Health Catalyst Inc (HCAT) Reports Revenue Growth and Margin Expansion in Q4 and Full Year 2023 ...
Total Revenue: Increased by 7% year-over-year to $295.9 million in 2023.
Adjusted EBITDA: Grew significantly to $11.0 million, a 543% increase from the previous year.
Technology Revenue: Rose by 6% year-over-year, driving the company's growth.
Professional Services Revenue: Saw a 14% increase compared to the previous year.
Net Loss: Improved by 14%, with a reduction in loss from operations by 9% year-over-year.
Dollar-based Retention Rate: Remained strong at 100% for the year ended December 31, 2023.
On February 22, 2024, Health Catalyst Inc (NASDAQ:HCAT) released its 8-K filing, announcing its financial results for the fourth quarter and full year ended December 31, 2023. The company, a leader in providing data and analytics technology and services to healthcare organizations, reported a 7% increase in total revenue to $295.9 million for the year, surpassing the midpoint of its guidance. Adjusted EBITDA also saw a remarkable increase, reaching $11.0 million, which aligns with the company's expectations and represents a 543% increase from the previous year.
Health Catalyst operates two segments: Technology, which is the primary revenue driver through cloud-based subscription arrangements, and Professional Services, which combines analytics, implementation, and advisory services. The Technology segment's revenue grew by 6% to $187.6 million, while Professional Services revenue increased by 8% to $108.4 million for the year.
Financial Performance and Leadership Changes
Health Catalyst's CEO, Dan Burton, expressed satisfaction with the company's performance and the progress made in Adjusted EBITDA margin relative to 2022. He also announced leadership changes, with Bryan Hunt transitioning from CFO to a Strategic Advisor role, and Jason Alger stepping in as CFO, effective March 1, 2024. Dan LeSueur will be promoted to Chief Operating Officer, overseeing both the Technology and Professional Services business units.
"For the full year 2023, I am pleased to share that we achieved strong performance across our business, including total revenue of $295.9 million, with this result beating the midpoint of our most recent guidance, and Adjusted EBITDA of $11.0 million, with this result in line with the midpoint of our most recent guidance. Additionally, I am pleased by our meaningful 2023 Adjusted EBITDA margin progress relative to 2022, and I am excited that we anticipate material year-over-year Adjusted EBITDA growth again in 2024, at a rate of approximately 125%+." - Dan Burton, CEO of Health Catalyst.
Key Financial Metrics
The company's GAAP financial measures showed a net loss improvement of 14% year-over-year, with a decrease in loss from operations by 9%. Non-GAAP measures also reflected positive trends, with Adjusted Technology Gross Profit increasing by 4% and Adjusted EBITDA surging by 543% compared to the previous year. However, Adjusted Professional Services Gross Profit declined by 31%, indicating a challenge in maintaining profitability in this segment.
Health Catalyst's balance sheet remains solid, with $106.3 million in cash and cash equivalents and $211.5 million in short-term investments as of December 31, 2023. The company's Dollar-based Retention Rate stayed at a robust 100%, reflecting strong customer loyalty and product stickiness.
Outlook and Conference Call Details
Looking forward, Health Catalyst provided guidance for Q1 and the full year of 2024, expecting total revenue between $72.5 million and $76.5 million for the first quarter, and Adjusted EBITDA between $2.0 million and $4.0 million. For the full year, the company anticipates total revenue between $304 million and $312 million, with Adjusted EBITDA ranging from $24 million to $26 million.
The company will host a conference call to discuss the results, providing an opportunity for investors and analysts to gain further insights into the company's performance and strategic direction.
Health Catalyst's commitment to being the catalyst for massive, measurable, data-informed healthcare improvement is evident in its financial results and operational achievements. The company's focus on data and analytics technology, along with its strategic leadership changes, positions it well for continued growth and operational excellence in the dynamic healthcare industry.
For more detailed financial information and disclosures, please refer to the full 8-K filing.
Explore the complete 8-K earnings release (here) from Health Catalyst Inc for further details.
This article first appeared on GuruFocus.
