DH — Definitive Healthcare Corp.

Summary of Definitive Healthcare Corp. Q1 2026 Earnings Call

1. Key Financial Results and Metrics:

• Total Revenue: $55.9 million, down 6% year-over-year, but at the high end of guidance.
• Adjusted EBITDA: $15.3 million (27% margin), exceeding guidance by $2.3 million.
• Adjusted Net Income: $8.5 million, translating to $0.06 non-GAAP EPS.
• Unlevered Free Cash Flow: Approximately $50 million over the trailing 12 months.
• Deferred Revenue: $99 million, down 12% year-over-year.
• Current Remaining Performance Obligations (RPO): $161 million, down 12% year-over-year.

2. Strategic Updates and Business Highlights:

• Growth in Diversified and Provider Segments: These segments, accounting for over 60% of revenue, showed modest growth, contrasting with the decline in the life sciences segment.
• Improved Net Dollar Retention Rate: Year-over-year improvement noted, with the highest win-back quarter in three years, indicating successful customer retention strategies.
• Operational Efficiencies: Significant improvements in integration speed (from over 100 days to approximately 45 days) and completion of nearly 50 new integrations in Q1.
• AI Initiatives: Plans to launch AI-enabled solutions aimed at enhancing data accessibility and customer engagement, expected to drive retention and potential pricing power.

3. Forward Guidance and Outlook:

• Q2 2026 Revenue Guidance: Expected between $55 million and $56 million, reflecting an 8% to 9% decline year-over-year.
• Full-Year 2026 Revenue Guidance: Projected between $220 million and $226 million, a 6% to 9% decline year-over-year.
• Adjusted EBITDA for Full Year: Expected between $55 million and $59 million, with a margin of 25% to 26%.

4. Bad News, Challenges, or Points of Concern:

• Continued Decline in Life Sciences Segment: This segment is underperforming due to claims disruption and a challenging macro environment, impacting overall revenue.
• Goodwill Impairment: A $197 million non-cash goodwill impairment charge was recorded, reflecting market pressures but not affecting debt covenants.
• Shift to Shorter Contract Durations: A notable decline in multi-year contracts, which has negatively impacted remaining performance obligations and could persist into 2027.

5. Notable Q&A Insights:

• Growth Prospects for 2027: Management expressed confidence in returning to growth, particularly in the provider and diversified segments, while acknowledging ongoing challenges in life sciences.
• AI Monetization Strategy: The introduction of AI tools is expected to enhance retention and provide incremental pricing power over time, with a focus on democratizing access to data.
• Claims Data Improvement: Management indicated that claims data is now above historical levels, suggesting that this issue will no longer be a significant headwind moving forward.
• Market Dynamics in Biopharma: While some smaller biopharma firms are seeing improved funding, larger firms are shifting focus to early-stage R&D, impacting demand for Definitive's services.

Overall, while Definitive Healthcare Corp. is navigating challenges, particularly in the life sciences segment, strategic investments in data quality, customer success, and AI capabilities are expected to support a return to growth in the future.