Definitive Healthcare Corp. · NASDAQ:DH
Definitive Healthcare — Q1 2023 Earnings Presentation
29 slides from Definitive Healthcare's earnings presentation, May 4, 2023
Slide 1: First quarter 2023 earnings presentation
DEFINITIVE HEALTHCARE First quarter 2023 earnings presentation May 4, 2023
Slide 2: Forward-looking statements
This presentation includes forward-looking statements that reflect our current views with respect to future events Additional factors or events that could cause our actual performance to differ from these forward-looking and financial performance. Such statements are provided under the “safe harbor”
Slide 3: Company overview
—— Company overview
Slide 4: Category-defining software platform for healthcare commercial intelligence and analytics
Category-defining software platform Delivered via mission-critical SaaS platform 1 for healthcare commercial intelligence 4 deeply embedded into customer workflow and analytics Large and growing $10B+ TAM in Demonstrated combination of high 2 healthcare market with significant 5 growth and high prof
Slide 5: Early innings of penetrating the large addressable opportunity
ESTIMATED GLOBAL HEALTHCARE ▪ Healthcare is over 18% of U.S. GDP in 2021 and growing Growth in U.S. ANALYTICS MARKET ($B) 1 healthcare ▪ Research suggests overall spend driven by an aging population and the emphasis on healthcare spurred by the spending COVID-19 pandemic ▪ Stakeholders are focused o
Slide 6: $10B+ TAM and penetration
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 opportunity that we believe is available for our h
Slide 7: Multiple levers to drive long-term sustainable 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: The Atlas Dataset delivers the true picture of your target market
The Atlas Dataset delivers the true picture of your target market At one midwestern IDN in 2021… Adding analysis based on organization- Mapping DH reference and Physician-level claims lens alone dramatically level claims refines the number of affiliation data with claims provides overstates the numb
Slide 9: The Atlas Dataset gets your sales team to the right locations
The Atlas Dataset gets your sales team to the right locations where the buyers are A pharmaceutical firm wanted to find the doctors who could Due to centralized billing, 72% of Using claims data alone, sales reps claims flowed through one NPI -- would have gone to a billing office prescribe their dr
Slide 10: CEO with extensive experience leading healthcare SaaS
CEO with extensive experience leading healthcare SaaS companies at-scale Robert Musslewhite Jason Krantz Jon Maack Rick Booth Kate Shamsuddin Jensen CEO Founder & Exec. Chairman President Chief Financial Officer Chief Product Officer FOUNDER & CHAIRMAN with bold vision; named Entrepreneur of the Yea
Slide 11: Definitive Healthcare explainer, demo and introduction videos
Definitive Healthcare Definitive Healthcare Definitive Healthcare “explainer” video product demonstration video corporate introduction (2 MINUTES) (10 MINUTES) (30 MINUTES) 11
Slide 12: Financial highlights
—- Financial highlights
Slide 13: Our business model combines growth, profitability and visibility
HIGH AND SUSTAINABLE GROWTH EXCEPTIONAL PROFITABILITY VISIBILITY AND CONSISTENCY INTO LARGE MARKET Platform scale High gross margin SaaS business model $237M 34% 88% 98% Q1’23 Revenue 2022 Subscription Revenue 2022 Adj. Gross Margin1 Run Rate Revenue Growth (2022) Strong land and expand High profita
Slide 14: Annual and LTM revenue and enterprise customers
Annual and LTM revenue ($M) Enterprise customers (# CUSTOMERS >$100K ARR) 538 529 $232 $223 447 417 $179 $166 2021 2022 LTM Q1'22 LTM Q1'23 2021 2022 Q1'22 Q1'23 Total customers 2,800+ 3,000+ 2,900+ 3,000+ 14
Slide 15: Net dollar retention by customer cohort
All customers 105% NDR 108% NDR 102% NDR Customers 108% NDR 111% NDR 103% NDR 94% of ARR 96% of ARR 97% of ARR >$17,500 ARR 124% NDR 120% NDR 110% NDR 53% of ARR 57% of ARR 61% of ARR Enterprise Customers >$100,000 ARR 2020 2021 2022 Note: See Basis of Presentation for definitions of Net Dollar Rete
Slide 16: Historical framework and confidence in drivers
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 drivers Attractive ▪ Ear
Slide 17: Q1 results
—- OI results
Slide 18: First Quarter 2023 results vs guidance range
$ MILLIONS, except per share info First Quarter 2023 Guidance Range Comments Revenue $59.2 $56.5 - 58.5 • Revenue - 3% or $1.7 beat vs. midpoint % growth 18% 13% - 17% • Adj. Operating profit – 1% or $0.1 million beat Adjusted Operating Profit $14.1 $13.5 - 14.5 vs. midpoint % of revenue 24% 24% - 2
Slide 19: Key shareholder statistics as of 3/31/2023
Key shareholder statistics as of 3/31/2023 Public Shares Minority Interest Combined Comments (Class A Shares) (Class B Shares) ▪ 4.8M class B shares were exchanged into class Vested shares A public shares in the quarter Sponsor ownership (as-if converted) 64,520,111 19,458,380 83,978,491 ▪ 0.3M cla
Slide 20: Balance sheet and liquidity as of March 31, 2023
AS OF $ MILLIONS, except net leverage ratio MARCH 31, 2023 MARCH 31, 2022 YoY Growth Comments Cash & Short-term investments (1) $344.0 $339.0 $5.0 1% ▪ Cash & Debt – Strong balance sheet positions Total debt outstanding (2) $264.7 $271.6 -$6.9 -3% us to move quickly to seize opportunities Net levera
Slide 21: Guidance
— Guidance
Slide 22: Second quarter and full year 2023 guidance
(as of May 4, 2023) $ MILLIONS, except per share info Second Quarter 2023 Full Year 2023 Revenue $60.5 - 61.5 $249.0 - 255.0 % growth 11% - 13% 12% - 15% Adjusted Operating Profit $14.5 - 15.5 $61.5 - 65.5 % of revenue 24% - 25% 25% - 26% Adjusted EBITDA $16.0 - 17.0 $67.0 - 71.0 % of revenue 26% -
Slide 23: Non-GAAP reconciliations & basis of presentation
— Non-GAAP reconciliations & basis of presentation
Slide 24: Reported to adjusted gross profit
THREE MONTHS ENDED MARCH 31, $ THOUSANDS 2023 2022 $ % Reported Gross Profit $47,295 $38,796 $8,499 22% Amortization of intangible assets acquired through 2,290 5,102 (2,812) (55%) business combinations Equity-based compensation 258 232 26 11% Adjusted Gross Profit $49,843 $44,130 $5,713 13% Reporte
Slide 25: GAAP to non-GAAP operating expenses
THREE MONTHS ENDED MARCH 31, $ THOUSANDS 2023 2022 $ % GAAP Sales & Marketing $23,423 $21,293 $2,130 10% Equity-based compensation (2,649) (3,746) $1,098 (29%) Other non-recurring items (28) (27) ($1) 4% Non-GAAP Sales & Marketing $20,746 $17,520 $3,227 18% GAAP Product Development $9,884 $6,850 $3,
Slide 26: Net income to adjusted operating income and net income
THREE MONTHS ENDED MARCH 31, $ THOUSANDS 2023 2022 $ % Net income (loss) ($15,600) ($13,057) ($2,543) 19% Interest expense, net 780 1,884 (1,104) (59%) Income tax (benefit) provision (710) 87 (797) >(100%) Other expense (income), net 3,698 101 3,597 >100% GAAP Operating loss ($11,832) ($10,985) ($84
Slide 27: Net income to Adjusted EBITDA
THREE MONTHS ENDED MARCH 31, $ THOUSANDS 2023 2022 $ % Net income (loss) ($15,600) ($13,057) ($2,543) 19% Interest expense, net 780 1,884 (1,104) (59%) Income tax provision (710) 87 (797) >(100%) Depreciation & amortization 12,944 15,252 (2,308) (15%) Transaction, integration and restructuring expen
Slide 28: Cash flow from operations to unlevered free cash flow
THREE MONTHS ENDED MARCH 31, $ THOUSANDS 2023 2022 $ % Cash Flow from Operations $14,957 $13,633 $1,324 10% Cash interest 3,475 1,771 $1,704 96% Transaction, integration, and restructuring expenses paid 2,433 1,310 $1,123 86% in cash Payment of earnout in cash from operations - 6,400 ($6,400) (100%)
Slide 29: Basis of presentation and definitions
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 Global Healthcare Analytic
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