Definitive Healthcare Corp. · NASDAQ:DH
Definitive Healthcare — Q4 2022 Earnings Presentation
29 slides from Definitive Healthcare's earnings presentation, Feb 23, 2023
Slide 1: Fourth quarter 2022 earnings presentation
Fourth quarter 2022 earnings presentation February 23, 2023
Slide 2: Cautionary statement regarding forward-looking statements
Cautionary statement regarding forward-looking statements This presentation may include forward-looking statements that reflect our current views with respect to future performance projected in these forward-looking statements. events and financial performance. Such statements are provided under the
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 3.0K+ 100K+ 3.0% 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: 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 where the buyers are
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: Experienced and innovative management team
Experienced and innovative C EO management team 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 & C HA IR M A
Slide 11: 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) 11
Slide 12: Financial highlights
Financial highlights 12
Slide 13: 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 $242M 34% 88% 98% Q4’22 Revenue 2022 Subscription Revenue 2022 Adj. Gross Margin1 Run Rate Revenue
Slide 14: Strong and durable revenue growth
Strong and durable revenue growth Annual revenue ($M) Enterprise customers (# CUSTOMERS >$100K ARR) 538 $223 417 $166 292 $118 2020 2021 2022 2020 2021 2022 Total customers 2,000+ 2,500+ 3,000+ 14
Slide 15: Net dollar retention
Net dollar retention 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 definitio
Slide 16: 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 17: Q4 results
Q4 results 17
Slide 18: Q4 performance
Q4 performance Solid execution against guidance $ MILLIONS, except per share info Fourth Quarter 2022 Guidance Range Comments Revenue $60.6 $58.0 - 59.0 Revenue - 4% or $2.1 beat vs. midpoint % growth 31% 25% - 27% Adj. Operating Profit – 5% or $0.8 million beat Adjusted Operating Profit $16.3 $
Slide 19: Key shareholder statistics
Key shareholder statistics Key shareholder statistics as of 12/31/2022 Public Shares Minority Interest Combined Comments (Class A Shares) (Class B Shares) 9k class B shares were exchanged into class Vested shares A public shares in the quarter Sponsor ownership (as-if converted) 65,278,297 24,172
Slide 20: Balance sheet highlights
Balance sheet highlights AS OF $ MILLIONS, except net leverage ratio DECEMBER 31, 2022 DECEMBER 31, 2021 YoY Growth Comments Cash & Short-term investments $331.9 $387.5 -$55.6 -14% Cash & Debt – Strong balance sheet Total debt outstanding $266.4 $273.3 -$6.9 -3% positions us to move quickly to sei
Slide 21: Guidance
Guidance 21
Slide 22: Q1 and FY Guidance
Q1 and FY Guidance (as of February 23, 2023) $ MILLIONS, except per share info First Quarter 2023 Full Year 2023 Revenue $56.5 - 58.5 $249.0 - 255.0 % growth 13% - 17% 12% - 15% Adjusted Operating Profit $13.5 - 14.5 $61.5 - 65.5 % of revenue 24% - 25% 25% - 26% Adjusted EBITDA $15.0 - 16.0 $67.0 -
Slide 23: Non-GAAP reconciliations & basis of presentation
Non-GAAP reconciliations & basis of presentation 23
Slide 24: 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, $ THOUSANDS 2022 2021 $ % 2022 2021 $ % Reported Gross Profit $50,804 $35,415 $15,389 43% $180,028 $125,465 $54,563 43% Amortization of intangible assets resulting from acq
Slide 25: 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, $ THOUSANDS 2022 2021 $ % 2022 2021 $ % GAAP Sales & Marketing $23,523 $17,384 $6,139 35% $89,585 $56,387 $33,198 59% Equity-based compensation (2,446) (1,363) ($1,083) 79% (13,50
Slide 26: 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 THREE MONTHS ENDED DECEMBER 31, TWELVE MONTHS ENDED DECEMBER 31, $ THOUSANDS 2022 2021 $ % 2022 2021 $ % Net income (loss) $6,735 ($14,764) $21,499 >(100%) ($22,255) ($61,257) $39,002 (64%) Interest expense, n
Slide 27: Reconciliation from net income (loss) to adjusted EBITDA
Reconciliation from net income (loss) to adjusted EBITDA THREE MONTHS ENDED DECEMBER 31, TWELVE MONTHS ENDED DECEMBER 31, $ THOUSANDS 2022 2021 $ % 2022 2021 $ % Net income (loss) $6,735 ($14,764) $21,499 >(100%) ($22,255) ($61,257) $39,002 (64%) Interest expense, net 1,483 1,915 (432) (23%) 8,413 2
Slide 28: 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 DECEMBER 31, TWELVE MONTHS ENDED DECEMBER 31, $ THOUSANDS 2022 2021 $ % 2022 2021 $ % Cash Flow from Operations ($4,220) $4,219 ($8,439) (200%) $35,579 $25,212 $10,367 41% Cash interest 3,195 1,982 $1,213 61
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 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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