Definitive Healthcare Corp. Q1 FY2025 earnings call

• First quarter financial results were above the high end of guidance ranges on both top and bottom lines. • Operationally, first quarter was a solid start with improvement in new business, including new logo wins, though renewal rates stabilized but remain lower than achievable. • Company is focused on four strategic pillars: differentiated data (building high-quality and broad-coverage datasets), seamless integration (growing double-digit in data integration engagements, with higher retention when integrated), customer success (streamlined operations, refined go-to-market and support models, progress in life sciences customer delivery), and digital engagement (expanded go-to-market reach with agencies and direct deals). • CEO believes key areas identified for improvement, team assembled, and action plans are being implemented without disrupting progress toward stability.

Total revenue was $59.2 million, down 7% year over year, above the high end of guidance ranges. Adjusted EBITDA was $14.7 million, with a 25% margin. Unlevered free cash flow for the trailing twelve months was strong, with 91% conversion from adjusted EBITDA. Subscription revenue declined 7% year over year, while professional services revenue grew 9% in the quarter. Subscription revenues are impacted by lower renewal rates, but professional services outperformed expectations.

• Second quarter expected revenue: $58.5 million - $60 million, down 6% - 8% year over year; subscription revenues expected to grow modestly from Q1. Non-GAAP profitability: adjusted operating income $12 million - $13 million, adjusted EBITDA $15 million - $16 million, adjusted net income $6.5 million - $7.5 million. • Full-year 2025: revenue expected $234 million - $240 million, down 5% - 7% year over year; non-GAAP profit guidance unchanged: adjusted operating income $49 million - $53 million, adjusted EBITDA $61 million - $65 million, adjusted net income $30 million - $34 million.

• Forward-looking statements involve risks and uncertainties, including those discussed in the Risk Factors section and elsewhere in SEC filings. Actual results may differ materially from forward-looking statements. The company undertakes no obligation to revise or update forward-looking statements except as required by law.

Q: Jared Haas from William Blair asked about what determines data integration in client workflow and incentives for integrated adoption.

A: Kevin Coop said it's a combination of data sharing, facilitating data interactions, using prebuilt connectors or complex master data management, and seeing double-digit increase in integrations.

Q: Craig Hettenbach from Morgan Stanley asked about the time frame for growth inflection.

A: Kevin Coop said it will start to show up in the year, related to processes, vertical strategy, and segmented approach.

Q: David Grossman from Stifel asked about reconciling first quarter actual, second quarter guide, and implied revenues in the back half.

A: Casey Heller said Q1 benefited from uptick in professional services and subscription booking timing, second quarter guidance is prudent given uncertainty, and stabilizing subscription revenues is an encouraging sign.

Q: George Hill from Deutsche Bank asked about solutions related to tariffs.

A: Kevin Coop said tariff impact is de minimis, and focus is on quality of data.

Q: Jenny Shen from BTIG asked about churn percentage and competitive environment.

A: Rick Booth said Q1 renewal rates were consistent with second half 2024 but down from Q1 2024; Kevin Coop added about competitive dynamics and similar pressures across the board due to funding, interest rates, and regulatory uncertainty