Health Catalyst(US:HCAT)2020-02-28 03:17Financial Data and Key Metrics Changes - Total revenue for Q4 2019 was $43.5 million, representing a 21% growth compared to Q4 2018 [7][8] - Full year 2019 total revenue was $154.9 million, indicating a 38% annual growth [9] - Adjusted gross margin for Q4 2019 was 51.2%, up from 48.6% in Q4 2018 [8] - Full year 2019 adjusted gross margin was 52.2%, an increase of approximately 430 basis points compared to 2018 [9] - Adjusted EBITDA for Q4 2019 was a loss of $6.5 million, improving from a loss of $9.4 million in Q4 2018 [8][33] - Full year 2019 adjusted EBITDA was a loss of $27.4 million, an improvement from a loss of $38.1 million in 2018 [9][33] Business Line Data and Key Metrics Changes - Technology revenue for Q4 2019 was $22.6 million, a 20% increase year-over-year [26] - Professional services revenue for Q4 2019 was $20.9 million, a 21% increase year-over-year [26] - The Medicity business was noted as a headwind on technology revenue growth in Q4 2019 [27] Market Data and Key Metrics Changes - The company ended 2019 with 65 DOS subscription customers, having added 15 net new customers during the year [16][18] - Dollar-based retention rate for 2019 was 109%, up from 107% in 2018 [18] Company Strategy and Development Direction - The company aims to enable massive, measurable improvements for customers while maintaining high satisfaction and engagement [11] - There is a focus on digital transformation within healthcare, with a growing demand for outsourced technology-enabled services [19][20] - The acquisition of Able Health is expected to enhance quality and regulatory measures capabilities [22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's performance and outlook for 2020, with guidance for total revenue between $185 million and $188 million [37] - The company has over 90% visibility to projected 2020 revenue, which is beneficial for forecasting [55] - Management has not seen any impact from the coronavirus on the pipeline or forecast [70] Other Important Information - The company ended Q4 2019 with $228.3 million in cash and short-term investments, compared to $33.2 million at year-end 2018 [35] - Total debt as of December 31, 2019, was $48.2 million, an increase of $28 million over the end of 2018 [35] Q&A Session Summary Question: Composition of new adds in 2019 - The composition of the 15 net new DOS subscription clients was a mix of health systems and some risk-bearing entities [42][43] Question: Cadence of growth for new DOS subscription customers - The company expects a stronger performance in the second half of the year for Medicity cross-sells, with a typical sales cycle of about one year [47][48] Question: Opportunities for tuck-in acquisitions - There are many opportunities for acquisitions in the apps layer, with a robust pipeline of potential companies [49][50] Question: Upsell opportunity to existing customers - The greater than $10 million represents annual recurring revenue, indicating strong potential for similar opportunities in the future [52][53] Question: Impact of coronavirus on contracting decisions - There has been no observed impact on the pipeline or forecast due to the coronavirus [70] Question: Trends in deferred revenues - Deferred revenues can fluctuate due to the timing of new client additions and the nature of contracts [63] Question: Percentage of DOS clients on Azure - Most new clients have been transitioned to Microsoft Azure, with ongoing conversions expected to take 1-2 years [65]