• Health Catalyst Reports First Quarter 2021 Results

    ソース: Nasdaq GlobeNewswire / 06 5 2021 16:03:00   America/New_York

    SALT LAKE CITY, May 06, 2021 (GLOBE NEWSWIRE) -- Health Catalyst, Inc. ("Health Catalyst," Nasdaq: HCAT), a leading provider of data and analytics technology and services to healthcare organizations, today reported financial results for the quarter ended March 31, 2021.

    “In the first quarter of 2021, I am pleased to share that we achieved strong performance across our business, including exceeding the mid-point of our quarterly guidance for both revenue and Adjusted EBITDA,” said Dan Burton, CEO of Health Catalyst. “I am also happy to report that in the most recent team member engagement and satisfaction survey, independently administered by the Gallup organization, team member satisfaction scores at Health Catalyst measured in the 96th percentile. This latest engagement level continues a pattern that has been in place for many years, of industry-leading engagement, consistently ranked between the 95th and 99th percentile in overall team member satisfaction scores. This latest result is of particular significance given that it comes during a period where we were required to adapt to global pandemic necessitating a remote-only work environment, as well as having welcomed nearly two hundred new teammates who came to us primarily through multiple recent acquisitions.”

    Financial Highlights for the Three Months Ended March 31, 2021

    Key Financial Metrics

     Three Months Ended March 31, Year over Year Change
     2021 2020 
      
    GAAP Financial Data:(in thousands, except percentages, unaudited)
    Technology revenue$33,839  $24,699  37%
    Professional services revenue$22,007  $20,417  8%
    Total revenue$55,846  $45,116  24%
    Loss from operations$(24,317) $(18,105) (34)%
    Net loss$(28,370) $(17,490) (62)%
    Other Non-GAAP Financial Data:(1)     
    Adjusted Technology Gross Profit$23,388  $16,969  38%
    Adjusted Technology Gross Margin69% 69%  
    Adjusted Professional Services Gross Profit$6,929  $5,071  37%
    Adjusted Professional Services Gross Margin31% 25%  
    Total Adjusted Gross Profit$30,317  $22,040  38%
    Total Adjusted Gross Margin54% 49%  
    Adjusted EBITDA$(837) $(5,971) 86%

    ________________________
    (1) These measures are not calculated in accordance with generally accepted accounting principles in the United States (GAAP). See the accompanying "Non-GAAP Financial Measures" section below for more information about these financial measures, including the limitations of such measures, and for a reconciliation of each measure to the most directly comparable measure calculated in accordance with GAAP.

    Financial Outlook

    Health Catalyst provides forward-looking guidance on total revenue, a GAAP measure, and Adjusted EBITDA, a non-GAAP measure.

    For the second quarter of 2021, we expect:

    • Total revenue between $55.1 million and $58.1 million, and
    • Adjusted EBITDA between $(4.8) million and $(2.8) million

    For the full year of 2021, we expect:

    • Total revenue between $228.1 million and $231.1 million, and
    • Adjusted EBITDA between $(15.0) million and $(13.0) million

    We have not reconciled guidance for Adjusted EBITDA to net loss, the most directly comparable GAAP measure, and have not provided forward-looking guidance for net loss, because there are items that may impact net loss, including stock-based compensation, that are not within our control or cannot be reasonably predicted.

    Chair of the Board Transition

    On April 29, 2021, our board of directors (the board) accepted Dr. Tim Ferris's resignation from the board and all board committees, effective May 1, 2021. Dr. Ferris's resignation is not the result of any disagreement with Health Catalyst, but rather as a result of his new role as the National Director of Transformation for England's National Health Service (NHS). NHS required Dr. Ferris to resign from our board in connection with his NHS appointment.

    “Dr. Ferris provided a unique perspective that will continue to impact our company for years to come. We are grateful for the opportunity to have benefited from his wisdom and experience, and we congratulate him on his new role as National Director of Transformation at NHS,” said Dan Burton, CEO.

    Health Catalyst is thrilled to announce that John A. (Jack) Kane has accepted the invitation to serve as chair of the board effective May 1, 2021. Mr. Kane has been a director of the Company and has been the chair of the audit committee of the board since February 2016. Mr. Kane has more than 30 years’ experience in healthcare technology, including as a director and chairperson of the audit committee of Merchants Bancshares, Inc. (MBVT) from 2005 until 2014 and athenahealth, Inc. from 2007 until February 2019. He previously occupied the position of CFO, Treasurer & Senior VP-Administration at IDX Systems Corp.

    “Jack has served on our board for many years. His valuable guidance and feedback often challenges us to think deeply about our solutions. I am grateful for Jack’s dedication to our mission and his depth of financial leadership experience in healthcare and technology, which make him uniquely qualified to serve as our chair,” said Burton.

    Quarterly Conference Call Details

    The company will host a conference call to review the results today, Thursday, May 6, 2021, at 5:00 p.m. E.T. The conference call can be accessed by dialing 1-877-295-1104 for U.S. participants, or 1-470-495-9486 for international participants, and referencing participant code 9183315. A live audio webcast will be available online at https://ir.healthcatalyst.com/. A replay of the call will be available via webcast for on-demand listening shortly after the completion of the call, at the same web link, and will remain available for approximately 90 days.

    About Health Catalyst

    Health Catalyst is a leading provider of data and analytics technology and services to healthcare organizations committed to being the catalyst for massive, measurable, data-informed healthcare improvement. Its customers leverage the cloud-based data platform—powered by data from more than 100 million patient records and encompassing trillions of facts—as well as its analytics software and professional services expertise to make data-informed decisions and realize measurable clinical, financial, and operational improvements. Health Catalyst envisions a future in which all healthcare decisions are data informed.

    Available Information

    Health Catalyst intends to use its Investor Relations website as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD.

    Forward-Looking Statements

    This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, as amended. These forward-looking statements include statements regarding our future growth and our financial outlook for Q2 and fiscal year 2021. Forward-looking statements are subject to risks and uncertainties and are based on potentially inaccurate assumptions that could cause actual results to differ materially from those expected or implied by the forward-looking statements. Actual results may differ materially from the results predicted, and reported results should not be considered as an indication of future performance.

    Important risks and uncertainties that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: (i) changes in laws and regulations applicable to our business model; (ii) changes in market or industry conditions, regulatory environment and receptivity to our technology and services; (iii) results of litigation or a security incident; (iv) the loss of one or more key customers or partners; (v) the impact of COVID-19 on our business and results of operations; and (vi) changes to our abilities to recruit and retain qualified team members. For a detailed discussion of the risk factors that could affect our actual results, please refer to the risk factors identified in our SEC reports, including, but not limited to the Annual Report on Form 10-K for the year ended December 31, 2020 filed with the SEC on or about February 25, 2021 and the Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2021 expected to be filed with the SEC on or about May 7, 2021. All information provided in this release and in the attachments is as of the date hereof, and we undertake no duty to update or revise this information unless required by law.


    Condensed Consolidated Balance Sheets
    (in thousands, except share and per share data, unaudited)

     As of
    March 31,    		 As of
    December 31,
     2021 2020
    Assets   
    Current assets:   
    Cash and cash equivalents$132,627  $91,954 
    Short-term investments133,807  178,917 
    Accounts receivable, net45,905  48,296 
    Prepaid expenses and other assets12,404  10,632 
    Total current assets324,743  329,799 
    Property and equipment, net18,653  12,863 
    Intangible assets, net91,840  98,921 
    Operating lease right-of-use assets24,093  24,729 
    Goodwill107,822  107,822 
    Other assets4,068  3,606 
    Total assets$571,219  $577,740 
    Liabilities and stockholders’ equity   
    Current liabilities:   
    Accounts payable$4,626  $5,332 
    Accrued liabilities12,946  16,510 
    Acquisition-related consideration payable—  2,000 
    Deferred revenue51,634  47,145 
    Operating lease liabilities2,454  2,622 
    Contingent consideration liabilities15,902  14,427 
    Convertible senior notes, net171,864  — 
    Total current liabilities259,426  88,036 
    Convertible senior notes, net of current portion—  168,994 
    Deferred revenue, net of current portion1,135  1,878 
    Operating lease liabilities, net of current portion23,083  23,669 
    Contingent consideration liabilities, net of current portion16,509  16837 
    Other liabilities2,230  2227 
    Total liabilities302,383  301,641 
    Commitments and contingencies   
    Stockholders’ equity:   
    Common stock, $0.001 par value; 44,340,036 and 43,376,848 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively44  43 
    Additional paid-in capital1,022,781  1,001,645 
    Accumulated deficit(754,020) (725,650)
    Accumulated other comprehensive income31  61 
    Total stockholders' equity268,836  276,099 
    Total liabilities and stockholders’ equity$571,219  $577,740 


    Condensed Consolidated Statements of Operations
    (in thousands, except per share data, unaudited)

     Three Months Ended
    March 31,
     2021 2020
    Revenue:   
    Technology$33,839  $24,699 
    Professional services22,007  20,417 
    Total revenue55,846  45,116 
    Cost of revenue, excluding depreciation and amortization:   
    Technology(1)10,825  7,906 
    Professional services(1)16,513  16,162 
    Total cost of revenue, excluding depreciation and amortization27,338  24,068 
    Operating expenses:   
    Sales and marketing(1)15,651  13,487 
    Research and development(1)14,345  13,088 
    General and administrative(1)(2)(3)15,015  9,701 
    Depreciation and amortization7,814  2,877 
    Total operating expenses52,825  39,153 
    Loss from operations(24,317) (18,105)
    Interest and other expense, net(3,952) (621)
    Loss before income taxes(28,269) (18,726)
    Income tax provision (benefit)101  (1,236)
    Net loss$(28,370) $(17,490)
    Net loss per share, basic and diluted$(0.65) $(0.47)
    Weighted-average shares outstanding used in calculating net loss per share, basic and diluted43,870  37,109 
        
    Adjusted net loss(4)$(2,753) $(6,083)
    Adjusted net loss per share, basic and diluted(4)$(0.06) $(0.16)
            

    _______________
    (1) Includes stock-based compensation expense as follows:

     Three Months Ended
    March 31,
     2021 2020
      
    Stock-Based Compensation Expense:(in thousands)
    Cost of revenue, excluding depreciation and amortization:   
    Technology$374  $176 
    Professional services1,435  816 
    Sales and marketing4,818  3,182 
    Research and development2,257  1,882 
    General and administrative4,626  2,685 
    Total$13,510  $8,741 
            

    (2) Includes acquisition transaction costs as follows:

     Three Months Ended
    March 31,
     2021 2020
      
    Acquisition transaction costs:(in thousands)
    General and administrative$—  $875 

    (3) Includes the change in fair value of contingent consideration liabilities, as follows:

     Three Months Ended
    March 31,
     2021 2020
      
    Change in fair value of contingent consideration liabilities:(in thousands)
    General and administrative$2,156  $(359)

    (4) Includes non-GAAP adjustments to net loss. Refer to the "Non-GAAP Financial Measures—Adjusted Net Loss Per Share" section below for further details.


    Condensed Consolidated Statements of Cash Flows
    (in thousands, unaudited)

     Three Months Ended March 31,
    Cash flows from operating activities2021 2020
    Net loss$(28,370) $(17,490)
    Adjustments to reconcile net loss to net cash used in operating activities:   
    Depreciation and amortization7,814  2,877 
    Amortization of debt discount and issuance costs2,870  285 
    Non-cash operating lease expense965  741 
    Investment discount and premium amortization417  (6)
    Provision for expected credit losses300  51 
    Stock-based compensation expense13,510  8,741 
    Deferred tax (benefit) provision2  (1,280)
    Change in fair value of contingent consideration liabilities2,156  (359)
    Other(34) (4)
    Change in operating assets and liabilities:   
    Accounts receivable, net2,090  (7,335)
    Deferred costs—  444 
    Prepaid expenses and other assets(2,173) (2,244)
    Accounts payable, accrued liabilities, and other liabilities(5,352) (4,283)
    Deferred revenue3,745  3,936 
    Operating lease liabilities(1,083) (843)
    Net cash used in operating activities(3,143) (16,769)
        
    Cash flows from investing activities   
    Purchase of short-term investments(8,621) — 
    Proceeds from the sale and maturity of short-term investments53,240  66,653 
    Acquisition of businesses, net of cash acquired—  (15,249)
    Purchase of property and equipment(5,882) (428)
    Capitalization of internal use software(887) (78)
    Purchase of intangible assets(480) (758)
    Proceeds from sale of property and equipment6  6 
    Net cash provided by investing activities37,376  50,146 
        
    Cash flows from financing activities   
    Proceeds from exercise of stock options6,488  9,046 
    Proceeds from employee stock purchase plan1,349  1,289 
    Payments of acquisition-related consideration(1,391) (748)
    Net cash provided by financing activities6,446  9,587 
    Effect of exchange rate on cash and cash equivalents(6) (31)
    Net increase in cash and cash equivalents40,673  42,933 
        
    Cash and cash equivalents at beginning of period91,954  18,032 
    Cash and cash equivalents at end of period$132,627  $60,965 
            

    Non-GAAP Financial Measures

    To supplement our financial information presented in accordance with GAAP, we believe certain non-GAAP measures, including Adjusted Gross Profit, Adjusted Gross Margin, Adjusted EBITDA, Adjusted Net Loss, and Adjusted Net Loss per share, basic and diluted, are useful in evaluating our operating performance. For example, we exclude stock-based compensation expense because it is non-cash in nature and excluding this expense provides meaningful supplemental information regarding our operational performance and allows investors the ability to make more meaningful comparisons between our operating results and those of other companies. We use this non-GAAP financial information to evaluate our ongoing operations, as a component in determining employee bonus compensation, and for internal planning and forecasting purposes.

    We believe that non-GAAP financial information, when taken collectively, may be helpful to investors because it provides consistency and comparability with past financial performance. However, non-GAAP financial information is presented for supplemental informational purposes only, has limitations as an analytical tool and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP. In addition, other companies, including companies in our industry, may calculate similarly-titled non-GAAP measures differently or may use other measures to evaluate their performance. A reconciliation is provided below for each non-GAAP financial measure to the most directly comparable financial measure stated in accordance with GAAP. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures, and not to rely on any single financial measure to evaluate our business.

    Adjusted Gross Profit and Adjusted Gross Margin

    Adjusted Gross Profit is a non-GAAP financial measure that we define as revenue less cost of revenue, excluding depreciation and amortization and excluding stock-based compensation. We define Adjusted Gross Margin as our Adjusted Gross Profit divided by our revenue. We believe Adjusted Gross Profit and Adjusted Gross Margin are useful to investors as they eliminate the impact of certain non-cash expenses and allow a direct comparison of these measures between periods without the impact of non-cash expenses and certain other non-recurring operating expenses. The following is a reconciliation of revenue, the most directly comparable GAAP financial measure, to Adjusted Gross Profit, for the three months ended March 31, 2021 and 2020:

     Three Months Ended March 31, 2021
     (in thousands, except percentages)
     Technology Professional Services Total
    Revenue$33,839  $22,007  $55,846 
    Cost of revenue, excluding depreciation and amortization(10,825) (16,513) (27,338)
    Gross profit, excluding depreciation and amortization23,014  5,494  28,508 
    Add:     
    Stock-based compensation374  1,435  1,809 
    Adjusted Gross Profit$23,388  $6,929  $30,317 
    Gross margin, excluding depreciation and amortization68% 25% 51%
    Adjusted Gross Margin69% 31% 54%


     Three Months Ended March 31, 2020
     (in thousands, except percentages)
     Technology Professional Services Total
    Revenue$24,699  $20,417  $45,116 
    Cost of revenue, excluding depreciation and amortization(7,906) (16,162) (24,068)
    Gross profit, excluding depreciation and amortization16,793  4,255  21,048 
    Add:     
    Stock-based compensation176  816  992 
    Adjusted Gross Profit$16,969  $5,071  $22,040 
    Gross margin, excluding depreciation and amortization68% 21% 47%
    Adjusted Gross Margin69% 25% 49%
             

    Adjusted EBITDA

    Adjusted EBITDA is a non-GAAP financial measure that we define as net loss adjusted for (i) interest and other expense, net, (ii) income tax (benefit) provision, (iii) depreciation and amortization, (iv) stock-based compensation, (v) acquisition transaction costs, and (vi) change in fair value of contingent consideration liabilities when they are incurred. We view acquisition-related expenses when applicable, such as transaction costs and changes in the fair value of contingent consideration liabilities that are directly related to business combinations as events that are not necessarily reflective of operational performance during a period. We believe Adjusted EBITDA provides investors with useful information on period-to-period performance as evaluated by management and comparison with our past financial performance and is useful in evaluating our operating performance compared to that of other companies in our industry, as this metric generally eliminates the effects of certain items that may vary from company to company for reasons unrelated to overall operating performance. The following is a reconciliation of our net loss, the most directly comparable GAAP financial measure, to Adjusted EBITDA, for the three months ended March 31, 2021 and 2020:

     Three Months Ended
    March 31,
     2021 2020
      
     (in thousands)
    Net loss$(28,370) $(17,490)
    Add:   
    Interest and other expense, net3,952  621 
    Income tax (benefit) provision101  (1,236)
    Depreciation and amortization7,814  2,877 
    Stock-based compensation13,510  8,741 
    Acquisition transaction costs—  875 
    Change in fair value of contingent consideration liabilities2,156  (359)
    Adjusted EBITDA$(837) $(5,971)
            

    Adjusted Net Loss Per Share

    Adjusted Net Loss is a non-GAAP financial measure that we define as net loss attributable to common stockholders adjusted for (i) stock-based compensation, (ii) amortization of acquired intangibles, (iii) acquisition transaction costs, (iv) change in fair value of contingent consideration liabilities, and (v) non-cash interest expense related to our convertible senior notes. We believe Adjusted Net Loss provides investors with useful information on period-to-period performance as evaluated by management and comparison with our past financial performance and is useful in evaluating our operating performance compared to that of other companies in our industry, as this metric generally eliminates the effects of certain items that may vary from company to company for reasons unrelated to overall operating performance.

     Three Months Ended March 31,
     2021 2020
      
    Numerator:(in thousands, except share and per share amounts)
    Net loss attributable to common stockholders$(28,370) $(17,490)
    Add:   
    Stock-based compensation13,510  8,741 
    Amortization of acquired intangibles7,081  2,150 
    Acquisition transaction costs—  875 
    Change in fair value of contingent consideration liabilities2,156  (359)
    Non-cash interest expense related to convertible senior notes2,870  — 
    Adjusted Net Loss$(2,753) $(6,083)
    Denominator:   
    Weighted-average number of shares used in calculating net loss, basic and diluted43,870,288  37,108,998 
    Adjusted net loss per share, basic and diluted$(0.06) $(0.16)
            

    Health Catalyst Investor Relations Contact:
    Adam Brown
    Senior Vice President, Investor Relations and FP&A
    +1 (855)-309-6800
    ir@healthcatalyst.com

    Health Catalyst Media Contact:
    Amanda Hundt
    Vice President, Corporate Communications
    amanda.hundt@healthcatalyst.com
    +1 (575) 491-0974


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