DH - Earnings call 3 2023 | Definitive Healthcare Corp.

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Operator

Welcome to the Definitive Healthcare Q3 2023 Earnings Call.

Our host for today's call is Robert Musslewhite. [Operator Instructions].

I would now like to turn the call over to your host, Mr. Musslewhite, you may begin.

Matt Ruderman

you financial us results. thank Definitive to and quarterly Healthcare's afternoon, for today joining review Good

Chairman; CFO. Joining Robert Krantz, Executive Musslewhite, on CEO; Rick me the Jason the call Founder today are and Booth, and

not investments, our During this of make opportunities, care of future statements commercial clients will for solutions, our call, ability on use and solutions, generating to to market competitive and the intelligence and guidance, limited and benefits impact value the industry customers financial anticipated our health including, behaviors global shareholders our and of health customer and on forward-looking related and our performance to, statements, our we conditions but position, growth generally. business mitigate our churn, care the results macroeconomic

are the XXXX. of provisions forward-looking safe Reform Securities made Private Any to harbor Litigation pursuant the of Act statements

with Factors may required revise statements. the statements undertakes to elsewhere or in number conference discussed events Forward-looking a no to that forward-looking this The involve update law. as filings reflect in SEC. call, risks and arise those by any may statements sections obligation forward-looking and materially including from after the uncertainties, except Actual Risk company of any our differ results

cautionary information, please posted website. refer portion included For have more earnings to statement that Relations the our of we the release in to Investor the

release Investor this their measure. on the reconciliation measures tables Please earnings to these a refer our call. website measures non-GAAP financial most conference non-GAAP discuss Additionally, financial portion on of of for the in directly Relations our to

call the With to over that, turn like Robert. to I'd

Robert Musslewhite

Healthcare's call, or afternoon of quarter an you of I'll financial provide our on to to results. thanks review joining the for of latest And Jason today's we perspective it all us are innovations. highlight some Matt. results, market some overview I third provide On quarter. this key of some third Definitive our what and our wins to business turn over the in to review third seeing from Then and trends Thanks, will

I'll begin by results. financial reviewing our third quarter

which EBITDA which year-over-year and million quarter ranges the XX% both pleased with $XX.X the was the adjusted margin. represents quarter. revenue end $XX.X our and million, total high for EBITDA guidance the of our increased were growth, for XX% quarter adjusted our Our above profitability basis. translates on We into Revenue a non-GAAP were a was in

that growth and seen results. focused on measurable been have more conditions it continues parts across quarters and all organization, of with We see of reflect in efficient key was recent work to some full have we some Revenue becoming is nice what markets. macroeconomic the consistent yielding to our facing

new the new sizable detail. with businesses each product of news at quarter and planning in in signed the customers. are existing go-to-market their and ways. to is frontline remains when Demand challenging to Most for our engage different markets that development are in target importantly, macro, good growth we generation as with investments The also both us Looking customers many improve. begin solid in more despite continuing deals professionals

interested a conducting number demos are customers health of we the For record platform. product our example, prospective in for care's

seen new consistent type with for that pressured at with across or have getting the client of buying scrutiny through constraints business year. been dynamic this remain funding environment. complex processes biotech we are the Budget is a by true is still over it the remains final decision positive stages companies, quarters. slow is dealing most challenging. particularly activity end our new past with sign trends markets The customers but were moment, and While for This elevated, acute transactions number smaller and the firms existing the future is growth, of for macroeconomic whether a what business, have with

see out to in continue play these also our We renewals. dynamics

As but has not spending and some they and our on end also only persists challenging a both modest pulled cases, new in have environment led scrutinize the in to in back tightly, spend, their customers have this existing more downsell increase markets. and budgets most sought churn their market impacted to reduce

In the churn midst These to to control include can of series much are this environment. we possible thus as And what being on these sure focused we of conditions, initiatives we control. a are we in as try very efforts and at risk internal executive analysis concerted implementing Extra science our success our teams. identify products with and key from help and initiatives and delivery data the clients services value of managers professional our account and to most team. interaction accounts focus customer intervention minimize

while Additionally, clients made utilize run is aimed during their in our we possible efforts as are we stages, the and of that our renew solutions seeing Definitive series helping seen. time. work outreach to the a mitigate we to in our generally base have higher larger The campaigns have help at Healthcare continue rates businesses news a as smaller customer the that have that and is at worthwhile are churn And incremental our as this effectively than clients. good to companies early signs data our result investments to

We've faster consistent profitability to realizing value health there example opportunity a we addition, numerous data sets of specific improve. leveraging highlight and expand their seen to that our Definitive early and moment, data customers in a remains market. we in in opportunities remember to foundation these opportunity and always for lay are taken solutions and In the of growth I'll in areas develop It's deliver customers. new the conditions balanced invest approach confidence can enhance the the care one long-term when seeing to great Healthcare growth efforts. important that existing give and the continue that expansion past market Stores customers for of the importance some a this. and In the growth us the returned in strategic our in churn intelligence between our commercial business. like us have it to like value and land-and-expand among our customer enterprise are many

for them that a world, an more number higher the more makes We believe that on are partner helps this efficient face make consistently high-quality looking the customers health and trial Dataset commercial the company and growth about costly. platform This demand our that Our the to more go-to-market companies the constraints growth capital In decisions effective into any the future. drive will be data positioned make investments investments us Definitive combination to tell or And confident of cost choice of Healthcare for of clinical unsuccessful Atlas business. even pursue. we plan has they of in dynamic poorly market. actionable informed care need their can us they a designed intelligence strong

into in the to targeted customer business the few In from Healthcare a and spectrum those a minutes genomics like genetic plans now improve to are and value ultimately sciences and that the I December customer signing back Definitive This we contract to that a demonstrate diagnostic quarter its customers testing. vendor enterprise August to Atlas its data set to a reference highlighting CRM of platform. agreement to integrate the then would marketing all customer for offers in affiliation our Atlas us prior from full a leading out ways Definitive some our system quarter XXXX, third generating access both the second relevant had claims. at ended data reach This our spend space, XXXX of outreach of wins in life multiyear win Healthcare payer numerous clinicians. significant clinically

multiple of with August, access client quick to wins In to phone other e-mail the competitors' along its one had that significant decision Thrilled our XXX Atlas proposition the addition messaging to we dataset. identify to and continues an name, to targets targets released in its the results, particular the contributed in quarter, with use including to ] vendor. its installed value top With a the using a installed, win competition. those dataset, engagement a number technology at update purchasing new to client receiving prospects update shape ran adverse these to the maker. and data software patient identifying the [ That address report software

care run highly leading determinants This an wins and enterprise With health the the and omnichannel academic already intelligence hypersegment a in propensities August, had and market. population demographic strong based and to in our after Populi, win in services. a customer wealth activation Populi acquisition to competitive multiple was Also provider The the the was expanded of of upsell target our before campaigns market. both a campaign urban market we large patients important able of purchased quarter, announced California. elements. to using intelligence plans intelligence will commercial product and network most products, in acquisition provider recruit behavioral, more at customer center Populi's to clinical customer, social off be its but consumers medical a suite, this health ] digital other and marketing of intelligence [ which

the commercial Turning to to focused on XXXX. of enterprise to its before firm treatment of we regulatory pharmaceutical and XXXX. and end This assist current performance paths had outcomes submit a and in company diseases. path, With amyloid to implementation of Passport stage for genetic the our application in with follow to a health will medicines at new [ Analytics win Forward Path ] the company FDA diagnostic multiyear to transformative Suite, care, the treating the This additional cardiomyopathy. economics, plan filings drug modules evidence and standard planning use patients an plans assess

to for organizations the to presence now, reference third also product and quarter, between relationships This manufacturer American care affiliation health as accounts, price health salesforce.com industry purchasing food our it that the to outside services. understand largest plans wants use out purchasing organizations. authority to a cheese facilities. data Finally, I by like or plan integrated customized identify you we and the proprietary a Atlas ] particular, of to customer to know in care for customer division better target I unique dataset individuals long-term help into develop service incidence with include networks and different were both the In sells to facilities. results into dairy integrate hospitals care reach from its expand In and [ networks by those our strategic to its and the right chosen and group delivery

we're over innovation Jason it turn to to and the like I'd front. what to about on talk doing that, With product

Jason Krantz

Thanks, Robert.

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increase enhancements including in pharmacy of of in number XX% of number XX% increase increase a if a XXX% data patients. care pharmacy year, the claims of the our in sets professionals this increase the locations, made XX% health a database, to our in we've So the number a practice number of number in and

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technology We million from updated we installations improvements sources generate as hospitals, also and groups on made new applying our our then centers earnings health algorithms and intelligence. technology significant than ambulatory set. installed systems, for more Atlas to collecting And physician I multiple last X.X by cleansing new data data data surgery proprietary and on to shared linking call, our

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are to the of ] Monocl Our inventions leader understand improvements media key [ social we XXXX cover universe a Instagram activity [ made new Some care in health Facebook. product opinion and KOLs the clients YouTube, across tab ] news include our which and inset expert online. influencing and

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to help even people, in emphasized market. macro data need is critical we that in clients our continue As growth the dynamic invest even in in to the we more to environment, the difficult processes build we innovation effective health to past, care our a and more and succeed solutions

Healthcare's detail. Rick quarter Booth, I'd our financial to to now in like turn walk to through definitive performance it over CFO, more second

Richard Booth

of for unless start our I most QX I'll reflected Jason. XXXX you, Thank third review results on on XXXX. of recent results commenting noted. QX for before with In guidance basis, non-GAAP in providing a my as our and detailed And all our all or remarks, results otherwise discussing will filings. our a quarter be

conditions, can profitability to to strong Our economic model business on revenue and challenging. us control despite in solid allowed by QX very deliver strong what we results which focusing continue be

innovation market Our focus recovers. should the well efficiency continued and as us position

unlevered over plus free the last quarter XX% XX% trailing was a using months. EBITDA adjusted growth, compared free and the flow or EBITDA unlevered XXXX, flow the in adjusted margin. cash cash Revenue XX-month growth XX% XX% highlights XX financial Our include XX% to margin QX revenue margin

the with customers were defined and an ARR. quarter XXX increase in will Revenue year-over-year us Turning of customers professional enterprise the third ended our million, the large at previous in prior as quarter. and $X.X least XX% guidance. the includes to on from increase results customers at $XX.X for to with the $XXX,XXX We issues. in same challenging be an as of most work of engage above detail. enterprise million from was their XX% of some This more enterprise our XX clients XX year customers, services up quarter period This

of and programs. majority of go-to-market reminder, ARR our focus a represent a key our enterprise are As customers the

of customers, QX previous total which in Our the was and smaller of X,XXX from at down XXXX the account, customer includes end down quarter. from QX, X,XXX XX

As impacted smaller conditions. disproportionately customers by been have current

QX drive intended basis prior XXXX Gross Dataset from points overall the growth. to profit data additions XXXX. Populi decreased from gross XXX Atlas these year. from long-term relative at to both innovation Most XX% sources And million, and are $XX up the of was addition QX to and XX.X%, our due of margin

Sales expense from million XXXX. $XX and marketing up X% QX was

basis marketing of percentage that This made XXXX. to XX% highest the QX of revenue, from revenue, sales in we efficiencies on focusing results have points and As on a investment. changes XXX from markets and spend marketing the down drive activities the with are return

launch as development datasets Investing down XX our realized highly Product and the value to Product further and in X% Robert map. points efficient examples $X.X increase existing globalizing expense or XX.X% and XXXX of long-term enhance were in from expenses customers. deliver have using will pool. to way was earlier, and by these we QX up continue of million acquired and the invest to some identified in talent to is our XXXX. integrating revenue, product opportunities we started from QX multiple efficiencies a multiple we products our effective Jason our development we platform road basis operations

million, of $X.X down as XX% G&A in QX percentage revenue, of G&A XXXX. XX% of from from XX% expense QX XXXX. were down a was And expenses revenue,

XXX percentage basis and sales We efficiencies expect income was revenue, XXXX points as primarily lower 'XX. we ongoing costs improve leverage The XX% to margin both revenue, was XX% of from million, efficiency. a costs in up these continued due fixed see and QX to relatively to Adjusted and versus operating of to marketing because and as up due $XX.X increase efforts was year-over-year income are administrative G&A, from G&A. QX

above increase a was XXXX QX the range. guidance from $XX.X upper our of end XX% and Adjusted EBITDA million,

EBITDA was Adjusted basis and Adjusted the XXX income of XXXX. XXX million weighted of savings QX shares to percentage is $XX.X described revenue to a earlier. or net diluted outstanding. revenue EBITDA points of $X.XX on in was higher a per revenue, approximately share based due investments as average million adjusted QX compared As XX% percentage

the requirements billing free Turning flow. the cash cash Definitive trailing trailing which a million in of XX-month flow does cash period generation. deferred driver from million when XX% any $XX margins, were on $XX.X year We growth due to growth flows Like on and so CapEx upfront cash bookings comparable XX-month basis, flow. is substantial down company, revenue, Operating to cash seasonality. in flows slows, low a provide Healthcare's SaaS biggest high ago. focus

cash flows. recover, growth should As rates and stabilize so

on a And Unlevered free million flow basis, converting free XX% ago. a comparable a adjusted from TTM year XX-month TTM $XX.X period revenue unlevered effectively cash down was was the of $XX.X XX% cash cash. flow basis, EBITDA our million into trailing XX% of of on

cash of On in investments we fund adjusted we debt, quarter EBITDA our ended the sheet, the and with and initiatives. $XXX positioned million million that inorganic believe and only organic balance are well with both to $XXX short-term we strong growth profitability and

and year-over-year, obligations million Current performance up performance obligations Deferred X% up were revenue $XX.X million of revenue of revenue were total $XXX.X was X% up year-over-year. year-over-year. X%

note will grew than revenue year, that the deferred and revenue. as expected throughout You more CRPO and seen we have slowly

end, on our then year good as of normally also equities stock benefit. of our [ a retirement $XX.X book and generated XX. market ] that segment versus liability value a scheduled TRA tax million we identified review our $XX.X a Right million to Subsequent gain undertook the million and $XXX.X September value,

impacts excluded our adjusted charges debt earnings. from covenants, impact a all have reminder, noncash no and our are As on are and these accounting

to that guidance through also year. conditions assume now Moving believe for current quarter. to the We extend of it's the prudent remainder the fourth

to million rate adjusted income we X% a outstanding. million Assuming to $XX.X XX% of total per million. case, million million $XX $XX.X QX, Adjusted of $XX.X expect in in million XX%. this EBITDA XXX.X revenue to $XX.X average share million $X.XX adjusted $XX.X operating to growth of Adjusted of of million diluted $XX EBITDA and is net $XX.X or for to the on margin $X.XX to XX% to weighted million were shares would

results, when range sales the revenue CRPO our model, of we as XXXX and fourth but quarter day, so preliminary guide of an renewal us, single recurring is are I the growth. share can important best formally for as to some we our potential XXXX there's remarks The But primary our XXXX announce will QX still quarter outcomes. approach of We is growth Due year-end. predictor bookings XXXX driver a revenue. revenue

our net moves on conditions would right in QX we guide dollar we're but in the expect to perspective, QX business the confident net EBITDA expect performance levels, renewals also an to we'd important to drivers. year-end our XXXX XXXX formally performance NDR are maintaining significantly the improvements while across profitability retenant. dollar XXs And and to growth will from profitability low see date, We not upsells critical that long-term a to impact but do overall retention, basis. we're making align year-over-year adjusted margin. today's given

for long-term solid Healthcare line and a [ are invest the despite support and positioned to product We're well and efficiency. ], believe the in Covenant we term the results large top headwinds. clear a efficiently growth. profitability high a quarter capital current position revenue for development in to prudently leadership committed while QX long position We was Definitive predictable bottom levels manage that company will best growth, of have and economic continuing because market for we attractive believe developed to we

before I'll Robert closing hand And it for we thoughts to a few questions. that, take with back

Robert Musslewhite

Rick. Thanks,

and absolutely Her questions, selling leadership as of accounts both as she Sales to that our and does, verticals. our wealth new across of chose Carrie a welcome the for SVP success range delighted Chief of for in customer Officer. a medium-sized to want executive chief a team. our join is and on and Worldwide software businesses brings and evident I call office everything Before I'm ] she and small enterprise a passion Carrie experience we Nuance, she open service a Lazorchak at similar to moment background web tremendous Revenue take has [ team to

that, at new background. led I'd Chief Clear like In Craig was before welcome Officer. Most Craig very as impressive And recently, addition, our has Craig Hazenfield [ a HR to ]. People he also with and with hardware we consumer Google, partner excited a ads to senior evolve we and directly our where executive our business. I'm at Craig grow teams. grow as partnered team leader Google's to HR

Craig. the as about levels all we Carrie additions the will grow of great evolve into and of support that fantastic and the we're diverse excited of at are the I'm the They that organization of and examples Healthcare people future. and adding types Definitive both

also want to vendors of and thank continued their Definitive I'm I day, proud are economy, team service to excellence and commitment to challenging success. innovation, routinely in acknowledge that employees our all for to see partners, In a customer their all demanding from and nearly I customers. say Healthcare the continually rises countless our to Every customers X,XXX that challenge. passion and of

look well reiterate are to close believe want our on for financial we year. that we to XXXX, commitments I deliver we As the to positioned out

remaining product great executing and customers Our growth focused a on on is doing our our team initiatives. key and job

profitability customers We opportunity coming in in long-term have revenue opportunity great remain a ability the and incredible to we the care substantial an and and confident scale business built shareholders. large, our health meaningfully for generate to value our for and years, growing that dynamic our definitive in and provides market

like With that, would now Operator? Q&A. we start to the

Operator

[Operator Instructions].

today Craig with first question Stanley. Our Hettenbach Morgan from comes

Craig Hettenbach

the for you customer impact you enterprise could still appreciate you is for think thoughts to headcount? do preliminary XXXX. on grow growing, specifically, actions have and mentioned count and mitigate churn. some which think an to do you can the Thanks Robert, When enterprise continue I that

Robert Musslewhite

We'll we're enterprise. headcount. Look, growing the Craig. enterprise continue grow always to Thanks,

and a more see question. macro. in of business, huge a challenging not our you that part happening this That's that's So even

wouldn't I to So that expect change.

on to hope we'd fact, that. In to do better and continue better

On the doing we're churn, tonne. a

are think comment good of impact some to the I work. like my of work, doing we is, and see we're feel that starting

to out until But continue I play is year. churn the next feel really do some we you like as that we the until get into we're know that never and into hope in impact very always, in. it's as yield work positive doing year. Again, always next should I So see it's

looking at 'XX, back we quarter first the science, to so if over kind to March coming April April a 'XX look the that XX% 'XX, So of second through have do one ARR, the of go beginning if at, 'XX. looked when back kind forward our worked we'd you between through normal this you which will thing been estimate and of have of is challenging we estimate of renewals March, saw macro

that environment. you we've give this challenging an dealt more with would the amount book that of in idea our So of

an and that's act to the the get customer together things So out next indicator and expect that across that start really improvement we'd if we're see play we also doing our some things to year. base, those

Craig Hettenbach

into you And okay XX% next headcount as organizational it mentioned, stays it. starting guys have EBITDA do of you're this are managing year? my And you as then if you follow-up, the kind you Got see way think margins, year. environment in you're terms that to benefits going is, to how of some the of structure headcount or

Robert Musslewhite

there's quarter here. I think, left lot of a Craig,

a next we So where the we to plan drives use year, all of for quarter performance our of and then investments. land that lot

growth is be we you'll we'll always very what from balancing think see our investments. make and us I profitability about as careful

growth and hand investments against that sure have run our to on want we're while right and the those to sure after the staff right deliver also So that revenues. prudent funding we we being strong be profitability being

So it's we're always something to a premature little perfect have but it's that to question, on balancing. answer working the that

Operator

Grossman from with David Our will next Stifel. come question

David Grossman

that RPO as down You wondering at just have of enterprise could right? negative just it decelerated deferred XX and looks the some revenue. It may was looks calculated in good disclosures the we quarters. last reconcile experience new CRPO, customer as, well ] of ] as a were like Yes, sequentially, you a if after like couple modestly [ the pretty despite you those [ I'm adds, some do help the seeing bookings number. also strong quarter, be me the

you doing that So to customer can of I right these continuing seem be of reconcile the if to decelerate. strong some maybe the data help am, me kind am points I and other math new adds with

Richard Booth

Yes.

is group among pretty we're the I It dollars a think of year. multimillions group. is seeing up that per ranges the $XXX,XXX smaller from churn enterprise customers. And to broad

that's the So mix. there, the you'd mix depending see what on on in

I reconciling figures. think that's why those you're having trouble X

David Grossman

that of though is the is that the count not customers, still -- the I count I'm is it how is you're works. clear presumably is on getting So that coming when that? I offsetting going are is guess, out larger mean, -- enterprise up, even dynamic which things timing going

Richard Booth

No.

I think historically than seeing expansion case, is more been you're the price would some downsell. what less have

David Grossman

suggest assume a to seems that mean, your know in have I then down, could there's just comments of Got right? variables, the lot just quick down it. it we revenue. I but am be about low math -- imply, the XXXX. back retention, I year-over-year bookings, of Is I including or again, that if If And wondering other right envelope XXs you does

Richard Booth

potentially year-over-year, No, don't Yes. see scenario a we're in I which down David.

David Grossman

Okay. offline. you with Good. I can follow that

Operator

will from Santangelo question next come with Jefferies. Glen Our

Glen Santangelo

I I of of the in want incremental like respect up sort years apologize, can can comparisons number big you give think just the of couple previous with the that what is? said, the past of trending so low headwind we over dollar some the on questions. us a I XXs, couple follow gauge retention, has to Rick net how looked Rob, to we're

Richard Booth

So last at ]. we year XXX [ ended

Glen Santangelo

right. All XXX. At

I what comments you renewals, think, I and Rick, you your to NDR talked of say. so I the And sort it's mean, on trying about booking were upsells mean CRPO exactly to growth, 'XX, just up unclear, follow on

have you were So the on elaborate all to a at terms of into I trying we you bit clarity this current like that this saying you're have more in mid-teens say 'XX I growth, comfortable little about in bit want kind environment, if about And it sounds environment. shifted. just year, talked can on things coming more of next but what said because to a current don't what little We're you in year. know

Richard Booth

Yes.

that's is slightly indicators I that. get It's I think year, commentary, of forward-looking a to of how we've it's think earlier I appropriate the closer as growth that end not slightly But indicator. and closer perfect always consistent growth. could to one it. our with better, about CRPO said on Things focus we be think of And the worse. better

Robert Musslewhite

like about Yes, would would if effect taking but be of questions whatever those I and the can next CRPO add, cumulatively, Rick's incorporated assume the that in you're a those it NDR, couple year. comment sounds

Rick and that the indicator. best number, says CRPO So that's

Operator

with Company. Ryan MacDonald move Needham next we'll & And to

Matthew Shea

you kind optimism for is head and with about year up more on being last Ryan. towards XX%? that year-end, kind important and giving ARR the compared maybe or are And activities? QX does your you'll this potentially for last next through those QX renewals concerns March of commentary wanted this through working to And upsells. big quarter follow signs How QX Matt year. of as be XXXX Is to Shea on This you QX I of what than of year. that a XX% around by sales

Robert Musslewhite

quarter always us QX of for terms a and in big So business commercially, is both of terms in renewals. new

I think our second is biggest QX. renewal quarter

a period very of ahead obviously, it's us. So important

as feels we've of kind what I'd that think the I environment across same year. is this still the that it seen say about commentary our is

environment deals are through really upsell funnel new on pipeline of good relationship both there on are deals and challenged. you in and while down focus new now this said, upsells a and get executional a how metrics top getting clients their renew are and and some business to with what been That for for how their renewals. really So our do business do expand operating had when Even us. in even lot we've definitely of challenges and environments focus close closed, the we getting

optimism So has to in And it up renewals that but we've tactics time hopeful I'm through not that, sales next really lot X a like I'm very focus different, work run that now improvement. closing is coming feels for these are my it's I some and and who the quarters. or this guess closing environment work because clients feels had been because some the more yield hopeful good, necessarily

Matthew Shea

so see that. maybe And churn nice you win-back in you ultimately, back? opportunities the have across book walked then pipeline? come of do to broader term the look place? see them what near drove Got other to that win And drove win back. just think if quarter, it. you the of the back Appreciate then and sign I could in then in other the to that on what really comment optimism was away, customers the first medium out that And as Curious

Robert Musslewhite

the in for some what generalizing, that's really reins user is going cases, the who the and many dynamic has win a on tightened decision-maker, somewhere in Yes. us the I cases, with user we've buyer seen but is has been a mean spend. have is, back. or always market that over in general, and engaged the prevented budget And past we business XX in or so above generally look months a this we very

the activity. in record lot commercial to I a and to to steps doing work been we think reflected still playing and In pressure top-of-funnel closed, good And through our organizational of budget fact what's really they us. so things kind with number People performance. have that's of where want general, more demos. felt that's in get We're out a get

make that example, to budget try for quarter, told much no. the tough cases, as wants who being side most is on have with with other really someone In keep we every them So to can't us have clients stay we to there's and us some on as stick decisions board.

other like Just that's spend a telling of external people happening bunch Rick organizations. in here, no is

things win processes when a on specific budget we So a to times, when with the someone get quarter, after that's example to every We we're when engaged and of to going back, we stay internally, don't the that about in those know we turn that. we'll certainly favor. in happened those churns after our comes they've have knowing forget it, get lot chance client. and been user have few the stay and things clients, that for it. for or bit see an that turn little back a in We chance of a in get to able work what's just We we'll back

Operator

with will question Vruwink next come from Baird. Our Joe

Joseph Vruwink

quickly I commentary. back go wanted to the CRPO to

loud if just normally now. guess growing how possible I the you analog approach around think sales where a you don't a right renewals point and clear, and it X% that's that's the indicator put think in best is and XQ, I X% So and bounds think a XQ number given the to ends CRPO of I about And good when a of range or is I not. know this around at XXX start that. revenue guide up year-end? the there's at year, basis importance But

XXX to by Or would So think about bound you you would maybe basis X% that? points? how

Richard Booth

It's how had industry we've because really formally across matter. a And quarter great experiences XXXX. segments. about for divergent It's QX we guide more next does observation

most what said. comfortable sticking already So with I've I'm

Joseph Vruwink

large I And Okay. the a that because like Fair a was one, enough. then question context services at that point? future have interested and guess, then I obviously engagement, this more the of the anecdote maybe in associated strong subscription seems was it things. is does And it item, client related. type pro with line some was look pull-through do of to question, of trying you're just some X seems can it services something part new that in it you

broadly a success that more could mentioned opportunity you customer potential uncovering our base? key with this maybe in engaging customer You and clients. run Is your

Richard Booth

PS direct spend build relationships, speak into problems, for strength our But that customers. I the that. large have long our cutting-edge really especially more They the more time understand certainly the in their necessarily with don't term, product follow-on. large, customers, engagements I the think we that more we we hope with our the of the to would

Robert Musslewhite

through that area, a million name relationship look even of services super sales part that to it. data value area, expanding and those a say, per valuable I we build therapeutic to brand of on on per drug dollars are pulling even can to our as and we large multiple Yes. deliver grow

our those So way. of it relationships early on the that, relationships component with clients days a but enterprise see key I'd along strengthening as and really

Richard Booth

We're itself. What a seeking an to are customers. product-driven partner ultimately, an as really to And end we're company. those And balance PS incredibly to strategic is important that. of just product-driven, seeking revenue not large we become

Joseph Vruwink

Sure. very No, Thank you well much. understood. that's

Operator

next And Bank with Allen to America. we'll of move Lutz

Allen Lutz

the different of want I Rick, in a CRPO dynamic way. little to a after go bit

from and over where few that you platform so, case? is enterprise like customers here. or it but sense next I at the that or lot as So get you step has churned over past look if trying past is kind these X Just fair that get to that X take small may part quarters, off And seems a think Do a moving that of we X%, XX%, a trend assume and of it the it's that CRPO customers are stabilizing here? some obviously, where the we X% a those headwind. or stabilizing growth anniversarying quarters? is assume that quarters the KPI X of If to be the things moderated would sense are increasing, back, a

Richard Booth

It's a great question.

especially the after about I think that habit fourth the in quarter that fact guidance issuing the fourth quarter. you resonate. of many of the not the CRPO, We're importance of talked factors guiding we'll given be the and

in CRPO. much add the have to don't specifics I terms of on So

Operator

question next James. come will Brian Peterson Your Raymond with from

Johnathan McCary

for This Jonathan on McCary Brian. is

not, of macro direction a referenced pipeline. are [ We've sort starts if see ties down oftentimes the an of trust of leading guys vendors maybe kind when But further I different here. slower coincident see that some maybe realize and to a you the other So for seen clinical what Or health software or here? stage? ] inflection any still of your development are care indicator you you'll guys tracking the that for point some in is

Robert Musslewhite

data really, have the we for drug Look, Yes. really process. many of commercialization stages good

So have data that KOL early we helps in great the process.

ahead it once decision has that take all ways and process, commercialize market the early and great of kinds have sizing sort to drugs certainly we have the made We data to we been market. in helps go and

to the helping understand in certainly, their development I question. sure part we in understand companies it's develop -- support a doing us not and drugs, of have first your continues, the continuing success to role first But big I'm to So so. important play

Richard Booth

rebound that as time will the customers, macroeconomic market look faster and And outside we And we with statistics we're we specifically of pitching. ahead indicators We're a in prospects spend that large not in the days to always change. do way. Yes. We're early conditions that out growth. opportunity, focused there on the or more

Operator

to [Operator with Instructions]. We'll Blair. Haase William move next Jared

Jared Haase

free still to Would demos. a a a think to environment. has little wanted in see curious And up I the love follow solid that I'm I demand number in anything seeing of that, think terms just of if demos clients? if you to generation I just messaging specifically you get get remarks, mentioned in beyond of color. to of Robert, users prepared record to you you more on, front mentioned the front a what's your terms trial product of environment? in how in guys sort has offer changed obviously get Or willing of are changed in challenging anything

Robert Musslewhite

team We've done question. our inbound huge on a channel say for trials. It's incredible marketing has I'd job -- us. Good free number one, an Yes.

numbers record of inbound leads. delivering been that's So

As and ways of that free team them is really to side focused trial. up innovative find get people our bring on lots in signing for them to and

[ get reps team done outreach our has prospect at and had sales active are their There lot team conference a us we to really I'd and industry executing clients' several inside where great That's really for order our they of setting also I to a our out ] us. are there. sales for sales calling really we up of the important those and both on job each spoke, that then on important we've That's them in clients and get say lot nice front self-generate list. in outside we a the new be investments and to demos. made. continue a over what and traffic, demos at with the have our understand was be health to people And that product we're person and chance of ones of where and events, doing see

a on have And we of things talk of lot pile to then that, about. I good top

we've tonne to platform. year this a our strengthen to strengthen strengthen our remarks, our data, If Jason's products, to you back go done

lot a helps have ] that we really and of think messages, I exciting inbound [ interest as the well. So with

of I that is still are well. with we and where on of with but where again, be that even in obviously, funnel, challenge macro, the the great the I'm needle at shape So bottom little elusive improvement, funnel, the can that, we pleased top down on bit really through working hard some in the that on getting been as a something that we we're has stuff hope front. the that's macro But move

Jared Haase

Okay. a Great. And maybe quick then clarification. just

that the On are they do Or analytics another short aware and came any data ] of do have [ solution the try clients you of churn time? that they for -- these period back, of any clients to replacement a similar coming hear at that they're came And a other clients as then ARR love back they would previous back that are of to those if also, you? or kind back scope coming engagement.

Robert Musslewhite

Yes.

-- question most So of a I of generally others, lot of the budgeting generalize But because say have people a with talking is what to there's clients, lot a mean on challenges. about we're to little in out. both I'd bit in not. environment we're Like gone and this seeing

to depending for a emphasis stronger is And to opting for on time. back painful of the in. them people period they're that So how get without go

what on So kinds realize they they they to come they get missed, of or it's there's the back, ways I'd But come budget talk at in say ARR. us. And they general, of say don't feeling back When else. coming greater generally all I'd budget when and come challenged. same somebody back They back. get They people back.

and with with Y to come We know and buying we're the chance engage better that X, a have you to by we really them a what tailor when a back about get positive they did to can they've around engage them, the they them product, how chance miss signal. way, doing did Z

have in I'd again, I'd So -- market. that's I the what kind there's we how probably a the average that typical super of of probably answer say I'm -- activity that's lot case. generalizing because

Operator

Next George question will with Deutsche Hill Bank. from come

George Hill

versus this you parse to your about probably to went bit expectation the low going NDR think I'm words the of quarter, last low to think mid-XXs Rick, XXs. a if I And here. ask little the from to the some quarter I

words things a am So worse? too your right have am a bit Or little bit little incrementally that reading much? pushing I I it gotten

Richard Booth

a consideration. to question. That's a pausing give I'm great

still the range same more we've visibility I specific. as gone gotten we've more think being through to another within quarter,

George Hill

my greater don't it would delta any are quarter follow-up Okay. churn which by by know been And I new sense, guess, there this if have forward? if quarter, XX sales I any we've driven make like is more [ the is change, as that, ] last what moved days then or versus don't even outlook

Richard Booth

when remained but may getting be in have comparing hard not of tough. conditions for companies, quite quarter as after some hearing conditions they've more operational information I'm and we'll been into as tough, would extreme QX. have without our really I one tough It much detail. It's you're say versus another,

Robert Musslewhite

year. kind the I It's felt environment, seen the qualitative same just across of same. commentary. was the on this going like We've it more feels

George Hill

Okay. is of And numbers then last question. strict kind a one the

or inclusive As think next of is of NDR escalators we a that kind about for pricing that factor, basis like-for-like year. on

Richard Booth

I what NDR would [ XX-month is the and ], which NDR on to be was that expect and No, XX/XX/XX will speaking be price we backward-looking trailing that increases decreases. a of inclusive

Operator

further or at Mr. closing remarks. any the additional no questions to like for to conference this are turn I'd There time. back Musslewhite

Robert Musslewhite

February. we time end look for you questions, on all you. Thank our coming across of to the and of back at Thank forward quarter, the go the attention seeing some and the next good call you and we'll tonight for

Operator

concludes for This conference call. Thank today's you attending.

Definitive Healthcare (DH) 2 Nov 232023 Q3 Earnings call transcript