Definitive Healthcare Corp. · NASDAQ:DH
Definitive Healthcare — Q4 2023 Earnings Presentation
29 slides from Definitive Healthcare's earnings presentation, Feb 28, 2024
Slide 1: Fourth quarter 2023 earnings presentation
Fourth quarter 2023 earnings presentation February 28, 2024
Slide 2: Cautionary statement regarding forward-looking statements
Cautionary statement regarding 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 perform
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: Large and underpenetrated market opportunity
Large and underpenetrated market opportunity Life $10B+ Providers sciences Diversified TAM1 Existing customer X X X ARR by segment Top Quartile Top Half Top Half (HCIT) All (other diversified) 2.9K+ 100K+ 3.0% Customers today Potential customers Penetrated 1 TAM or “Total Addressable Market” refers
Slide 6: 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 6
Slide 7: The Atlas Dataset delivers a truer picture of your target market
The Atlas Dataset delivers a truer 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 numbe
Slide 8: 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 9: Experienced and innovative management team
Experienced and innovative management team Jason Krantz Jon Maack Rick Booth Carrie Lazorchak Founder, Exec. Chairman, Chief Financial Officer Chief Revenue Officer CEO, FOUNDER & President and Interim CEO CHAIRMAN with bold vision; named Entrepreneur of the Year, New England in 2020 Extensive exper
Slide 10: Selected videos about Definitive Healthcare
Selected videos about Definitive Healthcare Definitive Healthcare Definitive Healthcare Definitive Healthcare corporate “explainer” video product demonstration video introduction (2 MINUTES) (10 MINUTES) (30 MINUTES) Populi product demo Passport Planning & Performance Passport Planning & Performance
Slide 11: Financial highlights
Financial highlights 11
Slide 12: Financial highlights
Financial highlights HIGH AND SUSTAINABLE GROWTH STRONG NON-GAAP PROFITABILITY VISIBILITY AND CONSISTENCY INTO LARGE MARKET Platform scale High gross margin SaaS business model $264M 13% 85% 97% Q4’23 Revenue 2023 Subscription Revenue 2023 Adj. Gross Margin1 Run Rate Revenue Growth (2023) Growing en
Slide 13: Net dollar retention
Net dollar retention All customers 108% NDR 102% NDR 91% NDR Customers 111% NDR 103% NDR 92% NDR >$17,500 ARR 96% of ARR 97% of ARR 98% of ARR 120% NDR 110% NDR 96% NDR 57% of ARR 61% of ARR 65% of ARR Enterprise Customers >$100,000 ARR 2021 2022 2023 Note: See Basis of Presentation for definitions
Slide 14: Growth and profitability
Growth and profitability Historical framework Confidence in drivers Culture of measurement Profitability drivers Attractive High gross margins PROFITABILITY Core Economies of scale with G&A profitability Investing in sales capacity and product development Growth drivers Early penetration int
Slide 15: Q4 results
Q4 results 15
Slide 16: Q4 performance
Q4 performance $ MILLIONS, except per share info Fourth Quarter 2023 Guidance Range Comments Revenue $65.9 $65.5 - 66.5 • Revenue – 0% or at midpoint % growth 9% 8% - 10% • Adjusted Operating Income – 2% or $0.3 million beat vs. Adjusted Operating Income $18.3 $17.5 - 18.5 midpoint % of revenue 28%
Slide 17: Key shareholder statistics
Key shareholder statistics Minority Public Shares Interest Key shareholder statistics as of 12/31/2023 (Class A) (Class B) Combined Comments 15k class B shares were exchanged into class Sponsor ownership (as-if converted) 63,935,333 13,843,158 77,778,491 A public shares in the quarter Management
Slide 18: Balance sheet highlights
Balance sheet highlights December 31, December 31, $ MILLIONS, except net leverage ratio 2023 2022 YoY Growth Comments Cash, cash equivalents & Short-term investments(1) $308.1 $331.9 -$23.8 -7% Cash & Debt – Strong balance sheet positions us to move quickly to seize opportunities Total debt outst
Slide 19: Guidance
Guidance 19
Slide 20: Q1 and FY Guidance
Q1 and FY Guidance (as of February 28, 2024) $ MILLIONS, except per share info First Quarter 2024 Full Year 2024 Revenue $63.0 - 65.0 $263.0 - 269.0 % growth 6% - 10% 5% - 7% Adjusted Operating Income $18.0 - 19.0 $78.0 - 82.0 % of revenue 28% - 29% 29% - 31% Adjusted EBITDA $19.5 - 20.5 $84.0 - 88.
Slide 21: Non-GAAP reconciliations & basis of presentation
Non-GAAP reconciliations & basis of presentation 21
Slide 22: Non-GAAP Financial Measures
Non-GAAP Financial Measures We define Unlevered Free Cash Flow as net cash provided by (used in) operating activities less purchases of property, equipment and other assets, plus cash interest expense, and cash payments related to transaction, integration, and restructuring related expenses, earnout
Slide 23: Reconciliation from GAAP gross profit and margin to adjusted gross profit and margin
Reconciliation from GAAP gross profit and margin to adjusted gross profit and margin Alerts 23
Slide 24: Reconciliation from GAAP to non-GAAP operating expenses
Reconciliation from GAAP to non-GAAP operating expenses Other non-core items represent expenses driven by events that are typically by nature one-time, non-operational and unrelated to our core operations. These expenses are comprised of non-core legal and regulatory costs isolated to unique and ext
Slide 25: Reconciliation from net income (loss) to adjusted operating income and adjusted net income
Reconciliation from net income (loss) to adjusted operating income and adjusted net income 25
Slide 26: Reconciliation from net income (loss) to adjusted EBITDA
Reconciliation from net income (loss) to adjusted EBITDA 26
Slide 27: Reconciliation from cash flow from operations to unlevered free cash flow
Reconciliation from cash flow from operations to unlevered free cash flow Transaction and integration expenses paid in cash primarily represent legal, accounting, and consulting expenses related to our acquisitions; restructuring expenses paid in cash relate to our restructuring plans announced in t
Slide 28: Reconciliations of transaction, integration and restructuring expense and other non-core items
Reconciliations of transaction, integration and restructuring expense and other non-core items 28
Slide 29: Basis of presentation
Basis of presentation TAM: TAM or “Total Addressable Market” refers to the revenue opportunity that we believe is available for Goodwill Impairment: Represents a non-cash, pretax, impairment charge of goodwill due to a decline in our healthcare commercial intelligence platform, a subset of the Globa
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