Definitive Healthcare Corp. · NASDAQ:DH
Definitive Healthcare — Q2 2022 Earnings Presentation
28 slides from Definitive Healthcare's earnings presentation, Aug 4, 2022
Slide 1: Second quarter 2022 earnings presentation
Second quarter 2022 earnings presentation August 4, 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 2.9K+ 100K+ 2.9% 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 management team C EO 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 $218M 40% 88% 99% Q2’22 Revenue 2021 Subscription Revenue 2021 Adj. Gross Margin1 Run Rate Revenue
Slide 12: Strong and durable revenue growth
Strong and durable revenue growth Annual and LTM revenue ($M) Enterprise customers (# CUSTOMERS >$100K ARR) 486 $194 417 $166 350 $141 292 $118 2020 2021 LTM Q2'21 LTM Q2'22 2020 2021 Q2'21 Q2'22 Total customers 2,000+ 2,500+ 2,700+ 2,990+ 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: Q2 results
Q2 results 16
Slide 17: Q2 performance
Q2 performance Solid execution against guidance $ MILLIONS, except per share info Second Quarter 2022 Guidance Range Comments • Revenue - 2% or $1.0 million beat vs. midpoint Revenue $54.5 $53.0 - 54.0 % growth 37% 33% - 36% • Adj. operating profit – 13% or $1.7 million beat Adjusted Operating Profi
Slide 18: Key shareholder statistics
Key shareholder statistics Key shareholder statistics as of 6/30/2022 Public Shares Minority Interest Combined Comments (Class A Shares) (Class B Shares) Vested shares • 2.9M class B shares were exchanged into Sponsor ownership (as-if converted) 65,523,574 28,243,350 93,766,924 class A public shares
Slide 19: Balance sheet highlights
Balance sheet highlights AS OF $ MILLIONS, except net leverage ratio JUNE 30, 2022 JUNE 30, 2021 YoY Growth Comments Cash and short-term investments 1 $346.4 $38.4 $308.0 >100% • Cash & debt – Strong balance sheet positions us to move quickly to seize opportunities Total debt outstanding 2 $267.5 $4
Slide 20: Guidance
Guidance 20
Slide 21: Q3 and full year 2022 guidance
Q3 and full year 2022 guidance (as of August 4, 2022) $ MILLIONS, except per share info Third Quarter 2022 2022 Comments Revenue $56.0 - 57.0 $220.5 - 224.5 • Full year revenue guidance reflects growth of % growth 30% - 31% 33% - 35% between 33% and 35% Adjusted Operating Profit $14.5 - 15.5 $58.5 -
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 JUNE 30, SIX MONTHS ENDED JUNE 30, $ THOUSANDS 2022 2021 $ % 2022 2021 $ % Reported Gross Profit $42,770 $29,952 $12,818 43% $81,566 $57,451 $24,115 42% Amortization of intangible assets resulting from acquisition- 5,3
Slide 24: Reconciliation from GAAP to non-GAAP operating expenses
Reconciliation from GAAP to non-GAAP operating expenses THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30, $ THOUSANDS 2022 2021 $ % 2022 2021 $ % GAAP Sales & Marketing $23,585 $12,884 $10,701 83% $44,878 $24,627 $20,251 82% Equity-based compensation (5,055) (139) ($4,916) >100% (8,802) (241) ($
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 JUNE 30, SIX MONTHS ENDED JUNE 30, $ THOUSANDS 2022 2021 $ % 2022 2021 $ % Net loss ($9,579) ($15,039) $5,460 (36%) ($22,636) ($25,527) $2,891 (11%) Interest expense, net 2,580 8,316 (5,736) -69% 4,4
Slide 26: Reconciliation from net loss to adjusted EBITDA
Reconciliation from net loss to adjusted EBITDA THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30, $ THOUSANDS 2022 2021 $ % 2022 2021 $ % Net loss ($9,579) ($15,039) $5,460 (36%) ($22,636) ($25,527) $2,891 (11%) Interest expense, net 2,580 8,316 (5,736) (69%) 4,464 16,770 (12,306) (73%) Income t
Slide 27: 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 JUNE 30, TWELVE MONTHS ENDED JUNE 30, $ THOUSANDS 2022 2021 $ % 2022 2021 $ % Cash Flow from Operations $15,481 $8,414 $7,067 84% $32,385 $31,409 $976 3% Cash interest 2,579 7,933 ($5,354) (67%) 17,947 28,04
Slide 28: 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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