Definitive Healthcare Corp (DH) Reports 14% YoY Revenue Growth in Q3 2023
Definitive Healthcare Corp (NASDAQ:DH) reported a 14% YoY increase in Q3 revenue, reaching $65.3 million.
The company experienced a net loss of $248.7 million, a significant increase from the $6.9 million loss in Q3 2022.
Adjusted EBITDA and net income showed positive growth, with EBITDA reaching $21.7 million and net income at $14.6 million.
DH expanded its enterprise client base by 10% YoY, ending the quarter with 555 enterprise customers.
Definitive Healthcare Corp (NASDAQ:DH), a leading provider of healthcare commercial intelligence, released its financial results for the third quarter of fiscal year 2023 on November 2, 2023. The company reported a 14% year-over-year increase in revenue, reaching $65.3 million. However, the net loss for the quarter was significant, amounting to $248.7 million, or 381% of revenue, compared to a loss of $6.9 million, or 12% of revenue in Q3 2022.
Financial Highlights
The company's adjusted net income was $14.6 million, showing an improvement from $8.8 million in Q3 2022. Adjusted EBITDA also increased to $21.7 million, or 33% of revenue, compared to $16.4 million, or 29% of revenue in the same period last year. Cash flow from operations was $9.5 million in the quarter, or 15% of revenue, and unlevered free cash flow was $17.7 million, or 27% of revenue.
Robert Musslewhite, CEO of Definitive Healthcare, commented on the results,
Revenue and adjusted EBITDA for the quarter were both above the high-end of our guidance ranges for the quarter. We were pleased with our increased adjusted EBITDA profitability in the quarter. We have been focused on becoming more efficient across all parts of the organization and it is nice to see that work yielding some measurable results."
Customer Growth and Innovation
In Q3, Definitive Healthcare expanded its enterprise client base by 10% year-over-year, ending the quarter with 555 enterprise customers. The company also made significant enhancements to its Atlas Dataset, including a 21% increase in the number of healthcare professionals in its database and a 120% increase in the number of pharmacy claims.
Business Outlook
For Q4 2023, the company expects revenue to be in the range of $65.5 $66.5 million, an 8-10% increase year over year. Adjusted Operating Income is expected to be in the range of $17.5 $18.5 million, and Adjusted EBITDA is expected to be in the range of $19 $20 million.
Despite the significant net loss, Definitive Healthcare Corp (NASDAQ:DH) shows promising growth in other areas. The company's focus on efficiency and strategic investments appears to be yielding positive results, as evidenced by the growth in adjusted EBITDA and net income. The increase in enterprise clients and enhancements to the Atlas Dataset also indicate potential for future growth.
Explore the complete 8-K earnings release (here) from Definitive Healthcare Corp for further details.
This article first appeared on GuruFocus.
