Health Catalyst — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total revenue for the three months ended September 30, 2026, was $56.283 million, a 26% decrease from $76.323 million in the prior year period.
• GAAP net income was $40.496 million for the quarter, compared to a net loss of $22.229 million in the prior year period, representing a 282% improvement.
• Gross profit was $17.345 million (31% margin) for the quarter, down from $29.979 million (39% margin) in the prior year.
• Adjusted Gross Profit was $24.913 million (44% margin) for the quarter, down from $40.133 million (53% margin) in the prior year.
• Adjusted EBITDA was $779 thousand for the quarter, a 94% decrease from $12.000 million in the prior year.
• Net loss for the nine months ended September 30, 2026, was $111.067 million, compared to a loss of $86.949 million in the prior year.
• Cash and cash equivalents were $53.746 million as of September 30, 2026, compared to $50.814 million as of December 31, 2025.
• Deferred revenue was $43.135 million total ($42.109 million current, $1.026 million non-current) as of September 30, 2026, down from $56.517 million ($56.107 million current, $410 thousand non-current) as of December 31, 2025.
• Total debt was eliminated as of September 30, 2026, compared to $153.251 million ($1.627 million current, $151.624 million long-term) as of December 31, 2025.

Guidance and Future Outlook:

• For the full year 2026, the company expects total revenue between $246 million and $249 million.
• For the full year 2026, the company expects Adjusted EBITDA between $18 million and $18.5 million.
• The company reaffirmed its full-year outlook.
• No forward-looking guidance was provided for net income (loss).

Business Segments and Product Lines:

• Technology revenue was $40.686 million for the quarter, down from $52.051 million in the prior year.
• Professional services revenue was $15.597 million for the quarter, down from $24.272 million in the prior year.
• The company is migrating from DOS to Ignite, which contributed to revenue headwinds.
• The company is focusing on retaining existing clients and developing a path to generating durable, profitable revenue.

Market and Competitive Landscape:

• The company is a healthcare intelligence company designed to accelerate measurable improvement for health systems across cost, clinical, and consumer performance.
• The company reports $2.8 billion in documented outcomes.
• The company faces headwinds related to client churn or down-selling in connection with the migration to Ignite.

Risks and Challenges:

• Revenue and profitability decreased primarily due to the divestiture of the Vitalware Business on July 31, 2026, and headwinds related to the migration from DOS to Ignite.
• Risks include changes in laws and regulations, market conditions, litigation, security incidents, loss of key clients, client churn, fluctuations in project-based revenue, macroeconomic challenges, and the potential for the Vitalware divestiture not to achieve expected benefits.
• Risks also include the ability to recruit and retain qualified team members.

Management Commentary and Tone:

• Simeon Kohl, President and CEO, stated the company delivered a third quarter above the high end of revenue and Adjusted EBITDA guidance.
• Management's immediate priority is to strengthen the foundation of the business, focusing on client retention and generating durable, profitable revenue.

Other Key Points:

• The company sold the Vitalware Business on July 31, 2026, generating a gain on sale of $65.889 million.
• Total consideration received for the Vitalware Transaction was $146.3 million, with $80.4 million of net assets disposed.
• On July 31, 2026, the company used net cash proceeds from the Vitalware Transaction and cash on hand to voluntarily repay in full all outstanding obligations under the Credit Agreement and terminate the agreement.
• The company recognized a loss on extinguishment of debt of $9.494 million in connection with the debt repayment.
• The company recognized a goodwill impairment charge of $122.548 million for the nine months ended September 30, 2026.
• Net cash provided by investing activities was $149.382 million for the nine months ended September 30, 2026, driven by $144.455 million in proceeds from the sale of the Vitalware business.
• Net cash used in financing activities was $163.331 million for the nine months ended September 30, 2026, primarily due to $163.960 million in debt repayments.
• Stock-based compensation expense was $4.077 million for the quarter and $10.556 million for the nine months ended September 30, 2026.