Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2024 | May 03, 2024 | |
Document Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2024 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | Definitive Healthcare Corp. | |
Entity Central Index Key | 0001861795 | |
Entity Tax Identification Number | 86-3988281 | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity File Number | 001-40815 | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Interactive Data Current | Yes | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, Address Line One | 492 Old Connecticut Path, Suite 401 | |
Entity Address, City or Town | Framingham | |
Entity Address, State or Province | MA | |
Entity Address, Postal Zip Code | 01701 | |
City Area Code | 508 | |
Local Phone Number | 720-4224 | |
Trading Symbol | DH | |
Title of 12(b) Security | Class A Common Stock, $0.001 par value | |
Security Exchange Name | NASDAQ | |
Document Quarterly Report | true | |
Entity Common Stock Shares Outstanding | 117,934,713 | |
Document Transition Report | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 105,994 | $ 130,976 |
Short-term investments | 189,174 | 177,092 |
Accounts receivable, net | 56,655 | 59,249 |
Prepaid expenses and other current assets | 13,296 | 13,120 |
Deferred contract costs | 13,598 | 13,490 |
Total current assets | 378,717 | 393,927 |
Property and equipment, net | 4,100 | 4,471 |
Operating lease right-of-use assets, net | 9,022 | 9,594 |
Other assets | 1,978 | 2,388 |
Deferred contract costs | 16,219 | 17,320 |
Intangible assets, net | 317,972 | 323,121 |
Goodwill | 1,082,137 | 1,075,080 |
Total assets | 1,810,145 | 1,825,901 |
Current liabilities: | ||
Accounts payable | 4,895 | 5,787 |
Accrued expenses and other liabilities | 35,950 | 51,529 |
Deferred revenue | 108,078 | 97,377 |
Term loan | 13,750 | 13,750 |
Operating lease liabilities | 2,307 | 2,239 |
Total current liabilities | 164,980 | 170,682 |
Long term liabilities: | ||
Deferred revenue | 9 | 9 |
Term loan | 239,267 | 242,567 |
Operating lease liabilities | 8,690 | 9,372 |
Tax receivable agreements liability | 125,150 | 127,000 |
Deferred tax liabilities | 66,615 | 67,163 |
Other liabilities | 10,403 | 9,934 |
Total liabilities | 615,114 | 626,727 |
Equity: | ||
Additional paid-in capital | 1,095,482 | 1,086,581 |
Accumulated other comprehensive income | 1,658 | 2,109 |
Accumulated deficit | (236,968) | (227,450) |
Noncontrolling interests | 334,741 | 337,817 |
Total equity | 1,195,031 | 1,199,174 |
Total liabilities and equity | 1,810,145 | 1,825,901 |
Common Class A | ||
Equity: | ||
Common stock, value | 118 | 117 |
Common Class B | ||
Equity: | ||
Common stock, value | $ 0 | $ 0 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2024 | Dec. 31, 2023 |
Common Class A | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 600,000,000 | 600,000,000 |
Common stock, shares issued | 117,790,025 | 116,562,252 |
Common stock, shares outstanding | 117,790,025 | 116,562,252 |
Common Class B | ||
Common stock, par value | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized | 65,000,000 | 65,000,000 |
Common stock, shares issued | 39,664,004 | 39,762,700 |
Common stock, shares outstanding | 39,238,832 | 39,168,047 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Income Statement [Abstract] | ||
Revenue | $ 63,480 | $ 59,201 |
Cost of revenue: | ||
Cost of revenue exclusive of amortization | 9,736 | 8,552 |
Amortization | 3,362 | 3,354 |
Gross profit | 50,382 | 47,295 |
Operating expenses: | ||
Sales and marketing | 21,760 | 23,423 |
Product development | 10,132 | 9,884 |
General and administrative | 16,883 | 14,079 |
Depreciation and amortization | 9,322 | 9,590 |
Transaction, integration and restructuring expenses | 8,534 | 2,590 |
Total operating expenses | 66,631 | 59,566 |
Loss from operations | (16,249) | (12,271) |
Other income (expense), net: | ||
Interest income | 3,927 | 2,834 |
Interest expense | (3,816) | (3,614) |
Gain (loss) on remeasurement of TRA liability | 2,267 | (3,552) |
Other income (expense), net | 373 | (79) |
Total other income (expense), net | 2,751 | (4,411) |
Net loss before income taxes | (13,498) | (16,682) |
Benefit from income taxes | 780 | 710 |
Net loss | (12,718) | (15,972) |
Less: Net loss attributable to noncontrolling interests | (3,200) | (3,909) |
Net loss attributable to Definitive Healthcare Corp. | $ (9,518) | $ (12,063) |
Net loss per share of Class A common stock: | ||
Basic | $ (0.08) | $ (0.11) |
Diluted | $ (0.08) | $ (0.11) |
Weighted average Class A Common Stock outstanding: | ||
Basic | 117,433,520 | 108,234,043 |
Diluted | 117,433,520 | 108,234,043 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (12,718) | $ (15,972) |
Other comprehensive (loss) income: | ||
Foreign currency translation adjustments | (181) | 19 |
Unrealized (loss) gain on available-for-sale securities | (164) | 89 |
Unrealized loss on interest rate hedging instruments | (240) | (1,355) |
Comprehensive loss | (13,303) | (17,219) |
Less: Comprehensive loss attributable to noncontrolling interests | (3,334) | (4,281) |
Comprehensive loss attributable to Definitive Healthcare Corp. | $ (9,969) | $ (12,938) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN TOTAL EQUITY (Unaudited) - USD ($) $ in Thousands | Total | Class A Units | Class B Units | Additional Paid In Capital | Accumulated Deficit | Accumulated Other Comprehensive Income | Noncontrolling Interest |
Beginning Balance at Dec. 31, 2022 | $ 1,481,945 | $ 105 | $ 970,207 | $ (25,062) | $ 3,668 | $ 533,027 | |
Beginning Balance (in shares) at Dec. 31, 2022 | 105,138,273 | 50,433,101 | |||||
Net loss | (15,972) | ||||||
Net loss | (12,063) | (12,063) | (3,909) | ||||
Other comprehensive Loss | (1,247) | (875) | (372) | ||||
Vested incentive units | (505) | 505 | |||||
Issuance of Class A Common Stock upon vesting of RSUs | 828 | (828) | |||||
Issuance of Class A Common Stock upon vesting of RSUs, shares | 380,676 | ||||||
Shares withheld related to net share settlement | (1,530) | (1,530) | |||||
Shares withheld related to net share settlement (in shares) | (127,829) | ||||||
Effect of LLC unit exchanges | (10,466) | $ 5 | 41,881 | (52,352) | |||
Effect of LLC unit exchanges, shares | 4,771,545 | (4,771,545) | |||||
Forfeited unvested incentive units | (34,623) | ||||||
Equity-based compensation | 11,128 | 7,811 | 3,317 | ||||
Ending Balance at Mar. 31, 2023 | 1,463,858 | $ 110 | 1,018,692 | (37,125) | 2,793 | 479,388 | |
Ending Balance (in shares) at Mar. 31, 2023 | 110,162,665 | 45,626,933 | |||||
Beginning Balance at Dec. 31, 2023 | 1,199,174 | $ 117 | 1,086,581 | (227,450) | 2,109 | 337,817 | |
Beginning Balance (in shares) at Dec. 31, 2023 | 116,562,252 | 39,762,700 | |||||
Net loss | (12,718) | ||||||
Net loss | (9,518) | (9,518) | (3,200) | ||||
Other comprehensive Loss | (585) | (451) | (134) | ||||
Vested incentive units | (784) | 784 | |||||
Issuance of Class A Common Stock upon vesting of RSUs | $ 2 | 2,532 | (2,534) | ||||
Issuance of Class A Common Stock upon vesting of RSUs, shares | 1,822,506 | ||||||
Shares withheld related to net share settlement | (5,806) | $ (1) | (5,805) | ||||
Shares withheld related to net share settlement (in shares) | (646,041) | ||||||
Effect of LLC unit exchanges | (616) | $ 0 | 1,276 | (1,892) | |||
Effect of LLC unit exchanges, shares | 51,308 | (51,308) | |||||
Forfeited unvested incentive units | (47,388) | ||||||
Equity-based compensation | 15,582 | 11,682 | 3,900 | ||||
Ending Balance at Mar. 31, 2024 | $ 1,195,031 | $ 118 | $ 1,095,482 | $ (236,968) | $ 1,658 | $ 334,741 | |
Ending Balance (in shares) at Mar. 31, 2024 | 117,790,025 | 39,664,004 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Cash flows provided by (used in) operating activities: | |||
Net loss | $ (12,718) | $ (15,972) | |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||
Depreciation and amortization | 554 | 513 | |
Amortization of intangible assets | 12,130 | 12,431 | |
Amortization of deferred contract costs | 3,692 | 2,860 | |
Equity-based compensation | 15,582 | 11,128 | |
Amortization of debt issuance costs | 176 | 176 | |
Provision for doubtful accounts receivable | 211 | 22 | |
Non-cash impairment charges related to office leases | 0 | 157 | |
Tax receivable agreement remeasurement | (2,267) | 3,552 | |
Changes in fair value of contingent consideration | 270 | 0 | |
Deferred income taxes | (847) | (773) | |
Changes in operating assets and liabilities: | |||
Accounts receivable | 2,999 | 6,966 | |
Prepaid expenses and other assets | (1,399) | (3,796) | |
Deferred contract costs | (2,699) | (4,021) | |
Contingent consideration | (602) | 0 | |
Accounts payable, accrued expenses and other liabilities | (8,231) | (3,855) | |
Deferred revenue | 9,738 | 5,569 | |
Net cash provided by operating activities | 16,589 | 14,957 | |
Cash flows (used in) provided by investing activities: | |||
Purchases of property, equipment and other assets | (266) | (1,338) | |
Purchases of short-term investments | (83,826) | (90,252) | |
Maturities of short-term investments | 73,588 | 58,120 | |
Cash paid for acquisitions, net of cash acquired | (13,530) | 0 | |
Net cash used in investing activities | (24,034) | (33,470) | |
Cash flows used in financing activities: | |||
Repayments of term loans | (3,438) | (1,719) | |
Taxes paid related to net share settlement of equity awards | (5,806) | (1,530) | |
Payment of contingent consideration | (1,000) | 0 | |
Payments under tax receivable agreement | (6,950) | (246) | |
Payments of equity offering issuance costs | 0 | (30) | |
Net cash used in financing activities | (17,194) | (3,525) | |
Net decrease in cash and cash equivalents | (24,639) | (22,038) | |
Effect of exchange rate changes on cash and cash equivalents | (343) | 65 | |
Cash and cash equivalents, beginning of period | 130,976 | 146,934 | $ 146,934 |
Cash and cash equivalents, end of period | 105,994 | 124,961 | $ 130,976 |
Supplemental cash flow disclosures: | |||
Interest | 3,642 | 3,475 | |
Income taxes | 0 | 79 | |
Acquisitions: | |||
Net assets acquired, net of cash acquired | 13,675 | 0 | |
Working capital adjustment receivable | (145) | 0 | |
Net cash paid for acquisitions | 13,530 | 0 | |
Supplemental disclosure of non-cash investing activities: | |||
Capital expenditures included in accrued expenses and other liabilities | $ 0 | $ 333 |
Organization and Basis of Prese
Organization and Basis of Presentation | 3 Months Ended |
Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Presentation | 1. Organization and Basis of Presentation Description of Business and Organization Definitive Healthcare Corp. (the “Company”) was formed on May 5, 2021 as a Delaware corporation to facilitate an initial public offering (“IPO”) and other related transactions to carry on the business of AIDH TopCo, LLC (“Definitive OpCo”). Following consummation of the Reorganization Transactions as described below, Definitive OpCo became a subsidiary of Definitive Healthcare Corp. The Company, through its operating subsidiaries, provides comprehensive and up-to-date hospital and healthcare-related information and insight across the entire healthcare continuum via a multi-tenant software-as-a-service (“SaaS”) platform which combines proprietary and public sources to deliver insights. The Company is headquartered in Framingham, Massachusetts. In connection with the IPO, the Company completed the following transactions (the “Reorganization Transactions”). Definitive OpCo entered into an amended and restated limited liability company agreement (the “Amended LLC Agreement”) pursuant to which members of Definitive OpCo prior to the IPO who continued to hold limited liability company interests (“LLC Units”) in Definitive OpCo following the consummation of the Reorganization Transactions acquired the right to require Definitive OpCo to redeem all or a portion of their LLC Units for newly issued shares of Class A Common Stock on a one-for-one basis. Until redeemed or exchanged, each LLC Unit is paired with one share of Definitive Healthcare Corp. Class B Common Stock. The total shares of Class B Common Stock outstanding is equal to the number of vested LLC Units outstanding, excluding LLC Units held by the Company. Unvested LLC Units are paired with Class B Common Stock, which are issued but do not have voting rights and are deemed not outstanding until the corresponding LLC Units have vested. Certain entities treated as corporations for U.S. federal income tax purposes that held LLC Units (individually, a “Blocker Company” and collectively, the “Blocker Companies”) each merged with a merger subsidiary of Definitive Healthcare Corp., and subsequently merged into Definitive Healthcare Corp. (the “Mergers”). The former shareholders of the Blocker Companies collectively received a number of shares of Class A Common Stock in the Mergers equal to the number of LLC Units held by the Blocker Companies prior to the Mergers. Following the Reorganization Transactions, Definitive Healthcare Corp. became a holding company, with its sole material asset being a controlling equity interest in Definitive OpCo. Definitive Healthcare Corp. operates and controls all of the business and affairs of Definitive OpCo, and through Definitive OpCo and its subsidiaries, conducts its business. Accordingly, Definitive Healthcare Corp. consolidates the financial results of Definitive OpCo, and reports the noncontrolling interests of unexchanged LLC Unit holders on its condensed consolidated financial statements. In connection with the Reorganization Transactions and the IPO, Definitive Healthcare Corp entered into a tax receivable agreement. See Note 15. Income Taxes . Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and in conformity with rules applicable to quarterly financial information. Any reference in these notes to applicable accounting guidance is meant to refer to the authoritative nongovernmental GAAP as found in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”). The condensed consolidated financial statements as of March 31, 2024 and for the three months ended March 31, 2024 and 2023 are unaudited and should be read in conjunction with the Company’s audited financial statements for the year ended December 31, 2023. All adjustments, consisting of normal recurring adjustments, except as otherwise noted, considered, in the opinion of management, necessary for a fair presentation of the unaudited interim condensed consolidated financial statements for these interim periods have been included. Refer to Note 2. Summary of Significant Accounting Policies in the notes to the consolidated financial statements in the 2023 Form 10-K for the Company’s significant accounting policies and estimates. Use of Estimates in the Preparation of Financial Statements The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting period. These estimates include, but are not limited to, revenue recognition, allowance for doubtful accounts, contingencies, valuations, useful lives of intangible assets acquired in business combinations, equity-based compensation, and income taxes. Actual results could differ from those estimates. Recently Issued Accounting Pronouncements Not Yet Adopted From time to time, new accounting pronouncements are issued by the FASB or other accounting standard setting bodies that the Company adopts as of the specified effective date. Unless otherwise discussed, we do not believe that the adoption of recently issued standards have had or may have a material impact on our condensed consolidated statements or disclosures. Restatement of Previously Issued Financial Statements As described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on February 28, 2024, the Company filed an Amendment No. 1 on Form 10-Q/A to amend the Quarterly Report on Form 10-Q for the three months ended March 31, 2023 with the SEC on August 14, 2023 to restate the Company’s unaudited condensed consolidated financial statements for the three months ended March 31, 2023 and 2022. The restated prior-year results are reflected in the condensed consolidated financial results disclosed within this Quarterly Report on Form 10-Q. |
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 31, 2024 | |
Business Combinations [Abstract] | |
Acquisitions | 2. Acquisitions Carevoyance On January 16, 2024, the Company completed the purchase of assets comprising the Carevoyance business line of H1 Insights, Inc. (“Carevoyance”), a product that helps medical technology (“MedTech”) customers to improve segmentation, targeting, and prospect engagement, for $ 13.7 million in cash consideration. The Carevoyance assets meet the definition of a business and accordingly, the Company has accounted for the Carevoyance transaction under the acquisition method. The assets acquired and liabilities assumed were recorded at their estimated fair values and the results of operations were included in the Company’s consolidated results prospectively from the acquisition date. The purchase price allocations for the Carevoyance acquisition are provisional and are based on the information that was available as of the acquisition date to estimate the fair values of assets acquired and liabilities assumed. The Company is gathering and reviewing additional information necessary to finalize the values assigned to the acquired assets and liabilities assumed, as well as acquired identified intangible assets and goodwill. Therefore, the provisional measurements of fair values reported as of March 31, 2024 are subject to change. The Company is expected to finalize the purchase price allocations as soon as practicable, but no later than one year from the acquisition date. Acquisition-date fair values of assets and liabilities pertaining to this business combination have been allocated as follows: (in thousands) Purchase price allocation: Preliminary Accounts receivable $ 605 Intangible assets 7,000 Deferred revenue ( 987 ) Total assets acquired and liabilities assumed 6,618 Goodwill 7,057 Purchase price $ 13,675 As a result of the Carevoyance acquisition, the Company recorded goodwill, developed technology, customer relationships, and tradename of $ 7.1 million, $ 6.8 million, $ 0.2 million, and $ 0.1 million, respectively, as of the acquisition date. The goodwill recognized includes the fair value of the assembled workforce, which is not recognized as an intangible asset separable from goodwill, and any expected synergies gained through the acquisition. The Company determined that the goodwill resulting from the acquisition is deductible for tax purposes. All goodwill has been allocated to the Company’s one reportable segment. The developed technology represents Carevoyance’s proprietary solutions that are designed to assist MedTech customers with improving segmentation, targeting, and prospect engagement. The Company used the income approach, specifically the multi-period excess earnings method, to determine the value of developed technology. Significant assumptions include an obsolescence factor, tax rate, and discount rate. The developed technology was valued at $ 6.8 million and is amortized using the economic value method, which represents the pattern of cash flows over the estimated 7-year life of this asset. Customer relationships represent the estimated fair value of the underlying relationships with the acquired entity’s business customers. The Company valued customer relationships using the income approach, specifically the multi-period excess earnings method. Significant assumptions include estimated attrition rates, discount rates, and tax rates reflecting the different risk profiles of the asset depending upon the acquisition. The value assigned to customer relationships is $ 0.2 million and is amortized using the straight-line method over the estimated remaining useful life of 5 years . The tradename represents the estimated fair value of the registered trade name associated with the Carevoyance corporate brand. The Company estimated the fair value of the trademark using a relief from royalty method of the income approach. Significant assumptions include forecast of royalty rate, tax rate, and discount rate. The trademark was valued at $ 0.1 million and is amortized using the straight-line method over the estimated remaining useful life of 2 years . In total, intangible assets acquired in the Carevoyance acquisition are estimated to be amortized over a weighted average of 6.9 years. See Note 7. Goodwill and Intangible Assets for the estimated total intangible amortization expense during the next five years. In connection with the acquisition, the Company recognized acquisition related costs of $ 0.1 million which were recorded within t ransaction, integration, and restructuring expenses in the accompanying condensed consolidated statements of operations for the three months ended March 31, 2024. During the three months ended March 31, 2024, Carevoyance’s post-acquisition revenue and net loss on a standalone basis were not material. Populi, Inc. On July 21, 2023, the Company completed the acquisition of Populi, Inc. (“Populi”), a provider-focused data and analytics company that works with healthcare organizations to optimize physician relationships, reduce network leakage, and expand market share, for total estimated consideration of $ 54.1 million, consisting of approximately $ 46.4 million of cash paid at closing, $ 0.1 reimbursement from sellers for working capital adjustments, and up to $ 28.0 million of contingent consideration, with an initial estimated fair value of $ 7.8 million. The contingent consideration relates to earn-out payments that may be paid subject to meeting certain revenue metrics during calendar years 2024 and 2025. In addition to the purchase consideration and pursuant to holdback agreements with certain key Populi employees, the Company agreed to pay $ 4.8 million to certain key Populi employees in quarterly installments beginning on December 31, 2023, and continuing through September 30, 2025. The payout of the holdback is subject to continued employment, and therefore recognized as compensation expense over the requisite service period as a component of transaction, integration and restructuring expenses in the accompanying condensed consolidated statements of operations. The assets acquired and liabilities assumed were recorded at their estimated fair values and the results of operations were included in the Company’s consolidated results as of the acquisition date. The consideration transferred for the transaction is summarized as follows: (in thousands) Cash consideration paid at closing $ 46,446 Working capital adjustment ( 145 ) Contingent consideration 7,800 Purchase price $ 54,101 The contingent consideration is based on the achievement of certain revenue metrics during the two-year period following the acquisition date, with potential earn-out payouts ranging from $ 0 to $ 28.0 million. The Company estimated the fair value of the contingent consideration to be $ 7.8 million as of July 21, 2023, based on the estimated achievement of the revenue metrics and time to payment. The contingent consideration was recorded in Other liabilities in the accompanying condensed consolidated balance sheet as of March 31, 2024. Refer to Note 11. Fair Value Measurements . The Company finalized the purchase price allocations of the Populi acquisition during the three months ended March 31, 2024. Acquisition-date fair values of assets and liabilities pertaining to this business combination have been allocated as follows: (in thousands) Purchase price allocation: Preliminary, as originally reported Measurement period adjustments As adjusted Cash $ 1,423 $ — $ 1,423 Accounts receivable 2,662 — 2,662 Prepaid expenses and other assets 153 — 153 Property and equipment 42 — 42 Intangible assets 22,830 ( 500 ) 22,330 Accounts payable and accrued expenses ( 3,316 ) — ( 3,316 ) Deferred revenue ( 4,010 ) — ( 4,010 ) Other liabilities ( 2,354 ) ( 576 ) ( 2,930 ) Total assets acquired and liabilities assumed 17,430 ( 1,076 ) 16,354 Goodwill 36,652 1,095 37,747 Purchase price $ 54,082 $ 19 $ 54,101 As a result of the Populi acquisition, the Company recorded goodwill, developed software, customer relationships, and tradename of $ 37.7 million, $ 21.4 million, $ 0.8 million, and $ 0.1 million, respectively, as of the acquisition date. The goodwill recognized includes the fair value of the assembled workforce, which is not recognized as an intangible asset separable from goodwill, and any expected synergies gained through the acquisition. The Company determined that the goodwill resulting from the acquisition is not deductible for tax purposes. All goodwill has been allocated to the Company’s one reportable segment. The developed software represents Populi’s proprietary solutions that are designed to assist organizations in optimizing physician relationships, reducing network leakage, and expanding market share. The Company used the income approach, specifically the multi-period excess earnings method, to determine the value of developed software. Significant assumptions include an obsolescence factor, tax rate, and discount rate. The developed software was valued at $ 21.4 million and is amortized using the economic value method, which represents the pattern of cash flows over the estimated 7-year life of this asset. Customer relationships represent the estimated fair value of the underlying relationships with the acquired entity’s business customers. The Company valued customer relationships using the income approach, specifically the multi-period excess earnings method. Significant assumptions include estimated attrition rates, discount rates, and tax rates reflecting the different risk profiles of the asset depending upon the acquisition. The value assigned to customer relationships is $0.8 million and is amortized using the straight-line method over the estimated remaining useful life of 15 years . The tradename represents the estimated fair value of the registered trade name associated with the Populi corporate brand. The Company estimated the fair value of the trademark using a relief from royalty method of the income approach. Significant assumptions include forecast of royalty rate, tax rate, and discount rate. The trademark was valued at $ 0.1 million and is amortized using the straight-line method over the estimated remaining useful life of 1 year . In total, intangible assets acquired in the Populi acquisition are estimated to be amortized over a weighted average of 7.2 years. See Note 7. Goodwill and Intangible Assets for the estimated total intangible amortization expense during the next five years. In connection with the acquisition, the Company recognized acquisition related costs of $ 0.7 million which were recorded within t ransaction, integration, and restructuring expenses in the accompanying condensed consolidated statements of operations for the three months ended March 31, 2024. Unaudited Pro Forma Supplementary Data as if the Populi acquisition had occurred on January 1, 2023: Three Months Ended March 31, 2023 (in thousands) Revenue $ 60,675 Net loss ( 18,451 ) These pro forma results have been prepared for comparative purposes only and do not purport to be indicative of the operating results of the Company that would have been achieved had the acquisition actually taken place on January 1, 2023. In addition, these results are not intended to be a projection of future results and do not reflect events that may occur after the acquisition, including but not limited to revenue enhancements, cost savings or operating synergies that the combined Company may achieve as a result of the acquisition . |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | 3. Revenue The Company disaggregates revenue from its arrangements with customers by type of service as it believes these categories best depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. The following table represents a disaggregation of revenue from arrangements with customers for the three months ended March 31, 2024 and 2023, respectively: Three Months Ended March 31, (in thousands) 2024 2023 Subscription services $ 61,752 $ 58,517 Professional services 1,728 684 Total revenue $ 63,480 $ 59,201 The opening and closing balances of the Company’s receivables, deferred contract costs and contract liabilities from contracts with customers are as follows: (in thousands) March 31, December 31, Accounts receivable, net $ 56,655 $ 59,249 Deferred contract costs, current portion 13,598 13,490 Deferred contract costs, long-term 16,219 17,320 Deferred revenues 108,087 97,386 Deferred Contract Costs A summary of the activity impacting the deferred contract costs for the three months ended March 31, 2024 and the year ended December 31, 2023 is presented below: (in thousands) Three Months Ended March 31, 2024 Twelve Months Ended December 31, 2023 Balance at beginning of period $ 30,810 $ 24,983 Costs amortized ( 3,692 ) ( 12,963 ) Additional amounts deferred 2,699 18,790 Balance at end of period 29,817 30,810 Classified as: Current 13,598 13,490 Non-current 16,219 17,320 Total deferred contract costs (deferred commissions) $ 29,817 $ 30,810 Contract Liabilities A summary of the activity impacting deferred revenue balances during the three months ended March 31, 2024 and for the year ended December 31, 2023 is presented below: (in thousands) Three Months Ended March 31, 2024 Twelve Months Ended December 31, 2023 Balance at beginning of period $ 97,386 $ 99,928 Revenue recognized ( 63,480 ) ( 251,415 ) Additional amounts deferred 74,181 248,873 Balance at end of period $ 108,087 $ 97,386 Remaining Performance Obligations Transaction price allocated to remaining performance obligations represents contracted revenue that has not yet been recognized, which includes unearned revenue and unbilled amounts that will be invoiced and recognized as revenue in future periods. Transaction price allocated to remaining performance obligations is influenced by several factors, including seasonality, the timing of renewals, and disparate contract terms. The Company’s backlog represents installment billings for periods beyond the current billing cycle. The majority of the Company’s noncurrent remaining performance obligations will be recognized in the next 13 to 36 months. The remaining performance obligations consisted of the following: (in thousands) March 31, December 31, Current $ 182,066 $ 187,331 Non-current 88,282 89,636 Total $ 270,348 $ 276,967 |
Short-term Investments
Short-term Investments | 3 Months Ended |
Mar. 31, 2024 | |
Investments, Debt and Equity Securities [Abstract] | |
Short-term Investments | 4. Short-term Investments Short-term investments classified as available-for-sale consisted of the following: March 31, 2024 (in thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Short-term investments: US Treasuries $ 54,542 $ 2 $ ( 59 ) $ 54,485 Commercial paper 105,519 18 ( 65 ) 105,472 Certificates of deposit 29,210 14 ( 7 ) 29,217 Total short-term investments $ 189,271 $ 34 $ ( 131 ) $ 189,174 December 31, 2023 (in thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Short-term investments: US Treasuries $ 62,486 $ 20 $ ( 45 ) $ 62,461 Corporate Bonds 2,314 10 — 2,324 Commercial Paper 94,269 85 ( 18 ) 94,336 Certificates of Deposit 17,954 19 ( 2 ) 17,971 Total short-term investments $ 177,023 $ 134 $ ( 65 ) $ 177,092 All short-term investments had stated maturity dates of less than one year. Included in the amortized cost as of March 31, 2024 and December 31, 2023 is net accumulated accretion of $ 2.2 million and $ 2.8 million, respectively. Interest accretion on short-term investments was $ 2.0 million and $ 1.8 million during the three months ended March 31, 2024 and 2023 , respectively. |
Accounts Receivable
Accounts Receivable | 3 Months Ended |
Mar. 31, 2024 | |
Receivables [Abstract] | |
Accounts Receivable | 5. Accounts Receivable Accounts receivable consisted of the following: (in thousands) March 31, December 31, Accounts receivable $ 58,193 $ 60,206 Unbilled receivable 602 1,346 58,795 61,552 Less: allowance for credit losses ( 2,140 ) ( 2,303 ) Accounts receivable, net $ 56,655 $ 59,249 |
Property and Equipment
Property and Equipment | 3 Months Ended |
Mar. 31, 2024 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | 6. Property and Equipment Property and equipment consisted of the following: (in thousands) March 31, December 31, Computers and software $ 7,106 $ 6,921 Furniture and equipment 1,152 1,172 Leasehold improvements 2,330 2,338 10,588 10,431 Less: accumulated depreciation and amortization ( 6,488 ) ( 5,960 ) Property and equipment, net $ 4,100 $ 4,471 Depreciation and amortization expense associated with property and equipment was $ 0.6 million and $ 0.5 million for the three months ended March 31, 2024 and 2023 , respectively. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Mar. 31, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | 7. Goodwill and Intangible Assets The carrying amounts of goodwill and intangible assets, as of March 31, 2024 and December 31, 2023, consisted of the following: March 31, 2024 (in thousands) Gross Accumulated Net Carrying Finite-lived intangible assets: Customer relationships $ 410,390 $ ( 171,776 ) $ 238,614 Developed technologies 85,116 ( 36,146 ) 48,970 Tradenames 36,093 ( 9,935 ) 26,158 Database 50,209 ( 45,979 ) 4,230 Total finite-lived intangible assets 581,808 ( 263,836 ) 317,972 Goodwill 1,082,137 — 1,082,137 Total goodwill and intangible assets $ 1,663,945 $ ( 263,836 ) $ 1,400,109 December 31, 2023 (in thousands) Gross Accumulated Net Carrying Finite-lived intangible assets: Customer relationships $ 410,210 $ ( 163,586 ) $ 246,624 Developed technologies 78,434 ( 33,769 ) 44,665 Tradenames 36,062 ( 9,379 ) 26,683 Database 50,221 ( 45,072 ) 5,149 Total finite-lived intangible assets 574,927 ( 251,806 ) 323,121 Goodwill 1,075,080 — 1,075,080 Total goodwill and intangible assets $ 1,650,007 $ ( 251,806 ) $ 1,398,201 Amortization expense associated with finite-lived intangible assets wa s $ 12.1 m illion and $ 12.4 million for the three months ended March 31, 2024 and 2023 , respectively, of which $ 3.3 million and $ 3.4 million was included in cost of revenue for each respective period. Estimated total intangible amortization expense during the next five years and thereafter is as follows: (in thousands) 2024, excluding the three months ended March 31, 2024 $ 36,661 2025 47,013 2026 40,838 2027 34,942 2028 30,778 Thereafter 127,740 Total $ 317,972 The Company determined it had one reporting unit. Goodwill consisted of the following: (in thousands) Three Months Ended Twelve Months Ended Goodwill - beginning of period $ 1,075,080 $ 1,324,733 Goodwill acquired during period 7,057 37,747 Goodwill impairment loss — ( 287,400 ) Goodwill - end of period $ 1,082,137 $ 1,075,080 |
Accrued Expenses and Other Liab
Accrued Expenses and Other Liabilities | 3 Months Ended |
Mar. 31, 2024 | |
Accounts Payable and Accrued Liabilities, Current [Abstract] | |
Accrued Expenses and Other Liabilities | 8. Accrued Expenses and Other Liabilities Accrued expenses and other liabilities consisted of the following: (in thousands) March 31, December 31, Payroll and payroll-related $ 8,023 $ 12,805 Tax receivable agreement, current portion 13,145 20,095 Contingent consideration, current — 1,602 Sales, franchise, and other taxes 7,028 9,526 Other 7,754 7,501 Accrued expenses and other liabilities $ 35,950 $ 51,529 On January 3, 2024, the Company committed to a restructuring plan (the “2024 Restructuring Plan”) intended to reduce operating costs, improve operating margins, and continue advancing the Company’s ongoing commitment to profitable growth. The 2024 Restructuring Plan provided for a reduction of the Company’s current workforce by approximately 150 people. During the three months ended March 31, 2024, the Company incurred restructuring and related charges of $ 7.2 million, consisting of severance payments, employee benefits and related cash expenses. As of March 31, 2024 , $ 2.0 million of severance and separation benefits is included in accrued expenses and other liabilities in the condensed consolidated balance sheets and the Company expects these payments will be made over the next nine months. The Company expects to incur additional restructuring and related charges associated with the 2024 Restructuring Plan of $ 0.5 million during the second quarter of 2024. |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Mar. 31, 2024 | |
Long-Term Debt, Unclassified [Abstract] | |
Long-Term Debt | 9. Long-Term Debt Long-term debt consisted of the following as of March 31, 2024 and December 31, 2023, respectively: March 31, 2024 (in thousands) Principal Unamortized debt Total debt, 2021 Term Loan $ 254,375 $ ( 1,358 ) $ 253,017 Less: current portion of long-term debt 13,750 Long-term debt $ 239,267 December 31, 2023 (in thousands) Principal Unamortized debt Total debt, 2021 Term Loan $ 257,813 $ ( 1,496 ) $ 256,317 Less: current portion of long-term debt 13,750 Long-term debt $ 242,567 During the three months ended March 31, 2024, the Company repaid $ 3.4 million in outstanding principal of the 2021 Term Loan (as defined below). 2021 Credit Agreement In September 2021, DH Holdings entered into a credit agreement (the “2021 Credit Agreement” ) with Bank of America, N.A., as administrative agent, the other lenders party thereto and the other parties specified therein. The 2021 Credit Agreement provides for (i) a $ 275.0 million term loan A facility (the “2021 Term Loan” ) and (ii) a $ 75.0 million revolving credit facility (the “2021 Revolving Line of Credit” and, together with the 2021 Term Loan, collectively, the “2021 Credit Facilities” ), the proceeds of which were used to repay a portion of the indebtedness outstanding under a previous credit agreement. Both the 2021 Term Loan and the 2021 Revolving Line of Credit mature on September 17, 2026 . The 2021 Credit Facilities include customary affirmative, negative, and financial covenants. The 2021 Credit Facilities are guaranteed by all of DH Holdings ’ wholly owned domestic restricted subsidiaries and AIDH Buyer, LLC, a Delaware limited liability company and the direct parent company of DH Holdings, in each case, subject to customary exceptions, and are secured by a lien on substantially all of the assets of DH Holdings and the guarantors, including a pledge of the equity of DH Holdings, in each case, subject to customary exceptions. The 2021 Term Loan is subject to annual amortization of principal, payable in equal quarterly installments on the last day of each fiscal quarter, commencing on December 31, 2021 (the “Initial Amortization Date” ), equal to approximately 2.5% per annum of the principal amount of the term loans in the first year and second year after the Initial Amortization Date and approximately 5.0% per annum of the principal amount of the term loans in the third year, fourth year, and fifth year after the Initial Amortization Date. A balloon payment of approximately $ 220.0 million will be due at the maturity of the 2021 Term Loan. There wa s $ 254.4 million outstanding on the 2021 Term Loan at March 31, 2024. DH Holdings is required to pay the lenders under the 2021 Credit Agreement an unused commitment fee of between 0.25 % and 0.30 % per annum on the undrawn commitments under the 2021 Revolving Line of Credit, depending on the total net leverage ratio, quarterly in arrears. The expense is included in interest expense in the statements of operations. There was no outstanding balance on the 2021 Revolving Line of Credit at March 31, 2024 . In September 2023, the lessor of the Company’s corporate headquarters transitioned from one entity to another. As a result, in December 2023, in lieu of a security deposit, the Company provided a standby letter of credit of $ 0.6 million, which reduced the amount available under our revolving credit facility to $ 74.4 million as of March 31, 2024. For both the 2021 Term Loan and 2021 Revolving Line of Credit, DH Holdings may elect from several interest rate options based on the LIBO Rate or the Base Rate plus an applicable margin. The applicable margin is based on the total leverage ratio beginning in the fiscal year ended December 31, 2022. As of March 31, 2024 , the effective interest rate was 7.18 %. On October 31, 2022, the Company amended the 2021 Credit Agreement to replace the LIBO rate with Term Secured Overnight Financing Rate (“SOFR”) plus an applicable rate. In connection with the 2021 Credit Agreement, the Company capitalized financing costs totaling $ 3.5 million, $ 2.8 million for the 2021 Term Loan facility and $ 0.8 million for the 2021 Revolving Line of Credit. The financing costs associated with the 2021 Term Loan facility are recorded as a contra-debt balance in Term loan, net of current portion in the condensed consolidated balance sheets and are amortized over the remaining life of the loan using the effective interest method. The financing costs associated with the 2021 Revolving Line of Credit are recorded in Other assets in the condensed consolidated balance sheet are amortized over the life of the arrangement. At March 31, 2024 and December 31, 2023 , the unamortized financing costs were $ 0.4 million. |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 3 Months Ended |
Mar. 31, 2024 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities | 10. Derivative Instruments and Hedging Activities Risk Management Objective of Using Derivatives The Company is exposed to risks from changes in interest rates related to the 2021 Term Loan (See Note 9. Long-Term Debt ). The Company uses derivative financial instruments, specifically, interest rate swap contracts, in order to manage its exposure to interest rate movements. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. Our primary objective in holding derivatives is to reduce the volatility of cash flows associated with changes in interest rates. The Company does not enter into derivative transactions for speculative or trading purposes. Cash Flow Hedges of Interest Rate Risk The Company entered into two interest rate swap agreements, effective on March 31, 2022. Until October 31, 2022, the counterparties to each of the agreements paid the Company interest at a floating rate on the notional amounts based on the one-month USD-LIBO swap rate. On October 31, 2022, in conjunction with the amendment to the 2021 Credit Agreement (See Note 9. Long-Term Debt ), the Company amended the two interest rate swap agreements to replace the LIBO rate with Term SOFR. As a result, subsequent to October 31, 2022, the counterparties paid and will continue to pay interest at a floating rate based on Term SOFR. As of March 31, 2024 , the two outstanding interest rate swap agreements each had a notional value of $ 63.6 million with fixed interest rate s of 1.90650 % and 1.90900 %. Inter est payments under the swaps are made monthly on a net settlement basis. The Company has not recorded any amounts due to ineffectiveness for the period ended March 31, 2024 . The notional value of each interest rate swap agreement is expected to match the corresponding principal amount of a portion of our borrowings under the 2021 Term Loan. The swap agreements mature on March 31, 2025 . The derivative interest rate swaps are designated and qualify as cash flow hedges. Consequently, the change in the estimated fair value of the effective portion of the derivative is recognized in accumulated other comprehensive income (“AOCI”) on our consolidated balance sheets and reclassified to interest expense, net, when the underlying transaction has an impact on earnings. The Company expects to recognize approximately $ 3.7 million of net pre-tax gains from accumulated other comprehensive income as a reduction of interest expense in the next twelve months associated with its interest rate swaps. The Company recognizes derivative instruments and hedging activities on a gross basis as either assets or liabilities on the Company’s consolidated balance sheets and measures them at fair value. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the earnings effect of the hedged forecasted transactions in a cash flow hedge. To receive hedge accounting treatment, all hedging relationships are formally documented at the inception of the hedge, and the hedges must be highly effective in offsetting changes to future cash flows on hedged transactions. The fair values of the interest rate swaps and their respective locations in our condensed consolidated balance sheets at March 31, 2024 and December 31, 2023 were as follows: (in thousands) Description Balance Sheet Location March 31, 2024 December 31, 2023 Short-term derivative asset Prepaid expenses and other assets $ 3,694 $ 3,426 Long-term derivative asset Other assets — 509 |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2024 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 11. Fair Value Measurements ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), defines fair value as the price that would be received for an asset, or paid to transfer a liability, in an orderly transaction between market participants on the measurement date, and establishes a three-level fair value hierarchy that prioritizes the inputs used to measure fair value as follows: Level 1 – Observable inputs that reflect unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 – Other inputs that are directly or indirectly observable in the marketplace. Level 3 – Unobservable inputs that are supported by little or no market activity, including the Company’s own assumptions in determining fair value. The Company’s financial assets and liabilities subject to the three-level fair value hierarchy consist principally of cash and equivalents, short-term investments, accounts receivable, accounts payable, long-term and short-term debt, and contingent consideration payable. The estimated fair value of cash included in cash and cash equivalents, accounts receivable, and accounts payable approximates their carrying value due to due to their short maturities (less than 12 months). Debt The Company’s short- and long-term debt are recorded at their carrying values in the condensed consolidated balance sheets, which may differ from their respective fair values. The carrying values and estimated fair values of the Company’s short- and long-term debt approximate their carrying values as of March 31, 2024 and December 31, 2023, based on interest rates currently available to the Company for similar borrowings. Money market funds (included in cash and cash equivalents) Money market funds are recorded at fair value using quoted market prices in active markets and are classified as Level 1 in the fair value hierarchy. Short-term investments The Company estimates the fair values of investments in U.S. treasuries, agency bond securities, commercial paper, and certificates of deposit using level 2 inputs, taking into consideration valuations obtained from a third-party pricing service. The pricing services utilize industry standard valuation models, including both income and market-based approaches, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. These inputs include reported trades of and broker/dealer quotes on the same or similar securities, issuer credit spreads, market yield curves, benchmark securities, prepayment/default projections based on historical data, and other observable inputs. Derivative financial instruments Currently, the Company uses interest rate swaps to manage interest rate risk. The valuation of these instruments is determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves, and implied volatilities. To comply with the provisions of ASC 820, the Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by the Company and its counterparties. The Company has determined that the significance of the impact of the credit valuation adjustments made to its derivative contracts, which determination was based on the fair value of each individual contract, was not significant to the overall valuation. As a result, all of its derivatives held as of March 31, 2024 and December 31, 2023 were classified as Level 2 in the fair value hierarchy. Contingent consideration The deferred consideration resulting from the acquisition of Populi in the third quarter of 2023, which is subject to meeting certain revenue metrics during calendar years 2024 and 2025, is measured at fair value on a recurring basis. The fair value was estimated based on the present value of the amount expected to be paid at the end of the measurement period. At March 31, 2024, the fair value of the contingent consideration associated with this acquisition was estimated to be $ 9.0 million and was included in other long-term liabilities on the condensed consolidated balance sheets. The contingent consideration that resulted from the earnout associated with the acquisition of Analytical Wizards Inc. in February 2022, which was included in accrued expenses and other liabilities in the condensed consolidated balance sheets as of December 31, 2023, was paid during the three months ended March 31, 2024. Earnout liabilities are classified within Level 3 in the fair value hierarchy because the methodology used to develop the estimated fair value includes significant unobservable inputs reflecting management’s own assumptions. The table below presents a reconciliation of earnout liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3): (in thousands) March 31, December 31, Balance at beginning of period $ 10,352 $ 2,250 Additions — 7,800 Net change in fair value and other adjustments 270 302 Payments ( 1,602 ) — Balance at end of period $ 9,020 $ 10,352 Non-recurring fair value measurements Certain assets and liabilities, including property, plant, and equipment, lease right-of-use assets, goodwill, and other intangible assets, are measured at fair value on a non-recurring basis. These assets are remeasured when the derived fair value is below the carrying value on the Company’s condensed consolidated balance sheet. For these assets, the Company does not periodically adjust carrying value to fair value except in the event of impairment. When impairment has occurred, the Company measures the required charges and adjusts the carrying value as discussed in Note 2. Summary of Significant Accounting Policies of the notes to the consolidated financial statements in the Company’s 2023 Form 10-K. At March 31, 2024 and December 31, 2023, assets and liabilities measured at fair value on a recurring basis were as follows: March 31, 2024 (in thousands) Total Level 1 Level 2 Level 3 Assets: Cash and cash equivalents: Money market funds $ 24,044 $ 24,044 $ — $ — Short-term investments: U.S. Treasuries 54,485 — 54,485 — Commercial paper 105,473 — 105,473 — Certificates of deposit 29,216 — 29,216 — Prepaid expenses and other assets: Interest rate swap contracts 3,694 — 3,694 — Liabilities: Contingent consideration 9,020 — — 9,020 December 31, 2023 (in thousands) Total Level 1 Level 2 Level 3 Assets: Cash and cash equivalents: Money market funds $ 87,869 $ 87,869 $ — $ — Commercial paper (maturities less than 90 days) 4,227 — 4,227 — Certificates of deposit (maturities less than 90 days) 1,000 — 1,000 — Short-term investments: U.S. treasuries 62,461 — 62,461 — Corporate bonds 2,324 — 2,324 — Commercial paper 94,336 — 94,336 — Certificates of deposit 17,971 — 17,971 — Prepaid expenses and other assets: Interest rate swap contracts 3,426 — 3,426 — Other assets: Interest rate swap contracts 509 — 509 — Liabilities: Contingent consideration 10,352 — — 10,352 At March 31, 2024 and December 31, 2023 , except for the contingent consideration noted above, the estimated fair values of all of the Company’s financial assets and liabilities subject to the three-level fair value hierarchy approximated their carrying values due to their short-term maturities (less than 12 months). |
Noncontrolling Interest
Noncontrolling Interest | 3 Months Ended |
Mar. 31, 2024 | |
Noncontrolling Interest [Abstract] | |
Noncontrolling Interest | 12. Noncontrolling Interest Definitive Healthcare Corp. operates and controls all of the business and affairs of Definitive OpCo, and through Definitive OpCo and its subsidiaries, conducts its business. Accordingly, Definitive Healthcare Corp. consolidates the financial results of Definitive OpCo, and reports the noncontrolling interests of its consolidated subsidiaries on its condensed consolidated financial statements based on the LLC Units held by Continuing Pre-IPO LLC Members other than Definitive Healthcare Corp. Changes in Definitive Healthcare Corp.’s ownership interest in its consolidated subsidiaries are accounted for as equity transactions. As such, future redemptions or direct exchanges of LLC Units by such Continuing Pre-IPO LLC Members will result in a change in ownership and reduce or increase the amount recorded as noncontrolling interests and increase or decrease additional paid-in capital in the Company’s Condensed Consolidated Balance Sheets. During the three months ended March 31, 2024, 51,308 LLC Units held by Continuing Pre-IPO LLC Members were exchanged for shares of Class A Common Stock of Definitive Healthcare Corp. pursuant to the terms of the Amended LLC Agreement. In addition, 1,822,506 restricted stock units vested and 646,041 shares were withheld to cover withholding tax obligations, resulting in the net issuance of 1,176,465 shares of Class A Common Stock of Definitive Healthcare Corp., for which LLC Units were issued on a one-for-one basis pursuant to the Definitive OpCo second amended and restated limited liability company agreement entered into in connection with the IPO. As of March 31, 2024 and December 31, 2023, Definitive Healthcare Corp. held ownership interests in Definitive OpCo of 75.0 % and 74.9 %, respectively, and noncontrolling interests of 25.0 % and 25.1 %, respectively . |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | 3 Months Ended |
Mar. 31, 2024 | |
Stockholders' Equity Note [Abstract] | |
Accumulated Other Comprehensive Income | 13. Accumulated Other Comprehensive Income The following tables summarize the changes in accumulated balances of other comprehensive income for the three months ended March 31, 2024 and 2023, respectively. Three Months Ended March 31, 2024 (in thousands) Unrealized Gain (Loss) on Cash Flow Hedges Unrealized Gain (Loss) on Investments Foreign Currency Translation Adjustments Total Beginning balance $ 2,387 $ 96 $ ( 374 ) $ 2,109 Other comprehensive income (loss) before reclassifications 658 ( 136 ) ( 136 ) 386 Amounts reclassified from AOCI ( 837 ) — — ( 837 ) Ending balance $ 2,208 $ ( 40 ) $ ( 510 ) $ 1,658 Three months ended March 31, 2023 (in thousands) Unrealized Gain (Loss) on Cash Flow Hedges Unrealized (Loss) Gain on Investments Foreign Currency Translation Adjustments Total Beginning balance $ 4,307 $ ( 135 ) $ ( 504 ) $ 3,668 Other comprehensive (loss) income before reclassifications ( 344 ) 62 14 ( 268 ) Amounts reclassified from AOCI ( 607 ) — — ( 607 ) Ending balance $ 3,356 $ ( 73 ) $ ( 490 ) $ 2,793 |
Equity-Based Compensation
Equity-Based Compensation | 3 Months Ended |
Mar. 31, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Equity-Based Compensation | 14. Equity-Based Compensation The Company recognizes equity-based compensation expense associated with awards granted under equity incentive plans. Equity-based compensation expense is allocated to all departments based on the recipients of the compensation. A summary of the expense by line item in the condensed consolidated statements of operations for the three months ended March 31, 2024 and 2023, respectively, is provided in the following table. Three Months Ended March 31, (in thousands) 2024 2023 Cost of revenue $ 271 $ 258 Sales and marketing 2,271 2,649 Product development 2,761 3,011 General and administrative 10,279 5,210 Total compensation expense $ 15,582 $ 11,128 In connection with the 2024 Restructuring Plan announced in the three months ended March 31, 2024, along with the departure of an executive-level employee, the Company accelerated the vesting of 596,476 previously unvested time-based RSUs (“RSUs”), 49,265 previously unvested performance-based RSUs (“PSUs”), and 61,240 LLC Units, which resulted in an incremental stock-based compensation charge resulting from the modifications of approximately $ 6.9 million. Remaining unvested shares held by the award holders were forfeited upon separation. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2024 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 15. Income Taxes During the three months ended March 31, 2024, management performed an assessment of the recoverability of deferred tax assets. Management determined, based on the accounting standards applicable to such assessment, that there was sufficient negative evidence as a result of the Company’s scheduled reversal of deferred tax liabilities and cumulative losses to conclude it was more likely than not that its deferred tax assets would not be realized and has recorded a valuation allowance against its deferred tax assets that are not more likely than not to be realized. As of March 31, 2024 and December 31, 2023 , the Company has recorded net deferred tax liabilities of $ 66.5 million and $ 67.2 million, respectively. The Company's effective tax rate was 5.8 % and 4.3 % for the three months ended March 31, 2024 and 2023 , respectively. The Company’s effective tax rate differs from the statutory tax rate of 21 % due to the valuation allowance recorded, foreign tax rates that differ from the U.S. statutory tax rate, and partnership income that is not taxed. The income of the Company’s subsidiaries is generally subject to corporate-level taxation, and certain of these subsidiaries have a valuation allowance whereas others do not. The effective tax rates for each period generally arise from the tax provisions for Company subsidiaries without valuation allowances, and the impact of any revaluation of deferred taxes arising from changes in the states effective tax rates. Such revaluations are caused by changes in state apportionment factors arising from fluctuations in the mix of sales, property and payroll by state, certain state tax rate changes and certain state tax incentives. Tax Receivable Agreement Pursuant to the Company’s election under Section 754 of the Internal Revenue Code (the “Code”), the Company expects to obtain an increase in its share of the tax basis in the net assets of Definitive OpCo when LLC Interests are redeemed or exchanged by other members. The Company intends to treat any redemptions and exchanges of LLC Interest as direct purchases of LLC Interests for U.S. federal income tax purposes. These increases in tax basis may reduce the amounts that would otherwise be paid in the future to various tax authorities. They may also decrease gains (or increase losses) on future dispositions of certain capital assets to the extent tax basis is allocated to those capital assets. In connection with the IPO, the Company entered into a Tax Receivable Agreement (“TRA”) among Definitive Healthcare Corp., Definitive OpCo, and the TRA Parties and has recorded a liability under the TRA of $ 138.3 milli on and $ 147.1 million as of March 31, 2024 and December 31, 2023, respectively. During the three months ended March 31, 2024 and 2023 , the Company recognized a TRA remeasurement gain of $ 2.3 million and a loss of $ 3.6 million, respectively, within other income (expense), net in the Company’s condensed consolidated statements of operations. Under the TRA, the Company generally will be required to pay to the TRA Parties 85 % of the amount of cash savings, if any, in U.S. federal, state, or local tax that the Company actually realizes directly or indirectly (or are deemed to realize in certain circumstances) as a result of (i) certain tax basis adjustments resulting from (a) acquisitions by the Company of LLC Units from pre-IPO holders in connection with the IPO, and (b) subsequent redemptions or exchanges of LLC Units by holders for Class A Common Stock or other consideration, (ii) certain tax attributes acquired by the Company from the Blocker Companies in the Reorganization Transactions, and (iii) certain payments made under the TRA. The Company expects to benefit from the remaining 15 % of any tax benefits that it may actually realize. To the extent that the Company is unable to timely make payments under the TRA for any reason, such payments generally will be deferred and will accrue interest until paid. |
Loss Per Share
Loss Per Share | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
Loss Per Share | 16. Loss Per Share Basic net loss per share of Class A Common Stock is computed by dividing net income attributable to Definitive Healthcare Corp. by the weighted-average number of shares of Class A Common Stock outstanding during the period, excluding unvested equity awards and subsidiary member units not exchanged. Diluted earnings per share of Class A Common Stock is calculated by dividing net income attributable to Definitive Healthcare Corp., adjusted for the assumed exchange of all potentially dilutive securities by the weighted-average number of shares of Class A Common Stock outstanding. The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted net loss per share of Class A Common Stock for the three months ended March 31, 2024 and 2023 . Three Months Ended March 31, (in thousands) 2024 2023 Numerator: Net loss $ ( 12,718 ) $ ( 15,972 ) Less: Net loss attributable to noncontrolling interests ( 3,200 ) ( 3,909 ) Net loss attributable to Definitive Healthcare Corp. $ ( 9,518 ) $ ( 12,063 ) The following table sets forth the computation of basic and diluted net loss per share of Class A Common Stock for the three months ended March 31, 2024 and 2023 (per share amounts unaudited). Three Months Ended March 31, (in thousands, except number of shares and per share amounts) 2024 2023 Basic net loss per share attributable to common stockholders Numerator: Allocation of net loss attributable to Definitive Healthcare Corp. $ ( 9,518 ) $ ( 12,063 ) Denominator: Weighted average number of shares of Class A Common Stock outstanding 117,433,520 108,234,043 Net loss per share, basic and diluted $ ( 0.08 ) $ ( 0.11 ) Shares of the Company’s Class B Common Stock do not participate in the earnings or losses of Definitive Healthcare Corp. and are therefore not participating securities. As such, separate presentation of basic and diluted earnings per share of Class B Common Stock under the two-class method has not been presented. The following table presents potentially dilutive securities excluded from the computation of diluted net loss per share for the period presented because their effect would have been anti-dilutive: Three Months Ended March 31, 2024 2023 Definitive OpCo LLC Units (vested and unvested) 39,664,004 45,626,933 Restricted Stock Units 7,523,924 6,211,625 |
Related Parties
Related Parties | 3 Months Ended |
Mar. 31, 2024 | |
Related Party Transactions [Abstract] | |
Related Parties | 17. Related Parties The Company has engaged in revenue transactions within the ordinary course of business with entities affiliated with its Sponsors and with members of the Company’s board of directors. During each of the three months ended March 31, 2024 and 2023 the Company recorded revenue from related parties of $ 0.4 million . Receivables for related party revenue transactions amounted to $ 0.1 million and $ 0.9 million at March 31, 2024 and December 31, 2023 , respectively. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2024 | |
Subsequent Events [Abstract] | |
Subsequent Events | 18. Subsequent Events In May 2024, the Company’s Board of Directors authorized a stock repurchase program of up to $ 20.0 million of its Class A Common Stock, which expires on December 31, 2024. Repurchases may be effected, from time to time, either on the open market (including pre-set trading plans), in privately negotiated transactions, and other transactions in accordance with applicable securities laws. The timing and the amount of any repurchased Class A Common Stock will be determined by the Company’s management based on its evaluation of market conditions and other factors. The repurchase program will be funded using the Company’s working capital. Any repurchased shares of Class A Common Stock will be retired. The repurchase program does not obligate the Company to acquire any particular amount of Class A Common Stock, and the repurchase program may be suspended or discontinued at any time at the Company’s discretion. As of May 7, 2024, no repurchases have been made pursuant to the repurchase program. |
Summary of Significant Accounti
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and in conformity with rules applicable to quarterly financial information. Any reference in these notes to applicable accounting guidance is meant to refer to the authoritative nongovernmental GAAP as found in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”). The condensed consolidated financial statements as of March 31, 2024 and for the three months ended March 31, 2024 and 2023 are unaudited and should be read in conjunction with the Company’s audited financial statements for the year ended December 31, 2023. All adjustments, consisting of normal recurring adjustments, except as otherwise noted, considered, in the opinion of management, necessary for a fair presentation of the unaudited interim condensed consolidated financial statements for these interim periods have been included. Refer to Note 2. Summary of Significant Accounting Policies in the notes to the consolidated financial statements in the 2023 Form 10-K for the Company’s significant accounting policies and estimates. |
Use of Estimates in the Preparation of Financial Statements | Use of Estimates in the Preparation of Financial Statements The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting period. These estimates include, but are not limited to, revenue recognition, allowance for doubtful accounts, contingencies, valuations, useful lives of intangible assets acquired in business combinations, equity-based compensation, and income taxes. Actual results could differ from those estimates. |
Recently Issued Accounting Pronouncements Not Yet Adopted | Recently Issued Accounting Pronouncements Not Yet Adopted From time to time, new accounting pronouncements are issued by the FASB or other accounting standard setting bodies that the Company adopts as of the specified effective date. Unless otherwise discussed, we do not believe that the adoption of recently issued standards have had or may have a material impact on our condensed consolidated statements or disclosures. |
Restatement of Previously Issued Financial Statements | Restatement of Previously Issued Financial Statements As described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on February 28, 2024, the Company filed an Amendment No. 1 on Form 10-Q/A to amend the Quarterly Report on Form 10-Q for the three months ended March 31, 2023 with the SEC on August 14, 2023 to restate the Company’s unaudited condensed consolidated financial statements for the three months ended March 31, 2023 and 2022. The restated prior-year results are reflected in the condensed consolidated financial results disclosed within this Quarterly Report on Form 10-Q. |
Acquisitions (Tables)
Acquisitions (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Carevoyance | |
Business Acquisition [Line Items] | |
Summary of Allocation of Purchase Price to the Fair Value of Assets Acquired | The Company is expected to finalize the purchase price allocations as soon as practicable, but no later than one year from the acquisition date. Acquisition-date fair values of assets and liabilities pertaining to this business combination have been allocated as follows: (in thousands) Purchase price allocation: Preliminary Accounts receivable $ 605 Intangible assets 7,000 Deferred revenue ( 987 ) Total assets acquired and liabilities assumed 6,618 Goodwill 7,057 Purchase price $ 13,675 |
Populi Inc. | |
Business Acquisition [Line Items] | |
Summary of Transaction Transferred | The consideration transferred for the transaction is summarized as follows: (in thousands) Cash consideration paid at closing $ 46,446 Working capital adjustment ( 145 ) Contingent consideration 7,800 Purchase price $ 54,101 |
Summary of Allocation of Purchase Price to the Fair Value of Assets Acquired | Acquisition-date fair values of assets and liabilities pertaining to this business combination have been allocated as follows: (in thousands) Purchase price allocation: Preliminary, as originally reported Measurement period adjustments As adjusted Cash $ 1,423 $ — $ 1,423 Accounts receivable 2,662 — 2,662 Prepaid expenses and other assets 153 — 153 Property and equipment 42 — 42 Intangible assets 22,830 ( 500 ) 22,330 Accounts payable and accrued expenses ( 3,316 ) — ( 3,316 ) Deferred revenue ( 4,010 ) — ( 4,010 ) Other liabilities ( 2,354 ) ( 576 ) ( 2,930 ) Total assets acquired and liabilities assumed 17,430 ( 1,076 ) 16,354 Goodwill 36,652 1,095 37,747 Purchase price $ 54,082 $ 19 $ 54,101 |
Schedule of Business Acquisition, Pro Forma Information | Unaudited Pro Forma Supplementary Data as if the Populi acquisition had occurred on January 1, 2023: Three Months Ended March 31, 2023 (in thousands) Revenue $ 60,675 Net loss ( 18,451 ) |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | The following table represents a disaggregation of revenue from arrangements with customers for the three months ended March 31, 2024 and 2023, respectively: Three Months Ended March 31, (in thousands) 2024 2023 Subscription services $ 61,752 $ 58,517 Professional services 1,728 684 Total revenue $ 63,480 $ 59,201 |
Summary of Receivables, Deferred Contract Costs and Contract Liabilities from Contract with Customers | The opening and closing balances of the Company’s receivables, deferred contract costs and contract liabilities from contracts with customers are as follows: (in thousands) March 31, December 31, Accounts receivable, net $ 56,655 $ 59,249 Deferred contract costs, current portion 13,598 13,490 Deferred contract costs, long-term 16,219 17,320 Deferred revenues 108,087 97,386 Deferred Contract Costs A summary of the activity impacting the deferred contract costs for the three months ended March 31, 2024 and the year ended December 31, 2023 is presented below: (in thousands) Three Months Ended March 31, 2024 Twelve Months Ended December 31, 2023 Balance at beginning of period $ 30,810 $ 24,983 Costs amortized ( 3,692 ) ( 12,963 ) Additional amounts deferred 2,699 18,790 Balance at end of period 29,817 30,810 Classified as: Current 13,598 13,490 Non-current 16,219 17,320 Total deferred contract costs (deferred commissions) $ 29,817 $ 30,810 |
Summary of Deferred Revenue Balances | A summary of the activity impacting deferred revenue balances during the three months ended March 31, 2024 and for the year ended December 31, 2023 is presented below: (in thousands) Three Months Ended March 31, 2024 Twelve Months Ended December 31, 2023 Balance at beginning of period $ 97,386 $ 99,928 Revenue recognized ( 63,480 ) ( 251,415 ) Additional amounts deferred 74,181 248,873 Balance at end of period $ 108,087 $ 97,386 |
Summary of Remaining Performance Obligation | The remaining performance obligations consisted of the following: (in thousands) March 31, December 31, Current $ 182,066 $ 187,331 Non-current 88,282 89,636 Total $ 270,348 $ 276,967 |
Short-term Investments (Tables)
Short-term Investments (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Short-term Investments | Short-term investments classified as available-for-sale consisted of the following: March 31, 2024 (in thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Short-term investments: US Treasuries $ 54,542 $ 2 $ ( 59 ) $ 54,485 Commercial paper 105,519 18 ( 65 ) 105,472 Certificates of deposit 29,210 14 ( 7 ) 29,217 Total short-term investments $ 189,271 $ 34 $ ( 131 ) $ 189,174 December 31, 2023 (in thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Short-term investments: US Treasuries $ 62,486 $ 20 $ ( 45 ) $ 62,461 Corporate Bonds 2,314 10 — 2,324 Commercial Paper 94,269 85 ( 18 ) 94,336 Certificates of Deposit 17,954 19 ( 2 ) 17,971 Total short-term investments $ 177,023 $ 134 $ ( 65 ) $ 177,092 |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Receivables [Abstract] | |
Schedule of Accounts Receivable | Accounts receivable consisted of the following: (in thousands) March 31, December 31, Accounts receivable $ 58,193 $ 60,206 Unbilled receivable 602 1,346 58,795 61,552 Less: allowance for credit losses ( 2,140 ) ( 2,303 ) Accounts receivable, net $ 56,655 $ 59,249 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consisted of the following: (in thousands) March 31, December 31, Computers and software $ 7,106 $ 6,921 Furniture and equipment 1,152 1,172 Leasehold improvements 2,330 2,338 10,588 10,431 Less: accumulated depreciation and amortization ( 6,488 ) ( 5,960 ) Property and equipment, net $ 4,100 $ 4,471 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets and Goodwill | The carrying amounts of goodwill and intangible assets, as of March 31, 2024 and December 31, 2023, consisted of the following: March 31, 2024 (in thousands) Gross Accumulated Net Carrying Finite-lived intangible assets: Customer relationships $ 410,390 $ ( 171,776 ) $ 238,614 Developed technologies 85,116 ( 36,146 ) 48,970 Tradenames 36,093 ( 9,935 ) 26,158 Database 50,209 ( 45,979 ) 4,230 Total finite-lived intangible assets 581,808 ( 263,836 ) 317,972 Goodwill 1,082,137 — 1,082,137 Total goodwill and intangible assets $ 1,663,945 $ ( 263,836 ) $ 1,400,109 December 31, 2023 (in thousands) Gross Accumulated Net Carrying Finite-lived intangible assets: Customer relationships $ 410,210 $ ( 163,586 ) $ 246,624 Developed technologies 78,434 ( 33,769 ) 44,665 Tradenames 36,062 ( 9,379 ) 26,683 Database 50,221 ( 45,072 ) 5,149 Total finite-lived intangible assets 574,927 ( 251,806 ) 323,121 Goodwill 1,075,080 — 1,075,080 Total goodwill and intangible assets $ 1,650,007 $ ( 251,806 ) $ 1,398,201 |
Schedule of Future Amortization Expense | Estimated total intangible amortization expense during the next five years and thereafter is as follows: (in thousands) 2024, excluding the three months ended March 31, 2024 $ 36,661 2025 47,013 2026 40,838 2027 34,942 2028 30,778 Thereafter 127,740 Total $ 317,972 |
Schedule of Goodwill | Goodwill consisted of the following: (in thousands) Three Months Ended Twelve Months Ended Goodwill - beginning of period $ 1,075,080 $ 1,324,733 Goodwill acquired during period 7,057 37,747 Goodwill impairment loss — ( 287,400 ) Goodwill - end of period $ 1,082,137 $ 1,075,080 |
Accrued Expenses and Other Li_2
Accrued Expenses and Other Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Accounts Payable and Accrued Liabilities, Current [Abstract] | |
Schedule of Accrued Expenses and Other Liabilities | Accrued expenses and other liabilities consisted of the following: (in thousands) March 31, December 31, Payroll and payroll-related $ 8,023 $ 12,805 Tax receivable agreement, current portion 13,145 20,095 Contingent consideration, current — 1,602 Sales, franchise, and other taxes 7,028 9,526 Other 7,754 7,501 Accrued expenses and other liabilities $ 35,950 $ 51,529 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Long-Term Debt, Unclassified [Abstract] | |
Schedule of Long-term Debt | Long-term debt consisted of the following as of March 31, 2024 and December 31, 2023, respectively: March 31, 2024 (in thousands) Principal Unamortized debt Total debt, 2021 Term Loan $ 254,375 $ ( 1,358 ) $ 253,017 Less: current portion of long-term debt 13,750 Long-term debt $ 239,267 December 31, 2023 (in thousands) Principal Unamortized debt Total debt, 2021 Term Loan $ 257,813 $ ( 1,496 ) $ 256,317 Less: current portion of long-term debt 13,750 Long-term debt $ 242,567 |
Derivative Instruments and He_2
Derivative Instruments and Hedging Activities (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of Fair Values of the Interest Rate Swap | The fair values of the interest rate swaps and their respective locations in our condensed consolidated balance sheets at March 31, 2024 and December 31, 2023 were as follows: (in thousands) Description Balance Sheet Location March 31, 2024 December 31, 2023 Short-term derivative asset Prepaid expenses and other assets $ 3,694 $ 3,426 Long-term derivative asset Other assets — 509 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Abstract] | |
Schedule of Reconciliation of Earnout Liabilities Measured at Fair Value on a Recurring Basis Unobservable Inputs | The table below presents a reconciliation of earnout liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3): (in thousands) March 31, December 31, Balance at beginning of period $ 10,352 $ 2,250 Additions — 7,800 Net change in fair value and other adjustments 270 302 Payments ( 1,602 ) — Balance at end of period $ 9,020 $ 10,352 |
Schedule of Fair Value of Assets and Liabilities Measured at Fair Value on Recurring Basis | At March 31, 2024 and December 31, 2023, assets and liabilities measured at fair value on a recurring basis were as follows: March 31, 2024 (in thousands) Total Level 1 Level 2 Level 3 Assets: Cash and cash equivalents: Money market funds $ 24,044 $ 24,044 $ — $ — Short-term investments: U.S. Treasuries 54,485 — 54,485 — Commercial paper 105,473 — 105,473 — Certificates of deposit 29,216 — 29,216 — Prepaid expenses and other assets: Interest rate swap contracts 3,694 — 3,694 — Liabilities: Contingent consideration 9,020 — — 9,020 December 31, 2023 (in thousands) Total Level 1 Level 2 Level 3 Assets: Cash and cash equivalents: Money market funds $ 87,869 $ 87,869 $ — $ — Commercial paper (maturities less than 90 days) 4,227 — 4,227 — Certificates of deposit (maturities less than 90 days) 1,000 — 1,000 — Short-term investments: U.S. treasuries 62,461 — 62,461 — Corporate bonds 2,324 — 2,324 — Commercial paper 94,336 — 94,336 — Certificates of deposit 17,971 — 17,971 — Prepaid expenses and other assets: Interest rate swap contracts 3,426 — 3,426 — Other assets: Interest rate swap contracts 509 — 509 — Liabilities: Contingent consideration 10,352 — — 10,352 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Stockholders' Equity Note [Abstract] | |
Summary of Changes in Accumulated Balances in Other Comprehensive Income | The following tables summarize the changes in accumulated balances of other comprehensive income for the three months ended March 31, 2024 and 2023, respectively. Three Months Ended March 31, 2024 (in thousands) Unrealized Gain (Loss) on Cash Flow Hedges Unrealized Gain (Loss) on Investments Foreign Currency Translation Adjustments Total Beginning balance $ 2,387 $ 96 $ ( 374 ) $ 2,109 Other comprehensive income (loss) before reclassifications 658 ( 136 ) ( 136 ) 386 Amounts reclassified from AOCI ( 837 ) — — ( 837 ) Ending balance $ 2,208 $ ( 40 ) $ ( 510 ) $ 1,658 Three months ended March 31, 2023 (in thousands) Unrealized Gain (Loss) on Cash Flow Hedges Unrealized (Loss) Gain on Investments Foreign Currency Translation Adjustments Total Beginning balance $ 4,307 $ ( 135 ) $ ( 504 ) $ 3,668 Other comprehensive (loss) income before reclassifications ( 344 ) 62 14 ( 268 ) Amounts reclassified from AOCI ( 607 ) — — ( 607 ) Ending balance $ 3,356 $ ( 73 ) $ ( 490 ) $ 2,793 |
Equity-Based Compensation (Tabl
Equity-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Summary of Equity Based Compensation Expense Recognized | A summary of the expense by line item in the condensed consolidated statements of operations for the three months ended March 31, 2024 and 2023, respectively, is provided in the following table. Three Months Ended March 31, (in thousands) 2024 2023 Cost of revenue $ 271 $ 258 Sales and marketing 2,271 2,649 Product development 2,761 3,011 General and administrative 10,279 5,210 Total compensation expense $ 15,582 $ 11,128 |
Loss Per Share (Tables)
Loss Per Share (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
Schedule of Net Loss Per Share, Basic and Diluted | The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted net loss per share of Class A Common Stock for the three months ended March 31, 2024 and 2023 . Three Months Ended March 31, (in thousands) 2024 2023 Numerator: Net loss $ ( 12,718 ) $ ( 15,972 ) Less: Net loss attributable to noncontrolling interests ( 3,200 ) ( 3,909 ) Net loss attributable to Definitive Healthcare Corp. $ ( 9,518 ) $ ( 12,063 ) The following table sets forth the computation of basic and diluted net loss per share of Class A Common Stock for the three months ended March 31, 2024 and 2023 (per share amounts unaudited). Three Months Ended March 31, (in thousands, except number of shares and per share amounts) 2024 2023 Basic net loss per share attributable to common stockholders Numerator: Allocation of net loss attributable to Definitive Healthcare Corp. $ ( 9,518 ) $ ( 12,063 ) Denominator: Weighted average number of shares of Class A Common Stock outstanding 117,433,520 108,234,043 Net loss per share, basic and diluted $ ( 0.08 ) $ ( 0.11 ) |
Schedule of Dilutive Securities Excluded from Computation of Diluted Net Loss Per Share | The following table presents potentially dilutive securities excluded from the computation of diluted net loss per share for the period presented because their effect would have been anti-dilutive: Three Months Ended March 31, 2024 2023 Definitive OpCo LLC Units (vested and unvested) 39,664,004 45,626,933 Restricted Stock Units 7,523,924 6,211,625 |
Organization and Basis of Pre_2
Organization and Basis of Presentation - Additional Information (Details) | 3 Months Ended |
Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Entity Incorporation, Date of Incorporation | May 05, 2021 |
Acquisition - Additional Inform
Acquisition - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Jan. 16, 2024 | Jul. 21, 2023 | Mar. 31, 2024 | |
Business Acquisition [Line Items] | |||
Cash consideration paid at closing | $ 46,400 | ||
Purchase price | 54,100 | ||
Working capital adjustment | 100 | ||
Contingent consideration | 28,000 | ||
Fair value of the contingent consideration | 7,800 | ||
Business combination, contingent consideration, liability | $ 9,000 | ||
Software Development [Member] | |||
Business Acquisition [Line Items] | |||
Other assets | 21,400 | ||
Developed Technology [Member] | |||
Business Acquisition [Line Items] | |||
Other assets | $ 6,800 | ||
Carevoyance | |||
Business Acquisition [Line Items] | |||
Cash consideration | 13,675 | ||
Purchase price | 13,700 | ||
Business combination, Acquisition related costs | $ 100 | ||
Weighted average amortization period of finite-lived intangible assets acquired | 6 years 10 months 24 days | ||
Carevoyance | Developed Technology [Member] | |||
Business Acquisition [Line Items] | |||
Other assets | $ 6,800 | ||
Weighted average amortization period | 7 years | ||
Populi Inc. | |||
Business Acquisition [Line Items] | |||
Cash consideration | 54,101 | ||
Cash consideration paid at closing | 4,800 | 46,446 | |
Purchase price | 54,101 | ||
Working capital adjustment | (145) | ||
Contingent consideration | $ 7,800 | ||
Fair value of the contingent consideration | 7,800 | ||
Business combination, Acquisition related costs | $ 700 | ||
Weighted average amortization period of finite-lived intangible assets acquired | 7 years 2 months 12 days | ||
Populi Inc. | Software Development [Member] | |||
Business Acquisition [Line Items] | |||
Other assets | $ 21,400 | ||
Weighted average amortization period | 7 years | ||
Trade Names [Member] | |||
Business Acquisition [Line Items] | |||
Other assets | $ 100 | $ 100 | |
Trademarks [Member] | Carevoyance | |||
Business Acquisition [Line Items] | |||
Other assets | $ 100 | ||
Weighted average amortization period | 2 years | ||
Trademarks [Member] | Populi Inc. | |||
Business Acquisition [Line Items] | |||
Other assets | $ 100 | ||
Weighted average amortization period | 1 year | ||
Customer Relationships [Member] | |||
Business Acquisition [Line Items] | |||
Other assets | $ 200 | $ 800 | |
Customer Relationships [Member] | Carevoyance | |||
Business Acquisition [Line Items] | |||
Other assets | $ 200 | ||
Weighted average amortization period | 5 years | ||
Customer Relationships [Member] | Populi Inc. | |||
Business Acquisition [Line Items] | |||
Weighted average amortization period | 15 years | ||
Goodwill [Member] | |||
Business Acquisition [Line Items] | |||
Other assets | $ 7,100 | $ 37,700 | |
Series of Individually Immaterial Business Acquisitions [Member] | |||
Business Acquisition [Line Items] | |||
Potential payouts range, Low | 0 | ||
Potential payouts range, High | $ 28,000 |
Acquisition - Summary of Transa
Acquisition - Summary of Transaction Transferred (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jul. 21, 2023 | Mar. 31, 2024 | |
Business Acquisition [Line Items] | ||
Cash consideration paid at closing | $ 46,400 | |
Working capital adjustment | 100 | |
Contingent consideration | 28,000 | |
Purchase price | 54,100 | |
Populi Inc. | ||
Business Acquisition [Line Items] | ||
Cash consideration paid at closing | $ 4,800 | $ 46,446 |
Working capital adjustment | (145) | |
Contingent consideration | 7,800 | |
Purchase price | $ 54,101 |
Acquisitions - Summary of Alloc
Acquisitions - Summary of Allocation of Purchase Price to the Fair Value of Assets Acquired (Details) $ in Thousands | Mar. 31, 2024 USD ($) |
Carevoyance | |
Accounts receivable | $ 605 |
Intangible assets | 7,000 |
Deferred revenue | (987) |
Total assets acquired and liabilities assumed | 6,618 |
Goodwill | 7,057 |
Purchase price | 13,675 |
Populi Inc. | |
Cash | 1,423 |
Accounts receivable | 2,662 |
Prepaid expenses and other assets | 153 |
Property and equipment | 42 |
Intangible assets | 22,330 |
Accounts payable and accrued expenses | (3,316) |
Deferred revenue | (4,010) |
Other liabilities | (2,930) |
Total assets acquired and liabilities assumed | 16,354 |
Goodwill | 37,747 |
Purchase price | 54,101 |
Populi Inc. | Preliminary, as originally reported | |
Cash | 1,423 |
Accounts receivable | 2,662 |
Prepaid expenses and other assets | 153 |
Property and equipment | 42 |
Intangible assets | 22,830 |
Accounts payable and accrued expenses | (3,316) |
Deferred revenue | (4,010) |
Other liabilities | (2,354) |
Total assets acquired and liabilities assumed | 17,430 |
Goodwill | 36,652 |
Purchase price | 54,082 |
Populi Inc. | Measurement period adjustments | |
Cash | 0 |
Accounts receivable | 0 |
Prepaid expenses and other assets | 0 |
Property and equipment | 0 |
Intangible assets | (500) |
Accounts payable and accrued expenses | 0 |
Deferred revenue | 0 |
Other liabilities | (576) |
Total assets acquired and liabilities assumed | (1,076) |
Goodwill | 1,095 |
Purchase price | $ 19 |
Acquisitions - Schedule of Busi
Acquisitions - Schedule of Business Acquisition, Pro Forma Information (Details) - Populi, Inc. [Member] $ in Thousands | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Business Acquisition [Line Items] | |
Revenue | $ 60,675 |
Net loss | $ (18,451) |
Revenue - Schedule of Disaggreg
Revenue - Schedule of Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Disaggregation Of Revenue [Line Items] | ||
Revenue | $ 63,480 | $ 59,201 |
Subscription Services [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 61,752 | 58,517 |
Professional Services [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | $ 1,728 | $ 684 |
Revenue - Summary of Receivable
Revenue - Summary of Receivables, Deferred Contract Costs and Contract Liabilities from Contract with Customers (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Revenue from Contract with Customer [Abstract] | ||
Accounts receivable, net | $ 56,655 | $ 59,249 |
Deferred contract costs, current portion | 13,598 | 13,490 |
Deferred contract costs, long-term | 16,219 | 17,320 |
Deferred revenues | $ 108,087 | $ 97,386 |
Revenue - Summary of Deferred C
Revenue - Summary of Deferred Contract Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Disaggregation of Revenue [Line Items] | |||
Additional amounts deferred | $ 74,181 | $ 248,873 | |
Current | 16,219 | 17,320 | |
Total deferred contract costs (deferred commissions) | (2,699) | $ (4,021) | |
Deferred Contract Costs [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Balance at beginning of period | 30,810 | $ 24,983 | 24,983 |
Costs amortized | (3,692) | (12,963) | |
Additional amounts deferred | 2,699 | 18,790 | |
Balance at end of period | 29,817 | 30,810 | |
Current | 13,598 | 13,490 | |
Non-current | 16,219 | 17,320 | |
Total deferred contract costs (deferred commissions) | $ 29,817 | $ 30,810 |
Revenue - Summary of Deferred R
Revenue - Summary of Deferred Revenue Balances (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | ||
Balance at beginning of period | $ 97,386 | $ 99,928 |
Revenue recognized | (63,480) | (251,415) |
Additional amounts deferred | 74,181 | 248,873 |
Balance at end of period | $ 108,087 | $ 97,386 |
Revenue - Summary of Remaining
Revenue - Summary of Remaining Performance Obligation (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Revenue from Contract with Customer [Abstract] | ||
Current | $ 182,066 | $ 187,331 |
Non-current | 88,282 | 89,636 |
Total | $ 270,348 | $ 276,967 |
Short-term Investments - Schedu
Short-term Investments - Schedule of Short-term Investments (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Debt Securities, Available-for-Sale [Line Items] | ||
Amortized Cost | $ 189,271 | $ 177,023 |
Gross unrealized gains | 34 | 134 |
Gross unrealized losses | (131) | (65) |
Fair Value | 189,174 | 177,092 |
U.S. Treasuries [Member] | ||
Debt Securities, Available-for-Sale [Line Items] | ||
Amortized Cost | 54,542 | 62,486 |
Gross unrealized gains | 2 | 20 |
Gross unrealized losses | (59) | (45) |
Fair Value | 54,485 | 62,461 |
Corporate Bonds [Member] | ||
Debt Securities, Available-for-Sale [Line Items] | ||
Amortized Cost | 2,314 | |
Gross unrealized gains | 10 | |
Gross unrealized losses | 0 | |
Fair Value | 2,324 | |
Commercial Paper [Member] | ||
Debt Securities, Available-for-Sale [Line Items] | ||
Amortized Cost | 105,519 | 94,269 |
Gross unrealized gains | 18 | 85 |
Gross unrealized losses | (65) | (18) |
Fair Value | 105,472 | 94,336 |
Certificates of Deposit [Member] | ||
Debt Securities, Available-for-Sale [Line Items] | ||
Amortized Cost | 29,210 | 17,954 |
Gross unrealized gains | 14 | 19 |
Gross unrealized losses | (7) | (2) |
Fair Value | $ 29,217 | $ 17,971 |
Short-term Investments - Additi
Short-term Investments - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |||
Amount of net accumulated accretion included in amortized cost | $ 2.2 | $ 2.8 | |
Interest accretion on short-term investments | $ 2 | $ 1.8 |
Accounts Receivable - Schedule
Accounts Receivable - Schedule of Accounts Receivable (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Receivables [Abstract] | ||
Accounts receivable | $ 58,193 | $ 60,206 |
Unbilled receivable | 602 | 1,346 |
Accounts Receivable, before Allowance for Credit Loss, Current | 58,795 | 61,552 |
Less: allowance for credit losses | (2,140) | (2,303) |
Accounts receivable, net | $ 56,655 | $ 59,249 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Property Plant And Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 10,588 | $ 10,431 |
Less: accumulated depreciation and amortization | (6,488) | (5,960) |
Property and equipment, net | 4,100 | 4,471 |
Computers and Software [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 7,106 | 6,921 |
Furniture and Equipment [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 1,152 | 1,172 |
Leasehold Improvements [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 2,330 | $ 2,338 |
Property and Equipment - Additi
Property and Equipment - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Property Plant And Equipment [Line Items] | ||
Depreciation and amortization | $ 9,322 | $ 9,590 |
Property Plant And Equipment [Member] | ||
Property Plant And Equipment [Line Items] | ||
Depreciation and amortization | $ 600 | $ 500 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Schedule of Intangible Assets and Goodwill (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 581,808 | $ 574,927 |
Accumulated Amortization | (263,836) | (251,806) |
Net Carrying Amount | 317,972 | 323,121 |
Goodwill [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 1,082,137 | 1,075,080 |
Accumulated Amortization | 0 | 0 |
Net Carrying Amount | 1,082,137 | 1,075,080 |
Goodwill And Intangible Assets [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 1,663,945 | 1,650,007 |
Accumulated Amortization | (263,836) | (251,806) |
Net Carrying Amount | 1,400,109 | 1,398,201 |
Customer Relationships [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 410,390 | 410,210 |
Accumulated Amortization | (171,776) | (163,586) |
Net Carrying Amount | 238,614 | 246,624 |
Developed Technologies [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 85,116 | 78,434 |
Accumulated Amortization | (36,146) | (33,769) |
Net Carrying Amount | 48,970 | 44,665 |
Trade Names [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 36,093 | 36,062 |
Accumulated Amortization | (9,935) | (9,379) |
Net Carrying Amount | 26,158 | 26,683 |
Database [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 50,209 | 50,221 |
Accumulated Amortization | (45,979) | (45,072) |
Net Carrying Amount | $ 4,230 | $ 5,149 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Additional Information (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 USD ($) Segment | Mar. 31, 2023 USD ($) | |
Finite Lived Intangible Assets [Line Items] | ||
Amortization of intangible assets | $ 12,130 | $ 12,431 |
Amortization | $ 3,362 | 3,354 |
Number of Reporting Units | Segment | 1 | |
Finite Lived Intangible Assets [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Amortization of intangible assets | $ 12,100 | 12,400 |
Amortization | $ 3,300 | $ 3,400 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Schedule of Future Amortization Expense (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2024, excluding the three months ended March 31, 2024 | $ 36,661 | |
2025 | 47,013 | |
2026 | 40,838 | |
2027 | 34,942 | |
2028 | 30,778 | |
Thereafter | 127,740 | |
Net Carrying Amount | $ 317,972 | $ 323,121 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Schedule of Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill - beginning of period | $ 1,075,080 | $ 1,324,733 |
Goodwill acquired during period | 7,057 | 37,747 |
Goodwill impairment loss | 0 | (287,400) |
Goodwill - end of period | $ 1,082,137 | $ 1,075,080 |
Accrued Expenses and Other Li_3
Accrued Expenses and Other Liabilities - Schedule of Accrued Expenses And Other Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Accounts Payable and Accrued Liabilities, Current [Abstract] | ||
Payroll and payroll-related | $ 8,023 | $ 12,805 |
Tax receivable agreement, current portion | 13,145 | 20,095 |
Contingent consideration, current | 0 | 1,602 |
Sales, franchise and other taxes | 7,028 | 9,526 |
Other | 7,754 | 7,501 |
Accrued expenses and other liabilities | $ 35,950 | $ 51,529 |
Accrued Expenses and Other Li_4
Accrued Expenses and Other Liabilities - Additional Information (Details) $ in Millions | 3 Months Ended | |
Jun. 30, 2024 USD ($) | Mar. 31, 2024 USD ($) Workforce | |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and related charges | $ 0.5 | |
Restructuring and related cost, remaining | $ 2 | |
Reduction of current workforce | Workforce | 150 | |
Restructuring and related charges, expected cost | $ 7.2 |
Long-Term Debt - Schedule of Lo
Long-Term Debt - Schedule of Long-term Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Debt Instrument [Line Items] | ||
Less: current portion of long-term debt | $ 13,750 | $ 13,750 |
Long-term debt | 239,267 | 242,567 |
2021 Term Loan [Member] | ||
Debt Instrument [Line Items] | ||
Principal | 254,375 | 257,813 |
Unamortized debt issuance costs / financing costs | (1,358) | (1,496) |
Total debt, net | $ 253,017 | $ 256,317 |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | |
Sep. 30, 2021 | Mar. 31, 2024 | Dec. 31, 2023 | |
Debt Instrument [Line Items] | |||
Frequency of payment | The 2021 Term Loan is subject to annual amortization of principal, payable in equal quarterly installments on the last day of each fiscal quarter, commencing on December 31, 2021 (the “Initial Amortization Date”), equal to approximately 2.5% per annum of the principal amount of the term loans in the first year and second year after the Initial Amortization Date and approximately 5.0% per annum of the principal amount of the term loans in the third year, fourth year, and fifth year after the Initial Amortization Date. | ||
Financing costs | $ 3,500 | ||
Standby Letters of Credit [Member] | |||
Debt Instrument [Line Items] | |||
Letters of Credit Outstanding, Amount | $ 600 | ||
2021 Term Loan [Member] | |||
Debt Instrument [Line Items] | |||
Repayment of debt | 3,400 | ||
Outstanding principal balance | 254,375 | 257,813 | |
Line of credit | $ 275,000 | ||
Balloon payment | 220,000 | ||
Financing costs | 2,800 | ||
Unamortized debt issuance costs / financing costs | (1,358) | (1,496) | |
2021 Revolving Line of Credit [Member] | |||
Debt Instrument [Line Items] | |||
Maturity date | Sep. 17, 2026 | ||
Line of credit | $ 75,000 | $ 74,400 | |
Interest rate | 7.18% | ||
Financing costs | $ 800 | ||
Unamortized debt issuance costs / financing costs | $ (400) | $ (400) | |
2021 Revolving Line of Credit [Member] | Minimum [Member] | |||
Debt Instrument [Line Items] | |||
Unused commitment fee percentage | 0.25% | ||
2021 Revolving Line of Credit [Member] | Maximum [Member] | |||
Debt Instrument [Line Items] | |||
Unused commitment fee percentage | 0.30% |
Derivative Instruments and He_3
Derivative Instruments and Hedging Activities - Additional Information (Details) - Interest Rate Swaps [Member] $ in Millions | 3 Months Ended | |
Mar. 31, 2024 USD ($) Segment | Mar. 31, 2022 Segment | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Derivative, Number of Instruments Held | Segment | 2 | 2 |
Notional amount | $ 63.6 | |
Maturity date | Mar. 31, 2025 | |
Net pre-tax gains | $ 3.7 | |
Goldman Sachs Bank USA [Member] | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Fixed interest rates | 1.9065% | |
Bank of America N.A [Member] | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Fixed interest rates | 1.909% |
Derivative Instruments and He_4
Derivative Instruments and Hedging Activities - Summary of Fair Values of the Interest Rate Swap (Details) - Interest Rate Swap [Member] - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Short-term derivative asset | $ 3,694 | $ 3,426 |
Derivative Asset, Current, Statement of Financial Position [Extensible Enumeration] | Prepaid Expense and Other Assets, Current | Prepaid Expense and Other Assets, Current |
Long-term derivative asset | $ 0 | $ 509 |
Derivative Asset, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other Assets, Noncurrent | Other Assets, Noncurrent |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) $ in Millions | Mar. 31, 2024 USD ($) |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |
Business combination, contingent consideration, liability | $ 9 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Reconciliation of Earnout Liabilities Measured at Fair Value on a Recurring Basis Unobservable Inputs (Details) - Fair Value, Inputs, Level 3 - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Balance at beginning of period | $ 10,352 | $ 2,250 |
Additions | 0 | 7,800 |
Net change in fair value and other adjustments | 270 | 302 |
Payments | (1,602) | 0 |
Balance at end of period | $ 9,020 | $ 10,352 |
Fair Value Measurements - Sch_2
Fair Value Measurements - Schedule of Fair Value of Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - Recurring [Member] - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
U.S. Treasuries [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | $ 54,485 | $ 62,461 |
Corporate Bonds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 2,324 | |
Commercial Paper [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 105,473 | 94,336 |
Certificates of Deposit [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 29,216 | 17,971 |
Interest Rate Swap [Member] | Prepaid Expenses and Other Assets [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 3,694 | 3,426 |
Interest Rate Swap [Member] | Other Assets [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 509 | |
Contingent Consideration [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | 9,020 | 10,352 |
Money Market Funds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 24,044 | 87,869 |
Commercial Paper Maturities Less Than 90 Days [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 4,227 | |
Certificates of Deposit Maturities Less Than 90 Days [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 1,000 | |
Level 1 [Member] | U.S. Treasuries [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | 0 |
Level 1 [Member] | Corporate Bonds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | |
Level 1 [Member] | Commercial Paper [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | 0 |
Level 1 [Member] | Certificates of Deposit [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | 0 |
Level 1 [Member] | Interest Rate Swap [Member] | Prepaid Expenses and Other Assets [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | 0 |
Level 1 [Member] | Interest Rate Swap [Member] | Other Assets [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | |
Level 1 [Member] | Contingent Consideration [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | 0 | 0 |
Level 1 [Member] | Money Market Funds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 24,044 | 87,869 |
Level 1 [Member] | Commercial Paper Maturities Less Than 90 Days [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | |
Level 1 [Member] | Certificates of Deposit Maturities Less Than 90 Days [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | |
Level 2 [Member] | U.S. Treasuries [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 54,485 | 62,461 |
Level 2 [Member] | Corporate Bonds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 2,324 | |
Level 2 [Member] | Commercial Paper [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 105,473 | 94,336 |
Level 2 [Member] | Certificates of Deposit [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 29,216 | 17,971 |
Level 2 [Member] | Interest Rate Swap [Member] | Prepaid Expenses and Other Assets [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 3,694 | 3,426 |
Level 2 [Member] | Interest Rate Swap [Member] | Other Assets [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 509 | |
Level 2 [Member] | Contingent Consideration [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | 0 | 0 |
Level 2 [Member] | Money Market Funds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | 0 |
Level 2 [Member] | Commercial Paper Maturities Less Than 90 Days [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 4,227 | |
Level 2 [Member] | Certificates of Deposit Maturities Less Than 90 Days [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 1,000 | |
Level 3 [Member] | U.S. Treasuries [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | 0 |
Level 3 [Member] | Corporate Bonds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | |
Level 3 [Member] | Commercial Paper [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | 0 |
Level 3 [Member] | Certificates of Deposit [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | 0 |
Level 3 [Member] | Interest Rate Swap [Member] | Prepaid Expenses and Other Assets [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | 0 |
Level 3 [Member] | Interest Rate Swap [Member] | Other Assets [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | |
Level 3 [Member] | Contingent Consideration [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | 9,020 | 10,352 |
Level 3 [Member] | Money Market Funds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | $ 0 | 0 |
Level 3 [Member] | Commercial Paper Maturities Less Than 90 Days [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | |
Level 3 [Member] | Certificates of Deposit Maturities Less Than 90 Days [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | $ 0 |
Stockholders' Equity and Member
Stockholders' Equity and Members' Equity - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Class Of Stock [Line Items] | ||
Equity-based compensation | $ 15,582 | $ 11,128 |
Noncontrolling Interest - Addit
Noncontrolling Interest - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Noncontrolling Interest [Line Items] | |||
Tax withholding obligation | $ 5,806 | $ 1,530 | |
Common Class A | |||
Noncontrolling Interest [Line Items] | |||
Common stock, shares outstanding | 117,790,025 | 116,562,252 | |
Definitive OpCo [Member] | |||
Noncontrolling Interest [Line Items] | |||
Ownership interest (as a percent) | 75% | 74.90% | |
Noncontrolling interest | 25% | 25.10% | |
Definitive OpCo [Member] | Common Class A | |||
Noncontrolling Interest [Line Items] | |||
Common stock, shares outstanding | 51,308 | ||
Tax withholding obligation | $ 646,041 | ||
Antidilutive securities excluded from computation of earnings per share, amount | 1,822,506 | ||
Issuance of common stock shares | 1,176,465 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income - Summary of Changes in Accumulated Balances in Other Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Unrealized Gain (Loss) on Cash Flow Hedges | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Beginning Balance | $ 2,387 | $ 4,307 |
Amounts reclassified from AOCI | (837) | (607) |
Other comprehensive (loss) income before reclassifications | 658 | (344) |
Ending Balance | 2,208 | 3,356 |
Unrealized Gain (Loss) on Investments | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Beginning Balance | 96 | (135) |
Amounts reclassified from AOCI | 0 | 0 |
Other comprehensive (loss) income before reclassifications | (136) | 62 |
Ending Balance | (40) | (73) |
Foreign Currency Translation Adjustment | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Beginning Balance | (374) | (504) |
Amounts reclassified from AOCI | 0 | 0 |
Other comprehensive (loss) income before reclassifications | (136) | 14 |
Ending Balance | (510) | (490) |
AOCI Attributable to Parent | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Beginning Balance | 2,109 | 3,668 |
Amounts reclassified from AOCI | (837) | (607) |
Other comprehensive (loss) income before reclassifications | 386 | (268) |
Ending Balance | $ 1,658 | $ 2,793 |
Equity-Based Compensation Expen
Equity-Based Compensation Expense - Summary of Equity Based Compensation Expense Recognized (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | $ 15,582 | $ 11,128 |
Cost of Revenue | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | 271 | 258 |
Sales and Marketing | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | 2,271 | 2,649 |
Product Development | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | 2,761 | 3,011 |
General And Administrative Expense | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | $ 10,279 | $ 5,210 |
Equity-Based Compensation - Add
Equity-Based Compensation - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Share-Based Payment Arrangement, Expense | $ 15,582 | $ 11,128 |
Employee [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Share-Based Payment Arrangement, Expense | $ 6,900 | |
Employee [Member] | Time-based RSUs | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Share based compensation accelerated vesting number of shares | 596,476 | |
Employee [Member] | Performance-Based RSUs | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Share based compensation accelerated vesting number of shares | 49,265 | |
Employee [Member] | Definitive OpCo | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Share based compensation accelerated vesting number of shares | 61,240 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |||
Effective tax rate | 5.80% | 4.30% | |
Deferred tax liabilities | $ 66.5 | $ 67.2 | |
Tax receivable agreement liability | $ 138.3 | $ 147.1 | |
Tax receivable agreement realized tax benefits payable to related parties percent | 85% | ||
Tax Receivable Agreement Benefit percentage | 15% | ||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21% | ||
TRA Remeasurement Gain (Loss) | $ 2.3 | $ (3.6) |
Loss Per Share - Schedule of Ne
Loss Per Share - Schedule of Net Loss Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Net loss | $ (12,718) | $ (15,972) |
Less: Net loss attributable to noncontrolling interests | (3,200) | (3,909) |
Net loss attributable to Definitive Healthcare Corp. | (9,518) | (12,063) |
Basic net loss per share attributable to common stockholders [Abstract] | ||
Allocation of net loss attributable to Definitive Healthcare Corp. | $ (9,518) | $ (12,063) |
Weighted average number of shares of Class A outstanding | 117,433,520 | 108,234,043 |
Net loss per share, basic | $ (0.08) | $ (0.11) |
Net loss per share, diluted | $ (0.08) | $ (0.11) |
Common Class A [Member] | ||
Net loss | $ (12,718) | $ (15,972) |
Less: Net loss attributable to noncontrolling interests | (3,200) | (3,909) |
Net loss attributable to Definitive Healthcare Corp. | (9,518) | (12,063) |
Basic net loss per share attributable to common stockholders [Abstract] | ||
Allocation of net loss attributable to Definitive Healthcare Corp. | $ (9,518) | $ (12,063) |
Weighted average number of shares of Class A outstanding | 117,433,520 | 108,234,043 |
Net loss per share, basic | $ (0.08) | $ (0.11) |
Net loss per share, diluted | $ (0.08) | $ (0.11) |
Loss Per Share - Schedule of Di
Loss Per Share - Schedule of Dilutive Securities Excluded from Computation of Diluted Net Loss Per Share (Details) - shares | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Vested and Unvested Units [Member] | ||
Antidilutive securities excluded from computation of earnings per share, amount | 39,664,004 | 45,626,933 |
Restricted Stock Unit [Member] | ||
Antidilutive securities excluded from computation of earnings per share, amount | 7,523,924 | 6,211,625 |
Related parties - Additional In
Related parties - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Related Party Transaction [Line Items] | |||
Revenue | $ 63,480 | $ 59,201 | |
Accounts receivable, net | 56,655 | $ 59,249 | |
Related Party [Member] | |||
Related Party Transaction [Line Items] | |||
Revenue | 400 | $ 400 | |
Accounts receivable, net | $ 100 | $ 900 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) - Common Class A - USD ($) | May 31, 2024 | May 07, 2024 |
Subsequent Event | ||
Subsequent Event [Line Items] | ||
Stock repurchase program | $ 0 | |
Forecast | ||
Subsequent Event [Line Items] | ||
Stock repurchase program | $ 20,000,000 |