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Health Catalyst Reports Third Quarter 2022 Results

Health Catalyst, Inc.
Health Catalyst, Inc.

SALT LAKE CITY, Nov. 08, 2022 (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 September 30, 2022.

“In the third quarter of 2022, I am pleased to share that we achieved strong performance across our business, including exceeding the mid-point of our quarterly guidance for both revenue and Adjusted EBITDA, and, based on an expanding pipeline and ahead-of-schedule cost reduction efforts, we are also pleased to raise our full year 2022 revenue and Adjusted EBITDA guidance. In addition, we now expect our 2022 dollar-based retention achievement level to be between 97% and 101%, an increase relative to the range we shared last quarter. This incremental confidence is driven by growth in our existing client expansion pipeline relative to prior expectations and a modest reduction in forecasted churn for 2022.” said Dan Burton, CEO of Health Catalyst. “In addition to this financial and operational execution, we held our ninth annual Healthcare Analytics Summit conference in Salt Lake City in September. We viewed this year’s in-person event as highly successful, hosting over a thousand attendees, representing more than 175 existing client and prospective client organizations, and included over 70 representatives from existing client organizations presenting their improvement case studies realized in partnership with Health Catalyst. This year’s Summit was an important opportunity for Health Catalyst to continue to provide thought leadership within the healthcare data and analytics ecosystem, while further cultivating and deepening our relationships with clients and prospects.”

Financial Highlights for the Three Months Ended September 30, 2022

Key Financial Metrics

 

Three Months Ended September 30,

 

Year over Year Change

 

 

2022

 

 

 

2021

 

 

GAAP Financial Data:

(in thousands, except percentages, unaudited)

Technology revenue

$

43,997

 

 

$

38,262

 

 

15%

Professional services revenue

$

24,357

 

 

$

23,475

 

 

4%

Total revenue

$

68,354

 

 

$

61,737

 

 

11%

Loss from operations

$

(45,721

)

 

$

(42,249

)

 

(8)%

Net loss

$

(45,735

)

 

$

(40,014

)

 

(14)%

Other Non-GAAP Financial Data:(1)

 

 

 

 

 

Adjusted Technology Gross Profit

$

29,993

 

 

$

26,731

 

 

12%

Adjusted Technology Gross Margin

 

68

%

 

 

70

%

 

 

Adjusted Professional Services Gross Profit

$

4,970

 

 

$

4,696

 

 

6%

Adjusted Professional Services Gross Margin

 

20

%

 

 

20

%

 

 

Total Adjusted Gross Profit

$

34,963

 

 

$

31,427

 

 

11%

Total Adjusted Gross Margin

 

51

%

 

 

51

%

 

 

Adjusted EBITDA

$

(4,554

)

 

$

(5,794

)

 

21%

________________________

ADVERTISEMENT

(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 fourth quarter of 2022, we expect:

  • Total revenue between $66.9 million and $68.9 million, and

  • Adjusted EBITDA between $(2.1) million and $(0.1) million

For the full year of 2022, we expect:

  • Total revenue between $274.0 million and $276.0 million, and

  • Adjusted EBITDA between $(4.0) million and $(2.0) 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, November 8, 2022, 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 Q322.” 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 Q4 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 September 30, 2022 expected to be filed with the SEC on or about November 8, 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 of
September 30,

 

As of
December 31,

 

 

2022

 

 

 

2021

 

 

(unaudited)

 

 

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

124,224

 

 

$

193,227

 

Short-term investments

 

255,918

 

 

 

251,754

 

Accounts receivable, net

 

49,544

 

 

 

48,801

 

Prepaid expenses and other assets

 

13,764

 

 

 

14,609

 

Total current assets

 

443,450

 

 

 

508,391

 

Property and equipment, net

 

25,042

 

 

 

23,316

 

Intangible assets, net

 

100,653

 

 

 

104,788

 

Operating lease right-of-use assets

 

17,254

 

 

 

21,133

 

Goodwill

 

185,982

 

 

 

169,972

 

Other assets

 

3,819

 

 

 

4,496

 

Total assets

$

776,200

 

 

$

832,096

 

Liabilities and stockholders’ equity

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

6,816

 

 

$

4,693

 

Accrued liabilities

 

24,405

 

 

 

23,725

 

Deferred revenue

 

56,381

 

 

 

56,632

 

Operating lease liabilities

 

3,464

 

 

 

3,425

 

Contingent consideration liabilities

 

 

 

 

4,576

 

Total current liabilities

 

91,066

 

 

 

93,051

 

Convertible senior notes

 

226,147

 

 

 

180,942

 

Deferred revenue, net of current portion

 

315

 

 

 

929

 

Operating lease liabilities, net of current portion

 

18,586

 

 

 

20,244

 

Contingent consideration liabilities, net of current portion

 

 

 

 

14,719

 

Other liabilities

 

120

 

 

 

113

 

Total liabilities

 

336,234

 

 

 

309,998

 

Commitments and contingencies

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

Preferred stock, $0.001 par value per share; 25,000,000 shares authorized as of September 30, 2022 and December 31, 2021; no shares issued and outstanding as of September 30, 2022 and December 31, 2021

 

 

 

 

 

Common stock, $0.001 par value per share; 500,000,000 shares authorized as of September 30, 2022 and December 31, 2021; 54,213,795 and 52,622,080 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively

 

54

 

 

 

53

 

Additional paid-in capital

 

1,404,032

 

 

 

1,400,972

 

Accumulated deficit

 

(963,241

)

 

 

(878,860

)

Accumulated other comprehensive loss

 

(879

)

 

 

(67

)

Total stockholders’ equity

 

439,966

 

 

 

522,098

 

Total liabilities and stockholders’ equity

$

776,200

 

 

$

832,096

 


Condensed Consolidated Statements of Operations
(in thousands, except per share data, unaudited)

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Revenue:

 

 

 

 

 

 

 

Technology

$

43,997

 

 

$

38,262

 

 

$

131,624

 

 

$

107,630

 

Professional services

 

24,357

 

 

 

23,475

 

 

 

75,450

 

 

 

69,580

 

Total revenue

 

68,354

 

 

 

61,737

 

 

 

207,074

 

 

 

177,210

 

Cost of revenue, excluding depreciation and amortization shown below:

 

 

 

 

 

 

 

Technology(1)(2)

 

14,572

 

 

 

12,094

 

 

 

41,895

 

 

 

34,766

 

Professional services(1)(2)(3)

 

21,768

 

 

 

20,992

 

 

 

63,048

 

 

 

55,711

 

Total cost of revenue, excluding depreciation and amortization

 

36,340

 

 

 

33,086

 

 

 

104,943

 

 

 

90,477

 

Operating expenses:

 

 

 

 

 

 

 

Sales and marketing(1)(2)(3)

 

25,401

 

 

 

20,808

 

 

 

67,141

 

 

 

53,164

 

Research and development(1)(2)(3)

 

20,770

 

 

 

16,385

 

 

 

56,066

 

 

 

45,254

 

General and administrative(1)(2)(3)(4)

 

19,192

 

 

 

23,056

 

 

 

45,551

 

 

 

60,596

 

Depreciation and amortization

 

12,372

 

 

 

10,651

 

 

 

36,633

 

 

 

26,604

 

Total operating expenses

 

77,735

 

 

 

70,900

 

 

 

205,391

 

 

 

185,618

 

Loss from operations

 

(45,721

)

 

 

(42,249

)

 

 

(103,260

)

 

 

(98,885

)

Interest and other income (expense), net

 

142

 

 

 

(4,423

)

 

 

(2,700

)

 

 

(12,082

)

Loss before income taxes

 

(45,579

)

 

 

(46,672

)

 

 

(105,960

)

 

 

(110,967

)

Income tax provision (benefit)(2)

 

156

 

 

 

(6,658

)

 

 

(4,339

)

 

 

(6,749

)

Net loss

$

(45,735

)

 

$

(40,014

)

 

$

(101,621

)

 

$

(104,218

)

Net loss per share, basic

$

(0.84

)

 

$

(0.82

)

 

$

(1.89

)

 

$

(2.27

)

Net loss per share, diluted

$

(0.84

)

 

$

(0.82

)

 

$

(1.97

)

 

$

(2.27

)

Weighted-average shares outstanding used in calculating net loss per share, basic

 

54,304

 

 

 

48,999

 

 

 

53,667

 

 

 

45,937

 

Weighted-average shares outstanding used in calculating net loss per share, diluted

 

54,304

 

 

 

48,999

 

 

 

54,025

 

 

 

45,937

 

_______________

(1) Includes stock-based compensation expense as follows:

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2022

 

 

2021

 

 

2022

 

 

2021

Stock-Based Compensation Expense:

(in thousands)

 

(in thousands)

Cost of revenue, excluding depreciation and amortization:

 

 

 

 

 

 

 

Technology

$

494

 

$

533

 

$

1,563

 

$

1,481

Professional services

 

1,991

 

 

2,149

 

 

6,082

 

 

5,866

Sales and marketing

 

7,037

 

 

6,098

 

 

20,925

 

 

16,848

Research and development

 

3,390

 

 

2,510

 

 

9,643

 

 

7,443

General and administrative

 

4,392

 

 

6,197

 

 

15,143

 

 

17,086

Total

$

17,304

 

$

17,487

 

$

53,356

 

$

48,724

(2) Includes acquisition-related costs (benefit), net, as follows:

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2022

 

 

2021

 

 

 

2022

 

 

 

2021

 

Acquisition-related costs (benefit), net:

(in thousands)

 

(in thousands)

Cost of revenue, excluding depreciation and amortization:

 

 

 

 

 

 

 

Technology

$

74

 

$

30

 

 

$

267

 

 

$

30

 

Professional services

 

143

 

 

64

 

 

 

509

 

 

 

64

 

Sales and marketing

 

367

 

 

296

 

 

 

1,557

 

 

 

296

 

Research and development

 

693

 

 

455

 

 

 

2,358

 

 

 

455

 

General and administrative

 

2,015

 

 

5,672

 

 

 

(1,503

)

 

 

15,942

 

Income tax provision (benefit)

$

 

$

(6,829

)

 

$

(4,533

)

 

$

(6,829

)

Total

$

3,292

 

$

(312

)

 

$

(1,345

)

 

$

9,958

 

(3) Includes restructuring costs, as follows:

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2022

 

 

2021

 

 

2022

 

 

2021

Restructuring costs:

(in thousands)

 

(in thousands)

Cost of revenue, excluding depreciation and amortization:

 

 

 

 

 

 

 

Professional services

$

247

 

$

 

$

247

 

$

Sales and marketing

 

1,559

 

 

 

 

1,559

 

 

Research and development

 

2,257

 

 

 

 

2,257

 

 

General and administrative

 

436

 

 

 

 

436

 

 

Total

$

4,499

 

$

 

$

4,499

 

$

(4) Includes non-recurring lease-related charges, as follows:

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2022

 

2021

 

2022

 

2021

Non-recurring lease-related charges:

(in thousands)

 

(in thousands)

General and administrative

3,700

 

1,800

 

3,700

 

1,800

Condensed Consolidated Statements of Cash Flows
(in thousands, unaudited)

 

Nine Months Ended
September 30,

 

 

2022

 

 

 

2021

 

Cash flows from operating activities

 

 

 

Net loss

$

(101,621

)

 

$

(104,218

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

Stock-based compensation expense

 

53,356

 

 

 

48,724

 

Depreciation and amortization

 

36,633

 

 

 

26,604

 

Impairment of long-lived assets

 

4,925

 

 

 

1,800

 

Non-cash operating lease expense

 

2,458

 

 

 

3,165

 

Amortization of debt discount and issuance costs

 

1,124

 

 

 

8,843

 

Amortization of investment discount and premium

 

(608

)

 

 

678

 

Provision for expected credit losses

 

700

 

 

 

698

 

Deferred tax benefit

 

(4,527

)

 

 

(6,823

)

Change in fair value of contingent consideration liabilities

 

(4,668

)

 

 

13,655

 

Other

 

(71

)

 

 

(17

)

Change in operating assets and liabilities:

 

 

 

Accounts receivable, net

 

(800

)

 

 

1,021

 

Prepaid expenses and other assets

 

2,020

 

 

 

(2,131

)

Accounts payable, accrued liabilities, and other liabilities

 

873

 

 

 

3,281

 

Deferred revenue

 

(4,365

)

 

 

6,540

 

Contingent consideration liabilities

 

(3,234

)

 

 

(11,766

)

Operating lease liabilities

 

(2,644

)

 

 

(3,402

)

Net cash used in operating activities

 

(20,449

)

 

 

(13,348

)

 

 

 

 

Cash flows from investing activities

 

 

 

Proceeds from the sale and maturity of short-term investments

 

270,171

 

 

 

186,893

 

Purchase of short-term investments

 

(274,529

)

 

 

(188,407

)

Acquisition of business, net of cash acquired

 

(27,846

)

 

 

(46,763

)

Capitalization of internal-use software

 

(10,024

)

 

 

(3,641

)

Purchase of intangible assets

 

(1,317

)

 

 

(1,269

)

Purchases of property and equipment

 

(1,752

)

 

 

(9,827

)

Proceeds from the sale of property and equipment

 

20

 

 

 

19

 

Net cash used in investing activities

 

(45,277

)

 

 

(62,995

)

 

 

 

 

Cash flows from financing activities

 

 

 

Repurchase of common stock

 

(8,393

)

 

 

 

Proceeds from exercise of stock options

 

3,927

 

 

 

17,303

 

Proceeds from employee stock purchase plan

 

2,558

 

 

 

3,975

 

Payments of acquisition-related consideration

 

(1,342

)

 

 

(6,290

)

Proceeds from public offering, net of discounts, commissions, and offering costs

 

 

 

 

245,180

 

Net cash (used in) provided by financing activities

 

(3,250

)

 

 

260,168

 

Effect of exchange rate changes on cash and cash equivalents

 

(27

)

 

 

(14

)

Net (decrease) increase in cash and cash equivalents

 

(69,003

)

 

 

183,811

 

 

 

 

 

Cash and cash equivalents at beginning of period

 

193,227

 

 

 

91,954

 

Cash and cash equivalents at end of period

 

124,224

 

 

 

275,765

 

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, acquisition-related costs, net, and restructuring costs 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 September 30, 2022 and 2021:

 

Three Months Ended September 30, 2022

 

(in thousands, except percentages)

 

Technology

 

Professional Services

 

Total

Revenue

$

43,997

 

 

$

24,357

 

 

$

68,354

 

Cost of revenue, excluding depreciation and amortization

 

(14,572

)

 

 

(21,768

)

 

 

(36,340

)

Gross profit, excluding depreciation and amortization

 

29,425

 

 

 

2,589

 

 

 

32,014

 

Add:

 

 

 

 

 

Stock-based compensation

 

494

 

 

 

1,991

 

 

 

2,485

 

Acquisition-related costs, net(1)

 

74

 

 

 

143

 

 

 

217

 

Restructuring costs(2)

 

 

 

 

247

 

 

 

247

 

Adjusted Gross Profit

$

29,993

 

 

$

4,970

 

 

$

34,963

 

Gross margin, excluding depreciation and amortization

 

67

%

 

 

11

%

 

 

47

%

Adjusted Gross Margin

 

68

%

 

 

20

%

 

 

51

%

___________________
(1) Acquisition-related costs, net include deferred retention expenses following the ARMUS, KPI Ninja, and Twistle acquisitions.
(2) Restructuring costs include severance and other team member costs from workforce reductions.

 

Three Months Ended September 30, 2021

 

(in thousands, except percentages)

 

Technology

 

Professional Services

 

Total

Revenue

$

38,262

 

 

$

23,475

 

 

$

61,737

 

Cost of revenue, excluding depreciation and amortization

 

(12,094

)

 

 

(20,992

)

 

 

(33,086

)

Gross profit, excluding depreciation and amortization

 

26,168

 

 

 

2,483

 

 

 

28,651

 

Add:

 

 

 

 

 

Stock-based compensation

 

533

 

 

 

2,149

 

 

 

2,682

 

Acquisition-related costs, net(1)

 

30

 

 

 

64

 

 

 

94

 

Adjusted Gross Profit

$

26,731

 

 

$

4,696

 

 

$

31,427

 

Gross margin, excluding depreciation and amortization

 

68

%

 

 

11

%

 

 

46

%

Adjusted Gross Margin

 

70

%

 

 

20

%

 

 

51

%

___________________
(1) Acquisition-related costs, net includes deferred retention expenses and post-acquisition restructuring costs incurred as part of business combinations.

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 provision (benefit), (iii) depreciation and amortization, (iv) stock-based compensation, (v) acquisition-related costs, net, including the change in fair value of contingent consideration liabilities, (vi) restructuring 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 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 September 30, 2022 and 2021:

 

Three Months Ended September 30,

 

 

2022

 

 

 

2021

 

 

(in thousands)

Net loss

$

(45,735

)

 

$

(40,014

)

Add:

 

 

 

Interest and other (income) expense, net

 

(142

)

 

 

4,423

 

Income tax provision (benefit)

 

156

 

 

 

(6,658

)

Depreciation and amortization

 

12,372

 

 

 

10,651

 

Stock-based compensation

 

17,304

 

 

 

17,487

 

Acquisition-related costs, net(1)

 

3,292

 

 

 

6,517

 

Restructuring cost(2)

 

4,499

 

 

 

 

Non-recurring lease-related charges(3)

 

3,700

 

 

 

1,800

 

Adjusted EBITDA

$

(4,554

)

 

$

(5,794

)

_______________
(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.
(2) Restructuring costs include severance and other team member costs from workforce reductions, impairment of discontinued capitalized software projects, and other minor miscellaneous charges. For additional details refer to Note 18 in our condensed consolidated financial statements.
(3) Includes the lease-related impairment charge for the subleased portion of our corporate headquarters.

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 acquisitions, (iv) restructuring costs, and (v) 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 Ended
September 30,

 

Nine Months Ended
September 30,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Numerator:

(in thousands, except share and per share amounts)

Net loss

$

(45,735

)

 

$

(40,014

)

 

$

(101,621

)

 

$

(104,218

)

Add:

 

 

 

 

 

 

 

Stock-based compensation

 

17,304

 

 

 

17,487

 

 

 

53,356

 

 

 

48,724

 

Amortization of acquired intangibles

 

9,400

 

 

 

8,965

 

 

 

28,724

 

 

 

23,091

 

Acquisition-related costs (benefit), net(1)

 

3,292

 

 

 

(312

)

 

 

(1,345

)

 

 

9,958

 

Restructuring costs

 

4,499

 

 

 

 

 

 

4,499

 

 

 

 

Non-recurring lease-related charges

 

3,700

 

 

 

1,800

 

 

 

3,700

 

 

 

1,800

 

Non-cash interest expense related to convertible senior notes

 

375

 

 

 

3,026

 

 

 

1,124

 

 

 

8,843

 

Adjusted Net Loss

$

(7,165

)

 

$

(9,048

)

 

$

(11,563

)

 

$

(11,802

)

Denominator:

 

 

 

 

 

 

 

Weighted-average number of shares used in calculating net loss per share, basic

 

54,303,667

 

 

 

48,998,548

 

 

 

53,666,667

 

 

 

45,937,227

 

Weighted-average number of shares used in calculating net loss per share, diluted

 

54,303,667

 

 

 

48,998,548

 

 

 

54,024,697

 

 

 

45,937,227

 

 

 

 

 

 

 

 

 

Adjusted Net Loss per share, basic and diluted

$

(0.13

)

 

$

(0.18

)

 

$

(0.22

)

 

$

(0.26

)

______________
(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 acquisitions. For additional details refer to Note 2 in our condensed consolidated financial statements.

Health Catalyst Investor Relations Contact:
Adam Brown
Senior Vice President, Investor Relations and FP&A
+1 (855)-309-6800
ir@healthcatalyst.com

Health Catalyst Media Contact:
Tarah Neujahr Bryan
Chief Marketing Officer
media@healthcatalyst.com