Definitive Healthcare Corp. (“Definitive Healthcare” or the
“Company”) (Nasdaq: DH), an industry leader in healthcare
commercial intelligence, today announced financial results for the
quarter ended March 31, 2023.
First Quarter 2023 Financial
Highlights:
-
Revenue was $59.2 million, an increase of 18% from
$50.1 million in Q1 2022.
-
Net loss was ($15.6) million, or 26% of revenue,
compared to ($13.1) million, or 26% of revenue in Q1 2022.
-
Adjusted Net Income was $9.2 million, compared to
$7.7 million in Q1 2022.
-
Adjusted EBITDA was $15.7 million, or 26% of
revenue, compared to $14.0 million, or 28% of revenue in Q1
2022.
-
Cash flow from operations was $15.0 million in the
quarter or 25% of revenue. For the trailing twelve-month period,
cash flow from operations was $36.9 million, or 16% of
revenue.
-
Unlevered free cash flow was $20.4 million in the
quarter, or 34% of revenue. For the trailing twelve-month period,
unlevered free cash flow was $50.7 million, or 22% of revenue.
“In the first quarter of 2023, we got off to a
solid start to the year, especially given the context of the
ongoing macroeconomic challenges,” said Robert Musslewhite, CEO of
Definitive Healthcare. “We continue to have strong demand
generation and customer interest in our commercial intelligence
platform. Our customers recognize that the Definitive Healthcare
platform plays a strategic role in their go-to-market and product
development efforts and that our solutions will be critical in
accelerating their business performance as market conditions
improve.”
Recent Business and Operating
Highlights:
Customer Wins
In the first quarter, Definitive Healthcare
continued to grow its enterprise client base, ending the quarter
with 529 enterprise customers, defined as those customers with more
than one hundred thousand dollars in annual recurring revenue.
Significant customer wins included:
-
The world’s leading mRNA therapeutic company expanded its
relationship with Definitive Healthcare by signing an enterprise
contract for Monocl ExpertInsight to help them better identify
clinical experts around the globe who could accelerate their
research and development efforts.
-
A multinational pharmaceutical and biotechnology company expanded
its relationship with Definitive Healthcare by making a multi-year
commitment to the Passport Analytics Suite. This company plans to
use the Passport Analytics Suite to optimize its global marketing
spend and re-allocate precious investment dollars to the sales and
marketing channels that are delivering the highest return.
-
A leading children’s hospital in the western region of the United
States purchased access to the Atlas All-Payer Claims Dataset, the
Atlas Reference and Affiliation Dataset, and the company’s
executive contact data, along with the Latitude Analytics Suite.
The hospital plans to use this data to help it understand the
pediatric market in its region, including market share, patient
flow, network leakage, and competitive analysis.
-
The largest virtual musculoskeletal clinic in the United States
will be using the new DefinitiveConnect product to directly import
data from the Atlas Dataset into their Salesforce instance to drive
their business development strategy. In addition, this company’s
strategy team will use the ConnectedCareView product to get better
insurance coverage in their core markets of hospitals and long-term
care facilities.
-
A non-profit humanitarian organization that provides emergency
assistance, disaster relief, and disaster preparedness education
across the United States organization purchased the Atlas All-Payor
Claims Dataset, which it will use to transform its sales strategy
and identify the US hospitals and departments offering the most
opportunity for growth.
Innovation
The company recently made two significant
product announcements that further expand its competitive
differentiation.
First, the company launched three new offerings
that significantly enhance its data integration capabilities.
Customers can now choose from a range of flexible options and
support services to seamlessly integrate the Definitive
Healthcare’s commercial intelligence into their IT infrastructure.
These new data integration offerings are:
-
DefinitiveConnect – Optimized to work with the
Salesforce Lightning platform, DefinitiveConnect provides users
with access to more than 300 data elements that are continuously
updated directly in their Salesforce environment through automated
data syncing. The DefinitiveConnect app is available now on the
Salesforce AppExchange.
-
Snowflake – Customers of one of the
industry-leading data warehouse platforms, Snowflake, can now
leverage its secure data-sharing technology to access the Atlas
Dataset. Existing clients can opt to work with a professional
services team to ingest the data they need into Snowflake, unite
multiple datasets, and create data marts to perform advanced
analytics.
-
APIs – A new suite of modern commercial APIs now
supports automated synchronization of Definitive Healthcare data
into a broad range of applications and systems. Developers can use
these APIs to request and retrieve Definitive Healthcare data
through virtually any CRM software system or business intelligence
data warehouse.
Second, the company recently launched Atlas AI,
a set of proprietary analytics embedded throughout its solutions
and services. Atlas AI is built on the Atlas Dataset, which
contains robust claims, reference, affiliation, and expert data
that provides a longitudinal, comprehensive, and current picture of
the healthcare market. Definitive Healthcare’s data science team
leverages the Atlas Dataset and applies deep domain expertise,
computer science, mathematics, and a vast toolbox of methodologies,
including natural language processing, machine learning, graph
networks, and proprietary algorithms to create new intelligence.
Atlas AI enables clients to better target opportunities, allocate
resources, inform strategic planning, and drive critical business
decisions.
The first release of Atlas AI includes 11
proprietary analytics, each designed by the company’s data science
team to address a specific customer challenge. Atlas AI comes
standard with Definitive Healthcare’s data products in the View
Product Suite, the Monocl Expert Suite, as well as its Latitude
Analytics Suite and Passport Analytics Suite. Additionally, clients
can use Atlas AI in offline reports and custom reports for more
complex analyses.
To learn more about Atlas AI, visit
https://www.definitivehc.com/why-definitive-healthcare/our-platform/atlas-ai.
Business Outlook
Based on information as of May 4, 2023, the
Company is issuing the following financial guidance.
Second Quarter 2023:
-
Revenue is expected to be in the range of $60.5 –
$61.5 million, a 12% increase year over year.
-
Adjusted Operating Income is expected to be in the
range of $14.5 – $15.5 million.
-
Adjusted EBITDA is expected to be in the range of
$16.0 – $17.0 million.
- Adjusted Net
Income is expected to be $7.0 – $8.0 million.
- Adjusted Net
Income Per Diluted Share is expected to be $0.03–
$0.05 per share on approximately 155.2 million weighted-average
shares outstanding.
Full Year 2023:
-
Revenue is expected to be in the range of $249.0 –
$255.0 million, up 12% – 15% from prior year.
-
Adjusted Operating Income is expected to be in the
range of $61.5 – $65.5 million.
-
Adjusted EBITDA is expected to be in the range of
$67.0 – $71.0 million.
- Adjusted Net
Income is expected to be $30.0 – $34.0 million.
- Adjusted Net
Income Per Diluted Share is expected to be $0.19 – $0.23
per share on approximately 155.5 million weighted-average shares
outstanding.
Conference Call Information
Definitive Healthcare will host a conference
call today, May 4, 2023, at 5:00 p.m. (Eastern Time) to discuss the
Company's financial results and current business outlook.
Participants may access the call at 1-877-407-3982 to be connected
through the operator or via Call me™ link to request a return call.
The Call me™ link will be available 15 minutes prior to the call.
Shortly after the conclusion of the call, a replay of this
conference call will be available through May 18, 2023 at
1-844-512-2921 or 1-412-317-6671. The replay passcode is 13737281.
A live audio webcast of the event will be available on the
Definitive Healthcare’s Investor Relations website at
https://ir.definitivehc.com/.
About Definitive Healthcare
At Definitive Healthcare, our passion is to
transform data, analytics and expertise into healthcare commercial
intelligence. We help clients uncover the right markets,
opportunities and people, so they can shape tomorrow’s healthcare
industry. Our SaaS platform creates new paths to commercial success
in the healthcare market, so companies can identify where to go
next. Learn more at definitivehc.com.
Forward-Looking
Statements
This press release includes forward-looking statements that
reflect our current views with respect to future events and
financial performance. Such statements are provided under the “safe
harbor” protection of the Private Securities Litigation Reform Act
of 1995. Forward-looking statements include all statements that do
not relate solely to historical or current facts, and can generally
be identified by words or phrases written in the future tense
and/or preceded by words such as “likely,” “should,” “may,”
“anticipates,” “intends,” “plans,” “seeks,” “believes,”
“estimates,” “expects” or similar words or variations thereof, or
the negative thereof, references to future periods, or by the
inclusion of forecasts or projections, but these terms are not the
exclusive means of identifying such statements. Examples of
forward-looking statements include, but are not limited to,
statements we make regarding our outlook, financial guidance, the
market, industry and macroeconomic environment, our business,
growth strategies, product development efforts and future expenses,
customer growth and statements reflecting our expectations about
our ability to execute on our strategic plans, achieve future
growth and profitability and achieve our financial goals.
Forward-looking statements in this press release are based on
our current expectations and assumptions regarding our business,
the economy and other future conditions. Because forward-looking
statements relate to the future, by their nature, they are subject
to inherent uncertainties, risks and changes in circumstances that
are difficult to predict. As a result, our actual results may
differ materially from those contemplated by the forward-looking
statements. Important factors that could cause actual results to
differ materially from those in the forward-looking statements
include the following: the war between Russia and Ukraine, global
geopolitical tension and worsening macroeconomic conditions; actual
or potential changes in international, national, regional and local
economic, business and financial conditions, including recessions,
inflation, rising interest rates, volatility in the capital markets
and related market uncertainty; the impact of worsening
macroeconomic conditions on our new and existing customers; our
inability to acquire new customers and generate additional revenue
from existing customers; our inability to generate sales of
subscriptions to our platform or any decline in demand for our
platform and the data we offer; the competitiveness of the market
in which we operate and our ability to compete effectively; the
failure to maintain and improve our platform, or develop new
modules or insights for healthcare commercial intelligence; the
inability to obtain and maintain accurate, comprehensive or
reliable data, which could result in reduced demand for our
platform; the risk that our recent growth rates may not be
indicative of our future growth; the inability to achieve or
sustain profitability in the future compared to historical levels
as we increase investments in our business; the loss of our access
to our data providers; the failure to respond to advances in
healthcare commercial intelligence; an inability to attract new
customers and expand subscriptions of current customers; the risk
of cyber-attacks and security vulnerabilities; litigation,
investigations or other legal, governmental or regulatory actions;
and the possibility that our security measures are breached or
unauthorized access to data is otherwise obtained.
Additional factors or events that could cause our actual
performance to differ from these forward-looking statements may
emerge from time to time, and it is not possible for us to predict
all of them. Should one or more of these risks or uncertainties
materialize, or should any of our assumptions prove incorrect, our
actual financial condition, results of operations, future
performance and business may vary in material respects from the
performance projected in these forward-looking
statements.
For additional discussion of factors that could impact our
operational and financial results, refer to our Quarterly Report on
Form 10-Q for the three months ended March 31, 2023 that will be
filed following this earnings release and our Annual Report on Form
10-K for the fiscal year ended December 31, 2022, and our
subsequent SEC filings, which are or will be available on the
Investor Relations page of our website at ir.definitivehc.com and
on the SEC website at www.sec.gov.
All information in this press release speaks only as of the date
on which it is made. We undertake no obligation to publicly update
this information, whether as a result of new information, future
developments or otherwise, except as may be required by
law.
Website
Definitive Healthcare intends to use its website as a
distribution channel of material company information. Financial and
other important information regarding the Company is routinely
posted on and accessible through the Company’s website at
https://www.definitivehc.com/. Accordingly, you should monitor the
investor relations portion of our website at
https://ir.definitivehc.com/ in addition to following our press
releases, SEC filings, and public conference calls and webcasts. In
addition, you may automatically receive email alerts and other
information about the Company when you enroll your email address by
visiting the “Email Alerts” section of our investor relations page
at https://ir.definitivehc.com/.
Non-GAAP Financial Measures
We have presented supplemental non-GAAP
financial measures as part of this earnings release. We believe
that these supplemental non-GAAP financial measures are useful to
investors because they allow for an evaluation of the Company with
a focus on the performance of its core operations, including
providing meaningful comparisons of financial results to historical
periods and to the financial results of peer and competitor
companies. A reconciliation of GAAP to Non-GAAP results has
been provided in the financial statement tables included at the end
of this press release.
We refer to Unlevered Free Cash Flow, Adjusted
EBITDA, Adjusted EBITDA Margin, Adjusted Gross Profit, Adjusted
Gross Margin, Adjusted Operating Income, Adjusted Net Income, and
Adjusted Net Income as non-GAAP financial measures. These non-GAAP
financial measures are not prepared in accordance with generally
accepted accounting principles in the U.S., (“GAAP”). These are
supplemental financial measures of our performance and should not
be considered substitutes for net (loss) income, gross profit,
gross margin, or any other measure derived in accordance with
GAAP.
We define Unlevered Free Cash Flow as net cash
provided from operating activities less purchases of property,
equipment and other assets, plus cash interest expense, and cash
payments related to transaction, integration, and restructuring
related expenses, earnouts, and other non-recurring items.
Unlevered Free Cash Flow does not represent residual cash flow
available for discretionary expenditures since, among other things,
we have mandatory debt service requirements.
We define EBITDA as earnings before debt-related
costs, including interest expense, net and loss on extinguishment
of debt, income taxes and depreciation and amortization. Adjusted
EBITDA is defined as EBITDA adjusted to exclude certain items of a
significant or unusual nature, including other income and expense,
equity-based compensation, transaction, integration, and
restructuring expenses and other non-recurring expenses. Adjusted
EBITDA Margin is defined as Adjusted EBITDA as a percentage of
revenue. Adjusted EBITDA and Adjusted EBITDA Margin are key metrics
used by management and our board of directors to assess the
profitability of our operations. We believe that Adjusted EBITDA
and Adjusted EBITDA Margin provide useful measures to investors to
assess our operating performance because these metrics eliminate
non-recurring and unusual items and non-cash expenses, which we do
not consider indicative of ongoing operational performance. We
believe that these metrics are helpful to investors in measuring
the profitability of our operations on a consolidated level.
We define Adjusted Gross Profit as revenue less
cost of revenue (excluding acquisition-related depreciation and
amortization and equity compensation costs) and Adjusted Gross
Margin means Adjusted Gross Profit as a percentage of revenue.
Adjusted Gross Profit differs from gross profit, in that gross
profit includes acquisition-related depreciation and amortization
expense and equity compensation costs. Adjusted Gross Profit and
Adjusted Gross Margin are key metrics used by management and our
board of directors to assess our operations. We exclude
acquisition-related depreciation and amortization expenses as they
have no direct correlation to the cost of operating our business on
an ongoing basis. A small quantity of equity-based compensation is
included in cost of revenue in accordance with GAAP but is excluded
from our Adjusted Gross Profit calculations due to its non-cash
nature.
We define Adjusted Operating Income as income
(loss) from operations plus acquisition related amortization,
equity-based compensation, transaction, integration, and
restructuring expenses and other non-recurring expenses.
We define Adjusted Net Income as Adjusted
Operating Income less interest expense, net, other expense, net,
excluding TRA liability remeasurement expense and recurring income
tax expense including the incremental tax effects of adjustments to
arrive at Adjusted Operating Income. We define Adjusted Net Income
Per Diluted Share as Adjusted Net Income divided by diluted
outstanding shares.
Our use of these non-GAAP terms may vary from
the use of similar terms by other companies in our industry and
accordingly may not be comparable to similarly titled measures used
by other companies and are not measures of performance calculated
in accordance with GAAP. Our presentation of these non-GAAP
financial measures are intended as supplemental measures of our
performance that are not required by, or presented in accordance
with, GAAP. These non-GAAP financial measures should not be
considered as alternatives to (loss) income from operations, net
(loss) income, gross profit, gross margin, earnings per share or
any other performance measures derived in accordance with GAAP, or
as measures of operating cash flows or liquidity.
We do not provide a quantitative reconciliation
of the forward-looking non-GAAP financial measures included in this
press release to the most directly comparable GAAP measures due to
the high variability and difficulty to predict certain items
excluded from these non-GAAP financial measures; in particular, the
effects of equity-based compensation expense, taxes and amounts
under the tax receivable agreement, deferred tax assets and
deferred tax liabilities, and transaction, integration, and
restructuring expenses. We expect the variability of these excluded
items may have a significant, and potentially unpredictable, impact
on our future GAAP financial results.
In evaluating our non-GAAP financial measures,
you should be aware that in the future we may incur expenses
similar to those eliminated in these presentations.
Investor Contact: Brian Denyeau ICR
for Definitive
Healthcare brian.denyeau@icrinc.com646-277-1251
Media Contact: Danielle
Johns djohns@definitivehc.com
Definitive Healthcare Corp. |
Condensed Consolidated Balance Sheets |
(amounts in thousands, except number of shares and par value;
unaudited) |
|
|
|
|
|
|
|
March 31, 2023 |
|
December 31, 2022 |
Assets |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
|
$ |
124,961 |
|
|
$ |
146,934 |
|
Short-term investments |
|
|
218,955 |
|
|
|
184,939 |
|
Accounts receivable, net |
|
|
51,801 |
|
|
|
58,799 |
|
Prepaid expenses and other current assets |
|
|
14,711 |
|
|
|
12,686 |
|
Current portion of deferred contract costs |
|
|
11,064 |
|
|
|
10,387 |
|
Total current assets |
|
|
421,492 |
|
|
|
413,745 |
|
Property and equipment, net |
|
|
4,452 |
|
|
|
4,464 |
|
Operating lease right-of-use assets, net |
|
|
9,118 |
|
|
|
9,681 |
|
Other assets |
|
|
3,697 |
|
|
|
4,683 |
|
Deferred contract costs, net of current portion |
|
|
15,080 |
|
|
|
14,596 |
|
Intangible assets, net |
|
|
338,295 |
|
|
|
350,722 |
|
Goodwill |
|
|
1,323,102 |
|
|
|
1,323,102 |
|
Total assets |
|
$ |
2,115,236 |
|
|
$ |
2,120,993 |
|
Liabilities and Equity |
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable |
|
|
4,535 |
|
|
|
3,948 |
|
Accrued expenses and other current liabilities |
|
|
20,770 |
|
|
|
18,748 |
|
Current portion of deferred revenue |
|
|
105,362 |
|
|
|
99,692 |
|
Current portion of term loan |
|
|
10,313 |
|
|
|
8,594 |
|
Current portion of operating lease liabilities |
|
|
1,640 |
|
|
|
1,521 |
|
Total current liabilities |
|
|
142,620 |
|
|
|
132,503 |
|
Long term liabilities: |
|
|
|
|
Deferred revenue, net of current portion |
|
|
138 |
|
|
|
236 |
|
Term loan, net of current portion |
|
|
252,465 |
|
|
|
255,765 |
|
Operating lease liabilities, net of current portion |
|
|
9,491 |
|
|
|
9,969 |
|
Tax receivable agreements liability, net of current portion |
|
|
161,721 |
|
|
|
156,311 |
|
Deferred tax liabilities |
|
|
78,315 |
|
|
|
75,737 |
|
Other long-term liabilities |
|
|
1,035 |
|
|
|
3,251 |
|
Total liabilities |
|
|
645,785 |
|
|
|
633,772 |
|
|
|
|
|
|
Equity: |
|
|
|
|
Class A Common Stock, par value $0.001, 600,000,000 shares
authorized, 110,162,665 and 105,138,273 shares issued and
outstanding at March 31, 2023 and December 31, 2022,
respectively |
|
|
110 |
|
|
|
105 |
|
Class B Common Stock, par value $0.00001, 65,000,000 shares
authorized, 45,626,933 and 44,217,344 shares issued and
outstanding, respectively, at March 31, 2023, and 50,433,101 and
48,923,952 shares issued and outstanding, respectively at December
31, 2022 |
|
|
— |
|
|
|
— |
|
Additional paid-in capital |
|
|
1,020,709 |
|
|
|
972,077 |
|
Accumulated other comprehensive income |
|
|
2,793 |
|
|
|
3,668 |
|
Accumulated deficit |
|
|
(35,531 |
) |
|
|
(23,714 |
) |
Noncontrolling interests |
|
|
481,370 |
|
|
|
535,085 |
|
Total equity |
|
|
1,469,451 |
|
|
|
1,487,221 |
|
Total liabilities and equity |
|
$ |
2,115,236 |
|
|
$ |
2,120,993 |
|
|
|
|
|
|
Definitive Healthcare Corp. |
Condensed Consolidated Statements of
Operations |
(amounts in thousands, except share amounts and per share data;
unaudited) |
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
|
2023 |
|
|
|
2022 |
|
Revenue |
|
$ |
59,201 |
|
|
$ |
50,124 |
|
Cost of revenue: |
|
|
|
|
Cost of revenue exclusive of amortization (1) |
|
|
8,552 |
|
|
|
5,950 |
|
Amortization |
|
|
3,354 |
|
|
|
5,378 |
|
Gross profit |
|
|
47,295 |
|
|
|
38,796 |
|
Operating expenses: |
|
|
|
|
Sales and marketing (1) |
|
|
23,423 |
|
|
|
21,293 |
|
Product development (1) |
|
|
9,884 |
|
|
|
6,850 |
|
General and administrative (1) |
|
|
13,640 |
|
|
|
10,454 |
|
Depreciation and amortization |
|
|
9,590 |
|
|
|
9,874 |
|
Transaction, integration, and restructuring expenses |
|
|
2,590 |
|
|
|
1,310 |
|
Total operating expenses |
|
|
59,127 |
|
|
|
49,781 |
|
Loss from operations |
|
|
(11,832 |
) |
|
|
(10,985 |
) |
Other expense, net |
|
|
|
|
Interest expense, net |
|
|
(780 |
) |
|
|
(1,884 |
) |
Other expense, net |
|
|
(3,698 |
) |
|
|
(101 |
) |
Total other expense, net |
|
|
(4,478 |
) |
|
|
(1,985 |
) |
Net loss before income taxes |
|
|
(16,310 |
) |
|
|
(12,970 |
) |
Benefit from (provision for) income taxes |
|
|
710 |
|
|
|
(87 |
) |
Net loss |
|
|
(15,600 |
) |
|
|
(13,057 |
) |
Less: Net loss attributable to noncontrolling interests |
|
|
(3,783 |
) |
|
|
(4,433 |
) |
Net loss attributable to Definitive Healthcare
Corp. |
|
$ |
(11,817 |
) |
|
$ |
(8,624 |
) |
Net loss per share of Class A Common Stock: |
|
|
|
|
Basic and diluted |
|
$ |
(0.11 |
) |
|
$ |
(0.09 |
) |
Weighted average Class A Common Stock outstanding: |
|
|
|
|
Basic and diluted |
|
|
108,234,043 |
|
|
|
97,158,823 |
|
|
|
|
|
|
|
|
|
|
|
(1) Amounts include equity-based compensation expense as
follows: |
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
|
2023 |
|
|
|
2022 |
|
Cost of revenue |
|
$ |
258 |
|
|
$ |
232 |
|
Sales and marketing |
|
|
2,649 |
|
|
|
3,746 |
|
Product development |
|
|
3,011 |
|
|
|
1,289 |
|
General and administrative |
|
|
5,210 |
|
|
|
1,605 |
|
Total equity-based compensation expense |
|
$ |
11,128 |
|
|
$ |
6,872 |
|
|
|
|
|
|
Definitive Healthcare Corp. |
|
Condensed Consolidated Statements of Cash
Flows |
|
(amounts in thousands; unaudited) |
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
|
|
2023 |
|
|
|
2022 |
|
|
Cash flows provided by (used in) operating
activities: |
|
|
|
|
|
Net loss |
|
$ |
(15,600 |
) |
|
$ |
(13,057 |
) |
|
Adjustments to reconcile net loss to net cash provided by operating
activities: |
|
|
|
|
|
Depreciation and amortization |
|
|
513 |
|
|
|
525 |
|
|
Amortization of intangible assets |
|
|
12,431 |
|
|
|
14,727 |
|
|
Amortization of deferred contract costs |
|
|
2,860 |
|
|
|
1,875 |
|
|
Equity-based compensation |
|
|
11,128 |
|
|
|
6,872 |
|
|
Amortization of debt issuance costs |
|
|
176 |
|
|
|
176 |
|
|
Provision for doubtful accounts receivable |
|
|
22 |
|
|
|
9 |
|
|
Non-cash restructuring charges related to office leases |
|
|
157 |
|
|
|
— |
|
|
Tax receivable agreement remeasurement |
|
|
3,619 |
|
|
|
248 |
|
|
Deferred income taxes |
|
|
(773 |
) |
|
|
69 |
|
|
Changes in operating assets and liabilities: |
|
|
|
|
|
Accounts receivable |
|
|
6,966 |
|
|
|
8,526 |
|
|
Prepaid expenses and other current assets |
|
|
(3,796 |
) |
|
|
692 |
|
|
Deferred contract costs |
|
|
(4,021 |
) |
|
|
(3,299 |
) |
|
Contingent consideration |
|
|
— |
|
|
|
(6,400 |
) |
|
Accounts payable, accrued expenses, and other liabilities |
|
|
(4,294 |
) |
|
|
(3,579 |
) |
|
Deferred revenue |
|
|
5,569 |
|
|
|
6,249 |
|
|
Net cash provided by operating activities |
|
|
14,957 |
|
|
|
13,633 |
|
|
Cash flows (used in) provided by investing
activities: |
|
|
|
|
|
Purchases of property, equipment, and other assets |
|
|
(1,338 |
) |
|
|
(794 |
) |
|
Purchases of short-term investments |
|
|
(90,252 |
) |
|
|
(109,559 |
) |
|
Maturities of short-term investments |
|
|
58,120 |
|
|
|
— |
|
|
Cash paid for acquisitions, net of cash acquired |
|
|
— |
|
|
|
(56,499 |
) |
|
Net cash used in investing activities |
|
|
(33,470 |
) |
|
|
(166,852 |
) |
|
Cash flows used in financing activities: |
|
|
|
|
|
Repayments of term loans |
|
|
(1,719 |
) |
|
|
(1,719 |
) |
|
Taxes paid related to net share settlement of equity awards |
|
|
(1,530 |
) |
|
|
— |
|
|
Payment of contingent consideration |
|
|
— |
|
|
|
(1,100 |
) |
|
Payments under tax receivable agreement |
|
|
(246 |
) |
|
|
— |
|
|
Payments of equity offering issuance costs |
|
|
(30 |
) |
|
|
(1,299 |
) |
|
Member distributions |
|
|
— |
|
|
|
(258 |
) |
|
Net cash used in financing activities |
|
|
(3,525 |
) |
|
|
(4,376 |
) |
|
Net decrease in cash and cash equivalents |
|
|
(22,038 |
) |
|
|
(157,595 |
) |
|
Effect of exchange rate changes on cash and cash equivalents |
|
|
65 |
|
|
|
(108 |
) |
|
Cash and cash equivalents, beginning of period |
|
|
146,934 |
|
|
|
387,498 |
|
|
Cash and cash equivalents, end of period |
|
$ |
124,961 |
|
|
$ |
229,795 |
|
|
Supplemental cash flow disclosures: |
|
|
|
|
|
Cash paid during the period for: |
|
|
|
|
|
Interest |
|
$ |
3,475 |
|
|
$ |
1,771 |
|
|
Income taxes |
|
$ |
79 |
|
|
$ |
— |
|
|
Acquisitions: |
|
|
|
|
|
Net assets acquired, net of cash acquired |
|
$ |
— |
|
|
$ |
97,499 |
|
|
Initial cash investment in prior year |
|
|
— |
|
|
|
(40,000 |
) |
|
Contingent consideration |
|
|
— |
|
|
|
(1,000 |
) |
|
Net cash paid for
acquisitions |
|
$ |
— |
|
|
$ |
56,499 |
|
|
Supplemental disclosure of non-cash investing
activities: |
|
|
|
|
|
Capital expenditures included in accrued expenses |
|
$ |
333 |
|
|
$ |
3,500 |
|
|
|
|
|
|
|
|
Definitive Healthcare Corp. |
Reconciliations of Non-GAAP Financial Measures to Closest
GAAP Equivalent |
|
|
|
|
Reconciliation of GAAP Operating Cash Flow to Unlevered Free Cash
Flow |
(in thousands; unaudited) |
|
|
|
|
|
Three Months Ended March 31, |
|
|
2023 |
|
|
|
2022 |
|
Cash flow from operations |
$ |
14,957 |
|
|
$ |
13,633 |
|
Purchases of property, equipment, and other assets |
|
(1,338 |
) |
|
|
(794 |
) |
Interest paid in cash |
|
3,475 |
|
|
|
1,771 |
|
Transaction, integration, and restructuring expenses paid in cash
(a) |
|
2,433 |
|
|
|
1,310 |
|
Earnout payment (b) |
|
— |
|
|
|
6,400 |
|
Other non-recurring items (c) |
|
837 |
|
|
|
1,596 |
|
Unlevered Free Cash Flow |
$ |
20,364 |
|
|
$ |
23,916 |
|
|
|
|
|
(a) Transaction and integration expenses paid in cash primarily
represent legal, accounting, and consulting expenses related to our
acquisitions. Restructuring expenses paid in cash relate to our
restructuring plan announced in the first quarter of 2023 and exit
costs related to office relocations.(b) Earnout payment represents
final settlement of contingent consideration included in cash flow
from operations.(c) Non-recurring items represent expenses that are
typically one-time, non-operational in nature, and unrelated to our
core operations. |
|
|
|
|
Reconciliation of GAAP Net Loss to Adjusted Net Income and |
GAAP Operating Loss to Adjusted Operating Income |
(in thousands, except per share amounts; unaudited) |
|
|
|
|
|
Three Months Ended March 31, |
|
|
2023 |
|
|
|
2022 |
|
Net loss |
$ |
(15,600 |
) |
|
$ |
(13,057 |
) |
Add: Income tax (benefit) provision |
|
(710 |
) |
|
|
87 |
|
Add: Interest expense, net |
|
780 |
|
|
|
1,884 |
|
Add: Other expense, net |
|
3,698 |
|
|
|
101 |
|
Loss from operations |
|
(11,832 |
) |
|
|
(10,985 |
) |
Add: Amortization of intangible assets acquired through business
combinations |
|
11,367 |
|
|
|
14,451 |
|
Add: Equity-based compensation |
|
11,128 |
|
|
|
6,872 |
|
Add: Transaction, integration, and restructuring expenses |
|
2,590 |
|
|
|
1,310 |
|
Add: Other non-recurring items |
|
837 |
|
|
|
1,596 |
|
Adjusted Operating Income |
|
14,090 |
|
|
|
13,244 |
|
Less: Interest expense, net |
|
(780 |
) |
|
|
(1,884 |
) |
Less: Recurring income tax benefit |
|
710 |
|
|
|
305 |
|
Less: Foreign currency (loss) gain |
|
(79 |
) |
|
|
147 |
|
Less: Tax impacts of adjustments to net loss |
|
(4,776 |
) |
|
|
(4,161 |
) |
Adjusted Net Income |
$ |
9,165 |
|
|
$ |
7,651 |
|
Shares for Adjusted Net Income Per Diluted Share (a) |
|
154,300,768 |
|
|
|
154,216,995 |
|
Adjusted Net Income Per Share |
$ |
0.06 |
|
|
$ |
0.05 |
|
|
|
|
|
(a) Diluted Adjusted Net Income Per Share is computed by giving
effect to all potential weighted average Class A common stock and
any securities that are convertible into Class A common stock,
including Definitive OpCo units and restricted stock units. The
dilutive effect of outstanding awards and convertible securities is
reflected in diluted earnings per share by application of the
treasury stock method assuming proceeds from unrecognized
compensation as required by GAAP. Fully diluted shares are
162,001,223 and 158,339,437 as of March 31, 2023 and 2022,
respectively. |
|
|
|
|
Reconciliation of Adjusted EBITDA to GAAP Net Loss |
(in thousands; unaudited) |
|
|
|
|
|
Three Months Ended March 31, |
|
|
2023 |
|
|
|
2022 |
|
Net loss |
$ |
(15,600 |
) |
|
$ |
(13,057 |
) |
Interest expense, net |
|
780 |
|
|
|
1,884 |
|
Income tax (benefit) provision |
|
(710 |
) |
|
|
87 |
|
Depreciation & amortization |
|
12,944 |
|
|
|
15,252 |
|
EBITDA |
|
(2,586 |
) |
|
|
4,166 |
|
Other expense, net (a) |
|
3,698 |
|
|
|
101 |
|
Equity-based compensation (b) |
|
11,128 |
|
|
|
6,872 |
|
Transaction, integration, and restructuring expenses (c ) |
|
2,590 |
|
|
|
1,310 |
|
Other non-recurring items (d) |
|
837 |
|
|
|
1,596 |
|
Adjusted EBITDA |
$ |
15,667 |
|
|
$ |
14,045 |
|
Revenue |
$ |
59,201 |
|
|
$ |
50,124 |
|
Adjusted EBITDA margin |
|
26% |
|
|
|
28% |
|
|
|
|
|
(a) Primarily represents foreign exchange and TRA liability
remeasurement gains and losses.(b) Equity-based compensation
represents non-cash compensation expense recognized in association
with equity awards made to employees and directors.(c) Transaction
and integration expenses primarily represent legal, accounting, and
consulting expenses and fair value adjustments for contingent
consideration related to our acquisitions. Restructuring expenses
relate to our restructuring plan announced in the first quarter of
2023 and impairment and restructuring charges related to office
relocations.(d) Non-recurring items represent expenses that are
typically by nature one-time, non-operational, and unrelated to our
core operations. These expenses are comprised primarily of
professional fees related to financing, capital structure changes,
and other non-recurring set-up costs related to public company
operations. |
|
|
|
|
Reconciliation of Adjusted Gross Profit and Margin to GAAP Gross
Profit and Margin |
(in thousands; unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
|
2023 |
|
|
|
2022 |
|
(in thousands) |
|
Amount |
|
% of Revenue |
|
Amount |
|
% of Revenue |
Reported gross profit and
margin |
|
$ |
47,295 |
|
80% |
|
|
$ |
38,796 |
|
77% |
|
Amortization of intangible assets acquired through business
combinations |
|
|
2,290 |
|
4% |
|
|
|
5,102 |
|
10% |
|
Equity compensation costs |
|
|
258 |
|
— |
|
|
|
232 |
|
— |
|
Adjusted gross profit and margin |
|
$ |
49,843 |
|
84% |
|
|
$ |
44,130 |
|
88% |
|
|
|
|
|
|
|
|
|
|
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