Definitive Healthcare Corp. · NASDAQ:DH
Definitive Healthcare — Q3 2022 Earnings Presentation
27 slides from Definitive Healthcare's earnings presentation, Nov 3, 2022
Slide 1: Third quarter 2022 earnings presentation
Third quarter 2022 earnings presentation November 3, 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: Rapidly growing market driven by strong healthcare tailwinds
Rapidly growing market driven by strong healthcare tailwinds EST IM A T ED GLOBA L HEA 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 IC S M A R K ET ( $B) 1 healthcare • Research suggests overall spend driven by an aging population and the emphasis on
Slide 6: 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 3.0K+ 100K+ 3.0% Customers today Potential customers Penetrated 1 TAM or “Total Addressable Market” refers to the revenue oppor
Slide 7: Multiple drivers of future growth
Multiple drivers of future growth Acquire new Expand with existing Innovate to strengthen Selective strategic customers customers our platform acquisitions Multiple levers to drive long-term sustainable growth 7
Slide 8: Experienced and innovative management team
Experienced and innovative C EO management team with extensive experience leading healthcare SaaS companies at-scale Robert Musslewhite Jason Krantz Rick Booth Kate Shamsuddin Jensen Joe Mirisola CEO Founder & Exec. Chairman Chief Financial Officer Chief Product Officer Chief Revenue Officer FOUNDER
Slide 9: 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) 9
Slide 10: Financial highlights
Financial highlights 10
Slide 11: Financial highlights
Financial highlights HIGH A ND SUST A INA BLE GR OW T H EX C EPT IONA L PR OFIT A BILIT Y V ISIBILIT Y A ND C ONSIST ENC Y INT O LA R GE M A R K ET Platform scale High gross margin SaaS business model $230M 40% 88% 99% Q3’22 Revenue 2021 Subscription Revenue 2021 Adj. Gross Margin1 Run Rate Revenue
Slide 12: Strong and durable revenue growth
Strong and durable revenue growth Annual and LTM revenue ($M) Enterprise customers (# CUSTOMERS >$100K ARR) 504 $208 417 377 $166 $153 292 $118 2020 2021 LTM Q3'21 LTM Q3'22 2020 2021 Q3'21 Q3'22 Total customers 2,000+ 2,500+ 2,700+ 3,000+ 12
Slide 13: Net dollar retention
Net dollar retention All customers 101% NDR 105% NDR 108% NDR Customers 106% NDR 108% NDR 111% NDR 92% of ARR 94% of ARR 96% of ARR >$17,500 ARR 118% NDR 124% NDR 120% NDR 46% of ARR 53% of ARR 57% of ARR Enterprise Customers >$100,000 ARR 2019 2020 2021 Note: See Basis of Presentation for definitio
Slide 14: Significant profitability
Significant profitability Adjusted EBITDA ($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 15: 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 16: Q3 results
Q3 results 16
Slide 17: Q3 performance
Q3 performance Solid execution against guidance Comments $ IN MILLIONS, except per share info Third Quarter 2022 Guidance Range • Revenue - 2% or $0.9 million beat vs. midpoint Revenue $57.4 $56.0 - 57.0 • Adj. operating profit – 5% or $0.7 million beat % growth 33% 30 - 32% vs. midpoint Adjusted Op
Slide 18: Key shareholder statistics
Key shareholder statistics 18
Slide 19: Balance sheet highlights
Balance sheet highlights Comments • Cash & Debt – Strong balance sheet positions us to move quickly to seize opportunities • Revenue visibility – Subscription revenue model provides excellent forward visibility and predictability • cRPO up 24% vs. 33% revenue growth • Difference = $12m cRPO 1. Compr
Slide 20: Guidance
Guidance 20
Slide 21: Q4 and FY Guidance
Q4 and FY Guidance (as of November 3, 2022) $ MILLIONS, except per share info Fourth Quarter 2022 2022 Revenue $58.0 - 59.0 $220.0 - 221.0 % growth 25% - 27% 32% - 33% Adjusted Operating Profit $15.0 - 16.0 $59.0 - 60.0 % of revenue 26% - 27% 27% - 27% Adjusted EBITDA $16.0 - 17.0 $63.0 - 64.0 % of
Slide 22: Non-GAAP reconciliations & basis of presentation
Non-GAAP reconciliations & basis of presentation 22
Slide 23: Reconciliation from GAAP gross profit to adjusted gross profit
Reconciliation from GAAP gross profit to adjusted gross profit THREE MONTHS ENDED SEPTEMBER 30, NINE MONTHS ENDED SEPTEMBER 30, $ THOUSANDS 2022 2021 $ % 2022 2021 $ % Reported Gross Profit $47,658 $32,599 $15,059 46% $129,224 $90,050 $39,174 44% Amortization of intangible assets resulting from acqu
Slide 24: Reconciliation from GAAP to non-GAAP operating expenses
Reconciliation from GAAP to non-GAAP operating expenses THREE MONTHS ENDED SEPTEMBER 30, NINE MONTHS ENDED SEPTEMBER 30, $ THOUSANDS 2022 2021 $ % 2022 2021 $ % GAAP Sales & Marketing $21,184 $14,376 $6,808 47% $66,062 $39,003 $27,059 69% Equity-based compensation (2,260) (326) (1,935) >100% (11,062
Slide 25: Reconciliation from net loss to adjusted operating income and adjusted net income
Reconciliation from net loss to adjusted operating income and adjusted net income THREE MONTHS ENDED SEPTEMBER 30, NINE MONTHS ENDED SEPTEMBER 30, $ THOUSANDS 2022 2021 $ % 2022 2021 $ % Net loss ($6,354) ($20,966) $14,612 (70%) ($28,990) ($46,493) $17,503 (38%) Interest expense, net 2,466 7,186 (4,
Slide 26: 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 SEPTEMBER 30, TWELVE MONTHS ENDED SEPTEMBER 30, $ THOUSANDS 2022 2021 $ % 2022 2021 $ % Cash Flow from Operations $10,685 ($948) $11,633 (1227%) $44,018 $29,666 $14,352 48% Cash interest 2,898 11,615 (8,717)
Slide 27: 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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