Definitive Healthcare Reports Mixed Q3 Results, Significant Net Loss and Goodwill Impairment Charges

Definitive Healthcare Corp. reported its financial results for the third quarter and the nine months ended September 30, 2024, revealing a mixed performance in revenue and significant changes in profitability compared to the previous fiscal period.

For the three months ended September 30, 2024, the company generated revenue of $62.7 million, a decrease of 4% from $65.3 million in the same period of 2023. Subscription services revenue also declined, falling from $62.6 million to $60.9 million. However, for the nine months ended September 30, 2024, total revenue increased by 2% to $189.9 million, driven primarily by a rise in subscription revenue. The company reported a gross profit of $49.0 million for the third quarter, down from $53.4 million a year earlier, while gross profit for the nine-month period remained relatively stable at $149.9 million.

The company faced substantial losses, with a net loss of $187.8 million for the third quarter, an improvement from a net loss of $248.7 million in the prior year. However, the nine-month net loss increased significantly to $506.7 million, compared to $276.3 million in the same period of 2023. This increase was largely attributed to goodwill impairment charges totaling $591.8 million for the nine months, reflecting declines in market capitalization.

Definitive Healthcare undertook strategic initiatives, including the acquisition of Carevoyance for $13.7 million in January 2024 and the acquisition of Populi, Inc. for $54.1 million in July 2023. The company also initiated a restructuring plan in January 2024, which involved a workforce reduction of approximately 150 employees to reduce operating costs and improve margins. Restructuring charges amounted to $8.0 million for the nine months ended September 30, 2024.

The company’s total assets decreased to $1.2 billion as of September 30, 2024, down from $1.8 billion at the end of 2023, with total equity also declining to $695.6 million. Cash and cash equivalents increased to $137.6 million, while accounts receivable saw a significant drop from $59.2 million to $35.8 million.

Definitive Healthcare's customer base decreased to approximately 2,570, down from 2,750 a year earlier, primarily due to higher churn rates among smaller customers. The company continues to focus on enhancing its platform and expanding its customer base, despite challenges posed by macroeconomic conditions and disruptions in sales efforts.