Health Catalyst, Inc · NASDAQ:HCAT
Health Catalyst — Conference Presentation (January 2023)
38 slides from Health Catalyst's conference presentation, Jan 9, 2023
Slide 1: Overview Presentation January 2023
Overview Presentation January 2023
Slide 2: Disclaimer
© Health Catalyst. Confidential and proprietary. 2 Disclaimer This presentation and the accompanying oral presentation, if any, contain forward-looking statements. All statements other than statements of historical fact contained in this presentation, including statements as to future results of ope
Slide 3: Health Catalyst Overview
© Health Catalyst. Confidential and proprietary. 3 Health Catalyst Overview Analytics Applications Data Platform Integrate data in a flexible, open, and scalable platform Deliver insights on how to measurably improve Enable and accelerate data-informed improvement Components of Our Solution Services
Slide 4: Our mission and flywheel
© Health Catalyst. Confidential and proprietary. 4 Our mission is to be the catalyst for massive, measurable, data-informed healthcare improvement Our flywheel represents how we accomplish our mission—our company strategy
Slide 5: Investment Highlights
© Health Catalyst. Confidential and proprietary. 5 Investment Highlights Recognized industry leader in healthcare data & analytics Comprehensive solution: data platform, analytics applications & services expertise Measurable clinical, financial & operational improvements World-class team member enga
Slide 6: The Problems Health Systems Face
© Health Catalyst. Confidential and proprietary. 6 The Problems Health Systems Face (1) According to estimates in 2019. Research estimates 25% of U.S. healthcare spending is wasteful in nature, implying approximately $1 trillion of waste amongst $3.8 trillion of total healthcare expenditure in 2019
Slide 7: Blue Chip Client Base
© Health Catalyst. Confidential and proprietary. 7 Blue Chip Client Base >500 clients(1) include academic medical centers, integrated delivery networks, community hospitals, large physician practices, ACOs, health information exchanges, health insurers, and other risk-bearing entities (1) 2022 figur
Slide 8: Externally-Validated Industry Leadership
© Health Catalyst. Confidential and proprietary. 8 Externally-Validated Industry Leadership Broad Recognition Chilmark Healthcare Analytics Report(1) 2019 Highest Client Satisfaction KLAS Evangelism Score(2) HIT Average Vendor Product Grade Market Grade Allscripts B+ B Arcadia A- A- Athenahealth B+
Slide 9: Comprehensive Solution for Data-informed Improvement
© Health Catalyst. Confidential and proprietary. Comprehensive Solution for Data-informed Improvement 9 Tech-Enabled Outsourcing (Abstraction, Analytics, etc.) Domain Expertise & Education Services (Analytics, Clinical, Financial, and Operational) Analytics Applications: A robust set of applications
Slide 10: Highly Differentiated, Comprehensive Solution
© Health Catalyst. Confidential and proprietary. 10 Highly Differentiated, Comprehensive Solution Comprehensive solution guiding our clients to greater levels of digital maturity, enabling clinical, financial, and operational improvements 2 3 Consulting Highly specialized Unable to sustain recommend
Slide 11: Clients' Realized Improvements Accelerate Over Time
© Health Catalyst. Confidential and proprietary. 11 Clients’ Realized Improvements Accelerate Over Time, Reinforcing Decisions to Renew and Expand $1.5B 5.4M 2.9M More client-approved measurable healthcare improvements lives positively impacted care gaps closed Together with our clients, celebrating
Slide 12: A Health Catalyst Success Story
© Health Catalyst. Confidential and proprietary. A Health Catalyst Success Story As the financial and operational burden of reporting quality measurement in healthcare continues to increase, systems such as Banner Health and Community Health Network (CHNw) look for options to ease their resource spe
Slide 13: Partnership Expansion
© Health Catalyst. Confidential and proprietary. Partnership Expansion Overview • Five-year deal with Carle Health, worth up to ~$80M over the life of the contract ($16M ARR) • At $11M+ ARR expansion, it represents one of the largest expansion contracts in the company’s history • The contractual gro
Slide 14: World-class Team Member Engagement
© Health Catalyst. Confidential and proprietary. 14 World-class Team Member Engagement Driving Industry-leading Client Satisfaction, Renewal, Expansion & Referral Consistently Recognized as One of the “Best Places to Work” 2015 – 1H 2022 Gallup Overall Engagement Score Percentile KLAS Evangelism Sco
Slide 15: Experienced and Visionary Management Team
© Health Catalyst. Confidential and proprietary. 15 Experienced and Visionary Management Team Daniel Burton Chief Executive Officer and Director Tenure at Health Catalyst: 11 years Anne Marie Bickmore Chief Product Officer Tenure at Health Catalyst: 10 years Paul Horstmeier Chief Operating Officer T
Slide 16: The Health Catalyst Operating Principles
© Health Catalyst. Confidential and proprietary. 16 The Health Catalyst Operating Principles The principles that govern our daily interactions Improvement • We are deeply committed to enabling our clients to achieve and sustain measurable clinical, financial, and operational improvements • We nurtur
Slide 17: The Health Catalyst Cultural Attributes
© Health Catalyst. Confidential and proprietary. 17 The Health Catalyst Cultural Attributes Continuous Learner • I can learn from anyone • I love to learn, and I am a lifelong student • I recognize my mistakes and correct them quickly; I fail fast • I am open to and respond favorably to feedback and
Slide 18: Strategic Levers to Drive Long-Term Growth
© Health Catalyst. Confidential and proprietary. 18 Strategic Levers to Drive Long-Term Growth Grow our overall client base 90 DOS subscription customers(2) amidst ~1,200 potential clients ~8% penetration Cross-sell DOS to hundreds of application-specific clients & cross-sell applications to DOS c
Slide 19: Share Repurchase Program
© Health Catalyst. Confidential and proprietary. Share Repurchase Program • Dan Burton (CEO & Director): ~$6M(1) • Duncan Gallagher (Director): ~$175K Insider Purchases • Authorization to purchase up to $40 million of HCAT Common Stock • Demonstrates our confidence in the future of our business and
Slide 20: Attractive Financial Model
© Health Catalyst. Confidential and proprietary. 20 Attractive Financial Model Long-term Revenue Growth Target Improving gross margin >90%(1) Recurring Revenue 20%+(2) Long-term Growth Target 102%-112%(3) Dollar-based Retention Rate Strong client retention and stickiness Recurring revenue streams ac
Slide 21: Total Revenue and Dollar-based Retention Rate
© Health Catalyst. Confidential and proprietary. 21 Total Revenue ($mm) Dollar-based Retention Rate(2) (1) Excludes impact of Medicity acquisition, which occurred on June 29, 2018. (2) We calculate our dollar-based retention rate as of a period end by starting with the sum of the Annual Recurring Re
Slide 22: Adjusted Gross Profit
© Health Catalyst. Confidential and proprietary. 22 Adj. Gross Profit(1) ($mm) $30 $54 $81 $95 $128 $111 41 % 48 % 52 % 50 % 53 % 54 % 64 % 66 % 67 % 68 % 69 % 70 % 24 % 29 % 35 % 25 % 27 % 26 % 2017 2018 2019 2020 2021 Q1-Q3 2022 Total Adjusted Gross Margin Adjusted Technology Gross Margin Adjusted
Slide 23: Long-Term Target Model
© Health Catalyst. Confidential and proprietary. 23 2017 2018 2019 2020 2021 Q1-Q3 2022 2025 Long-Term Goals(4) Total Revenue Growth 54% 38% 22% 28% 17% 20%+37% Excl. Medicity(1) Adj. Gross Margin(2) 41% 48% 52% 50% 53% 54% Tech: mid-70% Pro Serv: mid-30% Overall: high 50% Operating Expenses(3) S&M
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Slide 25: Healthcare Success: Proven Methodology
© Health Catalyst. Confidential and proprietary. 25 Healthcare Success: Proven Methodology Identify Variation and Generate Actionable Analytics Insights2 Integrate All Revenue, Cost, and Quality Data1 Quantify and Communicate Value4 Apply Expertise to Drive Sustainable Improvements3 ExpansionVolume
Slide 26: Comprehensive Solution for Data-informed Improvement
© Health Catalyst. Confidential and proprietary. 26 Comprehensive Solution for Data-informed Improvement Services Expertise (~$3bn TAM) 3 Enable and accelerate data-informed improvement with the assistance of analytical, clinical, financial, and operational experts Analytics Applications (~$3bn TAM)
Slide 27: Allina Health: $33M+ in Quality & Operations Improvements
© Health Catalyst. Confidential and Proprietary. Allina Health: High-Value Data & Analytics Drive $33M+ in Quality & Operations Improvements The Challenge: As the breadth, complexity, and volume of healthcare data grow, Allina Health recognized the need to manage data as a strategic asset by ensurin
Slide 28: Carle Health & Health Alliance: $10M+ Population Health Opportunities
© Health Catalyst. Confidential and Proprietary. Carle Health & Health Alliance: Solution Uncovers $10M+ in Population Health Opportunities The Challenge: For Carle Health and Health Alliance*, burdensome manual data collection and reporting processes made it difficult—and time-consuming—to identify
Slide 29: MultiCare Health System: $75M+ in Annual Revenue
MultiCare Health System: Operational and Charge Capture Improvements Help Realize $75M+ in Annual Revenue The Challenge: Inconsistent improvement methods, differing competencies, and inefficient data collection and analytics were impeding MultiCare Health System’s ability to improve—leaving financia
Slide 30: INTEGRIS Health case study
© Health Catalyst. Confidential and Proprietary. The Challenge: INTEGRIS Health had high volumes of data but lacked the timely, accurate, and actionable insight needed to support key leadership decisions and drive meaningful improvements. Analytics Applications2 Data and Analytics Platform (DOSTM) 1
Slide 31: Continued Execution of M&A Strategy
© Health Catalyst. Confidential and proprietary. $27 $40 $120 ~$105 31 Continued Execution of M&A Strategy Transaction value amount (1) Note: Transaction close date shown (1) Transaction value includes only the upfront purchase price amount anticipated at the time of the execution of the respective
Slide 32: How We Engage With Our Customers
© Health Catalyst. Confidential and proprietary. 32 How We Engage With Our Customers All-Access Option 1 Includes subscription access to DOS and all Analytics Applications Based on client size and data footprint; includes annual price escalators Includes opportunity to upsell additional applications
Slide 33: Questions requiring integrated data from multiple source systems
© Health Catalyst. Confidential and proprietary. 33 A single clinical, financial, or operational question often requires integrated data from multiple source systems DOS: ingests, integrates and organizes data sourcesData platform Data sources Use cases Financial Operational How do I reduce my hip a
Slide 34: Sepsis example: data from multiple source systems
© Health Catalyst. Confidential and proprietary. 34 A typical problem facing a healthcare organization most often requires data from multiple source systems: Sepsis example Question? EMR (Epic, Cerner, Meditech) How many cases of sepsis did we have last year? Benchmarking (Truven, UHC, Touchstone) I
Slide 35: The Healthcare Analytics Adoption Model
© Health Catalyst. Confidential and proprietary. 35 Pre-Health Catalyst Early implementation Maturity Improve Health & Reduce Variation Level 9 Direct-to-Patient Analytics & Artificial Intelligence Level 8 Personalized Medicine & Prescriptive Analytics Level 7 Clinical Risk Intervention & Predictive
Slide 36: GAAP to Non-GAAP Reconciliation: Gross Profit and Gross Margin
© Health Catalyst. Confidential and proprietary. 36 GAAP to Non-GAAP Reconciliation: Gross Profit and Gross Margin Year Ended 31-Dec-2017 (in thousands, except percentages) Technology Professional Services Total Revenue $31,693 $41,388 $73,081 Cost of Revenue, Excluding Depreciation and Amortization
Slide 37: GAAP to Non-GAAP Reconciliation: Adjusted EBITDA
© Health Catalyst. Confidential and proprietary. 9 Months Ended September 30, Year Ended December 31, (in thousands) 2022 2021 2021 2020 2019 2018 2017 Net loss ($101,621) ($104,218) ($153,210) ($115,017) ($60,096) ($61,984) ($47,035) Add: Interest and other expense, net $2,700 $12,082 $16,458 $11,5
Slide 38: GAAP to Non-GAAP Reconciliation: Adjusted Operating Expenses
© Health Catalyst. Confidential and proprietary. 9 Months Ended September 30, Year Ended December 31, (in thousands) 2022 2021 2021 2020 2019 2018 2017 Operating expenses $205,391 $185,618 $261,222 $186,893 $134,461 $112,817 $74,979 Less: Depreciation and amortization ($36,633) ($26,604) ($37,528) (
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