1.9 million in new revenue through improved patient flow[23] - Health Catalyst emphasizes its comprehensive solution, including a data platform, applications, and expertise, to drive measurable clinical, financial, and operational improvements for healthcare organizations[10, 15]

[Part I. Financial Information](index=6&type=section&id=Part%20I.%20Financial%20Information) [Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) This section presents Health Catalyst, Inc.'s unaudited condensed consolidated financial statements for Q1 2025, including balance sheets, statements of operations, and cash flows, with notes on key events like the Upfront Healthcare acquisition and a new restructuring plan Condensed Consolidated Balance Sheet Highlights (Unaudited) | Account | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | Change | | :--- | :--- | :--- | :--- | | Cash and cash equivalents | $341,968 | $249,645 | +$92,323 | | Goodwill | $313,380 | $259,759 | +$53,621 | | Total assets | $891,542 | $858,929 | +$32,613 | | Deferred revenue (Current) | $71,497 | $53,281 | +$18,216 | | Total liabilities | $514,731 | $493,722 | +$21,009 | | Total stockholders' equity | $376,811 | $365,207 | +$11,604 | Condensed Consolidated Statements of Operations (Unaudited) | Metric | Three Months Ended Mar 31, 2025 (in thousands) | Three Months Ended Mar 31, 2024 (in thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Total revenue | $79,413 | $74,723 | +6.3% | | Technology Revenue | $51,482 | $46,966 | +9.6% | | Professional Services Revenue | $27,931 | $27,757 | +0.6% | | Loss from operations | $(20,171) | $(22,812) | +11.6% | | Net loss | $(23,742) | $(20,587) | -15.3% | | Net loss per share, basic and diluted | $(0.35) | $(0.35) | 0.0% | Condensed Consolidated Statements of Cash Flows (Unaudited) | Cash Flow Activity | Three Months Ended Mar 31, 2025 (in thousands) | Three Months Ended Mar 31, 2024 (in thousands) | | :--- | :--- | :--- | | Net cash provided by operating activities | $280 | $10,266 | | Net cash provided by investing activities | $96,762 | $83,984 | | Net cash (used in) provided by financing activities | $(4,712) | $863 | | Net increase in cash and cash equivalents | $92,323 | $95,094 | - On January 22, 2025, the company acquired Upfront Healthcare Services, Inc. for a total consideration of **$80.0 million**, consisting of **$41.1 million** in net cash, **$31.6 million** in common stock, and **$7.3 million** in contingent consideration[99](index=99&type=chunk) - In Q1 2025, the company initiated a new restructuring plan to optimize its cost structure, reducing its global workforce and incurring **$3.6 million** in related costs, primarily for severance[206](index=206&type=chunk)[208](index=208&type=chunk) - On April 14, 2025, the company fully repaid the outstanding principal and accrued interest on its 2.50% Convertible Senior Notes due 2025, which had an aggregate principal amount of **$230.0 million**[213](index=213&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=49&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2025 financial results, noting a 6% revenue increase, widened net loss, improved Adjusted EBITDA, and strong liquidity, alongside strategic initiatives and macroeconomic impacts Key Financial Metrics Comparison (Unaudited) | Metric | Three Months Ended Mar 31, 2025 | Three Months Ended Mar 31, 2024 | | :--- | :--- | :--- | | Total revenue | $79,413 thousand | $74,723 thousand | | Gross margin | 36% | 39% | | Net loss | $(23,742) thousand | $(20,587) thousand | | Adjusted Gross Margin | 49% | 51% | | Adjusted EBITDA | $6,279 thousand | $3,377 thousand | - Total revenue increased by **6% YoY** to **$79.4 million** in Q1 2025, primarily driven by a **10% increase** in Technology revenue from new and acquired clients and contractual escalators with existing clients[268](index=268&type=chunk)[269](index=269&type=chunk) - Sales and marketing expenses decreased by **23% YoY** to **$14.7 million**, mainly due to lower stock-based compensation, a change in the timing of the annual HAS event, and a reduced provision for expected credit losses[273](index=273&type=chunk) - The company's liquidity position as of March 31, 2025, included **$342.0 million** in cash, cash equivalents, and short-term investments. The company believes this is sufficient to meet its needs for at least the next 12 months[283](index=283&type=chunk)[285](index=285&type=chunk) - The company performed a quantitative goodwill impairment test during Q1 2025 due to a decline in its stock price. The test concluded that the fair values of both the Technology and Professional Services reporting units exceeded their carrying values by approximately **10%** and **13%**, respectively, so no impairment was recorded[304](index=304&type=chunk)[306](index=306&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=69&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risks include interest rate risk from its variable-rate Credit Agreement, limited foreign currency risk, and ongoing inflation risk impacting client spending and operating costs - The company is exposed to interest rate risk from its Credit Agreement, which bears interest at a floating rate of SOFR plus **6.5%**. A hypothetical **100 basis point** change in interest rates is not expected to have a material impact on the fair value of the outstanding debt as of the filing date[313](index=313&type=chunk)[315](index=315&type=chunk) - Foreign currency exchange risk is currently not material due to the small size of international operations, with most international sales contracts denominated in U.S. dollars. The company may consider hedging programs as it expands internationally[317](index=317&type=chunk)[318](index=318&type=chunk) - The company acknowledges that the recent high inflationary environment has put financial strain on its health system end market. While client operating margins improved in early 2025, ongoing inflation could negatively impact client spending and the company's own costs[319](index=319&type=chunk)[320](index=320&type=chunk) [Controls and Procedures](index=70&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of March 31, 2025[322](index=322&type=chunk) - No changes occurred during the quarter that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[323](index=323&type=chunk) [Part II. Other Information](index=72&type=section&id=Part%20II.%20Other%20Information) [Legal Proceedings](index=72&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any legal proceedings expected to have a material adverse effect on its business or financial condition - As of the report date, Health Catalyst is not involved in any legal proceedings that management believes would have a material adverse effect on the company[326](index=326&type=chunk) [Risk Factors](index=72&type=section&id=Item%201A.%20Risk%20Factors) This section details significant risks including intense competition, macroeconomic impacts, operational challenges with third-party reliance and platform migration, regulatory compliance, and financial risks related to indebtedness and profitability - The company faces intense competition from large, well-financed entities like Epic Systems and Oracle Health, as well as niche vendors, which could lead to pricing pressures and impact market share[328](index=328&type=chunk)[329](index=329&type=chunk) - Macroeconomic challenges, including high inflation and interest rates, continue to strain the healthcare industry, which could lead to delays in client purchasing decisions and negatively affect demand for the company's solutions[334](index=334&type=chunk) - The company's business is vulnerable to information technology system failures and cyberattacks. A security breach could lead to litigation, reputational damage, and regulatory fines[401](index=401&type=chunk)[403](index=403&type=chunk)[404](index=404&type=chunk) - The business relies on third-party providers, particularly Microsoft Azure, for its computing infrastructure. Any disruption from these providers could adversely affect service delivery and lead to liability[409](index=409&type=chunk)[410](index=410&type=chunk) - The company is subject to numerous complex healthcare and data privacy laws, including HIPAA, the federal Anti-Kickback Statute, GDPR, and CCPA. Failure to comply could result in significant penalties and harm the business[436](index=436&type=chunk)[441](index=441&type=chunk)[449](index=449&type=chunk) - The Credit Agreement contains restrictive covenants that could limit the company's ability to incur debt, make investments, or pay dividends, potentially restricting operational and financial flexibility[472](index=472&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=111&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's share repurchase activities, including the repurchase of **1,103,601 shares** for **$5.0 million** in Q1 2025, with **$24.8 million** remaining for future repurchases Share Repurchases in Q1 2025 | Period | Total Shares Purchased | Average Price Paid per Share | Approximate Dollar Value of Shares Remaining for Purchase | | :--- | :--- | :--- | :--- | | Jan 1 - Jan 31, 2025 | — | $— | $29.8 million | | Feb 1 - Feb 28, 2025 | — | $— | $29.8 million | | Mar 1 - Mar 31, 2025 | 1,103,601 | $4.51 | $24.8 million | | **Total** | **1,103,601** | **$4.51** | **$24.8 million** | [Other Information](index=111&type=section&id=Item%205.%20Other%20Information) This section discloses that CEO Daniel Burton and General Counsel Benjamin Landry adopted Rule 10b5-1 trading arrangements in Q1 2025, while two other officers terminated theirs - During Q1 2025, CEO Daniel Burton and General Counsel Benjamin Landry adopted Rule 10b5-1 trading arrangements to permit future sales of their company stock[509](index=509&type=chunk) [Exhibits](index=113&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Quarterly Report on Form 10-Q, including the Upfront Healthcare merger agreement, corporate governance documents, and officer certifications - The exhibits filed with this report include the Agreement and Plan of Merger for the Upfront Healthcare acquisition, the company's Amended and Restated Certificate of Incorporation and Bylaws, and certifications by the CEO and CFO[511](index=511&type=chunk)

Financial Data and Key Metrics Changes - Total revenue for Q1 2025 was $79.4 million, representing a 6% year-over-year increase [26] - Adjusted EBITDA for Q1 2025 was $6.3 million, exceeding guidance [26] - Technology revenue for Q1 2025 was $51.5 million, reflecting a 10% year-over-year growth [27] - Professional services revenue for Q1 2025 was $27.9 million, a 1% increase compared to Q1 2024 [27] - Total adjusted gross margin was 49%, a decrease of approximately 210 basis points year-over-year [27] - Adjusted technology gross margin was 67%, a decrease of approximately 120 basis points year-over-year [27] - Adjusted professional services gross margin was 16%, a decrease of approximately 630 basis points year-over-year [27] Business Line Data and Key Metrics Changes - The technology segment showed strong performance with a 10% revenue growth year-over-year [27] - Professional services revenue growth was modest at 1% year-over-year [27] - The shift to the Ignite platform is expected to enhance profitability, with Ignite clients showing an 80/20 revenue mix favoring technology over services [52] Market Data and Key Metrics Changes - The company added 10 net new platform clients in Q1 2025, with two-thirds coming from existing app clients [6] - The average total ARR and non-recurring revenue per net new platform client was around the midpoint of $300,000 to $700,000 [6][23] - The company anticipates achieving approximately 40 net new platform clients for the full year 2025 [23] Company Strategy and Development Direction - The strategic shift to the Ignite platform is aimed at providing a more flexible, modular, and cost-effective solution compared to the legacy DOS model [8] - Ignite's lower entry price point is expected to accelerate sales cycles and enhance cross-selling opportunities [8] - The company is focusing on organic growth and capital allocation, with a recent $5 million share repurchase [24] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the resilience of Ignite in the face of macroeconomic challenges, including potential funding cuts [20] - The company expects to complete the majority of Ignite migrations by mid-2026, with two-thirds expected by the end of 2025 [11] - Management noted that the operating margins remain strong and stable, despite some uncertainties in the market [19] Other Important Information - The company ended Q1 2025 with $342 million in cash and short-term investments [30] - The face value of the term loan is $162 million, and the convertible notes were paid off in full on April 14, 2025 [30] - The company expects total revenue of approximately $80.5 million and adjusted EBITDA of approximately $8 million for Q2 2025 [31] Q&A Session Summary Question: Can you provide more color on the decision-making process with the modular strategy versus DOS? - The modularity and lower price point of Ignite allow for quicker decision-making and shorter sales cycles, making it easier to provide tangible value to clients [38][39] Question: Should we expect a different cadence in customer additions? - There may be a smoothing of customer additions throughout the year due to the flexibility of the offering, rather than being strictly aligned with budget seasons [44] Question: What is driving the higher weighting of tech versus services in Ignite? - The lower price point and specific use cases associated with Ignite lead to a higher technology-driven solution, requiring less service delivery compared to DOS [49][52] Question: How is the average starting ARR accounted for? - The $300,000 to $700,000 average applies to new net platform clients, with existing clients migrating to Ignite potentially reflecting a headwind in dollar-based retention metrics [57][59] Question: What is the expected timing for tech margins to improve? - An uplift in tech adjusted gross profit margins is expected in the second half of the year as the migration process progresses [80][81]

Financial Performance - Total revenue for Q1 2025 was $79.4 million, representing a 6% increase from $74.7 million in Q1 2024[4] - Adjusted EBITDA for Q1 2025 was $6.3 million, an 86% increase compared to $3.4 million in Q1 2024[4] - Gross profit for Q1 2025 was $28.7 million, with a gross margin of 36%, down from 39% in Q1 2024[4] - The net loss for Q1 2025 was $23.7 million, compared to a net loss of $20.6 million in Q1 2024, reflecting a 15% increase in losses[4] - For the three months ended March 31, 2025, the company reported a net loss of $23,742,000, compared to a net loss of $20,587,000 for the same period in 2024, representing an increase in loss of approximately 10.4%[22] - Total revenue for the three months ended March 31, 2025, was $79,413,000, up from $74,723,000 in the same period of 2024, indicating a year-over-year growth of about 6.5%[28] - Adjusted EBITDA for the three months ended March 31, 2025, was $6,279,000, compared to $3,377,000 in 2024, showing a significant increase of about 86.5%[33] - Adjusted Net Income for the three months ended March 31, 2025, was $328,000, compared to $2,707,000 in 2024, indicating a decrease of approximately 87.9%[34] - The company reported a net cash provided by operating activities of $280,000 for the three months ended March 31, 2025, a significant decrease from $10,266,000 in 2024[22] Client Growth - The company added 10 net new Platform Clients in Q1 2025, contributing to a target of 40 net new additions for the full year[3] Future Projections - For Q2 2025, the company expects total revenue of approximately $80.5 million and Adjusted EBITDA of approximately $8 million[6] - For the full year 2025, total revenue is projected to be approximately $335 million, with technology revenue expected to be around $220 million[6] Cash and Assets - Cash and cash equivalents as of March 31, 2025, were $342 million, up from $250 million as of December 31, 2024[13] - Total assets increased to $891.5 million as of March 31, 2025, compared to $858.9 million as of December 31, 2024[13] - The company reported a total stockholders' equity of $376.8 million as of March 31, 2025, compared to $365.2 million at the end of 2024[13] - The company’s cash and cash equivalents at the end of the period were $341,968,000, up from $201,370,000 at the end of the same period in 2024, representing a growth of approximately 69.8%[22] Cost and Expenses - Adjusted Gross Profit for the three months ended March 31, 2025, was $39,048,000, compared to $38,319,000 in 2024, reflecting an increase of approximately 1.9%[28] - The company’s Adjusted Gross Margin for the three months ended March 31, 2025, was 49%, compared to 51% in 2024, reflecting a decline of about 2 percentage points[28] - The company incurred acquisition-related costs of $3,029,000 for the three months ended March 31, 2025, compared to $813,000 in 2024, representing an increase of approximately 272.5%[34] - Stock-based compensation expense for the three months ended March 31, 2025, was $7,543,000, down from $10,838,000 in 2024, indicating a decrease of about 30.5%[33] Non-recurring Charges - Non-recurring lease-related charges include an impairment charge related to corporate office space designated for subleasing[36]

Core Insights - Health Catalyst reported strong financial results for Q1 2025, with total revenue of $79.4 million, exceeding guidance, and Adjusted EBITDA of $6.3 million, reflecting an 86% increase year-over-year [2][38] - The company added 10 net new Platform Clients in Q1 2025, contributing to confidence in achieving the target of 40 net new Platform Client additions for the year [2][38] - The financial outlook for Q2 2025 includes expected total revenue of approximately $80.5 million and Adjusted EBITDA of around $8 million [4][38] Financial Performance - Total revenue for Q1 2025 was $79.4 million, a 6% increase from $74.7 million in Q1 2024 [3][38] - Gross profit decreased slightly to $28.7 million, with a gross margin of 36%, down from 39% in the previous year [3][38] - The net loss for the quarter was $23.7 million, compared to a net loss of $20.6 million in Q1 2024, indicating a 15% increase in losses [3][38] - Adjusted Gross Profit was $39.0 million, with an Adjusted Gross Margin of 49%, down from 51% year-over-year [3][38] Client Growth and Market Position - The addition of 10 net new Platform Clients in Q1 2025 is significant, especially as Q1 is typically a quieter period for bookings [2][38] - The company anticipates achieving approximately halfway to the target of 40 net new Platform Clients by the end of Q2 2025 [38] Future Guidance - For the full year 2025, total revenue is projected to be around $335 million, reflecting a 9% increase [4][38] - The technology business unit is expected to generate approximately $220 million in revenue, a 13% increase [4][38] - Adjusted EBITDA for the full year is forecasted to be approximately $41 million, representing a 57% increase [4][38] Operational Insights - Health Catalyst's Ignite platform continues to gain traction, with recent client wins highlighting its momentum in the market [38] - The company remains confident in its ability to drive profitability despite a dynamic macroeconomic environment, with expectations for improved stock-based compensation as a percentage of revenue by 2026 [38]

Company Overview - Hims & Hers Health, Inc. (HIMS) shares increased by 23% to close at $35.04, with trading volume significantly higher than usual, contrasting with a 3.6% loss over the previous four weeks [1][2] Recent Developments - The surge in Hims & Hers Health's shares is linked to the announcement of a deal to sell Novo Nordisk's weight-loss drug, Wegovy, on its telehealth platform, allowing U.S. customers to access NovoCare Pharmacy through Hims & Hers for $599 per month [2] Financial Performance Expectations - The company is projected to report quarterly earnings of $0.14 per share, reflecting a year-over-year increase of 180%, with revenues expected to reach $537.85 million, a 93.4% rise from the same quarter last year [3] - The consensus EPS estimate for the upcoming quarter has been revised 21.3% higher in the last 30 days, indicating a positive trend that typically correlates with stock price appreciation [4] Industry Context - Hims & Hers Health is categorized within the Zacks Medical Info Systems industry, where Health Catalyst (HCAT) is another player, having closed 0.3% higher at $4.07 but showing a -10.4% return over the past month [4]

Core Insights - Health Catalyst has announced a strategic partnership with Microsoft to enhance operational, clinical, and financial performance in healthcare through AI-driven innovation [1][2] - The collaboration leverages Health Catalyst's expertise with Microsoft Azure and Azure AI Foundry to provide advanced AI solutions for healthcare organizations [2][4] - The partnership aims to transform data and analytics into actionable insights, driving sustainable performance improvements for healthcare providers [4][5] Company Overview - Health Catalyst is a leading provider of data and analytics technology and services, serving over 1,000 organizations globally [5] - The company offers a cloud-based technology ecosystem, Health Catalyst Ignite™, and AI-enabled data and analytics solutions to improve clinical, financial, and operational outcomes [5] - Health Catalyst has a proven track record of delivering billions of dollars in measurable results, emphasizing its commitment to data-informed healthcare improvement [5] Product Offerings - Healthcare.AI™ and Health Catalyst Ignite™ are currently available on the Azure Marketplace, with additional solutions to be introduced [3] - These offerings enable healthcare organizations to address challenges in data analytics, cybersecurity, financial, and operational improvements [3] Strategic Goals - The partnership is designed to help healthcare organizations achieve their goals for 2025 and beyond by moving from data analytics to reliable actions and sustained outcomes [4] - The collaboration combines machine intelligence with healthcare expertise to accelerate AI-driven outcomes and optimize decision-making [4]

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]

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]