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, 2022.
“I am pleased to share that Q2 2022 marked
another quarter of strong financial performance, including
exceeding the mid-point of our quarterly guidance for both revenue
and Adjusted EBITDA,” said Dan Burton, CEO of Health Catalyst. “I
am also happy to report that in the most recent team member
engagement survey, independently administered by the Gallup
organization, team member engagement scores at Health Catalyst
measured in the 97th percentile. This latest engagement level
continues a pattern that has been in place for many years, of
industry-leading engagement, consistently ranked between the 95th
and 99th percentile in overall team member engagement scores. We as
a leadership team continue to maintain a primary, prioritized focus
on team member engagement – the center of our strategic flywheel –
because we recognize the central and foundational contributions
that our team members make in building the software and providing
the services expertise that enable our customers to achieve
massive, measurable improvement.”
“While we are pleased with these Q2 2022
results, we are disappointed that we are revising down our revenue
and Adjusted EBITDA outlook for the full year. We are witnessing a
challenging end market environment that has materially impacted our
year-to-date bookings performance relative to our plan at the
beginning of the year. Importantly, however, as we navigate this
challenging macro-environment, we are committed to operating with
financial discipline. As such, while our near-term growth is
impacted by the macro-economic pressure on our end market, we are
confident in our ability to drive meaningful, positive Adjusted
EBITDA leverage in 2023 and beyond.”
Financial Highlights for the Three Months
Ended June 30, 2022
Key Financial Metrics
|
Three Months Ended June 30, |
|
Year over Year Change |
|
|
2022 |
|
|
|
2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands, except percentages, unaudited) |
Technology revenue |
$ |
45,397 |
|
|
$ |
35,529 |
|
|
28 |
% |
Professional services revenue |
$ |
25,236 |
|
|
$ |
24,098 |
|
|
5 |
% |
Total revenue |
$ |
70,633 |
|
|
$ |
59,627 |
|
|
18 |
% |
Loss from operations |
$ |
(33,192 |
) |
|
$ |
(32,319 |
) |
|
3 |
% |
Net loss |
$ |
(33,428 |
) |
|
$ |
(35,834 |
) |
|
(7 |
)% |
Other Non-GAAP Financial
Data:(1) |
|
|
|
|
|
Adjusted Technology Gross Profit |
$ |
31,968 |
|
|
$ |
24,256 |
|
|
32 |
% |
Adjusted Technology Gross Margin |
|
70 |
% |
|
|
68 |
% |
|
|
Adjusted Professional Services Gross Profit |
$ |
6,696 |
|
|
$ |
8,174 |
|
|
(18 |
)% |
Adjusted Professional Services Gross Margin |
|
27 |
% |
|
|
34 |
% |
|
|
Total Adjusted Gross Profit |
$ |
38,664 |
|
|
$ |
32,430 |
|
|
19 |
% |
Total Adjusted Gross Margin |
|
55 |
% |
|
|
54 |
% |
|
|
Adjusted EBITDA |
$ |
1,999 |
|
|
$ |
1,661 |
|
|
20 |
% |
|
|
|
|
|
|
|
|
|
|
|
________________________(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 2022, we expect:
- Total revenue between $65.3 million
and $68.3 million, and
- Adjusted EBITDA
between $(6.0) million and $(4.0) million
For the full year of 2022, we expect:
- Total revenue between $271.5 million
and $275.5 million, and
- Adjusted EBITDA
between $(6.0) million and $(4.0) 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, Thursday, August 4, 2022, at 5:00 p.m. E.T.
Participants can pre-register for the conference call at
https://register.vevent.com/register/BI819cb5d2860c4bd5a9054759c47b3898.
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 customers 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
Health Catalyst intends to use its Investor
Relations website as a means of disclosing
material non-public information and for complying with
its 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 2022. 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
customers or partners; (v) the impact of COVID-19 and inflation 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, 2022 expected
to be filed with the SEC on or about August 4, 2022 and the
Annual Report on Form 10-K for the year ended December 31, 2021
filed with the SEC on March 1, 2022. 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, |
|
|
2022 |
|
|
|
2021 |
|
|
(unaudited) |
|
|
Assets |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
176,983 |
|
|
$ |
193,227 |
|
Short-term investments |
|
226,365 |
|
|
|
251,754 |
|
Accounts receivable, net |
|
47,752 |
|
|
|
48,801 |
|
Prepaid expenses and other assets |
|
14,270 |
|
|
|
14,609 |
|
Total current assets |
|
465,370 |
|
|
|
508,391 |
|
Property and equipment, net |
|
26,527 |
|
|
|
23,316 |
|
Intangible assets, net |
|
109,508 |
|
|
|
104,788 |
|
Operating lease right-of-use assets |
|
20,228 |
|
|
|
21,133 |
|
Goodwill |
|
185,982 |
|
|
|
169,972 |
|
Other assets |
|
3,724 |
|
|
|
4,496 |
|
Total assets |
$ |
811,339 |
|
|
$ |
832,096 |
|
Liabilities and
stockholders’ equity |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
5,691 |
|
|
$ |
4,693 |
|
Accrued liabilities |
|
18,612 |
|
|
|
23,725 |
|
Deferred revenue |
|
60,883 |
|
|
|
56,632 |
|
Operating lease liabilities |
|
3,498 |
|
|
|
3,425 |
|
Contingent consideration liabilities |
|
1,625 |
|
|
|
4,576 |
|
Total current liabilities |
|
90,309 |
|
|
|
93,051 |
|
Convertible senior notes |
|
225,772 |
|
|
|
180,942 |
|
Deferred revenue, net of current portion |
|
553 |
|
|
|
929 |
|
Operating lease liabilities, net of current portion |
|
19,142 |
|
|
|
20,244 |
|
Contingent consideration liabilities, net of current portion |
|
6,390 |
|
|
|
14,719 |
|
Other liabilities |
|
118 |
|
|
|
113 |
|
Total liabilities |
|
342,284 |
|
|
|
309,998 |
|
Commitments and contingencies |
|
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
Preferred stock, $0.001 par value per share; 25,000,000 shares
authorized as of |
|
|
|
June 30, 2022 and December 31, 2021; no shares issued and
outstanding as of June 30, 2022 and December 31,
2021 |
|
— |
|
|
|
— |
|
Common stock, $0.001 par value per share; 500,000,000 shares
authorized as of |
|
|
|
|
|
|
|
June 30, 2022 and December 31, 2021; 54,053,379 and
52,622,080 shares issued and outstanding as of June 30, 2022
and December 31, 2021, respectively |
|
54 |
|
|
|
53 |
|
Additional paid-in capital |
|
1,386,946 |
|
|
|
1,400,972 |
|
Accumulated deficit |
|
(917,506 |
) |
|
|
(878,860 |
) |
Accumulated other comprehensive loss |
|
(439 |
) |
|
|
(67 |
) |
Total stockholders’ equity |
|
469,055 |
|
|
|
522,098 |
|
Total liabilities and
stockholders’ equity |
$ |
811,339 |
|
|
$ |
832,096 |
|
|
|
|
|
|
|
|
|
Condensed Consolidated Statements of Operations(in
thousands, except per share data, unaudited) |
|
|
Three Months EndedJune 30, |
|
Six Months EndedJune 30, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Revenue: |
|
|
|
|
|
|
|
Technology |
$ |
45,397 |
|
|
$ |
35,529 |
|
|
$ |
87,627 |
|
|
$ |
69,368 |
|
Professional services |
|
25,236 |
|
|
|
24,098 |
|
|
|
51,093 |
|
|
|
46,105 |
|
Total revenue |
|
70,633 |
|
|
|
59,627 |
|
|
|
138,720 |
|
|
|
115,473 |
|
Cost of revenue, excluding
depreciation and |
|
|
|
|
|
|
|
amortization: |
|
|
|
|
|
|
|
Technology(1)(2) |
|
13,996 |
|
|
|
11,847 |
|
|
|
27,323 |
|
|
|
22,672 |
|
Professional services(1)(2) |
|
20,611 |
|
|
|
18,206 |
|
|
|
41,280 |
|
|
|
34,719 |
|
Total cost of revenue,
excluding depreciation and |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
amortization |
|
34,607 |
|
|
|
30,053 |
|
|
|
68,603 |
|
|
|
57,391 |
|
Operating expenses: |
|
|
|
|
|
|
|
Sales and marketing(1)(2) |
|
20,922 |
|
|
|
16,705 |
|
|
|
41,740 |
|
|
|
32,356 |
|
Research and development(1)(2) |
|
18,148 |
|
|
|
14,524 |
|
|
|
35,296 |
|
|
|
28,869 |
|
General and administrative(1)(2) |
|
17,536 |
|
|
|
22,525 |
|
|
|
26,359 |
|
|
|
37,540 |
|
Depreciation and amortization |
|
12,612 |
|
|
|
8,139 |
|
|
|
24,261 |
|
|
|
15,953 |
|
Total operating expenses |
|
69,218 |
|
|
|
61,893 |
|
|
|
127,656 |
|
|
|
114,718 |
|
Loss from operations |
|
(33,192 |
) |
|
|
(32,319 |
) |
|
|
(57,539 |
) |
|
|
(56,636 |
) |
Interest and other expense, net |
|
(1,180 |
) |
|
|
(3,707 |
) |
|
|
(2,842 |
) |
|
|
(7,659 |
) |
Loss before income taxes |
|
(34,372 |
) |
|
|
(36,026 |
) |
|
|
(60,381 |
) |
|
|
(64,295 |
) |
Income tax provision (benefit)(2) |
|
(944 |
) |
|
|
(192 |
) |
|
|
(4,495 |
) |
|
|
(91 |
) |
Net loss |
$ |
(33,428 |
) |
|
$ |
(35,834 |
) |
|
$ |
(55,886 |
) |
|
$ |
(64,204 |
) |
Net loss per share, basic |
$ |
(0.62 |
) |
|
$ |
(0.80 |
) |
|
$ |
(1.05 |
) |
|
$ |
(1.45 |
) |
Net loss per share,
diluted |
$ |
(0.62 |
) |
|
$ |
(0.80 |
) |
|
$ |
(1.15 |
) |
|
$ |
(1.45 |
) |
Weighted-average shares
outstanding used in |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
calculating net loss per share, basic |
|
53,675 |
|
|
|
44,886 |
|
|
|
53,343 |
|
|
|
44,381 |
|
Weighted-average shares
outstanding used in |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
calculating net loss per share, diluted |
|
53,675 |
|
|
|
44,886 |
|
|
|
53,804 |
|
|
|
44,381 |
|
Adjusted net loss |
|
(1,431 |
) |
|
|
(1 |
) |
|
|
(4,398 |
) |
|
|
(2,754 |
) |
Adjusted net loss per share,
basic and diluted(3) |
$ |
(0.03 |
) |
|
$ |
(0.00 |
) |
|
$ |
(0.08 |
) |
|
$ |
(0.06 |
) |
|
|
|
|
|
|
|
|
_______________(1) Includes
stock-based compensation expense as follows:
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
|
|
|
|
|
|
|
|
|
|
|
Stock-Based Compensation Expense: |
(in thousands) |
|
(in thousands) |
Cost of revenue, excluding
depreciation and amortization: |
|
|
|
|
|
|
|
Technology |
$ |
480 |
|
$ |
574 |
|
$ |
1,069 |
|
$ |
948 |
Professional services |
|
1,924 |
|
|
2,282 |
|
|
4,091 |
|
|
3,717 |
Sales and marketing |
|
6,875 |
|
|
5,932 |
|
|
13,888 |
|
|
10,750 |
Research and development |
|
3,163 |
|
|
2,676 |
|
|
6,253 |
|
|
4,933 |
General and administrative |
|
5,490 |
|
|
6,263 |
|
|
10,751 |
|
|
10,889 |
Total |
$ |
17,932 |
|
$ |
17,727 |
|
$ |
36,052 |
|
$ |
31,237 |
|
|
|
|
|
|
|
|
|
|
|
|
(2) Includes acquisition-related
costs (benefit), net, as follows:
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2022 |
|
|
|
2021 |
|
|
2022 |
|
|
|
2021 |
|
|
|
|
|
|
|
|
|
Acquisition-related costs (benefit), net: |
(in thousands) |
|
(in thousands) |
Cost of revenue, excluding
depreciation and amortization: |
|
|
|
|
|
|
|
Technology |
$ |
87 |
|
|
$ |
— |
|
$ |
193 |
|
|
$ |
— |
Professional services |
|
147 |
|
|
|
— |
|
|
366 |
|
|
|
— |
Sales and marketing |
|
793 |
|
|
|
— |
|
|
1,190 |
|
|
|
— |
Research and development |
|
1,107 |
|
|
|
— |
|
|
1,665 |
|
|
|
— |
General and administrative |
|
2,513 |
|
|
|
8,114 |
|
|
(3,518 |
) |
|
|
10,270 |
Income tax provision (benefit) |
$ |
(933 |
) |
|
$ |
— |
|
$ |
(4,533 |
) |
|
$ |
— |
Total |
$ |
3,714 |
|
|
$ |
8,114 |
|
$ |
(4,637 |
) |
|
$ |
10,270 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3) Includes non-GAAP adjustments
to net loss. Refer to the "Non-GAAP Financial Measures—Adjusted Net
Loss Per Share" section below for further details.
Condensed Consolidated Statements of Cash Flows(in
thousands, unaudited) |
|
|
Six Months EndedJune 30, |
|
|
2022 |
|
|
|
2021 |
|
Cash flows from operating activities |
|
|
|
Net loss |
$ |
(55,886 |
) |
|
$ |
(64,204 |
) |
Adjustments to reconcile net
loss to net cash used in operating activities: |
|
|
|
Stock-based compensation expense |
|
36,052 |
|
|
|
31,237 |
|
Depreciation and amortization |
|
24,261 |
|
|
|
15,953 |
|
Non-cash operating lease expense |
|
1,660 |
|
|
|
1,926 |
|
Amortization of debt discount and issuance costs |
|
749 |
|
|
|
5,817 |
|
Investment discount and premium amortization |
|
403 |
|
|
|
569 |
|
Provision for expected credit losses |
|
400 |
|
|
|
398 |
|
Deferred tax provision (benefit) |
|
(4,529 |
) |
|
|
4 |
|
Change in fair value of contingent consideration liabilities |
|
(7,303 |
) |
|
|
9,064 |
|
Other |
|
(78 |
) |
|
|
(25 |
) |
Change in operating assets and liabilities: |
|
|
|
Accounts receivable, net |
|
1,294 |
|
|
|
927 |
|
Prepaid expenses and other assets |
|
1,584 |
|
|
|
(1,548 |
) |
Accounts payable, accrued liabilities, and other liabilities |
|
(4,886 |
) |
|
|
(2,439 |
) |
Deferred revenue |
|
374 |
|
|
|
7,465 |
|
Contingent consideration liabilities |
|
(741 |
) |
|
|
(11,025 |
) |
Operating lease liabilities |
|
(1,772 |
) |
|
|
(2,107 |
) |
Net cash used in operating activities |
|
(8,418 |
) |
|
|
(7,988 |
) |
|
|
|
|
Cash flows from investing activities |
|
|
|
Proceeds from the sale and
maturity of short-term investments |
|
185,171 |
|
|
|
174,293 |
|
Purchase of short-term investments |
|
(160,548 |
) |
|
|
(53,686 |
) |
Acquisition of business, net of cash acquired |
|
(27,846 |
) |
|
|
— |
|
Capitalization of internal-use software |
|
(7,026 |
) |
|
|
(1,912 |
) |
Purchase of intangible assets |
|
(1,298 |
) |
|
|
(770 |
) |
Purchases of property and equipment |
|
(558 |
) |
|
|
(8,138 |
) |
Proceeds from the sale of property and equipment |
|
10 |
|
|
|
12 |
|
Net cash (used in) provided by investing activities |
|
(12,095 |
) |
|
|
109,799 |
|
|
|
|
|
Cash flows from financing activities |
|
|
|
Proceeds from exercise of stock options |
|
3,688 |
|
|
|
14,076 |
|
Proceeds from employee stock purchase plan |
|
1,531 |
|
|
|
2,619 |
|
Payments of acquisition-related consideration |
|
(930 |
) |
|
|
(5,360 |
) |
Net cash provided by financing activities |
|
4,289 |
|
|
|
11,335 |
|
Effect of exchange rate changes on cash and cash equivalents |
|
(20 |
) |
|
|
(5 |
) |
Net (decrease) increase in cash and cash equivalents |
|
(16,244 |
) |
|
|
113,141 |
|
|
|
|
|
Cash and cash equivalents at beginning of period |
|
193,227 |
|
|
|
91,954 |
|
Cash and cash equivalents at end of period |
$ |
176,983 |
|
|
$ |
205,095 |
|
|
|
|
|
|
|
|
|
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. 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, 2022 and
2021:
|
Three Months Ended June 30, 2022 |
|
(in thousands, except percentages) |
|
Technology |
|
Professional Services |
|
Total |
Revenue |
$ |
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 |
|
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 |
% |
|
Three Months Ended June 30, 2021 |
|
(in thousands, except percentages) |
|
Technology |
|
ProfessionalServices |
|
Total |
Revenue |
$ |
35,529 |
|
|
$ |
24,098 |
|
|
$ |
59,627 |
|
Cost of revenue, excluding depreciation and amortization |
|
(11,847 |
) |
|
|
(18,206 |
) |
|
|
(30,053 |
) |
Gross profit, excluding depreciation and amortization |
|
23,682 |
|
|
|
5,892 |
|
|
|
29,574 |
|
Add: |
|
|
|
|
|
Stock-based compensation |
|
574 |
|
|
|
2,282 |
|
|
|
2,856 |
|
Adjusted Gross Profit |
$ |
24,256 |
|
|
$ |
8,174 |
|
|
$ |
32,430 |
|
Gross margin, excluding depreciation and amortization |
|
67 |
% |
|
|
24 |
% |
|
|
50 |
% |
Adjusted Gross Margin |
|
68 |
% |
|
|
34 |
% |
|
|
54 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
Adjusted EBITDA is a non-GAAP financial measure
that we define as net loss adjusted for (i) interest and other
expense, net, (ii) income tax (benefit) provision, (iii)
depreciation and amortization, (iv) stock-based compensation, and
(v) acquisition-related costs, net, including the change in fair
value of contingent consideration liabilities. 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 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, 2022 and 2021:
|
Three Months Ended June 30, |
|
|
2022 |
|
|
|
2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands) |
Net loss |
$ |
(33,428 |
) |
|
$ |
(35,834 |
) |
Add: |
|
|
|
Interest and other expense, net |
|
1,180 |
|
|
|
3,707 |
|
Income tax (benefit) provision |
|
(944 |
) |
|
|
(192 |
) |
Depreciation and amortization |
|
12,612 |
|
|
|
8,139 |
|
Stock-based compensation |
|
17,932 |
|
|
|
17,727 |
|
Acquisition-related costs, net(1) |
|
4,647 |
|
|
|
8,114 |
|
Adjusted EBITDA |
$ |
1,999 |
|
|
$ |
1,661 |
|
_______________(1) Acquisition-related costs,
net includes 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.
Adjusted Net Loss and Adjusted Net Loss Per
Share
Adjusted Net 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 (benefit), net, including the change in
fair value of contingent consideration liabilities and the deferred
tax valuation allowance release from the acquisitions of ARMUS and
KPI Ninja, and (iv) non-cash interest expense related to our
convertible senior notes. We believe Adjusted Net 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 EndedJune 30, |
|
Six Months EndedJune 30, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Numerator: |
(in thousands, except share and per share
amounts) |
Net loss |
$ |
(33,428 |
) |
|
$ |
(35,834 |
) |
|
$ |
(55,886 |
) |
|
$ |
(64,204 |
) |
Add: |
|
|
|
|
|
|
|
Stock-based compensation |
|
17,932 |
|
|
|
17,727 |
|
|
|
36,052 |
|
|
|
31,237 |
|
Amortization of acquired intangibles |
|
9,976 |
|
|
|
7,045 |
|
|
|
19,324 |
|
|
|
14,126 |
|
Acquisition-related costs (benefit), net(1) |
|
3,714 |
|
|
|
8,114 |
|
|
|
(4,637 |
) |
|
|
10,270 |
|
Non-cash interest expense related to |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
convertible senior notes |
|
375 |
|
|
|
2,947 |
|
|
|
749 |
|
|
|
5,817 |
|
Adjusted Net Loss |
$ |
(1,431 |
) |
|
$ |
(1 |
) |
|
$ |
(4,398 |
) |
|
$ |
(2,754 |
) |
Denominator: |
|
|
|
|
|
|
|
Weighted-average number of shares used in |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
calculating net loss per share, basic |
|
53,675,377 |
|
|
|
44,886,489 |
|
|
|
53,342,887 |
|
|
|
44,381,196 |
|
Weighted-average number of shares used in |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
calculating net loss per share, diluted |
|
53,675,377 |
|
|
|
44,886,489 |
|
|
|
53,804,441 |
|
|
|
44,381,196 |
|
|
|
|
|
|
|
|
|
Adjusted Net Loss per share, basic and diluted |
$ |
(0.03 |
) |
|
$ |
(0.00 |
) |
|
$ |
(0.08 |
) |
|
$ |
(0.06 |
) |
______________(1) Acquisition-related costs
(benefit), net includes third-party fees associated with due
diligence, deferred retention expenses, post-acquisition
restructuring costs incurred as part of business combinations,
changes in fair value of contingent consideration liabilities for
potential earn-out payments, and the deferred tax valuation
allowance release from the acquisitions of ARMUS and KPI Ninja. For
additional details refer to Note 2 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 Brand and Communications
Officermedia@healthcatalyst.com
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