Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil EL&P Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Health Catalyst Reports Second Quarter 2023 Results By: Health Catalyst, Inc. via GlobeNewswire August 08, 2023 at 16:03 PM EDT SALT LAKE CITY, Aug. 08, 2023 (GLOBE NEWSWIRE) -- Health Catalyst, Inc. ("Health Catalyst," Nasdaq: HCAT), a leading provider of data and analytics technology and services to healthcare organizations, today reported financial results for the quarter ended June 30, 2023. “For the second quarter of 2023, we are encouraged by our financial results, including total revenue of $73.2 million and Adjusted EBITDA of $3.5 million, with these results beating the mid-point of our quarterly guidance on each metric. Additionally, given that we are tracking slightly ahead of our previous full year revenue and Adjusted EBITDA guidance, we are raising our 2023 revenue and Adjusted EBITDA guidance. We are pleased with our strong first half bookings performance and continued pipeline growth. As a result, we are reiterating our full year 2023 bookings expectations, inclusive of dollar-based retention rate and net new DOS subscription client additions. We are also encouraged to have received multiple additional external recognitions related to our team member engagement once again this quarter,” said Dan Burton, CEO of Health Catalyst. Financial Highlights for the Three Months Ended June 30, 2023 Key Financial Metrics Three Months Ended June 30, Year over Year 2023 2022 ChangeGAAP Financial Data:(in thousands, except percentages, unaudited)Technology revenue$47,324 $45,397 4%Professional services revenue$25,889 $25,236 3%Total revenue$73,213 $70,633 4%Loss from operations$(34,618) $(33,192) (4)%Net loss$(32,613) $(33,428) 2%Other Non-GAAP Financial Data:(1) Adjusted Technology Gross Profit$32,031 $31,968 —%Adjusted Technology Gross Margin 68% 70% Adjusted Professional Services Gross Profit$4,392 $6,696 (34)%Adjusted Professional Services Gross Margin 17% 27% Total Adjusted Gross Profit$36,423 $38,664 (6)%Total Adjusted Gross Margin 50% 55% Adjusted EBITDA$3,513 $1,999 76% ________________________ (1) These measures are not calculated in accordance with generally accepted accounting principles in the United States (GAAP). See the accompanying "Non-GAAP Financial Measures" section below for more information about these financial measures, including the limitations of such measures, and for a reconciliation of each measure to the most directly comparable measure calculated in accordance with GAAP. Financial Outlook Health Catalyst provides forward-looking guidance on total revenue, a GAAP measure, and Adjusted EBITDA, a non-GAAP measure. For the third quarter of 2023, we expect: Total revenue between $70.2 million and $74.2 million, and Adjusted EBITDA between $0.0 million and $2.5 million For the full year of 2023, we expect: Total revenue between $290.5 million and $295.5 million, and Adjusted EBITDA between $10.0 million and $12.0 million We have not reconciled guidance for Adjusted EBITDA to net loss, the most directly comparable GAAP measure, and have not provided forward-looking guidance for net loss, because there are items that may impact net loss, including stock-based compensation, that are not within our control or cannot be reasonably forecasted. Quarterly Conference Call Details The company will host a conference call to review the results today, Tuesday, August 8, 2023, at 5:00 p.m. E.T. The conference call can be accessed by dialing (800)-225-9448 for U.S. participants, or 203-518-9708 for international participants, and referencing conference ID “HCAT Q223.” A live audio webcast will be available online at https://ir.healthcatalyst.com/. A replay of the call will be available via webcast for on-demand listening shortly after the completion of the call, at the same web link, and will remain available for approximately 90 days. About Health Catalyst Health Catalyst is a leading provider of data and analytics technology and services to healthcare organizations committed to being the catalyst for massive, measurable, data-informed healthcare improvement. Its clients leverage the cloud-based data platform — powered by data from more than 100 million patient records and encompassing trillions of facts—as well as its analytics software and professional services expertise to make data-informed decisions and realize measurable clinical, financial, and operational improvements. Health Catalyst envisions a future in which all healthcare decisions are data informed. Available Information Our investors and others should note that we announce material information to the public about our company, products and services, and other matters related to our company through a variety of means, including our website (https://www.healthcatalyst.com/), our investor relations website (https://ir.healthcatalyst.com/), press releases, SEC filings, public conference calls, and social media, including our and our CEO's social media accounts, in order to achieve broad, non-exclusionary distribution of information to the public and to comply with our disclosure obligations under Regulation FD. Forward-Looking Statements This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, as amended. These forward-looking statements include statements regarding our future growth and our financial outlook for Q3 and fiscal year 2023. Forward-looking statements are subject to risks and uncertainties and are based on potentially inaccurate assumptions that could cause actual results to differ materially from those expected or implied by the forward-looking statements. Actual results may differ materially from the results predicted, and reported results should not be considered as an indication of future performance. Important risks and uncertainties that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: (i) changes in laws and regulations applicable to our business model; (ii) changes in market or industry conditions, regulatory environment, and receptivity to our technology and services; (iii) results of litigation or a security incident; (iv) the loss of one or more key clients or partners; (v) the impact of the challenging macroeconomic environment (including high inflationary and/or high interest rate environments) on our business and results of operations; and (vi) changes to our abilities to recruit and retain qualified team members. For a detailed discussion of the risk factors that could affect our actual results, please refer to the risk factors identified in our SEC reports, including, but not limited to the Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2023 expected to be filed with the SEC on or about August 8, 2023 and the Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on February 28, 2023. All information provided in this release and in the attachments is as of the date hereof, and we undertake no duty to update or revise this information unless required by law. Condensed Consolidated Balance Sheets(in thousands, except share and per share data, unaudited) As ofJune 30, As ofDecember 31, 2023 2022 (unaudited) Assets Current assets: Cash and cash equivalents$115,689 $116,312 Short-term investments 228,140 247,178 Accounts receivable, net 52,378 47,970 Prepaid expenses and other assets 14,744 16,335 Total current assets 410,951 427,795 Property and equipment, net 26,121 25,928 Intangible assets, net 79,041 92,189 Operating lease right-of-use assets 15,725 16,658 Goodwill 185,982 185,982 Other assets 5,083 3,734 Total assets$722,903 $752,286 Liabilities and stockholders’ equity Current liabilities: Accounts payable$7,974 $4,424 Accrued liabilities 15,791 19,691 Deferred revenue 59,526 54,961 Operating lease liabilities 3,468 3,434 Total current liabilities 86,759 82,510 Convertible senior notes 227,277 226,523 Deferred revenue, net of current portion 94 105 Operating lease liabilities, net of current portion 18,781 18,017 Other liabilities 125 121 Total liabilities 333,036 327,276 Commitments and contingencies Stockholders’ equity: Preferred stock, $0.001 par value per share; 25,000,000 shares authorized as of June 30, 2023 and December 31, 2022; no shares issued and outstanding as of June 30, 2023 and December 31, 2022 — — Common stock, $0.001 par value per share, and additional paid-in capital; 500,000,000 shares authorized as of June 30, 2023 and December 31, 2022; 56,541,641 and 55,261,922 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively 1,454,897 1,424,681 Accumulated deficit (1,064,826) (999,023)Accumulated other comprehensive loss (204) (648)Total stockholders’ equity 389,867 425,010 Total liabilities and stockholders’ equity$722,903 $752,286 Condensed Consolidated Statements of Operations(in thousands, except per share data, unaudited) Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 (in thousands) (in thousands)Revenue: Technology$47,324 $45,397 $94,510 $87,627 Professional services 25,889 25,236 52,571 51,093 Total revenue 73,213 70,633 147,081 138,720 Cost of revenue, excluding depreciation and amortization shown below: Technology(1)(2)(3) 15,859 13,996 30,586 27,323 Professional services(1)(2)(3) 23,579 20,611 47,156 41,280 Total cost of revenue, excluding depreciation and amortization 39,438 34,607 77,742 68,603 Operating expenses: Sales and marketing(1)(2)(3) 16,397 20,922 34,966 41,740 Research and development(1)(2)(3) 17,590 18,148 34,672 35,296 General and administrative(1)(2)(3)(4)(5) 23,671 17,536 47,504 26,359 Depreciation and amortization 10,735 12,612 21,729 24,261 Total operating expenses 68,393 69,218 138,871 127,656 Loss from operations (34,618) (33,192) (69,532) (57,539)Interest and other income (expense), net 2,090 (1,180) 3,883 (2,842)Loss before income taxes (32,528) (34,372) (65,649) (60,381)Income tax provision (benefit)(2) 85 (944) 154 (4,495)Net loss$(32,613) $(33,428) $(65,803) $(55,886)Net loss per share, basic$(0.58) $(0.62) $(1.18) $(1.05)Net loss per share, diluted$(0.58) $(0.62) $(1.18) $(1.15)Weighted-average shares outstanding used in calculating net loss per share, basic 55,977 53,675 55,732 53,343 Weighted-average shares outstanding used in calculating net loss per share, diluted 55,977 53,675 55,732 53,804 _______________(1) Includes stock-based compensation expense as follows: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022Stock-Based Compensation Expense:(in thousands) (in thousands)Cost of revenue, excluding depreciation and amortization: Technology$495 $480 $911 $1,069Professional services 1,981 1,924 3,755 4,091Sales and marketing 5,458 6,875 10,900 13,888Research and development 3,077 3,163 5,750 6,253General and administrative 3,618 5,490 7,197 10,751Total$14,629 $17,932 $28,513 $36,052 (2) Includes acquisition-related costs (benefit), net, as follows: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Acquisition-related costs (benefit), net:(in thousands) (in thousands)Cost of revenue, excluding depreciation and amortization: Technology$71 $87 $142 $193 Professional services 101 147 202 366 Sales and marketing 101 793 202 1,190 Research and development 195 1,107 389 1,665 General and administrative 27 2,513 41 (3,518)Income tax provision (benefit) — (933) — (4,533)Total$495 $3,714 $976 $(4,637) (3) Includes restructuring costs as follows: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022Restructuring costs:(in thousands) (in thousands)Cost of revenue, excluding depreciation and amortization: Technology$— $— $12 $—Professional services — — 434 —Sales and marketing — — 1,205 —Research and development — — 286 —General and administrative — — 118 —Total$— $— $2,055 $— (4) Includes litigation costs as follows: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022Litigation costs:(in thousands) (in thousands)General and administrative$9,591 $— $21,255 $—Total$9,591 $— $21,255 $— (5) Includes non-recurring lease-related charges as follows: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022Non-recurring lease-related charges:(in thousands) (in thousands)General and administrative$2,681 $— $2,681 $—Total$2,681 $— $2,681 $— Condensed Consolidated Statements of Cash Flows(in thousands, unaudited) Six Months EndedJune 30, 2023 2022 Cash flows from operating activities Net loss$(65,803) $(55,886)Adjustments to reconcile net loss to net cash used in operating activities: Stock-based compensation expense 28,513 36,052 Depreciation and amortization 21,729 24,261 Impairment of long-lived assets 2,681 — Non-cash operating lease expense 1,537 1,660 Amortization of debt discount and issuance costs 754 749 Amortization of investment (discount) premium (3,999) 403 Provision for expected credit losses 1,527 400 Deferred tax provision (benefit) 4 (4,529)Change in fair value of contingent consideration liabilities — (7,303)Other 31 (78)Change in operating assets and liabilities: Accounts receivable, net (5,936) 1,294 Prepaid expenses and other assets 321 1,584 Accounts payable, accrued liabilities, and other liabilities (1,295) (4,886)Deferred revenue 4,554 374 Contingent consideration liabilities — (741)Operating lease liabilities (1,772) (1,772)Net cash used in operating activities (17,154) (8,418) Cash flows from investing activities Proceeds from the sale and maturity of short-term investments 188,600 185,171 Purchase of short-term investments (165,188) (160,548)Capitalization of internal-use software (6,389) (7,026)Purchase of intangible assets (968) (1,298)Purchases of property and equipment (832) (558)Proceeds from the sale of property and equipment 11 10 Acquisition of business, net of cash acquired — (27,846)Net cash provided by (used in) investing activities 15,234 (12,095) Cash flows from financing activities Proceeds from exercise of stock options 897 3,688 Proceeds from employee stock purchase plan 2,206 1,531 Repurchase of common stock (1,808) — Payments of acquisition-related consideration — (930)Net cash provided by financing activities 1,295 4,289 Effect of exchange rate changes on cash and cash equivalents 2 (20)Net decrease in cash and cash equivalents (623) (16,244) Cash and cash equivalents at beginning of period 116,312 193,227 Cash and cash equivalents at end of period$115,689 $176,983 Non-GAAP Financial Measures To supplement our financial information presented in accordance with GAAP, we believe certain non-GAAP measures, including Adjusted Gross Profit, Adjusted Gross Margin, Adjusted EBITDA, Adjusted Net Loss, and Adjusted Net Loss per share, basic and diluted, are useful in evaluating our operating performance. For example, we exclude stock-based compensation expense because it is non-cash in nature and excluding this expense provides meaningful supplemental information regarding our operational performance and allows investors the ability to make more meaningful comparisons between our operating results and those of other companies. We use this non-GAAP financial information to evaluate our ongoing operations, as a component in determining employee bonus compensation, and for internal planning and forecasting purposes. We believe that non-GAAP financial information, when taken collectively, may be helpful to investors because it provides consistency and comparability with past financial performance. However, non-GAAP financial information is presented for supplemental informational purposes only, has limitations as an analytical tool and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP. In addition, other companies, including companies in our industry, may calculate similarly-titled non-GAAP measures differently or may use other measures to evaluate their performance. A reconciliation is provided below for each non-GAAP financial measure to the most directly comparable financial measure stated in accordance with GAAP. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures, and not to rely on any single financial measure to evaluate our business. Adjusted Gross Profit and Adjusted Gross Margin Adjusted Gross Profit is a non-GAAP financial measure that we define as revenue less cost of revenue, excluding depreciation and amortization, adding back stock-based compensation and acquisition-related costs, net as applicable. We define Adjusted Gross Margin as our Adjusted Gross Profit divided by our revenue. We believe Adjusted Gross Profit and Adjusted Gross Margin are useful to investors as they eliminate the impact of certain non-cash expenses and allow a direct comparison of these measures between periods without the impact of non-cash expenses and certain other non-recurring operating expenses. The following is a reconciliation of revenue, the most directly comparable GAAP financial measure, to Adjusted Gross Profit, for the three months ended June 30, 2023 and 2022: Three Months Ended June 30, 2023 (in thousands, except percentages) Technology Professional Services TotalRevenue$47,324 $25,889 $73,213 Cost of revenue, excluding depreciation and amortization (15,859) (23,579) (39,438)Gross profit, excluding depreciation and amortization 31,465 2,310 33,775 Add: Stock-based compensation 495 1,981 2,476 Acquisition-related costs, net(1) 71 101 172 Adjusted Gross Profit$32,031 $4,392 $36,423 Gross margin, excluding depreciation and amortization 66% 9% 46%Adjusted Gross Margin 68% 17% 50% ___________________(1) Acquisition-related costs, net include deferred retention expenses following the ARMUS and KPI Ninja acquisitions. Three Months Ended June 30, 2022 (in thousands, except percentages) Technology ProfessionalServices TotalRevenue$45,397 $25,236 $70,633 Cost of revenue, excluding depreciation and amortization (13,996) (20,611) (34,607)Gross profit, excluding depreciation and amortization 31,401 4,625 36,026 Add: Stock-based compensation 480 1,924 2,404 Acquisition-related costs, net(1) 87 147 234 Adjusted Gross Profit$31,968 $6,696 $38,664 Gross margin, excluding depreciation and amortization 69% 18% 51%Adjusted Gross Margin 70% 27% 55% ___________________(1) Acquisition-related costs, net include deferred retention expenses following the ARMUS, KPI Ninja, and Twistle acquisitions. Adjusted EBITDA Adjusted EBITDA is a non-GAAP financial measure that we define as net loss adjusted for (i) interest and other income (expense), net, (ii) income tax provision (benefit), (iii) depreciation and amortization, (iv) stock-based compensation, (v) acquisition-related costs, net, (vi) litigation costs, and (vii) non-recurring lease-related charges. We view acquisition-related expenses when applicable, such as transaction costs and changes in the fair value of contingent consideration liabilities that are directly related to business combinations, as costs that are unpredictable, dependent upon factors outside of our control, and are not necessarily reflective of operational performance during a period. We believe that excluding restructuring costs and litigation costs allows for more meaningful comparisons between operating results from period to period as these are separate from the core activities that arise in the ordinary course of our business and are not part of our ongoing operations. We believe Adjusted EBITDA provides investors with useful information on period-to-period performance as evaluated by management and a comparison with our past financial performance, and is useful in evaluating our operating performance compared to that of other companies in our industry, as this metric generally eliminates the effects of certain items that may vary from company to company for reasons unrelated to overall operating performance. The following is a reconciliation of our net loss, the most directly comparable GAAP financial measure, to Adjusted EBITDA, for the three months ended June 30, 2023 and 2022: Three Months Ended June 30, 2023 2022 (in thousands)Net loss$(32,613) $(33,428)Add: Interest and other (income) expense, net (2,090) 1,180 Income tax provision (benefit) 85 (944)Depreciation and amortization 10,735 12,612 Stock-based compensation 14,629 17,932 Acquisition-related costs, net(1) 495 4,647 Litigation costs(2) 9,591 — Non-recurring lease-related charges(3) 2,681 — Adjusted EBITDA$3,513 $1,999 __________________(1) Current year acquisition-related costs, net includes deferred retention expenses, while the prior year acquisition-related costs, net include third-party fees associated with due diligence, deferred retention expenses, post-acquisition restructuring costs incurred as part of business combinations, and changes in fair value of contingent consideration liabilities for potential earn-out payments. For additional details, refer to Note 2 in our condensed consolidated financial statements.(2) Litigation costs include costs related to litigation that are outside the ordinary course of our business. For additional details, refer to Note 14 in our condensed consolidated financial statements.(3) Includes the lease-related impairment charge related to our corporate office space designated for subleasing. Adjusted Net Loss and Adjusted Net Loss Per Share Adjusted Net Income (Loss) is a non-GAAP financial measure that we define as net loss adjusted for (i) stock-based compensation, (ii) amortization of acquired intangibles, (iii) acquisition-related costs, net, including the change in fair value of contingent consideration liabilities and the deferred tax valuation allowance release from acquisitions, (iv) litigation costs, (v) non-recurring lease-related charges, and (vi) non-cash interest expense related to our convertible senior notes. We believe Adjusted Net Income (Loss) provides investors with useful information on period-to-period performance as evaluated by management and comparison with our past financial performance and is useful in evaluating our operating performance compared to that of other companies in our industry, as this metric generally eliminates the effects of certain items that may vary from company to company for reasons unrelated to overall operating performance. Three Months Ended June 30, 2023 2022 Numerator:(in thousands, except share and per share amounts)Net loss$(32,613) $(33,428)Add: Stock-based compensation 14,629 17,932 Amortization of acquired intangibles 7,549 9,976 Acquisition-related costs (benefit), net(1) 495 3,714 Litigation costs(2) 9,591 — Non-recurring lease-related charges(3) 2,681 — Non-cash interest expense related to convertible senior notes 377 375 Adjusted Net Income (Loss)$2,709 $(1,431)Denominator: Weighted-average number of shares used in calculating net loss per share, basic 55,976,870 53,675,377 Non-GAAP weighted-average effect of dilutive securities 731,945 — Non-GAAP weighted-average number of shares used in calculating Adjusted Net Income (Loss) per share, diluted 56,708,815 53,675,377 Adjusted Net Income (Loss) per share, basic$0.05 $(0.03)Adjusted Net Income (Loss) per share, diluted$0.05 $(0.03) ______________(1) Current year acquisition-related costs, net includes deferred retention expenses, while the prior year acquisition-related costs, net include third-party fees associated with due diligence, deferred retention expenses, post-acquisition restructuring costs incurred as part of business combinations, and changes in fair value of contingent consideration liabilities for potential earn-out payments. For additional details, refer to Note 2 in our condensed consolidated financial statements.(2) Litigation costs include costs related to litigation that are outside the ordinary course of our business. For additional details, refer to Note 14 in our condensed consolidated financial statements.(3) Includes the lease-related impairment charge related to our corporate office space designated for subleasing. For additional details, refer to Note 1 in our condensed consolidated financial statements. Health Catalyst Investor Relations Contact:Adam BrownSenior Vice President, Investor Relations and FP&A+1 (855)-309-6800ir@healthcatalyst.com Health Catalyst Media Contact:Tarah Neujahr BryanChief Marketing Officermedia@healthcatalyst.com To view this slide as a PDF, please click here: http://ml.globenewswire.com/Resource/Download/57eb86e6-0406-4788-bc1a-daaaafdfacb1 Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. 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Health Catalyst Reports Second Quarter 2023 Results By: Health Catalyst, Inc. via GlobeNewswire August 08, 2023 at 16:03 PM EDT SALT LAKE CITY, Aug. 08, 2023 (GLOBE NEWSWIRE) -- Health Catalyst, Inc. ("Health Catalyst," Nasdaq: HCAT), a leading provider of data and analytics technology and services to healthcare organizations, today reported financial results for the quarter ended June 30, 2023. “For the second quarter of 2023, we are encouraged by our financial results, including total revenue of $73.2 million and Adjusted EBITDA of $3.5 million, with these results beating the mid-point of our quarterly guidance on each metric. Additionally, given that we are tracking slightly ahead of our previous full year revenue and Adjusted EBITDA guidance, we are raising our 2023 revenue and Adjusted EBITDA guidance. We are pleased with our strong first half bookings performance and continued pipeline growth. As a result, we are reiterating our full year 2023 bookings expectations, inclusive of dollar-based retention rate and net new DOS subscription client additions. We are also encouraged to have received multiple additional external recognitions related to our team member engagement once again this quarter,” said Dan Burton, CEO of Health Catalyst. Financial Highlights for the Three Months Ended June 30, 2023 Key Financial Metrics Three Months Ended June 30, Year over Year 2023 2022 ChangeGAAP Financial Data:(in thousands, except percentages, unaudited)Technology revenue$47,324 $45,397 4%Professional services revenue$25,889 $25,236 3%Total revenue$73,213 $70,633 4%Loss from operations$(34,618) $(33,192) (4)%Net loss$(32,613) $(33,428) 2%Other Non-GAAP Financial Data:(1) Adjusted Technology Gross Profit$32,031 $31,968 —%Adjusted Technology Gross Margin 68% 70% Adjusted Professional Services Gross Profit$4,392 $6,696 (34)%Adjusted Professional Services Gross Margin 17% 27% Total Adjusted Gross Profit$36,423 $38,664 (6)%Total Adjusted Gross Margin 50% 55% Adjusted EBITDA$3,513 $1,999 76% ________________________ (1) These measures are not calculated in accordance with generally accepted accounting principles in the United States (GAAP). See the accompanying "Non-GAAP Financial Measures" section below for more information about these financial measures, including the limitations of such measures, and for a reconciliation of each measure to the most directly comparable measure calculated in accordance with GAAP. Financial Outlook Health Catalyst provides forward-looking guidance on total revenue, a GAAP measure, and Adjusted EBITDA, a non-GAAP measure. For the third quarter of 2023, we expect: Total revenue between $70.2 million and $74.2 million, and Adjusted EBITDA between $0.0 million and $2.5 million For the full year of 2023, we expect: Total revenue between $290.5 million and $295.5 million, and Adjusted EBITDA between $10.0 million and $12.0 million We have not reconciled guidance for Adjusted EBITDA to net loss, the most directly comparable GAAP measure, and have not provided forward-looking guidance for net loss, because there are items that may impact net loss, including stock-based compensation, that are not within our control or cannot be reasonably forecasted. Quarterly Conference Call Details The company will host a conference call to review the results today, Tuesday, August 8, 2023, at 5:00 p.m. E.T. The conference call can be accessed by dialing (800)-225-9448 for U.S. participants, or 203-518-9708 for international participants, and referencing conference ID “HCAT Q223.” A live audio webcast will be available online at https://ir.healthcatalyst.com/. A replay of the call will be available via webcast for on-demand listening shortly after the completion of the call, at the same web link, and will remain available for approximately 90 days. About Health Catalyst Health Catalyst is a leading provider of data and analytics technology and services to healthcare organizations committed to being the catalyst for massive, measurable, data-informed healthcare improvement. Its clients leverage the cloud-based data platform — powered by data from more than 100 million patient records and encompassing trillions of facts—as well as its analytics software and professional services expertise to make data-informed decisions and realize measurable clinical, financial, and operational improvements. Health Catalyst envisions a future in which all healthcare decisions are data informed. Available Information Our investors and others should note that we announce material information to the public about our company, products and services, and other matters related to our company through a variety of means, including our website (https://www.healthcatalyst.com/), our investor relations website (https://ir.healthcatalyst.com/), press releases, SEC filings, public conference calls, and social media, including our and our CEO's social media accounts, in order to achieve broad, non-exclusionary distribution of information to the public and to comply with our disclosure obligations under Regulation FD. Forward-Looking Statements This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, as amended. These forward-looking statements include statements regarding our future growth and our financial outlook for Q3 and fiscal year 2023. Forward-looking statements are subject to risks and uncertainties and are based on potentially inaccurate assumptions that could cause actual results to differ materially from those expected or implied by the forward-looking statements. Actual results may differ materially from the results predicted, and reported results should not be considered as an indication of future performance. Important risks and uncertainties that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: (i) changes in laws and regulations applicable to our business model; (ii) changes in market or industry conditions, regulatory environment, and receptivity to our technology and services; (iii) results of litigation or a security incident; (iv) the loss of one or more key clients or partners; (v) the impact of the challenging macroeconomic environment (including high inflationary and/or high interest rate environments) on our business and results of operations; and (vi) changes to our abilities to recruit and retain qualified team members. For a detailed discussion of the risk factors that could affect our actual results, please refer to the risk factors identified in our SEC reports, including, but not limited to the Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2023 expected to be filed with the SEC on or about August 8, 2023 and the Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on February 28, 2023. All information provided in this release and in the attachments is as of the date hereof, and we undertake no duty to update or revise this information unless required by law. Condensed Consolidated Balance Sheets(in thousands, except share and per share data, unaudited) As ofJune 30, As ofDecember 31, 2023 2022 (unaudited) Assets Current assets: Cash and cash equivalents$115,689 $116,312 Short-term investments 228,140 247,178 Accounts receivable, net 52,378 47,970 Prepaid expenses and other assets 14,744 16,335 Total current assets 410,951 427,795 Property and equipment, net 26,121 25,928 Intangible assets, net 79,041 92,189 Operating lease right-of-use assets 15,725 16,658 Goodwill 185,982 185,982 Other assets 5,083 3,734 Total assets$722,903 $752,286 Liabilities and stockholders’ equity Current liabilities: Accounts payable$7,974 $4,424 Accrued liabilities 15,791 19,691 Deferred revenue 59,526 54,961 Operating lease liabilities 3,468 3,434 Total current liabilities 86,759 82,510 Convertible senior notes 227,277 226,523 Deferred revenue, net of current portion 94 105 Operating lease liabilities, net of current portion 18,781 18,017 Other liabilities 125 121 Total liabilities 333,036 327,276 Commitments and contingencies Stockholders’ equity: Preferred stock, $0.001 par value per share; 25,000,000 shares authorized as of June 30, 2023 and December 31, 2022; no shares issued and outstanding as of June 30, 2023 and December 31, 2022 — — Common stock, $0.001 par value per share, and additional paid-in capital; 500,000,000 shares authorized as of June 30, 2023 and December 31, 2022; 56,541,641 and 55,261,922 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively 1,454,897 1,424,681 Accumulated deficit (1,064,826) (999,023)Accumulated other comprehensive loss (204) (648)Total stockholders’ equity 389,867 425,010 Total liabilities and stockholders’ equity$722,903 $752,286 Condensed Consolidated Statements of Operations(in thousands, except per share data, unaudited) Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 (in thousands) (in thousands)Revenue: Technology$47,324 $45,397 $94,510 $87,627 Professional services 25,889 25,236 52,571 51,093 Total revenue 73,213 70,633 147,081 138,720 Cost of revenue, excluding depreciation and amortization shown below: Technology(1)(2)(3) 15,859 13,996 30,586 27,323 Professional services(1)(2)(3) 23,579 20,611 47,156 41,280 Total cost of revenue, excluding depreciation and amortization 39,438 34,607 77,742 68,603 Operating expenses: Sales and marketing(1)(2)(3) 16,397 20,922 34,966 41,740 Research and development(1)(2)(3) 17,590 18,148 34,672 35,296 General and administrative(1)(2)(3)(4)(5) 23,671 17,536 47,504 26,359 Depreciation and amortization 10,735 12,612 21,729 24,261 Total operating expenses 68,393 69,218 138,871 127,656 Loss from operations (34,618) (33,192) (69,532) (57,539)Interest and other income (expense), net 2,090 (1,180) 3,883 (2,842)Loss before income taxes (32,528) (34,372) (65,649) (60,381)Income tax provision (benefit)(2) 85 (944) 154 (4,495)Net loss$(32,613) $(33,428) $(65,803) $(55,886)Net loss per share, basic$(0.58) $(0.62) $(1.18) $(1.05)Net loss per share, diluted$(0.58) $(0.62) $(1.18) $(1.15)Weighted-average shares outstanding used in calculating net loss per share, basic 55,977 53,675 55,732 53,343 Weighted-average shares outstanding used in calculating net loss per share, diluted 55,977 53,675 55,732 53,804 _______________(1) Includes stock-based compensation expense as follows: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022Stock-Based Compensation Expense:(in thousands) (in thousands)Cost of revenue, excluding depreciation and amortization: Technology$495 $480 $911 $1,069Professional services 1,981 1,924 3,755 4,091Sales and marketing 5,458 6,875 10,900 13,888Research and development 3,077 3,163 5,750 6,253General and administrative 3,618 5,490 7,197 10,751Total$14,629 $17,932 $28,513 $36,052 (2) Includes acquisition-related costs (benefit), net, as follows: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Acquisition-related costs (benefit), net:(in thousands) (in thousands)Cost of revenue, excluding depreciation and amortization: Technology$71 $87 $142 $193 Professional services 101 147 202 366 Sales and marketing 101 793 202 1,190 Research and development 195 1,107 389 1,665 General and administrative 27 2,513 41 (3,518)Income tax provision (benefit) — (933) — (4,533)Total$495 $3,714 $976 $(4,637) (3) Includes restructuring costs as follows: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022Restructuring costs:(in thousands) (in thousands)Cost of revenue, excluding depreciation and amortization: Technology$— $— $12 $—Professional services — — 434 —Sales and marketing — — 1,205 —Research and development — — 286 —General and administrative — — 118 —Total$— $— $2,055 $— (4) Includes litigation costs as follows: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022Litigation costs:(in thousands) (in thousands)General and administrative$9,591 $— $21,255 $—Total$9,591 $— $21,255 $— (5) Includes non-recurring lease-related charges as follows: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022Non-recurring lease-related charges:(in thousands) (in thousands)General and administrative$2,681 $— $2,681 $—Total$2,681 $— $2,681 $— Condensed Consolidated Statements of Cash Flows(in thousands, unaudited) Six Months EndedJune 30, 2023 2022 Cash flows from operating activities Net loss$(65,803) $(55,886)Adjustments to reconcile net loss to net cash used in operating activities: Stock-based compensation expense 28,513 36,052 Depreciation and amortization 21,729 24,261 Impairment of long-lived assets 2,681 — Non-cash operating lease expense 1,537 1,660 Amortization of debt discount and issuance costs 754 749 Amortization of investment (discount) premium (3,999) 403 Provision for expected credit losses 1,527 400 Deferred tax provision (benefit) 4 (4,529)Change in fair value of contingent consideration liabilities — (7,303)Other 31 (78)Change in operating assets and liabilities: Accounts receivable, net (5,936) 1,294 Prepaid expenses and other assets 321 1,584 Accounts payable, accrued liabilities, and other liabilities (1,295) (4,886)Deferred revenue 4,554 374 Contingent consideration liabilities — (741)Operating lease liabilities (1,772) (1,772)Net cash used in operating activities (17,154) (8,418) Cash flows from investing activities Proceeds from the sale and maturity of short-term investments 188,600 185,171 Purchase of short-term investments (165,188) (160,548)Capitalization of internal-use software (6,389) (7,026)Purchase of intangible assets (968) (1,298)Purchases of property and equipment (832) (558)Proceeds from the sale of property and equipment 11 10 Acquisition of business, net of cash acquired — (27,846)Net cash provided by (used in) investing activities 15,234 (12,095) Cash flows from financing activities Proceeds from exercise of stock options 897 3,688 Proceeds from employee stock purchase plan 2,206 1,531 Repurchase of common stock (1,808) — Payments of acquisition-related consideration — (930)Net cash provided by financing activities 1,295 4,289 Effect of exchange rate changes on cash and cash equivalents 2 (20)Net decrease in cash and cash equivalents (623) (16,244) Cash and cash equivalents at beginning of period 116,312 193,227 Cash and cash equivalents at end of period$115,689 $176,983 Non-GAAP Financial Measures To supplement our financial information presented in accordance with GAAP, we believe certain non-GAAP measures, including Adjusted Gross Profit, Adjusted Gross Margin, Adjusted EBITDA, Adjusted Net Loss, and Adjusted Net Loss per share, basic and diluted, are useful in evaluating our operating performance. For example, we exclude stock-based compensation expense because it is non-cash in nature and excluding this expense provides meaningful supplemental information regarding our operational performance and allows investors the ability to make more meaningful comparisons between our operating results and those of other companies. We use this non-GAAP financial information to evaluate our ongoing operations, as a component in determining employee bonus compensation, and for internal planning and forecasting purposes. We believe that non-GAAP financial information, when taken collectively, may be helpful to investors because it provides consistency and comparability with past financial performance. However, non-GAAP financial information is presented for supplemental informational purposes only, has limitations as an analytical tool and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP. In addition, other companies, including companies in our industry, may calculate similarly-titled non-GAAP measures differently or may use other measures to evaluate their performance. A reconciliation is provided below for each non-GAAP financial measure to the most directly comparable financial measure stated in accordance with GAAP. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures, and not to rely on any single financial measure to evaluate our business. Adjusted Gross Profit and Adjusted Gross Margin Adjusted Gross Profit is a non-GAAP financial measure that we define as revenue less cost of revenue, excluding depreciation and amortization, adding back stock-based compensation and acquisition-related costs, net as applicable. We define Adjusted Gross Margin as our Adjusted Gross Profit divided by our revenue. We believe Adjusted Gross Profit and Adjusted Gross Margin are useful to investors as they eliminate the impact of certain non-cash expenses and allow a direct comparison of these measures between periods without the impact of non-cash expenses and certain other non-recurring operating expenses. The following is a reconciliation of revenue, the most directly comparable GAAP financial measure, to Adjusted Gross Profit, for the three months ended June 30, 2023 and 2022: Three Months Ended June 30, 2023 (in thousands, except percentages) Technology Professional Services TotalRevenue$47,324 $25,889 $73,213 Cost of revenue, excluding depreciation and amortization (15,859) (23,579) (39,438)Gross profit, excluding depreciation and amortization 31,465 2,310 33,775 Add: Stock-based compensation 495 1,981 2,476 Acquisition-related costs, net(1) 71 101 172 Adjusted Gross Profit$32,031 $4,392 $36,423 Gross margin, excluding depreciation and amortization 66% 9% 46%Adjusted Gross Margin 68% 17% 50% ___________________(1) Acquisition-related costs, net include deferred retention expenses following the ARMUS and KPI Ninja acquisitions. Three Months Ended June 30, 2022 (in thousands, except percentages) Technology ProfessionalServices TotalRevenue$45,397 $25,236 $70,633 Cost of revenue, excluding depreciation and amortization (13,996) (20,611) (34,607)Gross profit, excluding depreciation and amortization 31,401 4,625 36,026 Add: Stock-based compensation 480 1,924 2,404 Acquisition-related costs, net(1) 87 147 234 Adjusted Gross Profit$31,968 $6,696 $38,664 Gross margin, excluding depreciation and amortization 69% 18% 51%Adjusted Gross Margin 70% 27% 55% ___________________(1) Acquisition-related costs, net include deferred retention expenses following the ARMUS, KPI Ninja, and Twistle acquisitions. Adjusted EBITDA Adjusted EBITDA is a non-GAAP financial measure that we define as net loss adjusted for (i) interest and other income (expense), net, (ii) income tax provision (benefit), (iii) depreciation and amortization, (iv) stock-based compensation, (v) acquisition-related costs, net, (vi) litigation costs, and (vii) non-recurring lease-related charges. We view acquisition-related expenses when applicable, such as transaction costs and changes in the fair value of contingent consideration liabilities that are directly related to business combinations, as costs that are unpredictable, dependent upon factors outside of our control, and are not necessarily reflective of operational performance during a period. We believe that excluding restructuring costs and litigation costs allows for more meaningful comparisons between operating results from period to period as these are separate from the core activities that arise in the ordinary course of our business and are not part of our ongoing operations. We believe Adjusted EBITDA provides investors with useful information on period-to-period performance as evaluated by management and a comparison with our past financial performance, and is useful in evaluating our operating performance compared to that of other companies in our industry, as this metric generally eliminates the effects of certain items that may vary from company to company for reasons unrelated to overall operating performance. The following is a reconciliation of our net loss, the most directly comparable GAAP financial measure, to Adjusted EBITDA, for the three months ended June 30, 2023 and 2022: Three Months Ended June 30, 2023 2022 (in thousands)Net loss$(32,613) $(33,428)Add: Interest and other (income) expense, net (2,090) 1,180 Income tax provision (benefit) 85 (944)Depreciation and amortization 10,735 12,612 Stock-based compensation 14,629 17,932 Acquisition-related costs, net(1) 495 4,647 Litigation costs(2) 9,591 — Non-recurring lease-related charges(3) 2,681 — Adjusted EBITDA$3,513 $1,999 __________________(1) Current year acquisition-related costs, net includes deferred retention expenses, while the prior year acquisition-related costs, net include third-party fees associated with due diligence, deferred retention expenses, post-acquisition restructuring costs incurred as part of business combinations, and changes in fair value of contingent consideration liabilities for potential earn-out payments. For additional details, refer to Note 2 in our condensed consolidated financial statements.(2) Litigation costs include costs related to litigation that are outside the ordinary course of our business. For additional details, refer to Note 14 in our condensed consolidated financial statements.(3) Includes the lease-related impairment charge related to our corporate office space designated for subleasing. Adjusted Net Loss and Adjusted Net Loss Per Share Adjusted Net Income (Loss) is a non-GAAP financial measure that we define as net loss adjusted for (i) stock-based compensation, (ii) amortization of acquired intangibles, (iii) acquisition-related costs, net, including the change in fair value of contingent consideration liabilities and the deferred tax valuation allowance release from acquisitions, (iv) litigation costs, (v) non-recurring lease-related charges, and (vi) non-cash interest expense related to our convertible senior notes. We believe Adjusted Net Income (Loss) provides investors with useful information on period-to-period performance as evaluated by management and comparison with our past financial performance and is useful in evaluating our operating performance compared to that of other companies in our industry, as this metric generally eliminates the effects of certain items that may vary from company to company for reasons unrelated to overall operating performance. Three Months Ended June 30, 2023 2022 Numerator:(in thousands, except share and per share amounts)Net loss$(32,613) $(33,428)Add: Stock-based compensation 14,629 17,932 Amortization of acquired intangibles 7,549 9,976 Acquisition-related costs (benefit), net(1) 495 3,714 Litigation costs(2) 9,591 — Non-recurring lease-related charges(3) 2,681 — Non-cash interest expense related to convertible senior notes 377 375 Adjusted Net Income (Loss)$2,709 $(1,431)Denominator: Weighted-average number of shares used in calculating net loss per share, basic 55,976,870 53,675,377 Non-GAAP weighted-average effect of dilutive securities 731,945 — Non-GAAP weighted-average number of shares used in calculating Adjusted Net Income (Loss) per share, diluted 56,708,815 53,675,377 Adjusted Net Income (Loss) per share, basic$0.05 $(0.03)Adjusted Net Income (Loss) per share, diluted$0.05 $(0.03) ______________(1) Current year acquisition-related costs, net includes deferred retention expenses, while the prior year acquisition-related costs, net include third-party fees associated with due diligence, deferred retention expenses, post-acquisition restructuring costs incurred as part of business combinations, and changes in fair value of contingent consideration liabilities for potential earn-out payments. For additional details, refer to Note 2 in our condensed consolidated financial statements.(2) Litigation costs include costs related to litigation that are outside the ordinary course of our business. For additional details, refer to Note 14 in our condensed consolidated financial statements.(3) Includes the lease-related impairment charge related to our corporate office space designated for subleasing. For additional details, refer to Note 1 in our condensed consolidated financial statements. Health Catalyst Investor Relations Contact:Adam BrownSenior Vice President, Investor Relations and FP&A+1 (855)-309-6800ir@healthcatalyst.com Health Catalyst Media Contact:Tarah Neujahr BryanChief Marketing Officermedia@healthcatalyst.com To view this slide as a PDF, please click here: http://ml.globenewswire.com/Resource/Download/57eb86e6-0406-4788-bc1a-daaaafdfacb1
SALT LAKE CITY, Aug. 08, 2023 (GLOBE NEWSWIRE) -- Health Catalyst, Inc. ("Health Catalyst," Nasdaq: HCAT), a leading provider of data and analytics technology and services to healthcare organizations, today reported financial results for the quarter ended June 30, 2023. “For the second quarter of 2023, we are encouraged by our financial results, including total revenue of $73.2 million and Adjusted EBITDA of $3.5 million, with these results beating the mid-point of our quarterly guidance on each metric. Additionally, given that we are tracking slightly ahead of our previous full year revenue and Adjusted EBITDA guidance, we are raising our 2023 revenue and Adjusted EBITDA guidance. We are pleased with our strong first half bookings performance and continued pipeline growth. As a result, we are reiterating our full year 2023 bookings expectations, inclusive of dollar-based retention rate and net new DOS subscription client additions. We are also encouraged to have received multiple additional external recognitions related to our team member engagement once again this quarter,” said Dan Burton, CEO of Health Catalyst. Financial Highlights for the Three Months Ended June 30, 2023 Key Financial Metrics Three Months Ended June 30, Year over Year 2023 2022 ChangeGAAP Financial Data:(in thousands, except percentages, unaudited)Technology revenue$47,324 $45,397 4%Professional services revenue$25,889 $25,236 3%Total revenue$73,213 $70,633 4%Loss from operations$(34,618) $(33,192) (4)%Net loss$(32,613) $(33,428) 2%Other Non-GAAP Financial Data:(1) Adjusted Technology Gross Profit$32,031 $31,968 —%Adjusted Technology Gross Margin 68% 70% Adjusted Professional Services Gross Profit$4,392 $6,696 (34)%Adjusted Professional Services Gross Margin 17% 27% Total Adjusted Gross Profit$36,423 $38,664 (6)%Total Adjusted Gross Margin 50% 55% Adjusted EBITDA$3,513 $1,999 76% ________________________ (1) These measures are not calculated in accordance with generally accepted accounting principles in the United States (GAAP). See the accompanying "Non-GAAP Financial Measures" section below for more information about these financial measures, including the limitations of such measures, and for a reconciliation of each measure to the most directly comparable measure calculated in accordance with GAAP. Financial Outlook Health Catalyst provides forward-looking guidance on total revenue, a GAAP measure, and Adjusted EBITDA, a non-GAAP measure. For the third quarter of 2023, we expect: Total revenue between $70.2 million and $74.2 million, and Adjusted EBITDA between $0.0 million and $2.5 million For the full year of 2023, we expect: Total revenue between $290.5 million and $295.5 million, and Adjusted EBITDA between $10.0 million and $12.0 million We have not reconciled guidance for Adjusted EBITDA to net loss, the most directly comparable GAAP measure, and have not provided forward-looking guidance for net loss, because there are items that may impact net loss, including stock-based compensation, that are not within our control or cannot be reasonably forecasted. Quarterly Conference Call Details The company will host a conference call to review the results today, Tuesday, August 8, 2023, at 5:00 p.m. E.T. The conference call can be accessed by dialing (800)-225-9448 for U.S. participants, or 203-518-9708 for international participants, and referencing conference ID “HCAT Q223.” A live audio webcast will be available online at https://ir.healthcatalyst.com/. A replay of the call will be available via webcast for on-demand listening shortly after the completion of the call, at the same web link, and will remain available for approximately 90 days. About Health Catalyst Health Catalyst is a leading provider of data and analytics technology and services to healthcare organizations committed to being the catalyst for massive, measurable, data-informed healthcare improvement. Its clients leverage the cloud-based data platform — powered by data from more than 100 million patient records and encompassing trillions of facts—as well as its analytics software and professional services expertise to make data-informed decisions and realize measurable clinical, financial, and operational improvements. Health Catalyst envisions a future in which all healthcare decisions are data informed. Available Information Our investors and others should note that we announce material information to the public about our company, products and services, and other matters related to our company through a variety of means, including our website (https://www.healthcatalyst.com/), our investor relations website (https://ir.healthcatalyst.com/), press releases, SEC filings, public conference calls, and social media, including our and our CEO's social media accounts, in order to achieve broad, non-exclusionary distribution of information to the public and to comply with our disclosure obligations under Regulation FD. Forward-Looking Statements This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, as amended. These forward-looking statements include statements regarding our future growth and our financial outlook for Q3 and fiscal year 2023. Forward-looking statements are subject to risks and uncertainties and are based on potentially inaccurate assumptions that could cause actual results to differ materially from those expected or implied by the forward-looking statements. Actual results may differ materially from the results predicted, and reported results should not be considered as an indication of future performance. Important risks and uncertainties that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: (i) changes in laws and regulations applicable to our business model; (ii) changes in market or industry conditions, regulatory environment, and receptivity to our technology and services; (iii) results of litigation or a security incident; (iv) the loss of one or more key clients or partners; (v) the impact of the challenging macroeconomic environment (including high inflationary and/or high interest rate environments) on our business and results of operations; and (vi) changes to our abilities to recruit and retain qualified team members. For a detailed discussion of the risk factors that could affect our actual results, please refer to the risk factors identified in our SEC reports, including, but not limited to the Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2023 expected to be filed with the SEC on or about August 8, 2023 and the Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on February 28, 2023. All information provided in this release and in the attachments is as of the date hereof, and we undertake no duty to update or revise this information unless required by law. Condensed Consolidated Balance Sheets(in thousands, except share and per share data, unaudited) As ofJune 30, As ofDecember 31, 2023 2022 (unaudited) Assets Current assets: Cash and cash equivalents$115,689 $116,312 Short-term investments 228,140 247,178 Accounts receivable, net 52,378 47,970 Prepaid expenses and other assets 14,744 16,335 Total current assets 410,951 427,795 Property and equipment, net 26,121 25,928 Intangible assets, net 79,041 92,189 Operating lease right-of-use assets 15,725 16,658 Goodwill 185,982 185,982 Other assets 5,083 3,734 Total assets$722,903 $752,286 Liabilities and stockholders’ equity Current liabilities: Accounts payable$7,974 $4,424 Accrued liabilities 15,791 19,691 Deferred revenue 59,526 54,961 Operating lease liabilities 3,468 3,434 Total current liabilities 86,759 82,510 Convertible senior notes 227,277 226,523 Deferred revenue, net of current portion 94 105 Operating lease liabilities, net of current portion 18,781 18,017 Other liabilities 125 121 Total liabilities 333,036 327,276 Commitments and contingencies Stockholders’ equity: Preferred stock, $0.001 par value per share; 25,000,000 shares authorized as of June 30, 2023 and December 31, 2022; no shares issued and outstanding as of June 30, 2023 and December 31, 2022 — — Common stock, $0.001 par value per share, and additional paid-in capital; 500,000,000 shares authorized as of June 30, 2023 and December 31, 2022; 56,541,641 and 55,261,922 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively 1,454,897 1,424,681 Accumulated deficit (1,064,826) (999,023)Accumulated other comprehensive loss (204) (648)Total stockholders’ equity 389,867 425,010 Total liabilities and stockholders’ equity$722,903 $752,286 Condensed Consolidated Statements of Operations(in thousands, except per share data, unaudited) Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 (in thousands) (in thousands)Revenue: Technology$47,324 $45,397 $94,510 $87,627 Professional services 25,889 25,236 52,571 51,093 Total revenue 73,213 70,633 147,081 138,720 Cost of revenue, excluding depreciation and amortization shown below: Technology(1)(2)(3) 15,859 13,996 30,586 27,323 Professional services(1)(2)(3) 23,579 20,611 47,156 41,280 Total cost of revenue, excluding depreciation and amortization 39,438 34,607 77,742 68,603 Operating expenses: Sales and marketing(1)(2)(3) 16,397 20,922 34,966 41,740 Research and development(1)(2)(3) 17,590 18,148 34,672 35,296 General and administrative(1)(2)(3)(4)(5) 23,671 17,536 47,504 26,359 Depreciation and amortization 10,735 12,612 21,729 24,261 Total operating expenses 68,393 69,218 138,871 127,656 Loss from operations (34,618) (33,192) (69,532) (57,539)Interest and other income (expense), net 2,090 (1,180) 3,883 (2,842)Loss before income taxes (32,528) (34,372) (65,649) (60,381)Income tax provision (benefit)(2) 85 (944) 154 (4,495)Net loss$(32,613) $(33,428) $(65,803) $(55,886)Net loss per share, basic$(0.58) $(0.62) $(1.18) $(1.05)Net loss per share, diluted$(0.58) $(0.62) $(1.18) $(1.15)Weighted-average shares outstanding used in calculating net loss per share, basic 55,977 53,675 55,732 53,343 Weighted-average shares outstanding used in calculating net loss per share, diluted 55,977 53,675 55,732 53,804 _______________(1) Includes stock-based compensation expense as follows: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022Stock-Based Compensation Expense:(in thousands) (in thousands)Cost of revenue, excluding depreciation and amortization: Technology$495 $480 $911 $1,069Professional services 1,981 1,924 3,755 4,091Sales and marketing 5,458 6,875 10,900 13,888Research and development 3,077 3,163 5,750 6,253General and administrative 3,618 5,490 7,197 10,751Total$14,629 $17,932 $28,513 $36,052 (2) Includes acquisition-related costs (benefit), net, as follows: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Acquisition-related costs (benefit), net:(in thousands) (in thousands)Cost of revenue, excluding depreciation and amortization: Technology$71 $87 $142 $193 Professional services 101 147 202 366 Sales and marketing 101 793 202 1,190 Research and development 195 1,107 389 1,665 General and administrative 27 2,513 41 (3,518)Income tax provision (benefit) — (933) — (4,533)Total$495 $3,714 $976 $(4,637) (3) Includes restructuring costs as follows: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022Restructuring costs:(in thousands) (in thousands)Cost of revenue, excluding depreciation and amortization: Technology$— $— $12 $—Professional services — — 434 —Sales and marketing — — 1,205 —Research and development — — 286 —General and administrative — — 118 —Total$— $— $2,055 $— (4) Includes litigation costs as follows: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022Litigation costs:(in thousands) (in thousands)General and administrative$9,591 $— $21,255 $—Total$9,591 $— $21,255 $— (5) Includes non-recurring lease-related charges as follows: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022Non-recurring lease-related charges:(in thousands) (in thousands)General and administrative$2,681 $— $2,681 $—Total$2,681 $— $2,681 $— Condensed Consolidated Statements of Cash Flows(in thousands, unaudited) Six Months EndedJune 30, 2023 2022 Cash flows from operating activities Net loss$(65,803) $(55,886)Adjustments to reconcile net loss to net cash used in operating activities: Stock-based compensation expense 28,513 36,052 Depreciation and amortization 21,729 24,261 Impairment of long-lived assets 2,681 — Non-cash operating lease expense 1,537 1,660 Amortization of debt discount and issuance costs 754 749 Amortization of investment (discount) premium (3,999) 403 Provision for expected credit losses 1,527 400 Deferred tax provision (benefit) 4 (4,529)Change in fair value of contingent consideration liabilities — (7,303)Other 31 (78)Change in operating assets and liabilities: Accounts receivable, net (5,936) 1,294 Prepaid expenses and other assets 321 1,584 Accounts payable, accrued liabilities, and other liabilities (1,295) (4,886)Deferred revenue 4,554 374 Contingent consideration liabilities — (741)Operating lease liabilities (1,772) (1,772)Net cash used in operating activities (17,154) (8,418) Cash flows from investing activities Proceeds from the sale and maturity of short-term investments 188,600 185,171 Purchase of short-term investments (165,188) (160,548)Capitalization of internal-use software (6,389) (7,026)Purchase of intangible assets (968) (1,298)Purchases of property and equipment (832) (558)Proceeds from the sale of property and equipment 11 10 Acquisition of business, net of cash acquired — (27,846)Net cash provided by (used in) investing activities 15,234 (12,095) Cash flows from financing activities Proceeds from exercise of stock options 897 3,688 Proceeds from employee stock purchase plan 2,206 1,531 Repurchase of common stock (1,808) — Payments of acquisition-related consideration — (930)Net cash provided by financing activities 1,295 4,289 Effect of exchange rate changes on cash and cash equivalents 2 (20)Net decrease in cash and cash equivalents (623) (16,244) Cash and cash equivalents at beginning of period 116,312 193,227 Cash and cash equivalents at end of period$115,689 $176,983 Non-GAAP Financial Measures To supplement our financial information presented in accordance with GAAP, we believe certain non-GAAP measures, including Adjusted Gross Profit, Adjusted Gross Margin, Adjusted EBITDA, Adjusted Net Loss, and Adjusted Net Loss per share, basic and diluted, are useful in evaluating our operating performance. For example, we exclude stock-based compensation expense because it is non-cash in nature and excluding this expense provides meaningful supplemental information regarding our operational performance and allows investors the ability to make more meaningful comparisons between our operating results and those of other companies. We use this non-GAAP financial information to evaluate our ongoing operations, as a component in determining employee bonus compensation, and for internal planning and forecasting purposes. We believe that non-GAAP financial information, when taken collectively, may be helpful to investors because it provides consistency and comparability with past financial performance. However, non-GAAP financial information is presented for supplemental informational purposes only, has limitations as an analytical tool and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP. In addition, other companies, including companies in our industry, may calculate similarly-titled non-GAAP measures differently or may use other measures to evaluate their performance. A reconciliation is provided below for each non-GAAP financial measure to the most directly comparable financial measure stated in accordance with GAAP. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures, and not to rely on any single financial measure to evaluate our business. Adjusted Gross Profit and Adjusted Gross Margin Adjusted Gross Profit is a non-GAAP financial measure that we define as revenue less cost of revenue, excluding depreciation and amortization, adding back stock-based compensation and acquisition-related costs, net as applicable. We define Adjusted Gross Margin as our Adjusted Gross Profit divided by our revenue. We believe Adjusted Gross Profit and Adjusted Gross Margin are useful to investors as they eliminate the impact of certain non-cash expenses and allow a direct comparison of these measures between periods without the impact of non-cash expenses and certain other non-recurring operating expenses. The following is a reconciliation of revenue, the most directly comparable GAAP financial measure, to Adjusted Gross Profit, for the three months ended June 30, 2023 and 2022: Three Months Ended June 30, 2023 (in thousands, except percentages) Technology Professional Services TotalRevenue$47,324 $25,889 $73,213 Cost of revenue, excluding depreciation and amortization (15,859) (23,579) (39,438)Gross profit, excluding depreciation and amortization 31,465 2,310 33,775 Add: Stock-based compensation 495 1,981 2,476 Acquisition-related costs, net(1) 71 101 172 Adjusted Gross Profit$32,031 $4,392 $36,423 Gross margin, excluding depreciation and amortization 66% 9% 46%Adjusted Gross Margin 68% 17% 50% ___________________(1) Acquisition-related costs, net include deferred retention expenses following the ARMUS and KPI Ninja acquisitions. Three Months Ended June 30, 2022 (in thousands, except percentages) Technology ProfessionalServices TotalRevenue$45,397 $25,236 $70,633 Cost of revenue, excluding depreciation and amortization (13,996) (20,611) (34,607)Gross profit, excluding depreciation and amortization 31,401 4,625 36,026 Add: Stock-based compensation 480 1,924 2,404 Acquisition-related costs, net(1) 87 147 234 Adjusted Gross Profit$31,968 $6,696 $38,664 Gross margin, excluding depreciation and amortization 69% 18% 51%Adjusted Gross Margin 70% 27% 55% ___________________(1) Acquisition-related costs, net include deferred retention expenses following the ARMUS, KPI Ninja, and Twistle acquisitions. Adjusted EBITDA Adjusted EBITDA is a non-GAAP financial measure that we define as net loss adjusted for (i) interest and other income (expense), net, (ii) income tax provision (benefit), (iii) depreciation and amortization, (iv) stock-based compensation, (v) acquisition-related costs, net, (vi) litigation costs, and (vii) non-recurring lease-related charges. We view acquisition-related expenses when applicable, such as transaction costs and changes in the fair value of contingent consideration liabilities that are directly related to business combinations, as costs that are unpredictable, dependent upon factors outside of our control, and are not necessarily reflective of operational performance during a period. We believe that excluding restructuring costs and litigation costs allows for more meaningful comparisons between operating results from period to period as these are separate from the core activities that arise in the ordinary course of our business and are not part of our ongoing operations. We believe Adjusted EBITDA provides investors with useful information on period-to-period performance as evaluated by management and a comparison with our past financial performance, and is useful in evaluating our operating performance compared to that of other companies in our industry, as this metric generally eliminates the effects of certain items that may vary from company to company for reasons unrelated to overall operating performance. The following is a reconciliation of our net loss, the most directly comparable GAAP financial measure, to Adjusted EBITDA, for the three months ended June 30, 2023 and 2022: Three Months Ended June 30, 2023 2022 (in thousands)Net loss$(32,613) $(33,428)Add: Interest and other (income) expense, net (2,090) 1,180 Income tax provision (benefit) 85 (944)Depreciation and amortization 10,735 12,612 Stock-based compensation 14,629 17,932 Acquisition-related costs, net(1) 495 4,647 Litigation costs(2) 9,591 — Non-recurring lease-related charges(3) 2,681 — Adjusted EBITDA$3,513 $1,999 __________________(1) Current year acquisition-related costs, net includes deferred retention expenses, while the prior year acquisition-related costs, net include third-party fees associated with due diligence, deferred retention expenses, post-acquisition restructuring costs incurred as part of business combinations, and changes in fair value of contingent consideration liabilities for potential earn-out payments. For additional details, refer to Note 2 in our condensed consolidated financial statements.(2) Litigation costs include costs related to litigation that are outside the ordinary course of our business. For additional details, refer to Note 14 in our condensed consolidated financial statements.(3) Includes the lease-related impairment charge related to our corporate office space designated for subleasing. Adjusted Net Loss and Adjusted Net Loss Per Share Adjusted Net Income (Loss) is a non-GAAP financial measure that we define as net loss adjusted for (i) stock-based compensation, (ii) amortization of acquired intangibles, (iii) acquisition-related costs, net, including the change in fair value of contingent consideration liabilities and the deferred tax valuation allowance release from acquisitions, (iv) litigation costs, (v) non-recurring lease-related charges, and (vi) non-cash interest expense related to our convertible senior notes. We believe Adjusted Net Income (Loss) provides investors with useful information on period-to-period performance as evaluated by management and comparison with our past financial performance and is useful in evaluating our operating performance compared to that of other companies in our industry, as this metric generally eliminates the effects of certain items that may vary from company to company for reasons unrelated to overall operating performance. Three Months Ended June 30, 2023 2022 Numerator:(in thousands, except share and per share amounts)Net loss$(32,613) $(33,428)Add: Stock-based compensation 14,629 17,932 Amortization of acquired intangibles 7,549 9,976 Acquisition-related costs (benefit), net(1) 495 3,714 Litigation costs(2) 9,591 — Non-recurring lease-related charges(3) 2,681 — Non-cash interest expense related to convertible senior notes 377 375 Adjusted Net Income (Loss)$2,709 $(1,431)Denominator: Weighted-average number of shares used in calculating net loss per share, basic 55,976,870 53,675,377 Non-GAAP weighted-average effect of dilutive securities 731,945 — Non-GAAP weighted-average number of shares used in calculating Adjusted Net Income (Loss) per share, diluted 56,708,815 53,675,377 Adjusted Net Income (Loss) per share, basic$0.05 $(0.03)Adjusted Net Income (Loss) per share, diluted$0.05 $(0.03) ______________(1) Current year acquisition-related costs, net includes deferred retention expenses, while the prior year acquisition-related costs, net include third-party fees associated with due diligence, deferred retention expenses, post-acquisition restructuring costs incurred as part of business combinations, and changes in fair value of contingent consideration liabilities for potential earn-out payments. For additional details, refer to Note 2 in our condensed consolidated financial statements.(2) Litigation costs include costs related to litigation that are outside the ordinary course of our business. For additional details, refer to Note 14 in our condensed consolidated financial statements.(3) Includes the lease-related impairment charge related to our corporate office space designated for subleasing. For additional details, refer to Note 1 in our condensed consolidated financial statements. Health Catalyst Investor Relations Contact:Adam BrownSenior Vice President, Investor Relations and FP&A+1 (855)-309-6800ir@healthcatalyst.com Health Catalyst Media Contact:Tarah Neujahr BryanChief Marketing Officermedia@healthcatalyst.com To view this slide as a PDF, please click here: http://ml.globenewswire.com/Resource/Download/57eb86e6-0406-4788-bc1a-daaaafdfacb1
