DH - Earnings call transcript Q2 2024 | Definitive Healthcare Corp.

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Operator

Welcome to definitive Healthcare's Q2 2024 Earnings Call. [Operator Instructions] I would now like to turn the call over to Matt. Please go ahead.

Matt Ruderman

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

Joining me on the call today are Kevin Coop, Chief Executive Officer; and Rick Booth, Chief Financial Officer.

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

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

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

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

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

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

Kevin Coop

all XXXX results. to definitive Quarter review Thanks, of financial for afternoon this Healthcare's Matt, you and thanks joining to us Second

and ahead. to with new CEO the in and excited I many Let the of of be look I'm you me and begin very saying weeks to by Definitive meeting Healthcare, forward energized days

call, our As you in the was performance second hear quarter. on mixed will today's

up XXX points margin up range. exceeding million, XX%, year-over-year, and exceeding our up guidance Adjusted was range. EBITDA year-over-year was our year-over-year basis XX% was guidance Adjusted $XX.X Our total EBITDA million, range. exceeding guidance $XX.X and X% revenue our also

In renewal continue improved to year. prior addition, we drive rates versus

definitive underperformed business and continued highlight These remainder largely revise internal results sales make which we the is disappointing. can remarks, due across model us these logo to guidance profitability, I and caused business the address commitment challenges fairly I that fixes headwinds to of our challenges. of in the the Although execution will macro for we Healthcare's our sales quickly. as year, and upsell to expectations, believe to need But be many operational done on my

performance; me some action job; last our operational first outlined, at quarter my of I on financial we're Before level, we into myself background dive I've what give wins and key my improving putting days XX will high and plans results, thoughts what the a Healthcare; the and details some provide in towards of I our learned into drive initial to attracted in to the highlight will from on place the quarter. second Definitive

always adherence of to own data my One been driven role with interest. also levels constant sets this of and to product-centric Definitive attracted of like has many initially XX the a a I relentless I With I'd which combination all and transformation start skill experience join Healthcare years in decided requires, Definitive capabilities business scale align why was by focus, always the to that though, commercially framing with results. of and foundation to at driving Healthcare. across verticals,

the ICE, Knight, to analytics the as data I profit and markets to part returned commercial businesses President. solutions our responsible company businesses growth of & a that returned I leadership drove part a while the also of I its leader growth for private, to IPO. to the now division Black return led and to the synergies ultimately, also successful that and that led P&L role, Prior and and very ultimately America was global that Dun transformation businesses annual that, Verisk. realizing accelerate substantial for successful In public team allowed with expanding Bradstreet Exchange, the this As for data Intercontinental which took us North At double-digit cost the and was I very for decade, margins and supporting increases its profit led IPO. to double-digit the sustain growth, the

the the how a the DailyPay, go-to-market growth, you schedule. every entrusted through And issues, as deep profit business accelerated a the goals identify performance the growth achieving in importantly, that CEO and a and those identified a on had that data, leadership. ahead all perhaps, a I've growth-oriented core, space, developed power tech market-leading improving do the direct of proud have of led high-performing of I'm profitability into in efficient to a understanding of very I'm roles, fintech action ability of I recently, Most in accountable At and engine. cause developed lead. translate commercial years team work I impact I've of and to build to executive, trait needs most these been to of nurtured root

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have to a give performance confidence key great weeks. base and excited even improve their customer prospects We the on day partners health me conversations counts of customers' to definitive our we over in operational add My can great with I'm customer and meet care coming and more day more value that out. initial directly that

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a new In QX, we flagship the Carevoyance, launched industry. View app along mobile for our new platform. platform for our med with tech

to continue We to physician XXXX were In addition, life and Databricks also innovative to data and data set. and Sciences focus our the delivering which on a industries. data is of expand management sets, solutions organizations recently the selected we as health services practice independent Healthcare new Life our Year, AI to sciences associations Partner care our and adding the testament

great great for delivering data, are making even customers. and in So strides we we great more products our have

road focused and What we simplifying our product map. is now are prioritizing on

solutions sciences more for development and internal our customer problems. and years focused. customers solutions diversified and several teams provider our the for to streamline in innovation, is To focused end-to-end reflect acquisition bringing point a robust now industries these efficient the use more on life last solve team a more that made Our into unified to range be further strategy of together the innovation important our company's and of product business can easier is most broader that platform their

able ensure new on targeted solution. the efficient and In product will to product will for the decision-making we put development process stay market This that of a that more where decisions. together addition, a believe we streamline be compete we road will as framework we've future focused top-tier parts also map

improve. that are to what we So things the need

high it been doing level, as things on as execution for would deliver We've us simplification, summarize to objectives too both has I suffered and made development. in led needs to This same a many it to has at time and the result. and inefficiencies it a harder At product go-to-market be. our than

of and enterprise a give creating the bag. outlined to couple go-to-market tremendous that our been simply believe to by sales me change mixed a which Let standpoint, X while last high-level includes and for examples. X quarter, small- the you more past separate to medium-sized framework. over acknowledge customers months, the of have right is resources approach From motion I we it's been a there's amount team the important devoting a most customers a

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position other Lazorchak has we As resigned as Carrie her pursue last week, CRO announced to opportunities.

background I effectively directly reporting of me and organization profile extensive business, will its allow will to the leading enact This me. commercial required leaders quickly with my sales senior growth overseeing organizations be Given changes. to directly and the current sales the

far enterprise efforts For complex. our the too identified is example, key one so become that have we've of learnings go-to-market

way, more be complicated unified motion, solutions, be evolved, Much more team how I our evolve point find solutions sales they of often Said our could believe this sale. pricing less a driven than our of selling be. needs but platform to ourselves can business go-to-market will an a opportunity and we by it it's be. point effective part Given and made platform. to which success a more and has the vision. unified towards product demand through than selling has having efficient This is packaging selling simplified another in addressed made our have even efforts and than greater we generation rather

the unlock by simplified able We a help more our effort, will churn our offering. and enable a to continue to also meet we to of a improve serving through customers better customers. unified of believe grow enterprise us platform that be needs into streamlined fully our entirety and solution their By more go-to-market presenting motion will solutions

In of good the self-serve the is a focus need capabilities SMB and can part to growth fairly across our market. strengthening we expand developing these news done product-led make that in The many our will reach be business on of market, fixes to quickly. the operational that we motion this

the operationalize as I tell for drive continue quickly tremendous changes that of of begun the many definitive early of to be improvements business. making them we're everybody Obviously, a you the sense already across amongst to but urgency challenges have possible. and and at operationalize excitement there on can these other a as and improvement. is and identify executing will We finalizing areas to near-term we stages

quarter and delivering not did spending the have for is are they for we Healthcare, will a remains but we QX. prevent to conditions life So what elongated of prevalent in forward. ensuring dedicated while believe sales they the scrutiny sense from sciences better we challenging Challenging on are market very future a cycles, prospects, in operational many particularly very going results bright heightened are, customers us market. that Definitive

above strategy out are confident we bring go-to-market our to team, stability and execute to growth. can as return the consistent that We we company I this laid

their understand highlight hierarchies. our a I'd provider of early opportunity data for have. integration cancer Definitive screening data, volume and and of a Clinical Healthcare QX strategy by proprietary and breast market software we of functions. provider affiliation executive place key and customer foundation the Through commercial contact demonstrate intelligence complex now personalized serve needed and network like few will AI service relationship. that as detection reference planning growth claims and the An to to wins from

the After Healthcare. of Since one providers electronic their sales they of of Next organization Definitive up, identification. hospital Healthcare's competitive Definitive relationship expanded white medical record view products recently systems their acquired suite largest for on relied technology, with the install U.S. and space were company, to XXXX, account analysis intelligence, has team our formed in in-depth our software addition Their ease online go-to-market marketing for sales. use data Definitive selected affiliation newly by their portal. larger our data their organization and of Healthcare marketing a multinational of of has programs expanded granularity for use data,

Another of win marketing cardiovascular Carevoyance cardiovascular devices initiatives division and territories pharmaceuticals. sales tech understand the platform the of of to recently providers on to us space the and their largest is in They funnel. for focused of displacement for patient and the med our selected the medical diagnostics, field for teams competitive procedures their specific within beginning movement support physician referral stages one

resources child more on line Coast their provide migration. referrals level, analysis neurology, including to Healthcare This West market them and the increase oncology, Definitive out A the large health. service insights selected allow and health at reduce efficiently, into will orthopedic cardiology, allocate maternal system to opportunity

care sales target will that into our software imaging view EHR case of leveraging hospital systems and utilize teams, of to their Finally, view Epic initial to and field centers their health use teams facilities systems, the field After world's data they expand to the sciences rollout be largest plan and one health the types. imaging additional life companies hospitals, platforms.

excited Rick, I me couldn't I call up more wrap saying by let over turn Definitive's Before to future. be the about

return first The deliver to differentiated great built business that has a our only more some my to performance our needs. to enthusiasm most our for and in team operational before position served foundation financial truly customers' joining. days a I a technology important and customers to solve expect. confirm build we're the believe can value that of great The XX upon shareholders even

With to over Rick? that, let to walk the call me turn the Rick numbers. you through

Richard Booth

non-GAAP I reviewing full QX with for results by otherwise for detail, remarks, XXXX. start discussing our then I'll on will all noted. the in my In year be unless finish our basis, guidance a QX Kevin. results Thanks, our and

profit issues As Kevin mentioned, but short the bookings results. sales us second leaving the pleased faced we're with execution revenue in well quarter internal our quarter, and of late expectations.

efforts impact adjusted end QX the recovers I'll efforts did on QX, my While high results, are position of impact remarks. full delivering and to above the not QX shortfall discuss pleased the we of which to did the at view it are end In deliver bookings and EBITDA We we Both and range. of can year, as more our and on efficiently while guided advance remain well operate for control what innovation growth focused to our us to market clients. improves. these continue our the expected revenue

of XXX the a XXXX, highlights quarter, include EBITDA, Financial over XX% XX% year-over-year. growth compared grew delivered margin respectively, income, to share we over quarter EBITDA period. of net the per non-GAAP earnings the same QX by and up We and revenue and XX%, second basis for adjusted points XX%, adjusted X% adjusted

$XX.X and the flow quarter. XX-month versus prior. plus basis, and up XX on million was As free which a the million XX%, growth the margin generated trailing adjusted is our months result, cash XX% QX $XX.X unlevered of EBITDA revenue in XX-month we trailing a

was to prior same described same XX-Q customer consolidation. some to we customers strategy project sales quarter, the during are in adjusted quarter reference to this cases, reflect in Revenue high we in allocate investors Turning In the of these reflect entities the the our this includes refresh time, adjusted for larger changes. will To us moved therefore, more work more resources and note, most second as to small and, XXXX second on disclosed the a of some issues. And was total In normalized the existing detail. customers, counts clients or call, of XXX per for reduced quarter-over-quarter guided an following million, we This was customers we year-over-year ARR impacts, to up the call, than as increase We of professional XXXX our the ARR. our in with updated engage as periods large the At revenue. client customers to results above more a the enterprise prior their hierarchies define from to year enterprise $X.X year under parent of with services challenging X% accounts This completed we part the normalized provide today. the X decrease end customer with while range. for the count our year-over-year, transparency the and filed X% counts $XX.X million industry enterprise on unaffected. mapping ended discussing in adjusted. XX and changes. to customers our which the quarter as last $XXX,XXX and quarter-over-quarter of of as our

roughly As programs. are a a focus X/X ARR represent reminder, key and of customers go-to-market our of our these

customers, total have customers. XXXX and at down account, customer as Our smaller previous was down from the disproportionately approximately which XXX XXX end includes from of the X,XXX about QX smaller quarter conditions QX, impacted current

X% profit adjusted and of QX leverage of was gross decreased margin benefit of of reduces will Sales QX acquired we term, Populi which the XX.X%, QX definitive QX operate of expect $XX.X the Populi, of in a the long the approximately due in XXXX. to gross comparable short gross to gross revenue, it margin Adjusted million at from from believe XXXX. points XXX And and profit down in margin of margins operating we as was marketing impact it as expense X% scales, percentage term. Note million it was from to XXXX. $XX.X from up while that basis XXXX

I'll efficiencies by markets drive XXX the made on an of in And and full XXX of XXXX. a investment. to and we improvement now get which XX.X% basis on of we've expect revenue, see in sales marketing relative activities to approximately revenue, reflects year-over-year our to operating few The return sales revenue in year based on nearly the highest leverage points from QX minutes, sales was As the focusing outlook, a improvement from marketing percentage expense XXXX changes to current with of and and basis XXXX. points marketing

earlier, was sets from was product development And in products or our believe investing our existing launch with expense data efficient deliver product using and down some platform XX.X% is ROI and We the X% long-term our XXXX. on invest increase to value a effective on continue we way these enhance revenue, QX examples as multiple and development for we $X.X revenue, opportunities road highly Kevin XXXX. Product map. of us percentage we'll identified a have of million, consistent of the to in customers. highest to to QX touched

We the expect with revenue year XXXX full be as continue development of full a to to product expense XXXX. year consistent fairly percentage

G&A G&A over percentage XX.X% from basis which expenses revenue, XXXX, is to revenue, a million, XXX $X.X was expense QX down of of improvement XX% as an QX points and of XXXX. compared were

to XX% XXXX expense percentage to income XXXX. increase G&A up expect And QX revenue, year-over-year points points to XXX efficiencies XXX operating spending XX% of revenue, in from margin EBITDA Adjusted was up from of We $XX.X million of increase basis due percentage income QX as and QX was The $XX.X primarily operating XX basis million, improve a XXXX. was of a was year-over-year. a XXXX. marketing. over revenue in from Adjusted as XX% sales

of adjusted revenue, points As revenue, XXX XXXX. a XX% from up was QX over EBITDA percentage of basis

are the improvement areas that to million profit a continue we make our margin. in shares us on based million important was that $XX.X Adjusted average EBITDA investments and net full continue $X.XX We'll income XXX.X most in outstanding. and XXXX, weighted per year-over-year see adjusted expect share to drives expansion. a balanced financial clients to maintain For the diluted our profile year or margin to

basis, comparable and cash cash flows on XX% basis, year TTM CapEx was our comparable from Healthcare's ago. flow cash of Turning to trailing million. flows billing from Unlevered trailing XX% million XX-month $XX.X cash up cash upfront free on free On XX-month to unlevered year a of margins, free focus seasonality. ago. free a substantial $XX.X XX% million, We flow. the EBITDA adjusted Unlevered was low revenue Definitive flow to period requirement period quarter. $XX.X generation. basis, the XX-month a cash due a million flow $XX.X TTM on cash million provides high were in was flow of a in the equivalent XX% trailing up $XX.X Operating

Board of repurchase stock. on authorized call, last of $XX As the the million up May announced earnings on to X, our the

end repurchase We to continue expect the XXXX. the of through program

third of Within our an the long-term generation, approximately confidence and of second $X.XX quarter, share and other cash in program average buyback active But At our this repurchase our commitment continue in to expect quarter prospects repurchased to subject authorization The of it our business' enhancing any X.X million be considerations, total a of strong shares market the in shareholder the to ongoing we implementation conditions. XXXX. we market value. reflect is the million. flow $X relevant at including fourth as time, price for per and always, to

performance year-over-year when million balance over the clauses. obligations year-over-year obligations and out was and believe revenue year-over-year of $XXX of $XXX of million the organic we due quarter adjusting initiatives. EBITDA were with growth were revenue to Total we performance we flat and but On that down from positioned million million Current of fund only down $XX.X well X% adjusted strong debt, short-term with are to deferred inorganic as both and cash year-over-year. sheet, down X.X% excluded are investments profitability contracts $XXX for reported, opt CRPO X% revenue ended

liability a our end, we and approximately deferred and value book down equities market identified that benefit. tax versus also $XX of million stock's million generated undertook $XX impairment XX, quarter review of remeasurement of gain June write $XXX.X assessment million as on our ] a income of the value an [ goodwill the TRA After that

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

potential year-to-date change. accordingly. and guidance As our performance, We this the short-term disruption and organizational to macro headwinds sales believe Kevin continue conditions, discussed, experience -- execution guidance adjusting contemplates challenges, recent fully from revised current we we're and

first expect revenue revenue half resulting more reflects total RAB This when million year-over-year For of performance. subscription X% digits in significant services now on decline of Populi Within a bookings to single expect acquisition, and $XX XXXX. revenue to be to down million, with $XX.X revenue. revenue, professional compared total decline a in to the X% we low our QX, year-over-year QX we the both

From a expect we of diluted million profitability $XX QX, adjusted perspective, to income to $XX XXX.X share or $X.XX XX% net in EBITDA operating adjusted adjusted outstanding. million to $XX.X $XX adjusted million to income of EBITDA million or per of average margin on and XX% million million; $XX.X million to weighted shares $XX $X.XX

to protect expansion the results. to income be forward Adjusted $XX to $X.XX share year. million, and million $XX from to adjusted $X.XX weighted operating full million, $XX despite we expect of efficiency to adjusted per for full a to are associated million year expansion pressures, from average outstanding. the and XXXX and shares now expected reiterate, margin on ranging income XXXX, net $XX between XX% margin approximately and XX XXX profitability line points $XX basis expect to costs be of decline margin $XXX.X operating to top year of the to for million earnings we profitability full year-over-year. $XX year like Accordingly, of million to I'd expect EBITDA million XX%. to to to committed flat expected From remain a the of managing perspective, tightly now we're Rolling X% million we a revenue $XXX $XXX million is

current drive in with fully of performance, the delivered to We us large guidance to we're and long short-term on revenue long changes. contemplates quarter value conclusion, shareholder that to getting in recent time attractive will we EBITDA share, and come. in have a term market from conditions a the year-to-date net well remain organizational and believe growth top for potential track and adjusted we're non-GAAP guidance We earnings our for positioned revised per for program. above adjusted that our our double-digit disruptions confident pleased help EBITDA, have delivered So adjusted believe end income buyback while and the

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

Kevin Coop

Before strategy. judging will I we open We some some take discussed our today frame time recognize I for from about the want patience to to think have that success and investors investors. up how we it will changes of questions, require the

So let we can on will us me We is clearly to growth deliver growth. that there. are what It opportunity double-digit care for believe we take that focusing revenue some achieving. return a company. be goal, health the time clear on definitive is and but

are high We delivering to and operating profitability continued committed also efficiency. of non-GAAP levels

the our that drive to expansion growth. business way we most of through the believe effective scalable Given margin is highly nature model, faster durable

So we important financial will to expansion. in continue to invest long-term a balanced our maintain areas margin clients drives profit the most that profile

our progress We future do to itself, to you Finally, look our updating on knowing needs company strategies. growth expand no calls. earnings plan on that we everything to the of reach inorganic forward partnership and

I'd that, for like up to with And it questions. open

Operator

first come Kalia will our And from Instructions] with [Operator today Saket question Barclays.

Saket Kalia

to Kevin. with Okay. Kevin, forward maybe really Great. you. And We to look start you. working just welcome, with

how unfair sense? question. But to of like So higher of bit double-click helpful go-to-market envision you what might course, where an really Your little a with you're the X maybe you'd And of make into it and in does prepared remarks a I maybe could month right? this look a role, just even thought of you shifting were sale organization. platform customer? to the go the definitive platform just sale on more like Does level, sort just to be framing

Kevin Coop

so. think I Yes,

it's It's signed a there more And the underway. thought situation, large And I But and what to some things anticipated. that's is I rather a So meaning -- here complex. at one we large look right? segment. there of got started take impact up we valuable what areas continuity, are recognizing situation was to was I Frankly, arrival, was we've the my really going were the than familiar it's think me. reorganization. a the first, I already for. asset, And way stuff time. it's prior lot to And had it obviously, of is that probably quality strategic

to today GTM a together And the from and of so for with efficient you're And what sell organization product really with start to platform, the more when are what And a a effective. go-to-market. solution simplified doing. is we means most it's think more point to is solutions, that starting much already more sold through a more flatter products that moving about you a stitch products the that's unified still, as those part, individual often approach point

a UI more ultimately access makes taking customers it that affects arrival, was -- help much very started and is through solutions churn easier it and makes with going it something on It this to where renewal number ability fewer the were on. on execute was interoperability, focusing areas customers to for a simplified we're rate, difficult to got interface, that were more sell. your significantly that my we'll a for and that to common Saket, our a concurrently that So you've it single and was start simplified just focused what larger by easier that in to on things map our to is prior others and consume UX, of road things,

Saket Kalia

might Could rest follow-up point, dovetail of maybe net question anecdotally. that's maybe lot even of year, sense. how just for good a Rick. a retention you into talk trend the makes that on about revenue you, That my this just And through of sort

periods and that maybe translate when if you calls is of sort starting think some does that that correct we me higher what we're of churn, into some said overall lap to But I'm I NRR metric? of in prior in wrong. the improvement there

Richard Booth

our Thank the to you, typically We year still half QX largest quarter. go. Saket. have bookings is

because guidance scenario on are QX half not slow NDR our opportunities of on late shortfall. progressing to focused not point really the our put we're it. current to what improving And depend on It's reiterating start is those the second particularly NDR half soon finer first too bookings, a today So we does guidance year-over-year.

Operator

question Craig with next our And from will Morgan Stanley. Hettenbach come

Craig Hettenbach

patients share with there's you the and the terms quarters, in the that remarks. that are you'd if terms you things as investment to hoping the of to point on in proof Kevin, of couple appreciate some community in be would some your for I of next the can of prepared here going over all what turnaround. Understanding context you points Question required progress retool be

Kevin Coop

Yes.

this to service, us news is, root in right, root be the look increasing an of think, and look you've the market you got in So focus when we cause is that general on focus got really ROI. of part we that on I I -- segments the disciplined think customers is at for cause, basically at you've good your and analysis

which and like Carevoyance a Populi, strength. frankly, where challenged. goodness into segment. some of our year, relative data is still helping got extension the We've got of with You've in biopharma, got areas really is diversified we've provider visualization is our renewals. expectations It's that and point in showing line for

what talking when very in, that's will packaging, that's where different customers, of what pricing so doing a I we low-hanging as focus, quick the really how going fact experience with much significantly you talk what quickly And able to And products of on I'm a organization. a to start with focused more so where and around it wasn't is look upshot simplification I've out customer just directive you're the be and had closer take you to simplified that metrics have in we I'm show you're really around that The could prioritization to would we've in next to, hand start more going or that we a of taking while actually as about expected, -- allowing kind sales conversation. customer we'll a fruit with to the already what to that we right to me the And in with I'm at got our that it getting quarter, story whether have -- the it's to motions able we're different right? market. be in at we more whether entity. can this do determine seeing and and uptick hopefully we're very the talk hoping it's need lot about segmentation it's it's some call to enjoyable change strategy. look a more our to sales we you, see going make the start It's what to you our win go-to-market to process

Craig Hettenbach

of then segue rate about costs run done thinking terms helped back year? next today lower the and half there have for year And the terms and just Rick. you Understanding given around into that early how reorg a anything costs as and Got margins the the the year, lot it. doing you in in of are edges taking of you're in year. of down, follow-up for was work a which this

Richard Booth

year-over-year. And our proud expand type. Thanks to cost we incremental about baseline. points new manage prudently. by and We continue risks But full not planning run a we're a rate did manage feel we course, for of margin with acknowledging costs any that other XXX revised are actions EBITDA or structure. that to the pleased lower good of as We

Operator

next Joe Baird. question from your come And with Vruwink will

Joseph Vruwink

point just that taking the you around capability detail that's benefit. for strategy. better think in get macro-agnostic, deal makes more Kevin, the closing as and probably thanks away at go-to-market about they for to the the focused, selling, When to solution ultimately the customers in you from characterize X-sided all would it's once always, sense moving consume approach that likelier, platform

comment? suited so and agnostic action way? you the in that's So through macro macro do better Or do is come aimed an better maybe leverage think start to gets a for this things DH when my on or upside improving

Kevin Coop

ought question. improves, improving improve, no then sure, the I everybody If an what, help an matter market it's that environment better. for interesting of mean to working. not call. I a you're Maybe the I right? will of macro It will Yes. natural. segments, in sort think the you've on independent have reinforce and -- which what ruble or less market we of and macro get whether especially some emphasis heard just to lot of a It's we lot going more hear heightened at the of goodness, the whether because ROI, are on more that stringent what are able reality processes, mean, in not you need on this the of I people sales past But to a maybe focus working cycles elongating, deferring decisions there's have and on of in to whatever that more it to what's is grow that we we are, need do challenges look that -- despite really not can't that's be control. to right? kind

And so environment. I going sure. look to at grow and macro the market will this only to of And for more need favorable, as if we that's grow help regardless turns us macro the we

Joseph Vruwink

clear like just a total want my great at grew, look account be where on grew. value if ARR it looks that that That's then And occurred. the I on accounts answer. I to disruptions understanding Okay. If I sales enterprise per calculate

I'm that So customer you the the trying to the maybe of Just logo more undershot quarter? in happened exposed reconcile medium end total and was and expectations? small wondering, where it towards churn what

Kevin Coop

Yes.

going But is to But reps way time. I the first systems that we going I great. have on getting It Balanced prior. right? a think slightly sales That moved quota-carrying complex adaptive but our longer it completely. that when probably overlay reorganization, we being business You more opportunity. example, with it efficiencies think just have that a need of look it's have probably biggest you all, over majority areas have of a we're couple they always market, of was being the period. from PowerPoint, market have key, you've it to enterprise sort end particularly But and the looks a through, when without sales than in people, didn't a one lot offset they the of the those a you all couple we sometimes sometimes it's are right? of going actually an spans gets outside you've did be of lower different you reps were things, one, and the didn't decisions. ways So probably in of does books -- for where minimized other profitability have eliminated teams We to like the calculated infrastructure. around, the got technology happened efficient. the of it, We to we exacerbated lot dynamic on a into reallocated people But we affected to the impact by did and Trump areas eye for through of right? And and at aren't thought growth like that align they're resources. the markets. we just teams reevaluate So those you've probably in into detail, with big at disruption. and thought of have creating more have times, layers. the do restructuring We're number well

And seeing so to saying other off while by it the in I think quickly. things actually that's did, need started -- some we shoots real of why I that green areas, address we're and we some really we're productivity pretty

our ultimately, the do hoping. What as show them the product to around on contract starting to solution we effectiveness. the way simple that's that's focus. GTM bring way And more to how the the points platform show a be more in we deals, made that not to some notion we entitle business. my efficiency a team, bringing able to you've point to story to through that proof market is, And We it a in we've coming will as XX got I as and customer the on and structure way, flattened immediate that that's to about our and I to expect be able some opposed team. hoping them to very with think so returns, towards back is a building clinical impact deals, enterprise compensation will sales [indiscernible] more focus where comment a This initial to have you've things starts start got this about days here for different this they're I'm in start

Operator

And we'll David Grossman move to next Stifel. with

David Grossman

of I a Kevin, more got sense make. your bubble the sense went these just and opposite, a of And operationally the health you changes business public given great a now we've really. that care to And back, want care company higher maybe during a health exact level, at think thanks, for us if recession. the you've

in years and probably about value you that is different this the tomorrow industry as so have and the so relate X be or forward perhaps much it you because proposition X the the going may undertaken, been could for ago. strategic changes to different the that what So shift think today much vis-a-vis environment you've

Kevin Coop

Yes.

So have where we accelerated an health we And proof that you the points -- the not improvements there's to isolated may have care, compete no in rate these ago X at in. You and such days. difference just that technology it's segment situation with happening to a years going have a change. that -- are right? are The

and around very way, a still was are -- as a the and we and in starts urgency remains original proposition of we we've not looking have good that as believe great it's constant lot think, as are actually that for healthy spur we today. standing creditors value more that's IPO. And what actually, fantastic, them. have, we as either, So still got of sense I the of it to A

We've reference fantastic especially got differentiated data, and relates have truly We data. it to our data. affiliation as

to visualization underway, more our better customers, to simplified map enhancing and that's to urgent acceleration it are that with make a easy is which more bringing We consume to road it. data solution product with

is the a I bit our are with is it's challenged that our here very got even biggest surprised coming you have necessity we of team a though the The organization. driving really a even kind in innovation. we've today, that leaders, challenges I that fact focusing that market when as actually -- into that look And tenured accountability David, customers. more and great domain the than So expertise, the at where that we've market on great really breeds got we're folks pleasantly team, rallied best into now was

competitors market to in And that's so love aren't a have but and be to people where any you don't I'd find. hard innovating,

benefit -- actually going us. So being to I it's think this it's in case,

David Grossman

bit about quarter. just is I And be for Rick, expected at color Is sequentially. margin maybe a little looks Or to a have revenue quick some question dynamic the fourth right. play you implied down could math give there? right? All both us more just and is It guide there my the like if

Richard Booth

Populi, in our of assuming anniversary rate assumption we're right, the the David. improvements math anniversary dynamic that's in assessed is the quarter, any And not removed third in play have pipeline. factors, sales impact reorg and on is in Your and and churn other we of as the in of increase potential close our the the an we've rate, we the

it those that services throughout X the things the greater decline professional in that result sequential is So together you're seeing decline than second is half subscription. in sequential in

seeing. So pro of terms services in clear is a be what want we smaller we're but just number, to

David Grossman

So Wouldn't year-over-year how to clear, that be just Populi, dynamic? does be a that dynamic? sequential impact the

Richard Booth

set that revenue year-over-year thought you Sorry, sorry, into about up us the were decline. going -- I asking

So we're down year X% year over the in second half.

Okay.

in assumptions no more Now the of bookings is the and assuming sequential churn. revenue improvement conservative impact

Operator

Ryan & MacDonald Needham next Company. from will come Our question with

Matthew Shea

color been on Shea the scrutiny Could Ryan. the I Matt out? the incremental you're call And any deal sensitivity all past. just Or appreciate in an thinking expand is external. you on internal I know changes. on about But the This changes seeing? to issue for has maybe price

improvement just moving around that cycle more sale a So sales are ROI. on the will revolves changes better really towards or potentially if packaged a curious pricing table help communicate that

Kevin Coop

from days matter in -- Yes. wouldn't that, this sorry, this this XX I'm I say that's is -- into format? or

Matthew Shea

Ryan This for is Matt on McDonald.

Kevin Coop

Matt. yes, Oh

I and pricing by a to it we're I Matt, solution there's that evaluating tell as solution. And But different. So wouldn't you that could varies say packaging plan.

cost aware be the demand always of is. your curve and supply what market to market the of -- have dynamics what the You

And my earlier. kind we're back of goes understand, it comment cause to fundamentally to that at root looking so

you're of issues, core customer thinking elasticity had is You've because be additional and what components strategy. process seeing of your scrutiny segmentation the cycles and your to that your to does whatever is strategy, do the been increasing is longer the and approval data companies have with market sales definitive, got but other price not scrutiny compliance X If other regulatory there reason, to right? pricing some that and and you in increasing there's product for have related about some

You've just curve what's be that's to reevaluating dynamics I So happening, what market be is the something question, offering. might you're trying dodge constantly the of basically product XXX the but I'm at not to that including got demand look supply the for

evaluate future. the to going we're not that, continue now but to in just So

Matthew Shea

asking enough. jump Fair in this early. probably the gun Yes, on you

shifting on any your out simplification, from the where of Populi? road Populi year? So in rolling markets just to And on end product Was planning could priorities? if in lift R&D expect now still Are you the the . pipeline stand an does you second over provide should right maybe other half Or map. this just the just to update wondering, that? we given

Kevin Coop

it's the we've product Yes, integrated that's very entire road into I mean, think I -- got map. being important.

having of to we in, done. breed through in leadership We got that's all that's really that of have integrations, acquisitions it been, and the was took been from many way best a We've X brand, standout involved and my component visualization team, it's we're pushed seeing our The they've data major I a different the perspective, think teams are that end and from as embraced companies, coming blended. really that users. being definitive .

Operator

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

Unknown Analyst

This Allen Lee for is Hanah Lutz. on

changes you've about your what you you priorities? expect was terms talk any M&A around wondering and been if can seeing of M&A in Just environment the if

Kevin Coop

from a any of this looking you concept to I you're going -- be to time. concept, be at well-run a think Well, operation, need constantly

I to can. we need aspect that much definitive as look think historically You build you're or by a manner. as the doing really don't angle leveraged at probably or partnership everything has in partner

days, to urgency. is to And up faster I ramp greater lot So opportunity a going that a of that something even we started of how go out can really be we've there. XX sense at in to there's with think look

growth think The our supportive that. structure evaluate Board fantastic part going pretty as shape, Rick and super that kind our I think to strategy a capital great. Board Definitive of is But good Directors. and comment is I And of a on opportunistically. can is in -- our those multipronged we're it's of

that opportunity be is lot of going to itself to show there's us. think a to going I

Operator

question James. with our from And come Brian next Raymond will Peterson

Johnathan McCary

just just And on John to double for cycle Brian. you're or Any there call commonality click where Maybe segments you're on sales follow-up. quick have sales a seeing it a cycle? is the is commentary. I This then out broad-based? longer longer GOG specific seeing Or any

Kevin Coop

in. XX It's days

little don't I based, macro just to general bit appear take definitive, little of you more need with it's data, as does of opposed to pretty think can with I I give at be can if So sense you the a a segment does indicate issue. kind But add. know it bit more think and unless of I we really probably that that analysis Rick, come a which more probably broad to in a back looking but a

Richard Booth

exactly That's right, Kevin. Yes.

Johnathan McCary

downsizing sales it you of more maybe stack of net marketing seating Just following combining Okay. competitive spend just up the operations, enterprise? would down the retention, on here function just with just there. a And Rick sells? maybe of pressures? Or is net color the how it and rank Perfect. in get drivers biotechs curious Is primarily to the

Kevin Coop

Yes.

pressure more upsell sales. and not more but at saw the we So on on delays new losses right

with impact at as And the impacts a improve fairly an although little were life churn in similar a sciences sorry, Life level. -- of not what churn overall I compared relevant relatively The biopharma. is continues seeing have biopharma, in to to bit did a rate result, XXXX. mean it we were life be year-over-year, so an sciences churn, to continues more on science But

Operator

William . And comes our Jared Blair. from next with question Haase

Jared Haase

maybe I ask a wanted to clarification.

budget change air So wondering lead of and sales. get to complicated criteria. an to a looking on more longer almost expect time moving just process, more to cycles a with because you're the sale that the kind if move of [indiscernible] average kind that there's to do approach, on allocation of larger of of I with it's kind sort more lot back efficient more shift that as from focus to like or point selling But if it's growth, create the larger sales clients solutions of to a decision a I'm that need to pocket but complicated being you platform would sort platform and know ultimately in because

Kevin Coop

same value right? per to My the slightly products over just that better or Yes. customer even buying part I doubles multiple in And go elongate sales products that a for renewal score did case, there's not to to that detail, it if case. lot more been a NPS time. -- is from talking experience of multiproduct your a has more improved but not rates, NPI about that take per is mean, draw be, will sale customer cycle, So I going if sake And of correlation more to a if personas, comes you're that. personas the you're that's goodness and very you selling to of lot complex there's the easy is have of goodness up. it might probably going but since argument the the think has

but more wish sell I this is my more I so you it experience to to doing XX not for had is this here, than a And years difficult product. one tell of point proof

are provides who and time. existing over to sell more happy and it's it products to fact, In way go back also to easier. them you customers them your for a And upsell

Jared Haase

sense. makes that Yes,

easier I with the least think clear be enterprise approach. easier ROI to should that kind theoretically of should on or multiproduct or the make emphasis be at

for that a here. a just kind general, you've Kevin, a areas lot detailed your appreciate level. quick of from in culture, to opportunities on into lot as I high stepping I the thoughts of kind improvement follow-up, of that. So a moving hear or here. be parts, you, Maybe corporate role would of just curious for Obviously,

everyone how and the Just aligned you culture kind all in direction. through moving as that morale work of of and to of of in do you kind and that, keep order sort thing maintain right

Kevin Coop

to but Yes. always you vision a got behind his get that built rapidly. pretty sauce that Definitive -- was here it's right, have and question right, because sort testimony if of people is business team that the that I is And you've and reality approach, deteriorate a Krantz it things that a he's very Jason along don't to I what isn't mean it's it original get and chemistry. secret it's start think are just and a a great great family

a domain years, So Like is here we tenured through experts X for -- You've have got very relatively tenured a go people very the domain critical lot [indiscernible] a young that got people right? many have company. been XX years, also -- and organization. we've that that of are

tenured very, people. very We have

my of part into to stay to part and so it's on that team people create was be and the we basically And to challenge start able to well continue bit of me to be culture as to want build which where of macro more an little on one environment. has more evolve hyper company, much as maybe products to a as continue a at growth easier point, and was, expectations what performance

bring have think ultimately that here team opportunity for lose. that the to change want is retain the augment I and here those you've what that to a memory doesn't it us external goodness is are and a that it way to So don't got corporate we to of that [indiscernible] in very in some the domain folks need going and into lot experts you we

and And one reasons of with extensive we many have so is joined we we're foundation. through like-minded the not the is kind that I the that's very something of think great going a but approach the to I build and only great of that conversations founder, of executives have Board here

and is getting everybody needs to that very that got think now people this direction. the to and kind time comfortable on your I'm on the approach, right first focus now got add acceleration. have you've organizational that, I design, have on expanding, you to And is well you right? effort that couple difficult so can going to redouble And of of than that on the boat the that to then in right are extra here start was of it's measure kind same that And critical question sauce on and secret simple, actually very is and people XX to a rolling you spending balanced a come and the really and back to the fewer it's we've to things done got can simplified, it. really lot right see problems, of we've that I'm days And report we're simplifying because to have just more some a going start while

Operator

question-and-answer our over closing concludes the That Coop Mr. session. I'd like remarks. to conference his turn to for

Kevin Coop

Yes.

. Just looking you, want It to to to And a I'm concludes future conversations. time you. that together for pleasure and time everybody today. today. talking their our was thank forward Thank

Operator

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

Definitive Healthcare (DH) 5 Aug 242024 Q2 Earnings call transcript