Health Catalyst Reports Fourth Quarter and Year End 2025 Results
Rhea-AI Summary
Health Catalyst (Nasdaq: HCAT) reported 2025 results: total revenue $311.1M (up 1% YoY) and Adjusted EBITDA $41.4M (up 59% YoY). GAAP net loss widened to $178.0M. Platform Clients grew to 162 and dollar-based retention fell to 93%. Q1 2026 guidance: revenue $68–70M, Adjusted EBITDA $7–8M.
Management cited opportunities and areas to improve and is conducting an internal strategic and operational review amid a CEO transition.
Positive
- Adjusted EBITDA +59% YoY for 2025 to $41.4M
- Q4 2025 Adjusted EBITDA rose 74% YoY to $13.8M
- Platform Clients increased to 162 from 130 (+25%)
- Adjusted gross margin improved to 51.1% (up ~230 bps)
Negative
- GAAP net loss widened to $177.974M (up 156% YoY)
- Dollar-based retention (Tech + TEMS) dropped to 93% from 102% (900 bps decline)
- No full-year 2026 guidance provided due to ongoing CEO transition and strategic review
Key Figures
Market Reality Check
Peers on Argus
HCAT was up 2.2% pre-release while momentum data showed only AMWL moving, down 0.54%. Broader health information peers were mixed, with gains in SOPH, LFMD, MNDR, SLP and a decline in CCLD, indicating stock-specific rather than broad sector dynamics.
Historical Context
| Date | Event | Sentiment | Move | Catalyst |
|---|---|---|---|---|
| Mar 02 | Earnings call notice | Neutral | +3.7% | Announced timing and access details for Q4 and year-end 2025 results call. |
| Feb 18 | CEO transition | Positive | +2.3% | Ben Albert appointed CEO, advancing succession plan and emphasizing efficiency focus. |
| Dec 02 | Board change | Positive | -5.2% | Largest shareholder’s CEO joined board, increasing investor representation and ownership focus. |
| Nov 14 | Investor conferences | Neutral | -1.1% | Management scheduled multiple late-2025 investor conference appearances and meetings. |
| Nov 10 | Q3 2025 earnings | Positive | -5.6% | Q3 2025 results beat guidance and full-year outlook reaffirmed with higher EBITDA. |
Recent positive strategic and earnings updates have sometimes seen negative or muted next-day moves, indicating inconsistent price alignment with news tone.
Over the past six months, Health Catalyst has focused on earnings delivery and leadership changes. Q3 2025 results showed revenue of $76.3M and Adjusted EBITDA of $12.0M with guidance reaffirmed, yet the stock fell 5.61%. Governance shifts included a major shareholder joining the board and a CEO transition to Ben Albert, both framed positively but with mixed price reactions. Today’s Q4 and 2025 report, including $311.1M in 2025 revenue and $41.4M Adjusted EBITDA, follows this backdrop of operational progress versus a depressed share price.
Market Pulse Summary
This announcement details 2025 revenue of $311.1M, Adjusted EBITDA of $41.4M, and improving adjusted gross margins, alongside a larger net loss of $(177.974M) and softer dollar-based retention at 93%. It follows prior quarters where guidance was met or exceeded but shares remained well below the 52-week high. Key factors to watch include execution under the new CEO, the outcome of the strategic review, Q1 2026 guidance delivery, and trends in client retention and platform client growth.
Key Terms
gaap financial
non-gaap financial measures financial
adjusted ebitda financial
annual recurring revenue financial
arr financial
form 10-k regulatory
adjusted gross margin financial
AI-generated analysis. Not financial advice.
SALT LAKE CITY, March 12, 2026 (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 and year ended December 31, 2025.
“We closed 2025 with solid performance across our business, including total revenue of
Financial Highlights for the Three and Twelve Months Ended December 31, 2025
Key Financial Measures
| Three Months Ended December 31, | Year over Year Change | Twelve Months Ended December 31, | Year over Year Change | ||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||
| GAAP Financial Measures: | (in thousands, except percentages) | (in thousands, except percentages) | |||||||||||||||||||
| Total revenue | $ | 74,679 | $ | 79,606 | (6 | )% | $ | 311,136 | $ | 306,584 | 1 | % | |||||||||
| Gross profit | $ | 31,385 | $ | 28,618 | 10 | % | $ | 120,356 | $ | 114,503 | 5 | % | |||||||||
| Gross margin | 42.0 | % | 35.9 | % | 38.7 | % | 37.3 | % | |||||||||||||
| Net loss | $ | (91,025 | ) | $ | (20,673 | ) | (340 | )% | $ | (177,974 | ) | $ | (69,502 | ) | (156 | )% | |||||
| Non-GAAP Financial Measures:(1) | |||||||||||||||||||||
| Adjusted Gross Profit | $ | 39,962 | $ | 37,121 | 8 | % | $ | 159,107 | $ | 149,533 | 6 | % | |||||||||
| Adjusted Gross Margin | 53.5 | % | 46.6 | % | 51.1 | % | 48.8 | % | |||||||||||||
| Adjusted EBITDA | $ | 13,786 | $ | 7,911 | 74 | % | $ | 41,408 | $ | 26,105 | 59 | % | |||||||||
________________________
(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.
Other Key Metrics
| As of December 31, | |||||
| 2025 | 2024 | ||||
| Platform Clients(1)* | 162 | 130 | |||
| Year Ended December 31, | |||||
| 2025 | 2024 | ||||
| Dollar-based Retention Rate (Tech + TEMS)(2)* | 93 | % | 102 | % | |
__________________
(1) At the beginning of 2025, we updated the name and definition of this key metric. Platform Clients are defined as: (i) all Platform Clients as of December 31, 2024 under our historical definition (i.e., these clients will be included in our Platform Client count until they cease to have an active subscription as of the end of the period), and (ii) as of January 1, 2025, any technology client that signs contracts with at least
(2) Dollar-based Retention Rate (Tech + TEMS) is calculated as of a period end by starting with the sum of the technology ARR and Tech-Enabled Managed Services (TEMS) ARR from our Platform Clients as of the date 12 months prior to such period end (this calculation excludes professional services ARR and non-recurring revenue), calculating the sum of the ARR from these same clients as of the current period end (which includes any upsells and also reflects contraction or attrition over the trailing twelve months but excludes revenue from new Platform Clients added in the current period who were not clients at the beginning of such period; this current period ARR may include acquired ARR from clients that overlap with the Platform Clients in a given calendar year), and then dividing the current period ARR by the prior period ARR. Please see our Annual Report on Form 10-K for the year ended December 31, 2025 expected to be filed with the SEC on or about March 12, 2026 for additional information.
* We anticipate sunsetting our reporting of this metric for 2026 and future years, and we anticipate providing new 2026 growth metrics in lieu of this metric in the future.
Financial Outlook
Health Catalyst provides forward-looking guidance on total revenue, a GAAP measure, and Adjusted EBITDA, a non-GAAP measure.
For the first quarter of 2026, we expect:
- Total revenue between
$68 and$70 million , and
- Adjusted EBITDA between
$7 and$8 million
We have not provided forward-looking guidance for net loss, the most directly comparable GAAP measure to Adjusted EBITDA, and therefore have not reconciled guidance for Adjusted EBITDA to 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 forecasted.
We are not providing forward-looking guidance for the full year of 2026 at this time due to an ongoing internal strategic and operational review in connection with our CEO transition.
Quarterly Conference Call Details
We will host a conference call to review the results today, Thursday, March 12, 2026, at 5:00 p.m. E.T. The conference call can be accessed by dialing (800) 343-5172 for U.S. participants, or (203) 518-9856 for international participants, and referencing conference ID “HCATQ425.” 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 (Nasdaq: HCAT) is a leading provider of data and analytics technology and services that ignite smarter healthcare, lighting the path to measurable clinical, financial, and operational improvement. More than 1,200 organizations worldwide rely on Health Catalyst’s offerings, including our cloud-based technology ecosystem Health Catalyst Ignite™, AI-enabled data and analytics solutions, and expert services to drive meaningful outcomes across hundreds of millions of patient records. Powered by high-value data, standardized measures and registries, and deep healthcare domain expertise, Ignite helps organizations transform complex information into actionable insights. Backed by a multi-decade mission and a proven track record of delivering billions of dollars in measurable results, Health Catalyst continues to serve as the catalyst for massive, measurable, data-informed healthcare improvement and innovation.
Available Information
Our investors and others should note that we announce material information to the public about our company, products and services, and other matters related to our company through a variety of means, including our website (https://www.healthcatalyst.com/), our investor relations website (https://ir.healthcatalyst.com/), press releases, SEC filings, public conference calls, and social media, including our and our CEO’s social media accounts such as LinkedIn (https://www.linkedin.com/in/ben-albert-0a763b1/ and https://www.linkedin.com/company/healthcatalyst/), in order to achieve broad, non-exclusionary distribution of information to the public and to comply with our 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, our growth strategies, our strategic priorities, and our financial outlook for Q1 2026. 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 clients or partners, clients reducing or eliminating their spend with us, client churn or down-selling in connection with the migration to Ignite or otherwise; (v) fluctuations in our project-based, non-recurring revenue, (vi) macroeconomic challenges (including high inflationary and/or high interest rate environments, tariffs, or market volatility and measures taken in response thereto), natural disasters or any new public health crises, and regional or global conflicts (including the conflicts in the Middle East); and (vii) 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 Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2025 that was filed with the SEC on November 10, 2025 and the Annual Report on Form 10-K for the year ended December 31, 2025 expected to be filed with the SEC on or about March 12, 2026. 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.
| Consolidated Balance Sheets (in thousands, except share and per share data) | |||||||
| As of December 31, | |||||||
| 2025 | 2024 | ||||||
| Assets | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 50,814 | $ | 249,645 | |||
| Short-term investments | 44,918 | 142,355 | |||||
| Accounts receivable, net | 59,128 | 57,182 | |||||
| Prepaid expenses and other assets | 14,447 | 16,468 | |||||
| Total current assets | 169,307 | 465,650 | |||||
| Property and equipment, net | 33,838 | 29,394 | |||||
| Intangible assets, net | 77,678 | 86,052 | |||||
| Operating lease right-of-use assets | 6,640 | 12,058 | |||||
| Goodwill | 209,073 | 259,759 | |||||
| Other assets | 6,107 | 6,016 | |||||
| Total assets | $ | 502,643 | $ | 858,929 | |||
| Liabilities and stockholders’ equity | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 9,363 | $ | 11,433 | |||
| Accrued liabilities | 18,697 | 26,340 | |||||
| Deferred revenue | 56,107 | 53,281 | |||||
| Operating lease liabilities | 3,779 | 3,614 | |||||
| Current portion of long-term debt | 1,627 | 231,182 | |||||
| Total current liabilities | 89,573 | 325,850 | |||||
| Long-term debt, net of current portion | 151,624 | 151,178 | |||||
| Deferred revenue, net of current portion | 410 | 249 | |||||
| Operating lease liabilities, net of current portion | 14,208 | 16,291 | |||||
| Other liabilities | 798 | 154 | |||||
| Total liabilities | 256,863 | 493,722 | |||||
| Stockholders’ equity: | |||||||
| Preferred stock, | — | — | |||||
| Common stock, | 1,608,840 | 1,552,714 | |||||
| Accumulated deficit | (1,364,646 | ) | (1,186,672 | ) | |||
| Accumulated other comprehensive income (loss) | 1,586 | (835 | ) | ||||
| Total stockholders’ equity | 245,780 | 365,207 | |||||
| Total liabilities and stockholders’ equity | $ | 502,643 | $ | 858,929 | |||
| Consolidated Statements of Operations (in thousands, except per share data, unaudited) | |||||||||||||||
| Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||
| Revenue: | |||||||||||||||
| Technology | $ | 51,868 | $ | 51,598 | $ | 208,277 | $ | 194,852 | |||||||
| Professional services | 22,811 | 28,008 | 102,859 | 111,732 | |||||||||||
| Total revenue | 74,679 | 79,606 | 311,136 | 306,584 | |||||||||||
| Cost of revenue, excluding depreciation and amortization: | |||||||||||||||
| Technology(1)(2)(3) | 16,621 | 18,821 | 69,741 | 67,812 | |||||||||||
| Professional services(1)(2)(3) | 18,675 | 26,094 | 89,720 | 97,993 | |||||||||||
| Total cost of revenue, excluding depreciation and amortization | 35,296 | 44,915 | 159,461 | 165,805 | |||||||||||
| Operating expenses: | |||||||||||||||
| Sales and marketing(1)(2)(3) | 10,172 | 11,242 | 52,477 | 54,387 | |||||||||||
| Research and development(1)(2)(3) | 9,911 | 15,002 | 49,770 | 57,950 | |||||||||||
| General and administrative(1)(2)(3)(4) | 11,044 | 15,681 | 49,559 | 56,817 | |||||||||||
| Depreciation and amortization | 12,882 | 10,266 | 50,500 | 41,431 | |||||||||||
| Impairment of goodwill and intangible assets | 81,454 | — | 110,223 | — | |||||||||||
| Total operating expenses | 125,463 | 52,191 | 312,529 | 210,585 | |||||||||||
| Loss from operations | (86,080 | ) | (17,500 | ) | (160,854 | ) | (69,806 | ) | |||||||
| Interest and other expense, net | (4,566 | ) | (2,548 | ) | (16,404 | ) | 637 | ||||||||
| Loss before income taxes | (90,646 | ) | (20,048 | ) | (177,258 | ) | (69,169 | ) | |||||||
| Income tax provision | 379 | 625 | 716 | 333 | |||||||||||
| Net loss | $ | (91,025 | ) | $ | (20,673 | ) | $ | (177,974 | ) | $ | (69,502 | ) | |||
| Net loss per share, basic and diluted | $ | (1.28 | ) | $ | (0.33 | ) | $ | (2.55 | ) | $ | (1.15 | ) | |||
| Weighted-average shares outstanding used in calculating net loss per share, basic and diluted | 70,998 | 62,377 | 69,896 | 60,185 | |||||||||||
_______________
(1) Includes stock-based compensation expense as follows:
| Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||
| Stock-Based Compensation Expense: | (in thousands) | (in thousands) | |||||||||
| Cost of revenue, excluding depreciation and amortization: | |||||||||||
| Technology | $ | 103 | $ | 494 | $ | 822 | $ | 1,700 | |||
| Professional services | 466 | 1,759 | 3,653 | 6,041 | |||||||
| Sales and marketing | 1,077 | 3,123 | 7,866 | 12,120 | |||||||
| Research and development | 322 | 2,305 | 3,743 | 7,696 | |||||||
| General and administrative | 2,139 | 3,131 | 10,928 | 12,571 | |||||||
| Total | $ | 4,107 | $ | 10,812 | $ | 27,012 | $ | 40,128 | |||
(2) Includes acquisition-related costs, net as follows:
| Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||
| Acquisition-related costs, net: | (in thousands) | (in thousands) | ||||||||||
| Cost of revenue, excluding depreciation and amortization: | ||||||||||||
| Technology | $ | 2 | $ | 74 | $ | 120 | $ | 320 | ||||
| Professional services | 8 | 103 | 208 | 433 | ||||||||
| Sales and marketing | 5 | 53 | 421 | 791 | ||||||||
| Research and development | 9 | 91 | 366 | 703 | ||||||||
| General and administrative | 397 | 4,012 | (3,201 | ) | 7,817 | |||||||
| Total | $ | 421 | $ | 4,333 | $ | (2,086 | ) | $ | 10,064 | |||
(3) Includes restructuring costs, as follows:
| Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||
| Restructuring costs: | (in thousands) | (in thousands) | |||||||||
| Cost of revenue, excluding depreciation and amortization: | |||||||||||
| Technology | $ | — | $ | — | $ | 837 | $ | 79 | |||
| Professional services | — | — | 1,792 | 181 | |||||||
| Sales and marketing | 206 | — | 2,505 | 449 | |||||||
| Research and development | 35 | — | 3,317 | 443 | |||||||
| General and administrative | 761 | — | 1,262 | 936 | |||||||
| Total | $ | 1,002 | $ | — | $ | 9,713 | $ | 2,088 | |||
(4) Includes non-recurring lease-related charges, as follows:
| Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||
| Non-recurring lease-related charges: | (in thousands) | (in thousands) | |||||||||
| General and administrative | $ | — | $ | — | $ | 6,900 | $ | 2,200 | |||
| Consolidated Statements of Cash Flows (in thousands) | |||||||
| Year Ended December 31, | |||||||
| 2025 | 2024 | ||||||
| Cash flows from operating activities | |||||||
| Net loss | $ | (177,974 | ) | $ | (69,502 | ) | |
| Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||
| Stock-based compensation expense | 27,012 | 40,128 | |||||
| Depreciation and amortization | 50,500 | 41,431 | |||||
| Investment discount and premium accretion | (1,565 | ) | (4,757 | ) | |||
| Impairment of long-lived assets | 6,900 | 2,200 | |||||
| Non-cash operating lease expense | 2,930 | 2,685 | |||||
| Provision for expected credit losses | 1,503 | 1,202 | |||||
| Amortization of debt discount, issuance costs, and deferred financing costs | 3,725 | 3,256 | |||||
| Deferred tax provision | 81 | 77 | |||||
| Change in fair value of contingent consideration liabilities | (7,063 | ) | (1,642 | ) | |||
| Impairment of goodwill and intangible assets | 110,223 | — | |||||
| Other | (429 | ) | 141 | ||||
| Change in operating assets and liabilities: | |||||||
| Accounts receivable, net | (1,809 | ) | 4,281 | ||||
| Prepaid expenses and other assets | 1,569 | (50 | ) | ||||
| Accounts payable, accrued liabilities, and other liabilities | (11,512 | ) | 5,581 | ||||
| Deferred revenue | 607 | (7,012 | ) | ||||
| Operating lease liabilities | (3,967 | ) | (3,460 | ) | |||
| Net cash provided by operating activities | 731 | 14,559 | |||||
| Cash flows from investing activities | |||||||
| Proceeds from the sale and maturity of short-term investments | 163,948 | 242,067 | |||||
| Purchases of short-term investments | (65,132 | ) | (168,307 | ) | |||
| Capitalization of internal-use software | (19,780 | ) | (14,274 | ) | |||
| Acquisition of businesses, net of cash acquired | (41,114 | ) | (80,277 | ) | |||
| Purchases of property and equipment | (968 | ) | (1,616 | ) | |||
| Purchases of intangible assets | (805 | ) | (508 | ) | |||
| Proceeds from the sale of property and equipment | 44 | 13 | |||||
| Net cash provided by (used in) investing activities | 36,193 | (22,902 | ) | ||||
| Cash flows from financing activities | |||||||
| Proceeds from issuance of long-term debt, net of issuance costs | — | 152,277 | |||||
| Payment of deferred financing costs | — | (2,152 | ) | ||||
| Repayment of debt | (232,292 | ) | (959 | ) | |||
| Proceeds from employee stock purchase plan | 1,510 | 2,411 | |||||
| Proceeds from exercise of stock options | — | 169 | |||||
| Repurchase of common stock | (5,000 | ) | — | ||||
| Net cash (used in) provided by financing activities | (235,782 | ) | 151,746 | ||||
| Effect of exchange rate changes on cash and cash equivalents | 27 | (34 | ) | ||||
| Net (decrease) increase in cash and cash equivalents | (198,831 | ) | 143,369 | ||||
| Cash and cash equivalents at beginning of period | 249,645 | 106,276 | |||||
| Cash and cash equivalents at end of period | $ | 50,814 | $ | 249,645 | |||
Non-GAAP Financial Measures
To supplement our financial information presented in accordance with GAAP, we believe certain non-GAAP financial measures, including Adjusted Gross Profit, Adjusted Gross Margin, Adjusted EBITDA, Adjusted Operating Expenses, Adjusted Net Income, and Adjusted Net Income 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 financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison. 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
Gross profit is a GAAP financial measure that is calculated as revenue less cost of revenue, including depreciation and amortization of capitalized software development costs and acquired technology. We calculate gross margin as gross profit divided by our revenue. Adjusted Gross Profit is a non-GAAP financial measure that we define as gross profit, adjusted for (i) depreciation and amortization, (ii) stock-based compensation, (iii) acquisition-related costs, net, and (iv) restructuring costs, as applicable. 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.
We present both of these measures for our technology and professional services business. We believe these non-GAAP measures are useful in evaluating our operating performance compared to that of other companies in our industry, as these metrics generally eliminate the effects of certain items that may vary from company to company for reasons unrelated to overall profitability.
The following is a reconciliation of our Adjusted Gross Profit and Adjusted Gross Margin, in total and for technology and professional services, to gross profit and gross margin, the most directly comparable financial measures calculated in accordance with GAAP, for the three and twelve months ended December 31, 2025 and 2024:
| Three Months Ended December 31, 2025 | |||||||||||
| (in thousands, except percentages) | |||||||||||
| Technology | Professional Services | Total | |||||||||
| Revenue | $ | 51,868 | $ | 22,811 | $ | 74,679 | |||||
| Cost of revenue, excluding depreciation and amortization | (16,621 | ) | (18,675 | ) | (35,296 | ) | |||||
| Amortization of intangible assets, cost of revenue | (4,581 | ) | — | (4,581 | ) | ||||||
| Depreciation of property and equipment, cost of revenue | (3,417 | ) | — | (3,417 | ) | ||||||
| Gross profit | 27,249 | 4,136 | 31,385 | ||||||||
| Gross margin | 52.5 | % | 18.1 | % | 42.0 | % | |||||
| Add: | |||||||||||
| Amortization of intangible assets, cost of revenue | 4,581 | — | 4,581 | ||||||||
| Depreciation of property and equipment, cost of revenue | 3,417 | — | 3,417 | ||||||||
| Stock-based compensation | 103 | 466 | 569 | ||||||||
| Acquisition-related costs, net(1) | 2 | 8 | 10 | ||||||||
| Adjusted Gross Profit | $ | 35,352 | $ | 4,610 | $ | 39,962 | |||||
| Adjusted Gross Margin | 68.2 | % | 20.2 | % | 53.5 | % | |||||
__________________
(1) Acquisition-related costs, net include deferred retention expenses attributable to the Upfront, Intraprise, ARMUS, and KPI Ninja acquisitions. For additional details refer to Notes 1, 2, and 7 in our consolidated financial statements.
| Three Months Ended December 31, 2024 | |||||||||||
| (in thousands, except percentages) | |||||||||||
| Technology | Professional Services | Total | |||||||||
| Revenue | $ | 51,598 | $ | 28,008 | $ | 79,606 | |||||
| Cost of revenue, excluding depreciation and amortization | (18,821 | ) | (26,094 | ) | (44,915 | ) | |||||
| Amortization of intangible assets, cost of revenue | (3,455 | ) | — | (3,455 | ) | ||||||
| Depreciation of property and equipment, cost of revenue | (2,618 | ) | — | (2,618 | ) | ||||||
| Gross profit | 26,704 | 1,914 | 28,618 | ||||||||
| Gross margin | 51.8 | % | 6.8 | % | 35.9 | % | |||||
| Add: | |||||||||||
| Amortization of intangible assets, cost of revenue | 3,455 | — | 3,455 | ||||||||
| Depreciation of property and equipment, cost of revenue | 2,618 | — | 2,618 | ||||||||
| Stock-based compensation | 494 | 1,759 | 2,253 | ||||||||
| Acquisition-related costs, net(1) | 74 | 103 | 177 | ||||||||
| Adjusted Gross Profit | $ | 33,345 | $ | 3,776 | $ | 37,121 | |||||
| Adjusted Gross Margin | 64.6 | % | 13.5 | % | 46.6 | % | |||||
___________________
(1) Acquisition-related costs, net include deferred retention expenses following the Lumeon, Carevive, ARMUS, and KPI Ninja acquisitions. For additional details refer to Notes 1, 2, and 7 in our consolidated financial statements.
| Twelve Months Ended December 31, 2025 | |||||||||||
| (in thousands, except percentages) | |||||||||||
| Technology | Professional Services | Total | |||||||||
| Revenue | $ | 208,277 | $ | 102,859 | $ | 311,136 | |||||
| Cost of revenue, excluding depreciation and amortization | (69,741 | ) | (89,720 | ) | (159,461 | ) | |||||
| Amortization of intangible assets, cost of revenue | (18,588 | ) | — | (18,588 | ) | ||||||
| Depreciation of property and equipment, cost of revenue | (12,731 | ) | — | (12,731 | ) | ||||||
| Gross profit | 107,217 | 13,139 | 120,356 | ||||||||
| Gross margin | 51.5 | % | 12.8 | % | 38.7 | % | |||||
| Add: | |||||||||||
| Amortization of intangible assets, cost of revenue | 18,588 | — | 18,588 | ||||||||
| Depreciation of property and equipment, cost of revenue | 12,731 | — | 12,731 | ||||||||
| Stock-based compensation | 822 | 3,653 | 4,475 | ||||||||
| Acquisition-related costs, net(1) | 120 | 208 | 328 | ||||||||
| Restructuring costs(2) | 837 | 1,792 | 2,629 | ||||||||
| Adjusted Gross Profit | $ | 140,315 | $ | 18,792 | $ | 159,107 | |||||
| Adjusted Gross Margin | 67.4 | % | 18.3 | % | 51.1 | % | |||||
__________________
(1) Acquisition-related costs, net include deferred retention expenses attributable to the Upfront, Intraprise, ARMUS, and KPI Ninja acquisitions. For additional details refer to Notes 1, 2, and 7 in our consolidated financial statements.
(2) Restructuring costs include severance and other team member costs from workforce reductions and restructuring. For additional details refer to Note 11 in our consolidated financial statements.
| Twelve Months Ended December 31, 2024 | |||||||||||
| (in thousands, except percentages) | |||||||||||
| Technology | Professional Services | Total | |||||||||
| Revenue | $ | 194,852 | $ | 111,732 | $ | 306,584 | |||||
| Cost of revenue, excluding depreciation and amortization | (67,812 | ) | (97,993 | ) | (165,805 | ) | |||||
| Amortization of intangible assets, cost of revenue | (16,150 | ) | — | (16,150 | ) | ||||||
| Depreciation of property and equipment, cost of revenue | (10,126 | ) | — | (10,126 | ) | ||||||
| Gross profit | 100,764 | 13,739 | 114,503 | ||||||||
| Gross margin | 51.7 | % | 12.3 | % | 37.3 | % | |||||
| Add: | |||||||||||
| Amortization of intangible assets, cost of revenue | 16,150 | — | 16,150 | ||||||||
| Depreciation of property and equipment, cost of revenue | 10,126 | — | 10,126 | ||||||||
| Stock-based compensation | 1,700 | 6,041 | 7,741 | ||||||||
| Acquisition-related costs, net(1) | 320 | 433 | 753 | ||||||||
| Restructuring costs(2) | 79 | 181 | 260 | ||||||||
| Adjusted Gross Profit | $ | 129,139 | $ | 20,394 | $ | 149,533 | |||||
| Adjusted Gross Margin | 66.3 | % | 18.3 | % | 48.8 | % | |||||
___________________
(1) Acquisition-related costs, net include deferred retention expenses attributable to the Lumeon, Carevive, ARMUS, and KPI Ninja acquisitions. For additional details refer to Notes 1, 2, and 7 in our consolidated financial statements.
(2) Restructuring costs include severance and other team member costs from workforce reductions and restructuring. For additional details refer to Note 11 in our consolidated financial statements.
Adjusted EBITDA
Adjusted EBITDA is a non-GAAP financial measure that we define as net loss adjusted for (i) interest and other (income) expense, net, (ii) income tax provision (benefit), (iii) depreciation and amortization, (iv) stock-based compensation, (v) acquisition-related costs, net, including the change in fair value of contingent consideration liabilities for potential earn-out payments, (vi) restructuring costs, (vii) impairment of goodwill and intangible assets, and (viii) non-recurring lease-related charges, as applicable. 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 costs that are unpredictable, dependent upon factors outside of our control, and are not necessarily reflective of operational performance during a period. We believe that excluding restructuring costs, impairment of goodwill and intangible assets, and non-recurring lease-related charges, as applicable, allows for more meaningful comparisons between operating results from period to period as these are separate from the core activities that arise in the ordinary course of our business and are not part of our ongoing operations. We believe Adjusted EBITDA provides investors with useful information on period-to-period performance as evaluated by management and a 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 financial measure calculated in accordance with GAAP, to Adjusted EBITDA, for the three and twelve months ended December 31, 2025 and 2024:
| Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||
| (in thousands) | (in thousands) | ||||||||||||||
| Net loss | $ | (91,025 | ) | $ | (20,673 | ) | $ | (177,974 | ) | $ | (69,502 | ) | |||
| Add: | |||||||||||||||
| Interest and other (income) expense, net | 4,566 | 2,548 | 16,404 | (637 | ) | ||||||||||
| Income tax provision | 379 | 625 | 716 | 333 | |||||||||||
| Depreciation and amortization | 12,882 | 10,266 | 50,500 | 41,431 | |||||||||||
| Stock-based compensation | 4,107 | 10,812 | 27,012 | 40,128 | |||||||||||
| Acquisition-related costs, net(1) | 421 | 4,333 | (2,086 | ) | 10,064 | ||||||||||
| Restructuring costs(2) | 1,002 | — | 9,713 | 2,088 | |||||||||||
| Impairment of goodwill and intangible assets(3) | 81,454 | — | 110,223 | — | |||||||||||
| Non-recurring lease-related charges(4) | — | — | 6,900 | 2,200 | |||||||||||
| Adjusted EBITDA | $ | 13,786 | $ | 7,911 | $ | 41,408 | $ | 26,105 | |||||||
__________________
(1) Acquisition-related costs, net includes third-party fees associated with due diligence, deferred retention expenses, post-acquisition restructuring costs incurred as part of business combinations, and changes in fair value of contingent consideration liabilities for potential earn-out payments. For additional details refer to Notes 1, 2, and 7 in our consolidated financial statements.
(2) Restructuring costs include severance and other team member costs from workforce reductions and restructuring, impairment of discontinued capitalized software projects, and other miscellaneous charges. For additional details, refer to Note 11 in our consolidated financial statements.
(3) Impairment of goodwill and intangible assets was recognized as a result of impairment indicators and quantitative tests indicating the fair values of the Technology and the Professional Services reporting units were below their respective carrying values as of June 30, 2025 and December 31, 2025. For additional details, refer to Note 4 in our consolidated financial statements.
(4) Non-recurring lease-related charges includes lease-related impairment charges for the subleased portion of our office space. For additional details refer to Note 9 in our consolidated financial statements.
Adjusted Operating Expenses
Adjusted Operating Expenses is a non-GAAP financial measure that we define as total operating expenses adjusted for (i) depreciation and amortization, (ii) stock-based compensation, (iii) acquisition-related costs, net, including the change in fair value of contingent consideration liabilities for potential earn-out payments, (iv) impairment of goodwill and intangible assets, (v) restructuring costs, and (vi) non-recurring lease-related charges, as applicable. We view these adjustments to allow for more meaningful comparisons between operating results from period-to-period as these are separate from the core activities that arise in the ordinary course of our business. We believe Adjusted Operating Expenses provides investors with useful information on period-to-period performance as evaluated by management and a 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 total operating expenses, the most directly comparable financial measure calculated in accordance with GAAP, to Adjusted Operating Expenses, as well as a calculation of total operating expenses and Adjusted Operating Expenses as a percentage of total revenue, for the three and twelve months ended December 31, 2025 and 2024:
| Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||
| (in thousands) | (in thousands) | ||||||||||||||
| Total operating expenses | $ | 125,463 | $ | 52,191 | $ | 312,529 | $ | 210,585 | |||||||
| Less: | |||||||||||||||
| Depreciation and amortization | (12,882 | ) | (10,266 | ) | (50,500 | ) | (41,431 | ) | |||||||
| Stock-based compensation | (3,538 | ) | (8,559 | ) | (22,537 | ) | (32,387 | ) | |||||||
| Acquisition-related costs, net(1) | (411 | ) | (4,156 | ) | 2,414 | (9,311 | ) | ||||||||
| Impairment of goodwill and intangible assets(2) | (81,454 | ) | — | (110,223 | ) | — | |||||||||
| Restructuring costs(3) | (1,002 | ) | — | (7,084 | ) | (1,828 | ) | ||||||||
| Non-recurring lease-related charges(4) | — | — | (6,900 | ) | (2,200 | ) | |||||||||
| Adjusted Operating Expenses | $ | 26,176 | $ | 29,210 | $ | 117,699 | $ | 123,428 | |||||||
| Total operating expenses as a percentage of total revenue | 168 | % | 66 | % | 100 | % | 69 | % | |||||||
| Adjusted Operating Expenses as a percentage of total revenue | 35 | % | 37 | % | 38 | % | 40 | % | |||||||
__________________
(1) Acquisition-related costs, net include third-party fees associated with due diligence, deferred retention expenses, post-acquisition restructuring costs incurred as part of business combinations, and changes in fair value of contingent consideration liabilities for potential earn-out payments.
(2) Impairment of goodwill and intangible assets was recognized as a result of impairment indicators and quantitative tests indicating the fair values of the Technology and the Professional Services reporting units were below their respective carrying values as of June 30, 2025 and December 31, 2025. For additional details, refer to Note 4 in our consolidated financial statements.
(3) Restructuring costs include severance and other team member costs from workforce reductions. For additional details, refer to Note 11 in our consolidated financial statements.
(4) Non-recurring lease-related charges include the lease-related impairment charge related to our corporate office space designated for subleasing. For additional details, refer to Note 9 in our consolidated financial statements.
Adjusted Net Income and Adjusted Net Income Per Share
Adjusted Net Income is a non-GAAP financial measure that we define as net loss adjusted for (i) stock-based compensation, (ii) amortization of acquired intangibles, (iii) acquisition-related costs, net, including the change in fair value of contingent consideration liabilities for potential earn-out payments, (iv) impairment of goodwill and intangible assets, (v) restructuring costs, (vi) non-recurring lease-related charges, and (vii) non-cash interest expense related to our convertible senior notes, as applicable. We believe Adjusted Net Income 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 financial measure calculated in accordance with GAAP, to Adjusted Net Income, for the three and twelve months ended December 31, 2025 and 2024:
| Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||
| Numerator: | (in thousands, except share and per share amounts) | ||||||||||||||
| Net loss | $ | (91,025 | ) | $ | (20,673 | ) | $ | (177,974 | ) | $ | (69,502 | ) | |||
| Add: | |||||||||||||||
| Stock-based compensation | 4,107 | 10,812 | 27,012 | 40,128 | |||||||||||
| Amortization of acquired intangibles | 8,885 | 7,029 | 35,487 | 28,654 | |||||||||||
| Loss on extinguishment of debt | — | — | — | — | |||||||||||
| Acquisition-related costs, net(1) | 421 | 4,333 | (2,086 | ) | 10,064 | ||||||||||
| Impairment of goodwill and intangible assets(2) | 81,454 | — | 110,223 | — | |||||||||||
| Restructuring costs(3) | 1,002 | — | 9,713 | 2,088 | |||||||||||
| Non-recurring lease-related charges(4) | — | — | 6,900 | 2,200 | |||||||||||
| Non-cash interest expense related to debt | 819 | 1,178 | 3,725 | 3,256 | |||||||||||
| Adjusted Net Income | $ | 5,663 | $ | 2,679 | $ | 13,000 | $ | 16,888 | |||||||
| Denominator: | |||||||||||||||
| Weighted-average number of shares used in calculating net loss per share, basic | 70,997,994 | 62,376,784 | 69,896,134 | 60,184,920 | |||||||||||
| Non-GAAP weighted-average effect of dilutive securities | 655,353 | 536,029 | 440,780 | 305,370 | |||||||||||
| Non-GAAP weighted-average number of shares used in calculating Adjusted Net Income per share, diluted | 71,653,347 | 62,912,813 | 70,336,914 | 60,490,290 | |||||||||||
| Net loss per share, basic and diluted | $ | (1.28 | ) | $ | (0.33 | ) | $ | (2.55 | ) | $ | (1.15 | ) | |||
| Adjusted Net Income per share, basic | $ | 0.08 | $ | 0.04 | $ | 0.19 | $ | 0.28 | |||||||
| Adjusted Net Income per share, diluted | $ | 0.08 | $ | 0.04 | $ | 0.18 | $ | 0.28 | |||||||
______________
(1) Acquisition-related costs, net includes third-party fees associated with due diligence, deferred retention expenses, post-acquisition restructuring costs incurred as part of business combinations, changes in fair value of contingent consideration liabilities for potential earn-out payments, and the deferred tax valuation allowance release from acquisitions. For additional details refer to Notes 1, 2, 7, and 15 in our consolidated financial statements.
(2) Impairment of goodwill and intangible assets was recognized as a result of impairment indicators and quantitative tests indicating the fair values of the Technology and the Professional Services reporting units were below their respective carrying values as of June 30, 2025 and December 31, 2025.For additional details, refer to Note 4 in our consolidated financial statements.
(3) Restructuring costs include severance and other team member costs from workforce reductions, impairment of discontinued capitalized software projects, and other miscellaneous charges. For additional details, refer to Note 11 in our consolidated financial statements.
(4) Includes the lease-related impairment charge for the subleased portion of our corporate headquarters. For additional details refer to Note 9 in our consolidated financial statements.
Health Catalyst Media Contact:
Kathryn Mykleseth
Director of Public Relations and Communications
media@healthcatalyst.com
Health Catalyst Investor Relations Contact:
Matt Hopper
SVP of Finance and Head of Investor Relations
ir@healthcatalyst.com
FAQ
What were Health Catalyst (HCAT) total revenue and Adjusted EBITDA for full-year 2025?
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