Definitive Healthcare Corp. · NASDAQ:DH
Definitive Healthcare — FY2021 Earnings Presentation
39 slides from Definitive Healthcare's earnings presentation, Feb 23, 2022
Slide 1: Fourth quarter and full year 2021 earnings presentation
Fourth quarter and full year 2021 earnings presentation February 23, 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 “Company ,” “we,” “our,” “us,” “Definitive Healthcare,” “Definitive,” or “DHC”) in connection with reporting quarterly financ
Slide 3: Company overview
——* Company overview
Slide 4: Investment highlights
Investment highlights 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
Slide 5: Our platform
Our platform SaaS-based …drives customers' …across entire continuum of intelligence platform… commercial success… 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 SCALE GROWTH $185M 40% 1 Q4’21 Revenue Run Rate 2021 Revenue Growth BUSINESS MODEL PROFITABILITY 99% Category-defining software platform 33% Subs cription Revenue for healthcare 2021 uFCF Ma rgi n1 (2021) commercial intelligence TAM 2 CUSTOMERS $10B+ 2,800+ Hea lthc
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 NETWORK SALES & MARKETING PRODUCT DEVELOPMENT 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 is the m
Slide 9: Definitive Healthcare makes healthcare commercial intelligence highly actionable
Definitive Healthcare makes healthcare commercial intelligence highly actionable ALTERNATIVE APPROACHES DEFINITIVE HEALTHCARE Google searches; disparate data sources Integrated platform organizing entire ecosystem Unstructured, complex, and inaccurate raw data Standardization through data linkages O
Slide 10: Integrated, growing platform provides 360° view of healthcare market
Integrated, growing platform provides 360° view of healthcare market Complete provider universe Physicians Affiliations & relationships (Definitive ID = Industry standard) Hospitals Physician groups Daily opportunities GPOs Connected Physician referral patterns care (RFPs, new patient starts) Payers
Slide 11: Multi-tenant SaaS platform deeply embedded into customer workflow
Multi-tenant SaaS platform deeply embedded into customer workflow ONE PLATFORM, MANY ACCESS CHANNELS DEEP INTEGRATIONS, FREQUENT USAGE Active users High usage / ROI ~33,500 ~1.3M Users actively utilize Reports run on SaaS the platform platform / month Multi-tenant SaaS CRM integration API integratio
Slide 12: Illustrative HCIT use case: platform enables actionable insights
Illustrative HCIT use case: platform enables actionable insights with just a few clicks MAP DECISION -MAKING QUANTIFY ROI FOR PRODUCT ENTITIES TO CRYSTALIZE MESSAGING (Affiliations data) (Readmission data) Analyze data by Physician Group and Analyze readmission rates for knee Health System to determ
Slide 13: Definitive Healthcare's unique AI-driven intelligence engine
Definitive Healthcare’s unique AI-driven intelligence engine SOURCE INDUSTRIALIZE LINKAGES BUILT OVER 10 YEARS (UN)STRUCTURED DATA HEALTHCARE INTELLIGENCE Hos pitals Phys i cian Ima ging Cl i nics groups centers First party research Ambul atory Integrated Phys i cians Pa yors s urgery centers Del iv
Slide 14: Our platform's self-reinforcing competitive moat
Our platform’s self-reinforcing competitive moat Hub of proprietary intelligence that we believe …Creates unique opportunity for rapid does not exist elsewhere… innovation on our platform NEW INTELLIGENCE Hos pitals Phys i cian Ima ging Cl i nics groups centers Medical claims Clinical trials Rx clai
Slide 15: Competitive positioning creates barriers to entry
Competitive positioning creates barriers to entry Hea l thc a r e c ommer c i a l i ntel l i genc e Raw claims Niche Horiz ontal data providers & Ecosystem healthcare g o-to-market consultants players specialists platforms Healthcare expertise Data linkages Healthcare affiliations Provider coverage
Slide 16: 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 drugs Ability to identify physicians with specific and facility-specific detail underdiagnosed pa
Slide 17: Diversified customer base across entire healthcare ecosystem
Diversified customer base across entire healthcare ecosystem Life sciences DIVERSIFIED CUSTOMER BASE 2,800+ Customers Healthcare IT <2.0% Revenue by a single customer Healthcare providers ENTERPRISE CUSTOMERS 417 Customers > $100K ARR Diversified Large and diverse customer base with significant demo
Slide 18: Highly effective land and expand go-to-market engine
Highly effective land and expand go-to-market engine LAND EXPAND Multi-Channel Lead Generation Experienced Account Managers, “Farmers” ▪ Outbound: Highly scalable outbound inside sales team booking ▪ Vertically focused Account Managers focus on driving retention, thousands of demos per year upsells
Slide 19: Rapidly growing market driven by strong healthcare tailwinds
Rapidly growing market driven by strong healthcare tailwinds ESTIMATED GLOBAL HEALTHCARE • Hea lthcare is over 18% of U.S. GDP in 2021 a nd growing ANALYTICS MARKET ($B) 1 Growth in U.S. healthcare spending • Res earch s uggests overall spend driven by a n aging population and the emphasis on health
Slide 20: Large and underpenetrated market opportunity
Large and underpenetrated market opportunity Life $10B+ sciences HCIT Providers Diversified TAM1 Existing Customer X X X X ARR by Segment Top Quartile Top Half Top Half All 2.8K+ 100K+ 2.8% Customers today Potential customers Penetrated 1 TAM or “Total Addressable Market” refers to the revenue oppor
Slide 21: 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 21
Slide 22: Experienced and innovative management team
Experienced and innovative management team Jason Krantz Robert Musslewhite Rick Booth Kate Shamsuddin Jensen Joe Mirisola FOUNDER & CEO Founder & CEO President Chief Financial Officer Chief Product Officer Chief Revenue Officer with bold vision; named Entrepreneur of the Year, New England in 2020 LE
Slide 23: Selected videos about Definitive Healthcare
Selected videos about Definitive Healthcare Definitive Healthcare Definitive Healthcare Definitive Healthcare “Explainer” video product demonstration video IPO roadshow video (2 MINUTES) (10 MINUTES) (30 MINUTES) 23
Slide 24: Financial highlights
Financial highlights 24
Slide 25: Financial highlights
Financial highlights HIGH AND SUSTAINABLE GROWTH EXCEPTIONAL PROFITABILITY VISIBILITY AND CONSISTENCY INTO LARGE MARKET Platform scale High gross margin SaaS business model $185M 40% 88% 99% Q4’21 Revenue 2021 Subs cription Revenue 2021 Adj. Gros s Margin1 Run Ra te Revenue Growth (2021) Strong land
Slide 26: Strong and durable revenue growth
Strong and durable revenue growth Annual revenue ($M) Enterprise customers (# CUSTOMERS >$100K ARR) 417 $166 292 $118 221 $86 2019 2020 2021 Total Customers 2019 2020 2021 2,000+ 2,500+ 2,800+ 26
Slide 27: Net dollar retention
Net dollar retention Note: See Basis of Presentation for definitions of Net Dollar Retention 27
Slide 28: Significant profitability
Significant profitability Adjusted EBITDA ($M) Investment driving growth Unlevered free cash flow ($M) and profitability $56 $55 $54 $50 $52 Sales and marketing $42 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 29: 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 30: Q1 and full year 2022 guidance
Q1 and full year 2022 guidance (as of February 23, 2022) $ IN MILLIONS, except per share info First Quarter 2022 2022 Comments Revenue $4 7.0 - 4 9.0 $218.0 - 222.0 • Strong revenue growth % grow t h 26% - 31% 31% - 34 % Adjust ed Operat ing Prof it $10.0 - 12.0 $57.0 - 63.0 • Adjusted EBITDA margin
Slide 31: Analytical Wizards
Analytical Wizards STRATEGIC & COMMERCIAL FIT FINANCIAL CONTRIBUTIONS Powerful analytical tools expand Definitive Healthcare capability High single digit revenue ▪ DH strategy is to add analytics capability on top of industry-leading datasets to ▪ 50%+ subscription revenue mix, create new commercial
Slide 32: Appendix
Appendix 32
Slide 33: Reconciliation from GAAP gross profit to adjusted gross profit
Reconciliation from GAAP gross profit to adjusted gross profit THREE MONTHS ENDED DECEMBER 31, TWELVE MONTHS ENDED DECEMBER 31, $ IN THOUSANDS 20 21 20 20 $ % 20 21 20 20 $ % Reported Gross Profit $ 3 5 ,4 15 $ 25 ,3 4 4 $ 10 ,0 71 4 0% $ 125 ,4 6 5 $ 8 7,8 4 9 $ 3 7,6 16 4 3% Amort izat ion of Int
Slide 34: Reconciliation from GAAP to non-GAAP operating expenses
Reconciliation from GAAP to non-GAAP operating expenses THREE MONTHS ENDED DECEMBER 31, TWELVE MONTHS ENDED DECEMBER 31, $ IN THOUSANDS 20 21 20 20 20 21 20 20 GAAP Sales & Marketing $ 17,3 8 4 $ 10 ,79 0 $ 5 6 ,3 8 7 $ 3 4 ,3 3 2 Equit y Compensat ion Cost s (1,363) (93) (1,930) (4 73) Non- Recurri
Slide 35: Reconciliation from net income to adjusted operating profit
Reconciliation from net income to adjusted operating profit THREE MONTHS ENDED DECEMBER 31, TWELVE MONTHS ENDED DECEMBER 31, $ IN THOUSANDS 20 21 20 20 $ % 20 21 20 20 $ % Net (Loss) Income ($ 14 ,76 4 ) ($ 15 ,8 6 2) $ 1,0 9 8 (7%) ($ 6 1,25 7) ($ 5 1,15 7) ($ 10 ,10 0 ) 20% Int erest Expense 1,915
Slide 36: Reconciliation from net income to adjusted EBITDA
Reconciliation from net income to adjusted EBITDA THREE MONTHS ENDED DECEMBER 31, TWELVE MONTHS ENDED DECEMBER 31, $ IN THOUSANDS 20 21 20 20 $ % 20 21 20 20 $ % Net (Loss) Income ($ 14 ,76 4 ) ($ 15 ,8 6 2) $ 1,0 9 8 (7%) ($ 6 1,25 7) ($ 5 1,15 7) ($ 10 ,10 0 ) 20% Int erest Expense 1,915 8,688 (6,
Slide 37: Reconciliation from net income to adjusted net income
Reconciliation from net income to adjusted net income THREE MONTHS ENDED DECEMBER 31, TWELVE MONTHS ENDED DECEMBER 31, $ IN THOUSANDS 20 21 20 20 $ % 20 21 20 20 $ % Net (Loss) Income ($ 14 ,76 4 ) ($ 15 ,8 6 2) $ 1,0 9 8 (7%) ($ 6 1,25 7) ($ 5 1,15 7) ($ 10 ,10 0 ) 20% Loss on Ext inguishment of De
Slide 38: Reconciliation from cash from operations to unlevered free cash flow
Reconciliation from cash from operations to unlevered free cash flow THREE MONTHS ENDED DECEMBER 31, TWELVE MONTHS ENDED DECEMBER 31, $ IN THOUSANDS 20 21 20 20 20 21 20 20 Cash from Operations $ 4 ,219 $ 8 ,6 73 $ 25 ,212 $ 23 ,217 Cash int erest 1,982 2,915 29,569 25,958 Total Assets Transact ion
Slide 39: Basis of presentation
Basis of presentation TAM: TAM or “Total Addressable Market” refers to the revenue opportunity that we believe is available for our healthcare interest income, (iii) provision for taxes and (iv) depreciation and amortization. Management further adjusts EBITDA in its commercial intelligence platform,