Health Catalyst, Inc 8-K, filed Jan 13, 2025
Health Catalyst, Inc. (HCAT)
8-K
2025-01-13
For: 2025-01-10
View Original
Added on
April 09, 2026
About this 8-K
Health Catalyst, Inc filed this 8-K on January 13, 2025, reporting on events of January 10, 2025.
Items reported
- Item 1.01: Entered into a material agreement
- Item 3.02: Unregistered sale of equity
- Item 7.01: Regulation FD disclosure
- Item 8.01: Other events
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________________________________________
FORM 8-K
__________________________________________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 10, 2025
__________________________________________________________
HEALTH CATALYST, INC.
(Exact name of registrant as specified in its charter)
________________________________________________________________
| Delaware | 001-38993 | 45-3337483 | ||||||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||||||
10897 South River Front Parkway #300
South Jordan, UT 84095
(Address of principal executive offices, including zip code)
(801) 708-6800
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
______________________________________________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
______________________________________________________________
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of exchange on which registered | ||||||||||||
| Common Stock, par value $0.001 per share | HCAT | The Nasdaq Global Select Market | ||||||||||||
________________________________________________________
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 ((§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01 Entry into a Material Definitive Agreement.
On January 10, 2025, Health Catalyst, Inc. (the “Company”) entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Traverse Merger Sub I, Inc., a Delaware corporation and direct wholly owned subsidiary of the Company (“MergerSub I”), Traverse Merger Sub II, LLC, a Delaware limited liability company and direct wholly owned subsidiary of the Company (“MergerSub II”), Upfront Healthcare, Inc., a Delaware corporation (“Upfront”), and WT Representative LLC, solely in its capacity as the representative of the Upfront indemnifying parties.
Pursuant to the terms of the Merger Agreement, MergerSub I will merge with and into Upfront (the “First Merger”), and upon consummation of the First Merger, MergerSub I will cease to exist and Upfront will be the surviving corporation of the First Merger and become a wholly owned subsidiary of the Company. The surviving corporation of the First Merger will then merge with and into MergerSub II, which will continue to exist as a wholly owned direct subsidiary of the Company. Upon consummation (the “Closing”) of the transactions contemplated by the Merger Agreement (the “Mergers”), all outstanding shares of Upfront capital stock, warrants and options to purchase Upfront capital stock will be cancelled in exchange for the right to receive: (i) consideration of approximately $86 million, net of cash on hand (“Closing Consideration”), subject to customary transaction adjustments set forth in the Merger Agreement, and (ii) potential additional aggregate consideration of approximately $33.4 million (the “Earn-Out”) subject to the achievement of certain earn-out performance targets measured as of December 31, 2026 (the “Measurement Date”). Closing Consideration will consist of approximately $41.5 million of cash, net of cash on hand, and approximately 5,753,814 shares (“Closing Stock Consideration”) of newly issued shares of the Company’s common stock, par value $0.001 per share (“Common Stock”). If achieved, any Earn-Out will be comprised of 37.5% cash and 62.5% shares of Common Stock (such shares of Common Stock, together with the Closing Stock Consideration, the “Stock Consideration”), with the maximum Earn-Out resulting in the payment of approximately $12.5 million in cash and approximately 2,699,121 shares of Common Stock. Notwithstanding the foregoing, any unaccredited stockholders holding shares of Upfront capital stock and unaccredited optionholders holding Upfront options shall receive cash in lieu of Stock Consideration. Any Earn-Out, if the relevant performance targets are achieved, will be issued and paid after the Measurement Date. The number of shares of Common Stock to be issued as Stock Consideration will be valued at the closing reference price of $7.734, which is equal to the average trading price of the Common Stock on the Nasdaq Global Select Market for the 35 consecutive trading day period ended January 8, 2025.
The Merger Agreement contains customary representations, warranties and covenants by the Company and Upfront. A portion of the aggregate consideration will be held back by the Company to secure the indemnification obligations of the Upfront securityholders. The Closing is subject to customary closing conditions, including, but not limited to, (a) receipt by Upfront of the requisite approval of Upfront stockholders and (b) the receipt of specified regulatory approvals and the expiration or termination of applicable waiting periods, including the expiration or termination of the applicable waiting period under the Hart-Scott Rodino Antitrust Improvements Act of 1976, as amended. The Closing is expected to occur during the Company’s quarter ending March 31, 2025.
The issuance of shares of Common Stock as Stock Consideration will be made in accordance with the terms and subject to the conditions set forth in the Merger Agreement and in reliance on the private offering exemption of Section 4(a)(2) of the Securities Act of 1933, as amended, and/or the private offering safe harbor provision of Rule 506 of Regulation D promulgated thereunder. The issuance and sale is not being conducted in connection with a public offering, and no public solicitation or advertisement will be made or relied upon in connection with the issuance of the shares.
The Merger Agreement provides customary termination rights, including, but not limited to, (a) both parties may terminate the Merger Agreement by mutual written consent, (b) either the Company or Upfront may terminate the Merger Agreement if, among other events, (i) the First Merger has not occurred on or before February 25, 2025, (ii) there is an order or any other action preliminarily or permanently enjoining or otherwise prohibiting the consummation of the Merger, or (iii) the other party breaches any of its representations, warranties, or covenants in the Merger Agreement, and such breach is not cured within 20 business days of written notice of such breach, such that closing conditions related thereto cannot be satisfied; and (c) the Company may terminate the Merger Agreement if any event has occurred or circumstance exists on or before the Closing that has had or can reasonably be expected to have a Material Adverse Effect (as defined in the Merger Agreement) on Upfront.
The foregoing summary of the Merger Agreement and the transactions contemplated thereby do not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Merger Agreement, which will be filed as an exhibit to the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.
Item 3.02 Unregistered Sales of Equity Securities.
The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 3.02.
Item 7.01 Regulation FD Disclosure.
On January 13, 2025, the Company issued a press release regarding its entry into the Merger Agreement (“Press Release”). A copy of the Press Release is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.
The information being furnished pursuant to this Item 7.01 shall not be deemed “filed” for any purpose, including for the purposes of Section 18 of the Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section. Such information shall not be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.
Item 8.01 Other Events.
On January 13, 2025, the Company published its J.P. Morgan 2025 Healthcare Conference presentation (“Presentation”) on its investor relations website (https://ir.healthcatalyst.com/), including certain preliminary estimated 2024 results and forward-looking commentary (“Excerpt”). Copies of the Presentation and Excerpt are filed herewith as Exhibits 99.2 and 99.3, respectively, and are incorporated herein by reference.
Forward-Looking Statements
This Current Report on Form 8-K contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the expected completion of the transactions contemplated by the Merger Agreement and the time frame in which this will occur as well as information related to the Company’s preliminary estimated 2024 results and forward-looking commentary. Any forward-looking statements contained in this Current Report on Form 8-K are based upon the Company’s historical performance and its current plans, estimates, and expectations, and are not a representation that such plans, estimates, or expectations will be achieved. These forward-looking statements represent the Company’s expectations as of the date of this Current Report on Form 8-K, and involve risks, uncertainties, and assumptions. The actual results may differ materially from those anticipated in the forward-looking statements as a result of numerous factors, many of which are beyond the control of the Company, including the anticipated Closing and related transactions described herein, the time frame of the Closing, failure to obtain regulatory approval with respect to the Mergers, the failure of other conditions to Closing not being satisfied, the potential impact on the business of Upfront due to the announcement of the Mergers, the occurrence of any event, change or other circumstances that could give rise to the termination of the Merger Agreement, changes under the Company’s financial performance, including expectations regarding its results of operations, unexpected or otherwise unplanned events, and the risks and uncertainties disclosed in the Company’s reports filed from time to time with the Securities and Exchange Commission, including its most recent Form 10‑K and any subsequent filings on Forms 10-Q or 8-K, available at www.sec.gov. Except as required by law, the Company does not intend to update any forward-looking statement contained in this Current Report on Form 8-K to reflect events or circumstances arising after the date hereof.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits.
| Exhibit No. | Description | |||||||
| 104 | Cover page Interactive Data File (embedded within the Inline XBRL document) | |||||||
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| HEALTH CATALYST, INC. | ||||||||
| Date: January 13, 2025 | By: | /s/ Jason Alger | ||||||
| Jason Alger | ||||||||
| Chief Financial Officer | ||||||||
Exhibit 99.1
Health Catalyst Signs Definitive Agreement to Acquire Upfront Healthcare Services
SALT LAKE CITY, UT, January 13, 2025 — Health Catalyst, Inc. ("Health Catalyst," Nasdaq: HCAT), a leading provider of data and analytics technology and services to healthcare organizations, today announced it has signed a definitive agreement to acquire Upfront Healthcare Services, Inc. (“Upfront”), a next-generation patient engagement platform provider. Health Catalyst anticipates the acquisition will close in the first quarter of 2025.
Upfront provides a comprehensive patient engagement and access platform and an analytics solution for healthcare providers, provider groups, and payers. A KLAS Research category leader, Upfront’s robust patient acquisition solutions enable healthcare organizations to improve patient engagement by leveraging hyper-personalized experiences.
The combination of Upfront’s patient acquisition and scheduling expertise with Health Catalyst’s current robust patient engagement portfolio is expected to strengthen the patient experience foundation set by Twistle Patient Engagement by Health Catalyst™ and the Lumeon by Health Catalyst™ Care Orchestration platform, which both help patients stay informed throughout the care process.
The closing of the acquisition is anticipated to enhance Health Catalyst’s portfolio in the focus areas of Clinical Improvement and Ambulatory Operations and help clients to engage, guide, and motivate patients from their first interaction and across the continuum of care.
Health Catalyst also looks forward to integrating Upfront’s technology in its offerings, as Upfront’s technology analyzes clinical, sociodemographic, and patient-reported data to digitally guide patients to the care they need, helping care providers reengage patients, promote appointment attendance, streamline scheduling and referrals, and improve care transitions.
Bolstered by the data foundation and deep analytical insights provided by Health Catalyst Ignite™ Data and Analytics, the combination of Upfront’s technology and Health Catalyst Ignite™ will aim to help healthcare clients provide their patients get the best possible care.
“We are excited to welcome the Upfront team and combine our mission-driven mindsets and patient experience capabilities. Guided by our commitment to igniting data-informed healthcare improvement with patient experience as a top priority, we are positioned to provide meaningful support to our clients for the patient care journey,” said Health Catalyst CEO Dan Burton. “Fostering improved patient engagement and satisfaction is critical, and by adding Upfront to Health Catalyst’s existing portfolio, we can better support our clients in their efforts to optimize access, improve care transitions, and close care gaps.”
“We’re thrilled to join the Health Catalyst family,” said Ben Albert, CEO and co-founder at Upfront. “By combining Upfront’s capabilities with Health Catalyst Ignite™ we aim to better serve healthcare organizations in transforming the patient experience by proactively guiding patients through the right type of communication, integrated across the system so that access and appointment booking is frictionless and easy.”
Health Catalyst plans to fund the transaction with a mix of cash and stock. Additional details regarding the acquisition were included in Health Catalyst’s Form 8-K filed with the Securities and Exchange Commission (“SEC”) on January 13, 2025.
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 1,000 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.
About Upfront Healthcare
Upfront is a mission-driven healthcare company delivering tangible outcomes to leading healthcare systems and provider groups. Its patient engagement and access platform makes each patient feel seen, guiding their care experience through personalized outreach. The backbone of the Upfront experience is its data engine, which analyzes clinical, sociodemographic, and patient-reported data. These insights, along with its advanced psychographic segmentation model, allow Upfront to individually activate patients to get the care they need while building a meaningful relationship between the patient and their health system. Upfront is rooted in partnership, leveraging best-in-class healthcare expertise to maximize the impact of technology and deliver a next-generation patient experience.
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 Health Catalyst’s ability to close and the timing of the closing of the acquisition of Upfront, its integration with Health Catalyst, and the benefits derived therefrom. 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 actual results to differ materially from Health Catalyst’s expectations, plans and prospects, including the benefits that will be derived from this transaction, include without limitation, conditions to closing the transaction not being satisfied, the risk of adverse and unpredictable macro-economic conditions, the potential impact on the business of Upfront due to the announcement of the transaction, and our ability to integrate Upfront into Health Catalyst’s portfolio. For a detailed discussion of the risk factors that could affect Health Catalyst’s actual results, please refer to the risk factors identified in Health Catalyst’s SEC reports, including, but not limited to, the Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2024, filed with the SEC on November 6, 2024 and the Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 22, 2024. All information provided in this release and in the attachments is as of the date hereof, and Health Catalyst undertakes no duty to update or revise this information unless required by law.
Health Catalyst Media Contact:
Amanda Flanders
SVP, Marketing and Communications
media@healthcatalyst.com
© Health Catalyst. Overview Presentation January 2025
© Health Catalyst. This presentation and the accompanying oral presentation, if any, contain forward-looking statements. All statements other than statements of historical fact contained in this presentation, including statements as to future results of operations and financial position, planned products and services, business strategy and plans, objectives of management for future operations of Health Catalyst, Inc. and its subsidiaries (“Health Catalyst” or the “Company”), market size and growth opportunities, competitive position and technological and market trends, are forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “expect,” “plan,” “anticipate,” “intend,” “target,” “project,” “predicts,” “shall,” “potential,” “explore” or “continues” or the negative of these terms or other similar words. You are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this presentation. The Company assumes no obligation to update any forward-looking statements or any other information included in this presentation after the date of this presentation, except as required by law. The forward-looking statements contained in this presentation and the accompanying oral presentation are subject to known and unknown risks, uncertainties, assumptions and other factors that may cause actual results or outcomes to be materially different from any future results or outcomes expressed or implied by the forward-looking statements. These risks, uncertainties, assumptions and other factors include, but are not limited to, (i) changes in laws and regulations applicable to the Company's business model; (ii) changes in market or industry conditions, regulatory environment, and receptivity to the Company's technology and services; (iii) results of litigation or a security incident; (iv) the loss of one or more key clients or partners; (v) the impact of the challenging macroeconomic environment (including high inflationary and/or high interest rate environments) on the Company's business and results of operations; (vi) the use of proceeds from the loans under the Company’s credit facility, availability of the delayed draw facility and the Company’s ability to refinance existing indebtedness, (vii) changes to the Company's abilities to recruit and retain qualified team members, and (viii) conditions to closing the acquisition of Upfront Healthcare Services, Inc. ("Upfront") not being satisfied, the potential impact on the business of Upfront Healthcare due to the announcement of the acquisition, and our ability to integrate Upfront Healthcare into our portfolio. These risks and uncertainties may also include those described under the heading “Risk Factors” and elsewhere in the Company’s most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q on file with the Securities and Exchange Commission (the “SEC”) and the Company’s other filings with the SEC. Moreover, the Company operates in a very competitive and rapidly changing environment, and new risks may emerge from time to time. It is not possible for the Company to predict all risks, nor can the Company assess the impact of all factors on the Company’s business or the extent to which any factor, or combination of factors, may cause actual results or outcomes to differ materially from those contained in any forward-looking statements the Company may make. In addition to the Company’s GAAP financial information, this presentation may include certain non-GAAP financial measures. These non-GAAP financial measures are not meant as a substitute for GAAP financial measures, but are included solely for informational comparative purposes. The non-GAAP measures have limitations as analytical tools and you should not consider them in isolation or as a substitute for the most directly comparable financial measures prepared in accordance with GAAP. There are a number of limitations related to the use of these non-GAAP financial measures versus their nearest GAAP equivalents. Other companies, including companies in Health Catalyst’s industry, may calculate non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of the Company’s non-GAAP financial measures as tools for comparison. Reconciliations of GAAP to non-GAAP amounts for the periods presented are provided in schedules accompanying this presentation and should be considered together with the Company's audited and unaudited financial statements included in the Company's most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q on file with the SEC. This presentation also includes select preliminary unaudited financial results for the fourth quarter and year ended December 31, 2024. We have not completed the preparation of our consolidated financial statements for the fourth quarter or fiscal year of 2024. The select preliminary unaudited financial results presented herein for the fourth quarter and year ended December 31, 2024 are inherently uncertain and subject to change as we complete preparation of our consolidated financial statements for the year ended December 31, 2024. We are in the process of completing our customary year-end close and review procedures as of and for the fourth quarter and year ended December 31, 2024, and there can be no assurance that final results for these periods will not differ from these estimates. During the course of the preparation of our consolidated financial statements and related notes as of and for the year ended December 31, 2024, we or our independent registered public accountants may identify items that could cause final reported results to be materially different from the preliminary unaudited financial estimates presented herein. This presentation also contains estimates and other statistical data made by independent parties and by the Company relating to market size and growth and other industry data. These data involve a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. The Company has not independently verified the statistical and other industry data generated by independent parties and contained in this presentation and, accordingly, it cannot guarantee their accuracy or completeness. In addition, projections, assumptions and estimates of its future performance and the future performance of the markets in which it competes are necessarily subject to a high degree of uncertainty and risk due to a variety of factors. These and other factors could cause results or outcomes to differ materially from those expressed in the estimates made by the independent parties and by Health Catalyst. The Company’s growth and financial targets included herein are based upon the Company’s historical performance and its current plans, estimates, and expectations, and are not a representation that such plans, estimates, or expectations will be achieved. This presentation shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of any securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. Disclaimer 2
© Health Catalyst. Health Catalyst Overview 3 Integrate data in a flexible, open, and scalable platform Deliver insights on how to measurably improve Enable and accelerate data- informed improvement Comprehensive Solution Data Platform 1 Applications 2 Services Expertise 3 We are a leading provider of data and analytics technology and services to healthcare organizations Our clients, which are primarily healthcare providers, use our Solution to manage their data, derive analytical insights to operate their organizations, and produce measurable clinical, financial, and operational improvements
© Health Catalyst. 4 Our mission is to be the catalyst for massive, measurable, data-informed healthcare improvement Our flywheel represents how we accomplish our mission with each client—our company strategy.
© Health Catalyst. Investment Highlights 5 Recognized industry leader in healthcare data & analytics Comprehensive solution: data platform, applications & services expertise Measurable clinical, financial & operational improvements Excellence in team member engagement Attractive operating model and long-term targets $8B TAM ~$1T WASTE(1) Up to 100 TBs / CLIENT >1,000 ANALYTICS & DOMAIN EXPERTS 110 BEST PLACE TO WORK AWARDS 94th-99th PERCENTILE ENGAGEMENT(2) 12 APP SUITES + LIBRARY >300 DATA SOURCES $2.2B IMPROVEMENTS CLIENT CASE STUDIES 6/YR → 25/YR 365+ (1) According to estimates in 2019. Research estimates 25% of U.S. healthcare spending is wasteful in nature, implying approximately $1 trillion of waste amongst $3.8 trillion of total healthcare expenditure in 2019 (2) As of December 2024 (3) In 2023 (4) Overall range from 2017 – 2024 for Platform Clients, as further defined in our Form 10-K (e.g., excludes clients acquired in Medicity, Able Health, Healthfinch, Vitalware, Twistle, KPI Ninja, ARMUS, ERS, Carevive, Lumeon and Intraprise acquisitions and other App Clients). (5) See "GAAP to Non-GAAP Reconciliation: Adjusted EBITDA" for more information about Adjusted EBITDA, including the limitations of Adjusted EBITDA. 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. >90% 100%-112% DOLLAR-BASED RETENTION RATE(4) RECURRING REVENUE(3) Anticipate 2025 Tech BU: ‘Rule of 30’ ~$500M/~$100M 2028 REVENUE/ADJ. EBITDA TARGET(5) ~$39M 2025 ADJ. EBITDA TARGET(5) Anticipate 2028 HCAT: ‘Rule of 30’ Tech BU: ‘Rule of 40’
© Health Catalyst. Broad Client Base Across the Healthcare Delivery Ecosystem >1,000 platform & app clients(1) include academic medical centers, integrated delivery networks, community hospitals, large physician practices, ACOs, health information exchanges, health insurers, and other risk-bearing entities (1) Preliminary figure as of December 2024; total clients inclusive of Platform and App Clients. App Clients represents all clients that are not Platform Clients. Note: Representative client list 6
© Health Catalyst. 7 Health Catalyst Solutions for Data-informed Improvement Simplify and focus on five core areas of differentiated client value. With every client and across every solution, ensure that consistent, measurable improvement goals are set, achieved, and communicated regularly Use Case Areas of Focus Clinical Improvement Technology Services ▪ Carevive Oncology ▪ Lumeon Care Orchestration ▪ Embedded Refills ▪ Twistle Patient Engagement ▪ Analytics accelerators in pareto areas of clinical improvement ▪ Domain Expertise: –Clinical improvement –Patient flow –Perioperative supplies –Population health –Care management –Patient safety Revenue & Cost Improvement Technology Services ▪ VitalIntegrity ▪ VitalCDM ▪ VitalKnowledge ▪ PowerCosting ▪ PowerLabor ▪ Hospital Price Index ▪ Domain Expertise: –Labor management –Supply chain –Charge capture –Claims denial –Revenue cycle Ambulatory Operations Technology Services ▪ Ambulatory operations analytics accelerators and dashboards ▪ Embedded Refills ▪ Twistle Patient Engagement ▪ Value Optimizer ▪ Lumeon Care Orchestration ▪ Domain Expertise: –Provider productivity –Patient access –Quality metrics –Value-based care contract performance Measures & Registries Technology Services ▪ MeasureAble ▪ ARMUS registries ▪ CRStar cancer registry ▪ Pop Analyzer ▪ Value Optimizer ▪ Domain Expertise: –Measures TEMS: –Chart abstraction –Registry submission Data & Analytics Technology Services ▪ Ignite Data & Analytics ▪ Expert Data Collections ▪ Carevive Oncology SMART Data (Life Sciences) ▪ Healthcare.AI: Analytics Integration ▪ Ninja Universe ▪ Intraprise (cybersecurity) ▪ Domain Expertise: –Healthcare.AI –Visualization migration TEMS: –Data science –Data and analytics engineering, operations, certification, strategy Infrastructure Areas of Focus = Technology Enabled Managed Services (TEMS)
© Health Catalyst. 8 Measurable Data-Informed Improvement for Focus Areas Examples of client improvements from all five areas of focus Use Case Areas of Focus Clinical Improvement ▪$22M cost savings and $1.9M in new revenue – improved patient flow* ▪$17.4M AI-enabled patient blood management improvements ▪$3.4M cost savings from automating medication refill processes Revenue & Cost Improvement ▪$75M cardiovascular service line cost savings* ▪$10M revenue increase enabled by PowerCosting ▪$7.8M charge capture improvements Ambulatory Operations ▪$25.4M revenue increase through improved patient access ▪$7M cost savings over three and a half years ▪$2.2M increase in revenue and 55K care gaps closed* Measures & Registries ▪38% relative improvement in quality scores ▪10% to 25% reduction in abstraction time ▪93% inter-rater reliability* Data & Analytics ▪$32.2M cost reduction through AI-enabled care management ▪$10M AI-enabled variable cost reduction ▪>$3M indirect labor cost savings* Infrastructure Areas of Focus *Enabled by Technology Enabled Managed Services (TEMS) Note: Metrics represent examples of improvements across all five areas of focus, for specific clients. Data as of February 2024.
© Health Catalyst. Highly Differentiated, Comprehensive Solution 9 Comprehensive solution guiding our clients to greater levels of digital maturity, enabling clinical, financial, and operational improvements 2 3 Consulting Highly specialized Unable to sustain recommended improvements High cost given ad-hoc work Services Expertise (~$3bn TAM) 1 Home grown solutions Control High start-up & maintenance costs Risk of failure Talent shortage Cross industry tech companies EMR vendors Modern technology Little healthcare content Fluctuating healthcare commitment Not improvement focused EMR integration Known vendor Rigid architecture, closed approach Slow time-to-value Not improvement focused Data Platform (~$2bn TAM) Tailored to specific needs Modern technology/interfaces Difficulty breaking through hundreds of vendors Often closed platforms Point solution vendors Difficulty growing sustainable businesses Lack domain expertise Applications (~$3bn TAM) Note: As of March 2019.
© Health Catalyst. 10 Excellence in Team Member & Client Engagement Our highly-engaged team members enable strong client engagement, renewal & expansion Recognized More Than 100 Times as a “Best Place to Work” 2015 – 2024 Gallup Team Member Engagement KLAS Client Recognition & Evangelism Score(1) HIT Average 94th — 99th Percentile 40 26 (1) Similar to a net promoter score, as of December 31, 2023. Overall evangelism score is an average of each Health Catalyst solution’s average evangelism scores. 11th Year in a Row
© Health Catalyst. Multiple Strategic Levers to Drive Durable, Long-Term Growth 11 Add platform clients by cross-selling to app clients Cross-sell Ignite and other apps to >900 App clients(1) Currently have >1,000 Platform + App clients(1) and focused on continuing to expand our client base through organic and inorganic growth Add new applications and services Developed a multitude of new software applications in last few years(3) Partnerships and open platform provide insights into new offerings Accelerates as relationships deepen and dataset grows Grow addressable market through adjacencies Careful, opportunistic expansion into adjacent segments of healthcare ecosystem Payers Life Sciences International Continued M&A as a consolidation platform Combine data assets and best- of-breed applications Pursue tuck-in app-layer acquisitions to provide valuable consolidation platform to clients Best-in-class culture a differentiating factor in sourcing opportunities Sell additional apps & services across our 130 Platform clients(1) Built-in, annual technology escalators High dollar-based retention rate: 100%-112%(2) Expand within our platform client base Monetize Core Expand Opportunity (1) As of December 31, 2024. (2) Overall range from 2017 - 2024 for Platform Clients, as further defined in our Form 10-K (e.g., excludes clients acquired in Medicity, Able Health, Healthfinch, Vitalware, Twistle, KPI Ninja, ARMUS, ERS, Carevive, Lumeon and Intraprise acquisitions and other App Clients). (3) Added to this figure via M&A.
© Health Catalyst. $73 $113 $155 43% 51% 54% 58% 61% 64% 63% ~64% ~66% 57% 49% 46% 42% 39% 36% 37% ~36% ~34% 2017 2018 2019 Professional services Technology 46 126 130 >350 >440 >520 >630 >1,000 34 50 65 74 90 98 109 13012 76 65 >300 >350 >425 >525 >900 2017 2018 2019 2020 2021 2022 2023 2024E App Clients Platform Clients108% 107% 109% 102% 112% 100% 100% 100% 102%~103% 2017 2018 2019 2020 2021 2022 2023 2024 2024E 2025 Target 12 (1) Excludes impact of Medicity acquisition, which occurred on June 29, 2018. (2) We calculate our dollar-based retention rate as of a period end by starting with the sum of the Annual Recurring Revenue (ARR) from all Platform clients as of the date 12 months prior to such period end (prior period ARR). We then calculate the sum of the ARR from these same clients as of the current period end (current period ARR). (3) Represents the mid-point of the range provided on slide 12. (4) 2025 excludes Pilot TEMS arrangements such as Ambulatory Operations. (5) Vast majority of App clients were acquired via acquisitions. (6) Preliminary unaudited financial results are inherently uncertain and subject to change as we complete preparation of our consolidated financial statements for the year ended December 31, 2024. During the course of the preparation of our consolidated financial statements and related notes as of and for the year ended December 31, 2024, we or our independent registered public accountants may identify items that could cause final reported results to be materially different from the preliminary unaudited financial estimates presented herein. Note (a): These targets contemplate that Health Catalyst will continue to be opportunistic with tuck-in acquisitions, with a primary focus on technology. We expect these tuck-in acquisitions to benefit annual revenue growth on a pro forma basis. Total Revenue ($mm) Platform Client Dollar-based Retention Rate(2) Total Clients (5) 2020 $189 $242 2021 $276 Growth: 54% 37% growth ex-Medicity(1) Growth: 38% Growth: 22% Growth: 28% Growth: 14% 2022 Growth: 7% $296 Growth Anticipated to Reaccelerate, with Engaged and Rapidly Expanding Client Base Produces a high-growth, predictable, recurring revenue business 2023 Growth: ~3%(3) $306 ~$335 Prelim. 2024E(6) 2025 Target Growth: ~10% Current Tech + Recurring Services New(4) Tech + TEMS (6)
© Health Catalyst. Preliminary Results(1) & Forward-Looking Targets(2) Q4 Financials • Revenue of $78.75M to $79.75M (+6%), in prior range, but with a few minor project delays; Tech Revenue of $50.6M to $51.6M (+9%) • Adj. EBITDA(3) of $7.9M (+480%, 10% Margin), above midpoint of range Full Year Financials • Revenue of $305.7M to $306.7M (+3%), in prior range; Tech Revenue of $194.0M to $195.0M (+4%) • Adj. EBITDA(3) of $26.1M (+137%, 9% Margin), above midpoint of range; Tech BU Adj. EBITDA of $25M (13% Margin) Growth Metrics • Net New Platform Clients(4): 21 (+91%), with avg. ARR + non-recurring revenue towards the lower end of the range of $400K to $1M • Number of Platform Clients(4): 130 (+19%) • Number of Platform + App Clients: >1,000 (+>50%) • Dollar-Based Retention current definition (Tech + Recurring Services): 100%, which excludes some existing client expansion • Dollar-Based Retention updated definition (Tech + TEMS) : 102%, which still excludes some existing client expansion 2024 Preliminary Results 13 2025 Forward-Looking Targets • Revenue: ~$335M (+10%); Tech Revenue: ~$220M (+13%) • Adj. EBITDA(5): ~$39M (+49%, 12% Margin); Tech BU Adj. EBITDA: ~$38M (+52%, 17% Margin) • Net New Platform Clients(4): ~40 (+90%), with expected ARR + non-recurring revenue to be similar to 2024 results • Dollar-Based Retention (Tech + TEMS)(6): ~103% • Tech BU with ‘Rule of 30’ Profile in 2025 (1) Preliminary unaudited financial results are inherently uncertain and subject to change as we complete preparation of our consolidated financial statements for the year ended December 31, 2024. During the course of the preparation of our consolidated financial statements and related notes as of and for the year ended December 31, 2024, we or our independent registered public accountants may identify items that could cause final reported results to be materially different from the preliminary unaudited financial estimates presented herein. (2) Growth percentages reference Year over Year performance, and where relevant, when a range is provided the percentage growth is calculated based on the midpoint of the range. (3) See “GAAP to Non-GAAP Reconciliation: Adjusted EBITDA” for more information about Adjusted EBITDA, including the limitations of Adjusted EBITDA. (4) Platform Clients (previously referred to as DOS Subscription Clients) include clients who directly or indirectly access our DOS platform or Health Catalyst Ignite via a technology subscription contract. Indirect access may include platform module components such as Healthcare.AI, Pop Analyzer, IDEA, and other platform components. (5) 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. (6) Excludes Pilot TEMS arrangements such as Ambulatory Operations. Commentary • Strategic decision made to exit unprofitable pilot Ambulatory Operations TEMS offering by mid-2025, representing ~$9M of annual services revenue • Signing & anticipated Q1 close of Upfront Healthcare acquisition, strengthening our patient activation offering • Upfront Healthcare acquisition is anticipated to contribute ~3% of 2025 revenue depending on close timing and operating plan execution
© Health Catalyst. Kyle Salyers Chief Strategy Officer & SVP of Corporate Development Tenure at Health Catalyst: 10 years Experienced and Visionary Management Team 14 Dave Ross Chief Technology Officer and Chief Product Officer Tenure at Health Catalyst: 4 years Daniel Burton Chief Executive Officer and Director Tenure at Health Catalyst: 14 years Holly Rimmasch Chief Clinical Officer and SVP & GM of Clinical Quality Tenure at Health Catalyst: 13 years Jason Alger Chief Financial Officer Tenure at Health Catalyst: 12 years Kevin Freeman Chief Commercial Officer Tenure at Health Catalyst: 4 years Dan LeSueur Chief Operating Officer Tenure at Health Catalyst: 13 years Practice Advisory Group Ben Landry General Counsel & Corporate Secretary Tenure at Health Catalyst: 6 years Linda Llewelyn Chief People Officer Tenure at Health Catalyst: 12 years Leslie Falk Chief Client Success Officer Tenure at Health Catalyst: 12 years Jason Jones Chief Analytics and Data Science Officer Tenure at Health Catalyst: 6 years Amanda Flanders SVP, Marketing & Communications Tenure at Health Catalyst: 10 years
© Health Catalyst. 15 Health Catalyst is Deploying its Next-Generation Data Platform: Health Catalyst Ignite
Ignite Ecosystem: Core Tools © Health Catalyst. 16 IGNITE DATA AND ANALYTICS Data Management Tools and Functions ▪ Source templates ▪ Job scheduling ▪ Data profiling ▪ 24x7 Support ▪ Identity management Data Products ▪ Foundational Expert Data Collections ▪ Terminology ▪ Unified data governance Self-Service ▪ Pop Analyzer ▪ Healthcare.AI: Analytics Integration ▪ Data entry ▪ Visualization tools
© Health Catalyst. Real-World Applications of AI in Our Solutions 17 Enhancing analytics and visuals to surface valuable insights in BI reports with a single click AI-DRIVEN VISUALIZATION INSIGHTS Ensuring that patients receive timely, targeted communication TARGETED PATIENT COMMUNICATION Amplifying ecosystem efficiency with generative assistance for coding, exploration, search, quality GENERATIVE AI TECHNOLOGY Empowering chart abstractors with instant answers through generative AI CHART ABSTRACTION AI Helping leaders leverage AI for better decisions, predictions, and strategic results with innovative approaches AI EXPERT SERVICES
© Health Catalyst. (1) Preliminary unaudited financial results are inherently uncertain and subject to change as we complete preparation of our consolidated financial statements for the year ended December 31, 2024. During the course of the preparation of our consolidated financial statements and related notes as of and for the year ended December 31, 2024, we or our independent registered public accountants may identify items that could cause final reported results to be materially different from the preliminary unaudited financial estimates presented herein. (2) Growth percentages reference Year over Year performance, and where relevant, when a range is provided the percentage growth is calculated based on the midpoint of the range. (3) High-level estimated business unit adjusted EBITDA margin analysis. Estimated business unit contribution profit for Technology and Professional Services based on allocating adjusted gross margin and operating expenses by business unit. Adjusted gross margin segmented by Technology and Professional Services. Operating expenses allocated between Technology and Professional Services based on type of operating expense: Research & Development (R&D) expenses allocated to Technology business unit; Sales & Marketing expenses allocated between Technology and Professional Services by percentage of adjusted gross profit; General & Administrative expenses allocated between Technology and Professional Services by percentage of total cost of revenue (excluding depreciation and amortization) and R&D. (4) Excludes Pilot TEMS arrangements such as Ambulatory Operations. Note (a): These targets contemplate that Health Catalyst will continue to be opportunistic with tuck-in acquisitions, with a primary focus on technology. We expect these tuck-in acquisitions to benefit annual revenue growth on a pro forma basis. Note (b): We have not reconciled guidance for Adjusted EBITDA or Adjusted EBITDA Margin to net loss or net loss margin, respectively, the most directly comparable GAAP measures, and have not provided forward-looking guidance for net loss or net loss margin, because there are items that may impact net loss and net loss margin, including stock-based compensation, that are not within our control or cannot be reasonably forecasted. 18 2025 Targets Revenue Overall: ~$335M (+10%) Tech: ~$220M (+13%) Adj. EBITDA Overall: ~$39M (+49%, 12% Margin) Tech BU(3): ~$38M (+52%, 17% Margin) Net New Platform Clients ~40 (+90%) Dollar-Based Retention (Tech + TEMS)(4) ~103% Tech BU with ‘Rule of 30’ Profile 2028 Targets Revenue ~$500M Tech ~2/3 of Revenue Adj. EBITDA ~$100M Overall Margin ~20%; Tech BU Margin(3) ~30% Company with ‘Rule of 30’ Profile Tech BU with ‘Rule of 40’ Profile 2024 Preliminary Results Revenue Overall: $305.7M to $306.7M (+3%) Tech: $194M to $195M (+4%) Adj. EBITDA Overall: $26.1M (+137%, 9% Margin) Tech BU(3): $25M (13% Margin) Net New Platform Clients 21 (+91%) Dollar-Based Retention 100% (Current Definition: Tech + Recurring Services) 102% (Updated Definition: Tech + TEMS) Total Clients 130 Platform Clients (+19%) >1,000 Platform + App Clients (+>50%) Preliminary Results(1) & Forward-Looking Targets(2)
© Health Catalyst. 2019 (IPO year) 2020 2021 2022 2023 2024E(3) 2025 Targets(4) 2028 Long-term Targets(4) Total Revenue Growth 38% 22% 28% 14% 7% 3% ~10% ~$500M Tech Revenue Growth 47% 32% 34% 19% 6% 4% ~13% ~2/3 of total revenue Adj. Gross Margin(1) 52% 50% 53% 53% 49% Adj. Operating Expenses(2) S&M as % of Revenue 28% 22% 21% 20% 15% R&D as % of Revenue 27% 24% 21% 20% 19% G&A as % of Revenue 15% 15% 15% 14% 11% Net Loss Margin(5) (39%) (61%) (63%) (50%) (40%) Adj. EBITDA Margin(6) (18%) (11%) (5%) (1%) 4% 9% ~12% ~20% Est. Tech BU Adj. EBITDA Margin(6) 13% ~17% ~30% Mid-term and Long-term Target Model (1) See "GAAP to Non-GAAP Reconciliation: Adjusted Gross Profit and Adjusted Gross Margin" for more information about Adjusted Gross Margin, including the limitations of Adjusted Gross Margin and a reconciliation to gross margin, the most directly comparable measure calculated in accordance with GAAP. (2) Excluding D&A, stock-based compensation, tender offer payments deemed compensation, loss on extinguishment of debt, acquisition-related costs, net, non-recurring lease-related charges, income tax provision (benefit), interest expense and other (net), restructuring charges and litigation costs. Please see the Appendix and our recent Annual Report on Form 10-K and our Quarterly Report on Form 10-Q for more details. (3) Preliminary unaudited financial results are inherently uncertain and subject to change as we complete preparation of our consolidated financial statements for the year ended December 31, 2024. During the course of the preparation of our consolidated financial statements and related notes as of and for the year ended December 31, 2024, we or our independent registered public accountants may identify items that could cause final reported results to be materially different from the preliminary unaudited financial estimates presented herein. (4) These targets contemplate that Health Catalyst will continue to be opportunistic with tuck-in acquisitions, with a primary focus on technology. These tuck-in acquisitions would benefit annual revenue growth on a pro forma basis. (5) See "GAAP to Non-GAAP Reconciliation: Adjusted EBITDA" for more information about Adjusted EBITDA, including the limitations of Adjusted EBITDA. 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. (6) See "GAAP to Non-GAAP Reconciliation: Adjusted EBITDA" for more information about Adjusted EBITDA margin, including the limitations of Adjusted EBITDA margin and a reconciliation to net loss margin, the most directly comparable measure calculated in accordance with GAAP. 19
© Health Catalyst. Confidential and Proprietary. Appendix
© Health Catalyst. Our Tech-enabled Managed Services arrangements include long-term contracts (~5 years) for both Tech and Pro Services, which create loyal client relationships. These deals are typically large & require limited incremental Opex, which drives Adj. EBITDA margin in line with our long-term targets over time. Typical Contract Structure • TEMS relationships are structured as long-term contracts with technology subscription renewal or expansion (at typical technology gross margin levels) • Health Catalyst typically re-badges existing health system team members within the applicable functional area • Health Catalyst provides a cost savings to the client’s existing spend, typically starting nine months after contract signing • The TEMS Pro Services gross margin starts out low in Year 1 and aims to grow to ~25% over a few year period by leveraging our technology, finding scale efficiencies, and improving processes to reduce the labor footprint • Year 5 margin profile roughly represents the steady state margin profile Tech-Enabled Managed Services (TEMS): Unit Economics 21 Illustrative TEMS Pro Services Gross Margin Over Time ~0% ~10% ~25% 0% 5% 10% 15% 20% 25% Year 1 Run Rate Contracts typically start at a low gross margin in year 1, typically between 0% - 10% As these contracts ramp over a few year period and efficiencies are realized, gross margins increase to ~25%. Additionally, we generally anticipate little incremental Opex associated with these contracts, which should drive Adj. EBITDA margin in line with our long-term targets over time.
© Health Catalyst. High Engagement, Satisfaction & Expansion Leads to adjusted technology gross margin expansion 22 41 % 48 % 52 % 50 % 53 % 53 % 49 % 50 % 64 % 66 % 67 % 68 % 69 % 69 % 68 % 67 % 24 % 29 % 35 % 25 % 27 % 24 % 15 % 20 % 2017 2018 2019 2020 2021 2022 2023 Q1-Q3 2024 Total Adjusted Gross Margin Adjusted Technology Gross Margin Adjusted Professional Services Gross Margin Adjusted Gross Margin(1) Adj. Gross Profit(1) ($mm) $30 $54 $81 $95 $128 $146 $144 $112 (1) See "GAAP to Non-GAAP Reconciliation: Adjusted Gross Profit and Adjusted Gross Margin" for more information about Adjusted Gross Margin, including the limitations of Adjusted Gross Margin and a reconciliation to gross margin, the most directly comparable measure calculated in accordance with GAAP.
© Health Catalyst. Allina Health: High-Value Data & Analytics Drive $33M+ in Quality & Operations Improvements Data-Driven Insights and Measurable Results Key Opportunities Identified Length of stay | Readmissions | Supply costs Key Improvements ▪ $33M+ in positive margin impact by expense reduction and additional hospital inpatient and outpatient revenue. ▪ $2.3M decrease in annual blood product acquisition costs. ▪ Improved care for patients undergoing spine surgery ‐ 31% of expected complications avoided ‐ 22% relative reduction in surgical site infections ‐ 8.8% relative reduction in length of stay ▪ 350K+ unique sessions in Allina Health’s top 10 analytics applications and accelerators in one year. Unleashing the data at Allina Health has been key to increasing organizational efficiency, reducing costs, and improving outcomes for our patients. —Jonathan Shoemaker, SVP, CIO, Allina Health Applications2 Data and Analytics Platform (DOSTM) 1 Expert Services3 DOS data and analytics platform enabled Allina Health to integrate, organize, and enhance 65 different data sources—clinical, financial, and operational. Key capabilities used: 90+ applications and accelerators surface high-value data and analytics to augment insights, stratify risk, prioritize opportunities, and monitor and report outcomes. Key examples: Health Catalyst analytics engineers, data scientists, and domain experts partnered closely with Allina teams to use high-value data and analytics to unlock the highest value use cases and accelerate time to value. The Health Catalyst Solution Key Process Analysis (KPA) Identify highest value opportunities Spine Pain Improve care and outcomes Blood Utilization Improve blood management Patient Safety (e.g., CAUTI) Prevent and manage complications Reusable Data Logic Expert Data Collections Source Connectors Self-Service Analytics—Pop Insights, Pop Analyzer, Healthcare.AI, IDEA (data entry)—enable both technical and non-technical users to easily build populations; create reusable data elements; and explore, analyze, and report on data. 23 The Challenge: As the breadth, complexity, and volume of healthcare data grow, Allina Health recognized the need to manage data as a strategic asset by ensuring ongoing data utilization and building capacity for continuous, data-driven improvement. Operational Improvements
© Health Catalyst. Carle Health & Health Alliance: Solution Uncovers $10M+ in Population Health Opportunities Data-Driven Insights and Measurable Results Key Opportunities Identified Cost, utilization, and performance metrics across 10 key population health areas, including: Emergency department utilization | Inpatient utilization Ambulatory utilization | Post-acute care Key Improvements ▪ $10M+ in cost and utilization opportunity identified ▪ $100K manual labor costs avoided by eliminating multiple iterations and meetings to obtain the necessary data and analyses ▪ >90% improvement in analytic efficiency; analyses that previously required months to complete are now complete in minutes Value Optimizer allows us to uncover opportunities quickly and easily without building a data set to see the likely impact. We can quickly drill down into the data and recommend potential interventions. —Rich Balbach, Director Clinical and Business Intelligence Health Alliance Applications2 Data and Analytics Platform (DOSTM) 1 Expert Services3 DOS data and analytics platform enabled integration, organization, and enhancement of 13 Carle source systems, +10 Health Alliance source systems, +37 different physician claim formats from the Carle clinically integrated network (CIN). Key capabilities used: Health Catalyst population health domain expert partnered with Carle Health and Health Alliance teams to surface compelling, actionable insights for the best opportunities for success in value-based care— providing practical guidance for transformation to reduce cost and utilization, increase quality scores, improve patient outcomes, and accelerate time to value. The Health Catalyst Solution 24 The Challenge: For Carle Health and Health Alliance(1), burdensome manual data collection and reporting processes made it difficult—and time-consuming—to identify and address opportunities for value-based care improvement across its populations. Value Optimizer surfaces insights—mined from claims data and enhanced by terminology, groupers, logic, and additional data from DOS—to instantly identify the most promising and impactful opportunities for value-based care (VBC) performance improvement. Self-Service Analytics—Pop Insights, Pop Analyzer, Healthcare.AI— enable both technical and non-technical users to easily build populations; create reusable data elements; and explore, analyze, and report on data. Reusable Data Logic Expert Data Collections Cloud- based Source Connectors Financial Improvements Operational Improvements (1) Health Alliance Medical Plans is a leading provider-driven health plan.
© Health Catalyst. MultiCare Health System: Operational and Charge Capture Improvements Help Realize $75M+ in Annual Revenue Data-Driven Insights and Measurable Results Key Opportunities Identified Charge capture | Contribution margins | Length of stay Key Improvements ▪ $6.1M net revenue retained, the result of resolving more than 350 charge capture issues. ▪ $48M in revenue, surpassing three-year market share goals in year two. ‐ Overall market share improved in every submarket. ▪ $24M in savings, the result of a 0.6-day reduction in LOS across the health system. VitalIntegrity enabled us to efficiently identify and resolve charge capture issues, retaining $6.1M in net revenue in just three months, while supporting root cause analyses for ongoing process improvement.” —Nicole Gorder, MBA, Executive Director of Revenue Integrity & CDM MultiCare Health System Applications2 Data and Analytics Platform (DOSTM) 1 Expert Services3 DOS data and analytics platform enabled MultiCare Health System to integrate, organize, and enhance 35 different data sources—clinical, financial, and operational. Key capabilities used: Health Catalyst experts partnered with MultiCare teams to help increase organizational alignment, boost data utilization and analytic acumen for more proactive revenue management, and realize new efficiencies by optimizing technology and processes. The Health Catalyst Solution 25 The Challenge: Inconsistent improvement methods, differing competencies, and inefficient data collection and analytics were impeding MultiCare Health System’s ability to improve—leaving financial and operational metrics below expectations. Self-Service Analytics—Pop Insights, Pop Analyzer, Healthcare.AI, IDEA (data entry)—enable both technical and non-technical users to easily build populations; create reusable data elements; and explore, analyze, and report on data. Reusable Data Logic Expert Data Collections Cloud- based Source Connectors 20+ applications and accelerators surface high-value data and analytics to augment insights, stratify risk, prioritize opportunities, and monitor and report outcomes. Key examples: Key Process Analysis (KPA) Identify highest value opportunities VitalIntegrity Improve charge capture and revenue performance Departmental Explorer Review and improve operational efficiency Financial Improvements Clinical Improvements
© Health Catalyst. INTEGRIS: Healthcare.AI Helps Drive Executive Alignment and Decision-making Data-Driven Insights and Measurable Results Key Opportunities Identified Value-based care measures performance | Patient safety targeted mortality and readmissions (e.g., sepsis) Key Improvements ▪ Aligned executive incentives based on shared understanding of highest value and most actionable improvement opportunities ▪ $500K saved annually by sunsetting a third-party benchmarking tool ▪ 50x faster data refresh than previous benchmarking tool—and benchmarks are now more adaptive as well as more detailed Applications2 Data and Analytics Platform (DOSTM) 1 Expert Services3 DOS data and analytics platform enabled integration, organization, and enhancement of 10 different data source systems. Key capabilities used: Health Catalyst’s analytics engineers, data scientists, and domain experts partnered with INTEGRIS teams to optimally leverage integrated data, analytics, and machine-learning-driven algorithms to identify and realize meaningful opportunities for improvement. The Health Catalyst Solution 26 The Challenge: INTEGRIS Health had high volumes of data but lacked the timely, accurate, and actionable insight needed to support key leadership decisions and drive meaningful improvements. Self-Service Analytics—Pop Insights, Pop Analyzer, Healthcare.AI enable both technical and non-technical users to easily build populations; create reusable data elements; and explore, analyze, and report on data Reusable Data Logic Expert Data Collections Cloud- based Source Connectors Touchstone® enabled INTEGRIS to analyze risk-adjusted benchmarks and integrated machine-learning algorithms to enhance understanding of performance compared to peer organizations— and proactively prioritize improvement opportunities. Healthcare.AI capabilities, integrated within Touchstone and other BI tools, deliver easy-to-use statistical and AI capabilities to help analysts produce more accurate, faster insights. Financial Improvements Clinical Improvements Using DOS and Touchstone has been transformational for our organization. The data and analytics are exactly what our CEO, CMO, and CNE need to set our organization's course. We’ve effectively separated the signals from noise in the data and are able to clearly see where the organization needs to go. —Benjamin Mansalis, MD Chief Information Officer, INTEGRIS Health We are using generative AI to exponentially increase the efficiency and overall business success of specific human capital-intensive tasks. Generative AI has been especially powerful when workflows are driven by narrative/written language, which is common in our chart abstraction use cases today, and we expect to be equally powerful as we expand our TEMS offerings into other workflow-heavy areas. —Dave Ross Chief Technology Officer, Health Catalyst
© Health Catalyst. Historical M&A Transactions 27 Transaction value amount (1) $mm 2019 2020 20212018 HCAT IPO M&A Strategy • Ability to integrate and scale software applications on top of Ignite platform • Broadens value proposition to existing and new clients • Primary focus on applications layer ▪ Hundreds of opportunities ▪ Gross margin accretive ▪ Faster time to market (buy vs. build) • Additional focus areas in adjacent markets ▪ International • Wide range of targets → tuck- ins to larger transactions • HCAT is destination of choice for many targets given cultural differentiation July July September JulyJune 2020 2022 February $27 $40 $120 ~$105 ~$33 ~$15 2022 April Note: Transaction close date shown (1) Transaction value includes only the upfront purchase price amount anticipated at the time of the execution of the respective acquisition agreements 2020 February ~$13.5 2023 October 2024 August ~$40 ~$22 2024 May 2024 November ~$43 $120 ~$105
© Health Catalyst. Confidential and Proprietary. 28 © Health Catalyst. Health Catalyst Ignite Accessible and Usable Data Consumption
© Health Catalyst. Healthcare Data Orchestration: Simplified 29 Tasks We Handle So You Don’t Have To Healthcare- Specific Source Connectors Identity Resolution for Providers and Patients Healthcare- Specific Data Security Longitudinal View Terminology Standardization Across Systems Healthcare- Specific Content Libraries Data Quality Assurance Healthcare Interoperability Support Self-Service Analytics Tools Healthcare.AI: Ignite Advisor
© Health Catalyst. Tailwinds • Health Catalyst will continue to differentiate itself by leveraging cross-industry technologies and layering them on top of healthcare-specific content for end markets • Anticipate AI integration will increasingly play a role in tech enablement and improved efficiency of TEMS relationships • Importance of clean, comprehensive data sets for AI use cases serves as a long-term tailwind for our data platform • The increasing prevalence of AI will increase the necessity for technology expert services as well as seamless integration with business intelligence tools Healthcare.AI by Health Catalyst • Deployment of machine learning/predictive models to optimize client workflows. Examples include: - Point of care (e.g., readmission prevention) - Point of service (e.g., financial assistance predictive models) - Revenue generation (e.g., marketing outreach) - Management (e.g., forecasting and budgeting) - Operations (e.g., pandemic and staffing “war rooms”) - Effect estimation (e.g., drug/device/program evaluations) • Impact: Helping healthcare leaders face an unprecedented list of increasingly critical issues across revenue, cost, and quality Health Catalyst Ignite Platform Leverages Healthcare.AI Generative AI • Health Catalyst is actively leveraging Generative AI for internal efficiency use-cases including - Chart abstraction for registries and related submissions - Code generation and translation • Generative AI can enable clients to make data-informed decisions to increase quality, speed, and cost of healthcare delivery - Building on Health Catalyst reputation of improvement, optimization, and ensuring aims are met - Helping clients convert hopes and concerns into plans and measurable improvement Health Catalyst has invested in machine learning and augmented intelligence models over the past few years, primarily through its Healthcare.AI cloud-native platform 30
© Health Catalyst. Health Catalyst Ignite Platform Leverages Healthcare.AI (cont’d) High-value analytics enables users to see what is right In front of them 31 • 96% of people draw meaningfully erroneous insights • Improve >10x with Healthcare.AI • True of analysts through board of directors • True of people who are confident or question their abilities • >75% of clients using Healthcare.AI for substantive decisions • >90% of clients using Healthcare.AI for some purpose (including Data Quality) • 5-25K calls per day Ty p ic al T im e Se ri es H ea lt h ca re .A I Note: Health Catalyst internal monitoring based on demo response, module usage data, and API calls.
© Health Catalyst. A Single Clinical, Financial, or Operational Question Often Requires Integrated Data from Multiple Source Systems Ignite: ingests, integrates and organizes data sources Data platform Data sources Use cases Financial Operational How do I reduce my hip and knee cost per case? How are new treatment protocols impacting length of stay and satisfaction? Clinical How do I improve my system’s sepsis care? Questions answered Data sources needed EHR, Claim, Clinical Specialty, etc. EHR, Financial ERP, Claims EHR, Clinical Specialty, Patient Satisfaction, etc. EHR (e.g. Cerner, Epic, Meditech) Financial (e.g. Lawson, EPSI) Billing (e.g. McKesson) HR/ERP (e.g. Peoplesoft, AP1) Claims (e.g. QXNT, CMS) Clinical Specialty (e.g. Lab, Rad. Rx, Clin Op Systems) Patient Satisfaction (e.g. Press Ganey) Other (e.g. benchmarking, homegrown) $ Health Catalyst Applications Health Catalyst Professional Services Organization Client Developed Applications & Algorithms 3rd Party Applications & Services ✓ ✓ ✓ 1 3 42 32
© Health Catalyst. A typical Problem Facing a Healthcare Organization Most Often Requires Data From Multiple Source Systems: Sepsis Example Question? EMR (Epic, Cerner, Meditech) How many cases of sepsis did we have last year? Benchmarking (Truven, UHC, Touchstone) Is our sepsis mortality rate above industry benchmarks? Financial (Lawson, EPSI) How much did those sepsis cases cost? What were the readmission rates of my sepsis population? Claims (QXNT, CMS, etc.) What lab or pharmacy tests were ordered for these sepsis patients? Lab (Quest, LabCorp) Pharmacy (McKesson, Cardinal) 1 2 3 4 5 Required Data Source 33
© Health Catalyst. Client’s Path to Greater Digital Maturity with Health Catalyst The healthcare analytics adoption model Pre-Health Catalyst Early implementation Maturity Improve Health & Reduce Variation Level 9 Direct-to-Patient Analytics & Artificial Intelligence Level 8 Personalized Medicine & Prescriptive Analytics Level 7 Clinical Risk Intervention & Predictive Analytics Level 6 Population Health Management & Suggestive Analytics Level 5 Waste & Care Variability Reduction Increase Efficiency Level 4 Automated External Reporting Level 3 Automated Internal Reporting Level 2 Standardized Vocabulary & Patient Registries Level 1 Enterprise Data Operating System Level 0 Fragmented Point Solutions 34 Note: Healthcare Analytics Adoption Model created by Health Catalyst’s former CTO Dale Sanders; HIMSS was granted a creative commons copyright, which they call HIMSS Analytics Adoption Model for Analytics Maturity (AMAM)
© Health Catalyst. Year Ended 31-Dec-2021 (in thousands, except percentages) Technology Professional Services Total Revenue $147,718 $94,208 $241,926 Cost of Revenue, Excluding Depreciation and Amortization ($47,516) ($76,838) ($124,354) Gross Profit, Excluding Depreciation and Amortization $100,202 $17,370 $117,572 Add: Stock-Based Compensation 2,063 8,047 10,110 Acquisition-related costs, net(2) 61 127 188 Adjusted Gross Profit $102,326 $25,544 $127,870 Gross Margin, Excluding Depreciation and Amortization 68% 18% 49% Adjusted Gross Margin 69% 27% 53% Year Ended 31-Dec-2022 (in thousands, except percentages) Technology Professional Services Total Revenue $176,288 $99,948 $276,236 Cost of Revenue, Excluding Depreciation and Amortization ($56,642) ($86,407) ($143,049) Gross Profit, Excluding Depreciation and Amortization $119,646 $13,541 $133,187 Add: Stock-Based Compensation 2,058 8,230 10,288 Acquisition-related costs, net(2) 351 655 1,006 Restructuring Charges(3) 229 1,139 1,368 Adjusted Gross Profit $122,284 $23,565 $145,849 Gross Margin, Excluding Depreciation and Amortization 68% 14% 48% Adjusted Gross Margin 69% 24% 53% Year Ended 31-Dec-2023 (in thousands, except percentages) Technology Professional Services Total Revenue $187,583 $108,355 $295,938 Cost of Revenue, Excluding Depreciation and Amortization ($62,474) ($101,631) ($164,105) Gross Profit, Excluding Depreciation and Amortization $125,109 $6,724 $131,833 Add: Stock-Based Compensation 1,866 7,369 9,235 Acquisition-related costs, net(2) 273 391 664 Restructuring Charges(3) 496 1,832 2,328 Adjusted Gross Profit $127,744 $16,316 $144,060 Gross Margin, Excluding Depreciation and Amortization 67% 6% 45% Adjusted Gross Margin 68% 15% 49% 9-Months Ended 30-Sep-2024 (in thousands, except percentages) Technology Professional Services Total Revenue $143,254 $83,724 $226,978 Cost of Revenue, Excluding Depreciation and Amortization ($48,991) ($71,899) ($120,890) Gross Profit, Excluding Depreciation and Amortization $94,263 $11,825 $106,088 Add: Stock-Based Compensation 1,206 4,282 5,488 Acquisition-related costs, net(2) 246 330 576 Restructuring Charges(3) 79 181 260 Adjusted Gross Profit $95,794 $16,618 $112,412 Gross Margin, Excluding Depreciation and Amortization 66% 14% 47% Adjusted Gross Margin 67% 20% 50% Year Ended 31-Dec-2017 (in thousands, except percentages) Technology Professional Services Total Revenue $31,693 $41,388 $73,081 Cost of Revenue, Excluding Depreciation and Amortization ($11,610) ($32,032) ($43,642) Gross Profit, Excluding Depreciation and Amortization $20,083 $9,356 $29,439 Add: Stock-Based Compensation 65 514 579 Adjusted Gross Profit $20,148 $9,870 $30,018 Gross Margin, Excluding Depreciation and Amortization 63% 23% 40% Adjusted Gross Margin 64% 24% 41% Year Ended 31-Dec-2018 (in thousands, except percentages) Technology Professional Services Total Revenue $57,224 $55,350 $112,574 Cost of Revenue, Excluding Depreciation and Amortization ($19,429) ($40,423) ($59,852) Gross Profit, Excluding Depreciation and Amortization $37,795 $14,927 $52,722 Add: Stock-Based Compensation 78 480 558 Tender Offer Payments Deemed Compensation(1) 28 284 312 Acquisition-related costs, net(2) 0 337 337 Adjusted Gross Profit $37,901 $16,028 $53,929 Gross Margin, Excluding Depreciation and Amortization 66% 27% 47% Adjusted Gross Margin 66% 29% 48% Year Ended 31-Dec-2019 (in thousands, except percentages) Technology Professional Services Total Revenue $83,975 $70,966 $154,941 Cost of Revenue, Excluding Depreciation and Amortization ($27,797) ($47,548) ($75,345) Gross Profit, Excluding Depreciation and Amortization $56,178 $23,418 $79,596 Add: Stock-Based Compensation 200 968 1,168 Acquisition-related costs, net(2) 0 108 108 Adjusted Gross Profit $56,378 $24,494 $80,872 Gross Margin, Excluding Depreciation and Amortization 67% 33% 51% Adjusted Gross Margin 67% 35% 52% Year Ended 31-Dec-2020 (in thousands, except percentages) Technology Professional Services Total Revenue $110,467 $78,378 $188,845 Cost of Revenue, Excluding Depreciation and Amortization ($35,604) ($62,473) ($98,077) Gross Profit, Excluding Depreciation and Amortization $74,863 $15,905 $90,768 Add: Stock-Based Compensation 803 3,453 4,256 Adjusted Gross Profit $75,666 $19,358 $95,024 Gross Margin, Excluding Depreciation and Amortization 68% 20% 48% Adjusted Gross Margin 68% 25% 50% GAAP to Non-GAAP Reconciliation: Adjusted Gross Profit and Adjusted Gross Margin 35 Note: 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, (iv) tender offer payments deemed compensation, and (v) 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, as well as certain other non-recurring operating 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. (1) Tender offer payments deemed compensation relate to employee compensation from repurchases of common stock at a price in excess of its estimated fair value. (2) Acquisition-related costs, net included in the Adjusted Gross Profit reconciliation relate to post acquisition restructuring costs and deferred retention expenses incurred as part of business combinations. (3) Restructuring charges include severance and other team member costs from workforce reductions.
© Health Catalyst. 9 Months Ended September. 30, Year Ended December 31, (in thousands) 2024 2023 2023 2022 2021 2020 2019 2018 2017 Net Loss ($48,829) ($87,835) ($118,147) ($137,403) ($153,210) ($115,017) ($60,096) ($61,984) ($47,035) Add: Interest and other expense, net ($3,185) ($6,490) ($9,106) $1,678 $16,458 $11,572 $3,419 $2,024 $1,469 Loss on extinguishment of debt $0 $0 $0 $0 $0 $8,514 $1,670 $0 $0 Income tax provision (benefit) ($292) $213 $356 ($4,280) ($6,898) ($1,194) $142 ($135) $26 Depreciation and amortization $31,165 $31,919 $42,223 $48,297 $37,528 $18,725 $9,212 $7,412 $5,892 Stock-based compensation $29,316 $42,745 $55,756 $72,104 $65,145 $37,957 $17,844 $4,198 $4,241 Tender offer payments deemed compensation(1) $0 $0 $0 $0 $0 $0 $0 $8,318 $0 Acquisition-related costs, net(2) $5,731 $3,102 $5,757 $4,894 $27,929 $16,758 $446 $2,114 $0 Restructuring costs(3) $2,088 $2,055 $8,822 $8,425 $0 $0 $0 $0 $0 Non-recurring lease-related charges(4) $2,200 $2,681 $4,081 $3,798 $1,800 $1,398 $0 $0 $0 Litigation costs(5) $0 $21,279 $21,279 $0 $0 $0 $0 $0 $0 Adjusted EBITDA $18,194 $9,669 $11,021 ($2,487) ($11,248) ($21,287) ($27,363) ($38,053) ($35,407) Net Loss as % of Revenue (22%) (40%) (40%) (50%) (63%) (61%) (39%) (55%) (64%) Adjusted EBITDA as % of Revenue 8% 4% 4% (1%) (5%) (11%) (18%) (34%) (48%) GAAP to Non-GAAP Reconciliation: Adjusted EBITDA 36 (1) Tender offer payments deemed compensation relate to employee compensation from repurchases of common stock at a price in excess of its estimated fair value. (2) Acquisition-related costs, net impacting Adjusted EBITDA includes third party fees associated with due diligence, deferred retention expenses, and post-acquisition restructuring costs incurred as part of business combinations, and changes in fair value of contingent consideration liabilities for potential earnout payments. (3) Restructuring costs include severance and other team member costs from workforce reductions, impairment of discontinued capitalized software projects, and other minor miscellaneous charges. (4) Includes the lease-related impairment charges for the subleased portion of our corporate headquarters and duplicate rent expense incurred during the relocation of our corporate headquarters. (5) Reflects costs related to litigation that are outside the ordinary course of our business. We believe it is useful to exclude such charges because we do not consider such amounts to be part of the ongoing operations of our business and because of the singular nature of the claims underlying the matter. Note: Adjusted EBITDA is a non-GAAP financial measure that we define as net loss adjusted for (i) interest and other (income) expense, net, (ii) loss on extinguishment of debt, (iii) income tax provision (benefit), (iv) depreciation and amortization, (v) stock-based compensation, (vi) tender offer payments deemed compensation, (vii) acquisition-related costs, net, (viii) restructuring costs, (ix) nonrecurring lease-related charges, and (x) litigation costs. Adjusted EBITDA margin is a non-GAAP financial measure that we define as Adjusted EBITDA divided by net revenue. 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 tender offer payments deemed compensation, loss on extinguishment of debt, restructuring costs, litigation costs and non-recurring lease-related charges 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 and Adjusted EBITDA margin provide 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 these metrics generally eliminate the effects of certain items that may vary from company to company for reasons unrelated to overall operating performance.
© Health Catalyst. 9 Months Ended September. 30, Year Ended December 31, (in thousands) 2024 2023 2023 2022 2021 2020 2019 2018 2017 Operating expenses $158,394 $195,437 $258,730 $273,192 $261,222 $186,893 $134,461 $112,817 $74,979 Less: Depreciation and amortization ($31,165) ($31,919) ($42,223) ($48,297) ($37,528) ($18,725) ($9,212) ($7,412) ($5,892) Stock-based compensation ($23,828) ($35,655) ($46,521) ($61,816) ($55,035) ($33,701) ($16,676) ($3,640) ($3,662) Tender offer payments deemed compensation (1) $0 $0 $0 $0 $0 $0 $0 ($8,006) $0 Acquisition-related costs, net (2) ($5,155) ($2,596) ($5,093) ($3,888) ($27,741) ($16,758) ($338) ($1,777) $0 Restructuring costs (3) ($1,828) ($1,609) ($6,494) ($7,057) $0 $0 $0 $0 $0 Non-recurring lease-related charges (4) ($2,200) ($2,681) ($4,081) ($3,798) ($1,800) ($1,398) $0 $0 $0 Litigation costs (5) $0 ($21,279) ($21,279) $0 $0 $0 $0 $0 $0 Adjusted Operating Expenses $94,218 $99,698 $133,039 $148,336 $139,118 $116,311 $108,235 $91,982 $65,425 Adjusted Operating Expenses as % of Revenue 42% 45% 45% 54% 58% 62% 70% 82% 90% GAAP to Non-GAAP Reconciliation: Adjusted Operating Expenses 37 (1) Tender offer payments deemed compensation relate to employee compensation from repurchases of common stock at a price in excess of its estimated fair value. (2) Acquisition-related costs, net impacting Adjusted EBITDA includes third party fees associated with due diligence, deferred retention expenses, and post-acquisition restructuring costs incurred as part of business combinations, and changes in fair value of contingent consideration liabilities for potential earnout payments. (3) Restructuring costs include severance and other team member costs from workforce reductions, impairment of discontinued capitalized software projects, and other minor miscellaneous charges. (4) Includes the lease-related impairment charges for the subleased portion of our corporate headquarters and duplicate rent expense incurred during the relocation of our corporate headquarters. (5) Reflects costs related to litigation that are outside the ordinary course of our business. We believe it is useful to exclude such charges because we do not consider such amounts to be part of the ongoing operations of our business and because of the singular nature of the claims underlying the matter. Note: Adjusted Operating Expenses is a non-GAAP financial measure that we define as operating expenses adjusted for (i) depreciation and amortization, (ii) stock-based compensation, (iii) tender offer payments deemed compensation, (iv) acquisition-related costs, net, (v) restructuring costs, (vi) non-recurring lease-related charges and (vii) litigation costs. 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.
© Health Catalyst. Preliminary Results(1) & Forward-Looking Targets(2) Q4 Financials • Revenue of $78.75M to $79.75M (+6%), in prior range, but with a few minor project delays; Tech Revenue of $50.6M to $51.6M (+9%) • Adj. EBITDA(3) of $7.9M (+480%, 10% Margin), above midpoint of range Full Year Financials • Revenue of $305.7M to $306.7M (+3%), in prior range; Tech Revenue of $194.0M to $195.0M (+4%) • Adj. EBITDA(3) of $26.1M (+137%, 9% Margin), above midpoint of range; Tech BU Adj. EBITDA of $25M (13% Margin) Growth Metrics • Net New Platform Clients(4): 21 (+91%), with avg. ARR + non-recurring revenue towards the lower end of the range of $400K to $1M • Number of Platform Clients(4): 130 (+19%) • Number of Platform + App Clients: >1,000 (+>50%) • Dollar-Based Retention current definition (Tech + Recurring Services): 100%, which excludes some existing client expansion • Dollar-Based Retention updated definition (Tech + TEMS) : 102%, which still excludes some existing client expansion 2024 Preliminary Results 2025 Forward-Looking Targets • Revenue: ~$335M (+10%); Tech Revenue: ~$220M (+13%) • Adj. EBITDA(5): ~$39M (+49%, 12% Margin); Tech BU Adj. EBITDA: ~$38M (+52%, 17% Margin) • Net New Platform Clients(4): ~40 (+90%), with expected ARR + non-recurring revenue to be similar to 2024 results • Dollar-Based Retention (Tech + TEMS)(6): ~103% • Tech BU with ‘Rule of 30’ Profile in 2025 (1) Preliminary unaudited financial results are inherently uncertain and subject to change as we complete preparation of our consolidated financial statements for the year ended December 31, 2024. During the course of the preparation of our consolidated financial statements and related notes as of and for the year ended December 31, 2024, we or our independent registered public accountants may identify items that could cause final reported results to be materially different from the preliminary unaudited financial estimates presented herein. (2) Growth percentages reference Year over Year performance, and where relevant, when a range is provided the percentage growth is calculated based on the midpoint of the range. (3) See “GAAP to Non-GAAP Reconciliation: Adjusted EBITDA” for more information about Adjusted EBITDA, including the limitations of Adjusted EBITDA. (4) Platform Clients (previously referred to as DOS Subscription Clients) include clients who directly or indirectly access our DOS platform or Health Catalyst Ignite via a technology subscription contract. Indirect access may include platform module components such as Healthcare.AI, Pop Analyzer, IDEA, and other platform components. (5) 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. (6) Excludes Pilot TEMS arrangements such as Ambulatory Operations. Commentary • Strategic decision made to exit unprofitable pilot Ambulatory Operations TEMS offering by mid-2025, representing ~$9M of annual services revenue • Signing & anticipated Q1 close of Upfront Healthcare acquisition, strengthening our patient activation offering • Upfront Healthcare acquisition is anticipated to contribute ~3% of 2025 revenue depending on close timing and operating plan execution
© Health Catalyst. (1) Preliminary unaudited financial results are inherently uncertain and subject to change as we complete preparation of our consolidated financial statements for the year ended December 31, 2024. During the course of the preparation of our consolidated financial statements and related notes as of and for the year ended December 31, 2024, we or our independent registered public accountants may identify items that could cause final reported results to be materially different from the preliminary unaudited financial estimates presented herein. (2) Growth percentages reference Year over Year performance, and where relevant, when a range is provided the percentage growth is calculated based on the midpoint of the range. (3) High-level estimated business unit adjusted EBITDA margin analysis. Estimated business unit contribution profit for Technology and Professional Services based on allocating adjusted gross margin and operating expenses by business unit. Adjusted gross margin segmented by Technology and Professional Services. Operating expenses allocated between Technology and Professional Services based on type of operating expense: Research & Development (R&D) expenses allocated to Technology business unit; Sales & Marketing expenses allocated between Technology and Professional Services by percentage of adjusted gross profit; General & Administrative expenses allocated between Technology and Professional Services by percentage of total cost of revenue (excluding depreciation and amortization) and R&D. (4) Excludes Pilot TEMS arrangements such as Ambulatory Operations. Note (a): These targets contemplate that Health Catalyst will continue to be opportunistic with tuck-in acquisitions, with a primary focus on technology. We expect these tuck-in acquisitions to benefit annual revenue growth on a pro forma basis. Note (b): We have not reconciled guidance for Adjusted EBITDA or Adjusted EBITDA Margin to net loss or net loss margin, respectively, the most directly comparable GAAP measures, and have not provided forward-looking guidance for net loss or net loss margin, because there are items that may impact net loss and net loss margin, including stock-based compensation, that are not within our control or cannot be reasonably forecasted. 2025 Targets Revenue Overall: ~$335M (+10%) Tech: ~$220M (+13%) Adj. EBITDA Overall: ~$39M (+49%, 12% Margin) Tech BU(3): ~$38M (+52%, 17% Margin) Net New Platform Clients ~40 (+90%) Dollar-Based Retention (Tech + TEMS)(4) ~103% Tech BU with ‘Rule of 30’ Profile 2028 Targets Revenue ~$500M Tech ~2/3 of Revenue Adj. EBITDA ~$100M Overall Margin ~20%; Tech BU Margin(3) ~30% Company with ‘Rule of 30’ Profile Tech BU with ‘Rule of 40’ Profile 2024 Preliminary Results Revenue Overall: $305.7M to $306.7M (+3%) Tech: $194M to $195M (+4%) Adj. EBITDA Overall: $26.1M (+137%, 9% Margin) Tech BU(3): $25M (13% Margin) Net New Platform Clients 21 (+91%) Dollar-Based Retention 100% (Current Definition: Tech + Recurring Services) 102% (Updated Definition: Tech + TEMS) Total Clients 130 Platform Clients (+19%) >1,000 Platform + App Clients (+>50%) Preliminary Results(1) & Forward-Looking Targets(2)