Definitive Healthcare Corp. · NASDAQ:DH
Definitive Healthcare — Q1 2022 Earnings Presentation
37 slides from Definitive Healthcare's earnings presentation, May 5, 2022
Slide 1: First quarter 2022 earnings presentation
First quarter 2022 earnings presentation May 5, 2022
Slide 2: Cautionary statement regarding forward-looking statements
Cautionary statement regarding forward-looking statements This following slides are part of a presentation by Definitive Healthcare Corp. (together with its subsidiaries, the contained in this presentation and no responsibility or liability whatsoever is accepted for the accuracy or “Company,” “we,”
Slide 3: Company overview
—— Company overview
Slide 4: Investment highlights
Investment highlights Category-defining software platform 1 for healthcare commercial intelligence 4 Delivered via mission-critical SaaS platform deeply embedded into customer workflow and analytics Large and growing $10B+ TAM in Demonstrated combination of high 2 healthcare market with significant
Slide 5: Our platform
Our platform SaaS-based …drives customers' …across entire intelligence platform… commercial success… continuum of healthcare Sales Life sciences Marketing Clinical research Healthcare IT & product development Strategy Providers Physician network management Other diversified Talent acquisition 5
Slide 6: Definitive Healthcare at-a-glance
Definitive Healthcare at-a-glance SCA LE GROW T H $200M 40% Q1’22 Revenue Run Rate1 2021 Revenue Growth BUSINESS MODEL PROFIT A BILIT Y 99% Category-defining 33% Subscription Revenue (2021) software platform 2021 uFCF Margin1 for healthcare commercial intelligence TA M2 CUST OMERS $10B+ 2,900+ Healt
Slide 7: The healthcare market is large and complex
The healthcare market is large and complex Healthcare companies without Definitive Healthcare Healthcare companies with Definitive Healthcare Medical devices Key opinion Consultants leaders Hospitals Patients Software Ambulatory vendors Physicians GPOs Payers Telemedicine Gov’t & regulators 7
Slide 8: Companies need to answer a range of critical questions
Companies need to answer a range of critical questions SA LES & NET W ORK PRODUCT MA RK ET ING DEV ELOPMENT Only ~1/3 of a sales rep’s ~50% of drug launches ~60% of physician groups day is spent selling1 underperform expectations2 owned by health systems3 • Who are the decision-makers? • How large i
Slide 9: Integrated, growing platform provides 360° view of healthcare market
Integrated, growing platform provides 360° view of healthcare market Complete provider universe Affiliations & Physicians (Definitive ID = Industry relationships Physician Hospitals groups standard) Physician referral Daily opportunities GPOs Connected care patterns (RFPs, new patient starts) Payers
Slide 10: Multi-tenant SaaS platform
Multi-tenant SaaS platform INTUITIVE AND EASY TO USE PLATFORM CLEAR CUSTOMER BENEFITS • Integrated platform organizing entire ecosystem, not just claims-generating entities • Standardized data linkages connect to other enterprise systems • Real-time, high-quality data updates & delivery • Data-drive
Slide 11: Illustrative HCIT use case: platform enables actionable insights with just a few clicks
Illustrative HCIT use case: platform enables actionable insights with just a few clicks M A P DE C I S I O N-M A K I NG Q UA NT I FY R O I FO R E NT I T I E S P R O DUC T T O C R Y S T A LI Z E (Affiliations data) M E S S A G I NG (Readmission data) Analyze data by Physician Group and Health System
Slide 12: Definitive Healthcare's unique AI-driven intelligence engine
Definitive Healthcare’s unique AI-driven intelligence engine S O UR C E I ND US T R I A LI Z E LI NK A G E S B UI LT O V E R 1 1 Y E A R S ( UN) S T R UC T UR E D D A T A H E A LT H C A R E C O M M E R C I A L I NT E LLI G E NC E Hospitals Physician Imaging Clinics groups centers First party researc
Slide 13: Our platform's self-reinforcing competitive moat
Our platform’s self-reinforcing competitive moat Hub of proprietary intelligence that we …Creates unique opportunity for believe does not exist elsewhere… rapid innovation on our platform NEW INTELLIGENCE Hospitals Physician Imaging Clinics groups centers Medical claims Clinical trials Rx claims Amb
Slide 14: Competitive positioning creates barriers to entry
Competitive positioning creates barriers to entry H e a l t hc ar e c o m m e r c i a l i n t e l l ig e n c e Raw cl ai ms Ni che Hori zontal data provi ders & Ecosystem heal thcare go- to- market consul tants pl ayers speci alists pl atforms Healthcare expertise Data linkages Healthcare affiliatio
Slide 15: Why Definitive Healthcare wins
Why Definitive Healthcare wins Vertical Customer need What customer couldn’t find elsewhere What Definitive Healthcare delivered Unlocked new opportunities with both physician- • Successfully launch two Ability to identify physicians with specific and facility-specific detail drugs underdiagnosed pa
Slide 16: Diversified customer base across entire healthcare ecosystem
Diversified customer base across entire healthcare ecosystem Life sciences D I V E R S I FI E D C US T O M E R B A S E 2,900+ Customers Healthcare IT <2.0% Revenue by a single customer Healthcare providers E NT E R P R I S E C US T O M E R S 447 Customers > $100K ARR Diversified Large and diverse cu
Slide 17: Highly effective land and expand go-to-market engine
Highly effective land and expand go-to-market engine LA ND EX PA ND Multi-Channel Lead Generation Experienced Account Managers, “Farmers” Outbound: Highly scalable outbound inside sales team booking Vertically focused Account Managers focus on driving retention, thousands of demos per year upsel
Slide 18: Rapidly growing market driven by strong healthcare tailwinds
Rapidly growing market driven by strong healthcare tailwinds E S T I M A T E D G LO BA L HE A LT HC A R E • Healthcare is over 18% of U.S. GDP in 2021 and growing Growth in U.S. A NA LY T I C S M A R K E T ( $ B) 1 healthcare • Research suggests overall spend driven by an aging population and the em
Slide 19: Large and underpenetrated market opportunity
Large and underpenetrated market opportunity Life $10B+ sciences HCIT Providers Diversified TAM1 Existing X X X X Customer ARR Top Quartile Top Half Top Half All by Segment 2.9K+ 100K+ 2.9% Customers today Potential customers Penetrated 1 TAM or “Total Addressable Market” refers to the revenue oppor
Slide 20: Multiple drivers of future growth
Multiple drivers of future growth Acquire new Expand with existing Innovate to strengthen our Selective strategic customers customers platform acquisitions Multiple levers to drive long-term sustainable growth 20
Slide 21: Experienced and innovative management team
Experienced and innovative management team Jason Krantz Robert Musslewhite Rick Booth Kate Shamsuddin Jensen Joe Mirisola FO UNDE R & C E O Founder & CEO President Chief Financial Officer Chief Product Officer Chief Revenue Officer with bold vision; named Entrepreneur of the Year, New England in 202
Slide 22: Selected videos about Definitive Healthcare
Selected videos about Definitive Healthcare Definitive Healthcare Definitive Healthcare Definitive Healthcare “Explainer” video product demonstration video Corporate Introduction (2 MINUTES) (10 MINUTES) (30 MINUTES) 22
Slide 23: Financial highlights
Financial highlights 23
Slide 24: Financial highlights
Financial highlights HI G H A ND S US T A I NA BLE G R O W T H E X C E PT I O NA L PR O FI T A BILI T Y V I S I BI LI T Y A ND C O NS I S T E NC Y I NT O LA R G E M A R K E T Platform scale High gross margin SaaS business model $200M 40% 88% 99% Q1’22 Revenue 2021 Subscription Revenue 2021 Adj. Gros
Slide 25: Strong and durable revenue growth
Strong and durable revenue growth Annual and LTM revenue ($M) Enterprise customers (# CUSTOMERS >$100K ARR) 447 417 $179 $166 320 292 $129 $118 2020 2021 LTM Q1'21 LTM Q1'22 2020 2021 Q1'21 Q1'22 Total Customers 2,000+ 2,500+ 2,600+ 2,900+ 25
Slide 26: Net dollar retention
Net dollar retention Note: See Basis of Presentation for definitions of Net Dollar Retention 26
Slide 27: Significant profitability
Significant profitability Adjusted EBITDA ($M) Investment driving growth Unlevered free cash flow ($M) and profitability $56 $55 $54 $50 $52 Sales and $42 marketing New product development G&A infrastructure 2019 2020 2021 2019 2020 2021 % Margin % Margin 49% 45% 34% 59% 44% 33% Note: See Basis of P
Slide 28: Growth and profitability
Growth and profitability Historical framework Confidence in drivers Culture of measurement Profitability drivers High gross margins Attractive PROFITABILITY profitability Economies of scale with G&A after absorbing public company costs Investing in sales capacity and product development Growth
Slide 29: Q2 and full year 2022 guidance
Q2 and full year 2022 guidance (as of May 5, 2022) $ IN MILLIONS, except per share info Second Quarter 2022 2022 Comments Revenue $53.0 - 54.0 $220.5 - 224.5 • Full year revenue guidance increased by % growth 33% - 36% 33% - 35% $2.5M, reflecting growth of between 33% and Adjusted Operating Profit $
Slide 30: Appendix
Appendix 30
Slide 31: Reconciliation from GAAP gross profit to adjusted gross profit
Reconciliation from GAAP gross profit to adjusted gross profit THREE MONTHS ENDED MARCH 31, $ IN THOUSANDS 2022 2021 $ % Reported Gross Profit $38,796 $27,499 $11,297 41% Amortization of Intangible Assets Resulting From Purchase 5,102 4,987 115 2% Accounting Adjustments Equity-based Compensation 232
Slide 32: Reconciliation from GAAP to non-GAAP operating expenses
Reconciliation from GAAP to non-GAAP operating expenses THREE MONTHS ENDED MARCH 31, $ IN THOUSANDS 2022 2021 $ % GAAP Sales & Marketing $21,293 $11,743 $9,550 81% Equity-based Compensation (3,746) (102) ($3,644) >100% Non-Recurring Items (27) (37) $10 (28%) Non-GAAP Sales & Marketing $17,520 $11,60
Slide 33: Reconciliation from net loss to adjusted operating profit
Reconciliation from net loss to adjusted operating profit THREE MONTHS ENDED MARCH 31, $ IN THOUSANDS 2022 2021 $ % ($13,057) ($10,488) ($2,569) 24% Net (Loss) Income Interest Expense 1,884 8,454 (6,570) (78%) Loss on remeasurement TRA liability 248 -Total Assets 248 Nmf Foreign Exchange Loss/(Gain)
Slide 34: Reconciliation from net income to adjusted EBITDA
Reconciliation from net income to adjusted EBITDA THREE MONTHS ENDED MARCH 31, $ IN THOUSANDS 2022 2021 $ % Net (Loss) Income ($13,057) ($10,488) ($2,569) 24% Interest Expense 1,884 8,454 (6,570) (78%) Loss on remeasurement TRA liability 248 - 248 Nmf Total Assets (Benefit) provision for income taxe
Slide 35: Reconciliation from net loss to adjusted net income
Reconciliation from net loss to adjusted net income THREE MONTHS ENDED MARCH 31, $ IN THOUSANDS 2022 2021 $ % Net (Loss) Income ($13,057) ($10,488) ($2,569) 24% Non-recurring provision for income taxes 392 - 392 Nmf Loss on remeasurement TRA liability 248 - 248 Nmf Transaction Expenses 1,310 38 1,27
Slide 36: Reconciliation from cash flow from operations to unlevered free cash flow
Reconciliation from cash flow from operations to unlevered free cash flow THREE MONTHS ENDED MARCH 31, $ IN THOUSANDS 2022 2021 $ % Cash Flow from Operations $13,633 $13,527 $106 1% Cash interest 1,771 8,039 ($6,268) (78%) Transaction expenses paid in cash 1,310 38 $1,272 >100% Earnout payment 6,400
Slide 37: Basis of presentation
Basis of presentation TAM: TAM or “Total Addressable Market” refers to the revenue opportunity that we believe is available for Non-GAAP General & Administrative: is calculated as GAAP General & Administrative expense less equity- our healthcare commercial intelligence platform, a subset of the Glob
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