Condensed Consolidated Statements of Operations(in thousands, except share amounts and per share data; unaudited) Three Months Ended March 31, 2025 2024 Revenue $59,191 $63,480 Cost of revenue: Cost of revenue exclusive of amortization (1) 10,141 9,736 Amortization 5,290 3,362 Gross profit 43,760 50,382 Operating expenses: Sales and marketing (1) 20,653 21,760 Product development (1) 9,301 10,132 General and administrative (1) 12,269 16,883 Depreciation and amortization 8,527 9,322 Transaction, integration, and restructuring expenses 1,265 8,534 Goodwill impairment 176,531 - Total operating expenses 228,546 66,631 Loss from operations (184,786) (16,249) Other (expense) income, net Interest (expense) income, net (381) 111 Other income, net 19,188 2,640 Total other income, net 18,807 2,751 Net loss before income taxes (165,979) (13,498) Benefit from income taxes 10,886 780 Net loss (155,093) (12,718) Less: Net loss attributable to noncontrolling interests (47,865) (3,200) Net loss attributable to Definitive Healthcare Corp. $(107,228) $(9,518) Net loss per share of Class A Common Stock: Basic and diluted $(0.95) $(0.08) Weighted average Class A Common Stock outstanding: Basic and diluted 112,782,505 117,433,520 (1) Amounts include equity-based compensation expense as follows: Three Months Ended March 31, 2025 2024 Cost of revenue $160 $271 Sales and marketing 1,179 2,271 Product development 1,739 2,761 General and administrative 4,241 10,279 Total equity-based compensation expense $7,319 $15,582 Definitive Healthcare Corp. Condensed Consolidated Statements of Cash Flows (in thousands; unaudited) Three Months Ended March 31, 2025 2024 Cash flows provided by (used in) operating activities: Net loss $(155,093) $(12,718) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 591 554 Amortization of intangible assets 13,226 12,130 Amortization of deferred contract costs 3,947 3,692 Equity-based compensation 7,319 15,582 Amortization of debt issuance costs 126 176 (Benefit from) provision for doubtful accounts receivable (142) 211 Loss on partial extinguishment of debt 507 — Non-cash restructuring charges 192 — Goodwill impairment charges 176,531 — Tax receivable agreement remeasurement (20,664) (2,267) Changes in fair value of contingent consideration (690) 270 Deferred income taxes (11,007) (847) Changes in operating assets and liabilities: Accounts receivable 10,351 2,999 Prepaid expenses and other assets (5,683) (1,399) Deferred contract costs (3,794) (2,699) Contingent consideration — (602) Accounts payable, accrued expenses, and other liabilities (8,745) (8,231) Deferred revenue 19,094 9,738 Net cash provided by operating activities 26,066 16,589 Cash flows (used in) provided by investing activities: Purchases of property, equipment, and other assets (7,706) (266) Purchases of short-term investments (12,000) (83,826) Maturities of short-term investments 103,251 73,588 Cash paid for acquisitions, net of cash acquired — (13,530) Net cash provided by (used in) investing activities 83,545 (24,034) Cash flows used in financing activities: Repayments of term loan (246,250) (3,438) Proceeds from term loan 175,000 — Payments of debt issuance costs (1,660) — Taxes paid related to net share settlement of equity awards (1,874) (5,806) Repurchases of Class A Common Stock (21,155) — Payments of contingent consideration — (1,000) Payments under tax receivable agreement (13,767) (6,950) Net cash used in financing activities (109,706) (17,194) Net decrease in cash and cash equivalents (95) (24,639) Effect of exchange rate changes on cash and cash equivalents 816 (343) Cash and cash equivalents, beginning of period 105,378 130,976 Cash and cash equivalents, end of period $106,099 $105,994 Supplemental cash flow disclosures: Cash paid during the period for: Interest $2,242 $3,642 Income taxes $32 $— Acquisitions: Net assets acquired, net of cash acquired $— $13,675 Working capital adjustment receivable — (145) Net cash paid for acquisitions $— $13,530 Supplemental disclosure of non-cash investing activities: Capital expenditures included in accounts payable and accrued expenses and other liabilities $5,393 $— Definitive Healthcare Corp.
Restructuring expenses paid in cash relate to our restructuring plans.(b) Earnout payment represents final settlement of contingent consideration included in cash flow from operations. (c) Non-core items represent expenses driven by events that are typically by nature one-time, non-operational, and unrelated to our core operations. Reconciliation of GAAP Net Loss to Adjusted Net Income andGAAP Operating Loss to Adjusted Operating Income(in thousands, except share and per share amounts; unaudited) Three Months Ended March 31, 2025 2024 Net loss$(155,093) $(12,718) Add: Income tax benefit (10,886) (780) Add: Interest expense (income), net 381 (111) Add: Loss on partial extinguishment from debt 507 — Add: Other income, net (19,695) (2,640) Loss from operations (184,786) (16,249) Add: Amortization of intangible assets acquired through business combinations 11,089 11,211 Add: Equity-based compensation 7,319 15,582 Add: Transaction, integration, and restructuring expenses 1,265 8,534 Add: Goodwill impairment charge 176,531 — Add: Other non-core items 560 (528) Adjusted Operating Income 11,978 18,550 Less: Interest (expense) income, net (381) 111 Less: Recurring income tax benefit 352 780 Less: Foreign currency (loss) gain (969) 373 Less: Tax impacts of adjustments to net loss (4,008) (6,772) Adjusted Net Income$6,972 $13,042 Shares for Adjusted Net Income Per Diluted Share (a) 151,800,030 156,634,698 Adjusted Net Income Per Share$0.05 $0.08 (a) Diluted Adjusted Net Income Per Share is computed by giving effect to all potential weighted average Class A common stock and any securities that are convertible into Class A common stock, including Definitive OpCo units and restricted stock units.
Fully diluted shares are 162,079,150 and 164,977,953 as of March 31, 2025 and 2024, respectively. Reconciliation of GAAP Gross Profit and Margin to Adjusted Gross Profit and Margin(in thousands, except percentages; unaudited) Three Months Ended March 31, 2025 2024(in thousands) Amount % of Revenue Amount % of RevenueReported gross profit and margin $43,760 74% $50,382 79%Amortization of intangible assets acquired through business combinations 3,153 5% 2,443 4%Equity compensation costs 160 0% 271 0%Adjusted gross profit and margin $47,073 80% $53,096 84% Reconciliation of GAAP Net Loss and Margin to Adjusted EBITDA and Margin(in thousands, except percentages; unaudited) Three Months Ended March 31, 2025 2024 Amount % of Revenue Amount % of Revenue Net loss and margin$(155,093) (262)% $(12,718) (20)% Interest expense (income), net 381 1% (111) (0)% Benefit from income taxes (10,886) (18)% (780) (1)% Loss on partial extinguishment of debt 507 1% — 0% Depreciation & amortization 13,817 23% 12,684 20% EBITDA and margin (151,274) (256)% (925) (1)% Other income, net (a) (19,695) (33)% (2,640) (4)% Equity-based compensation (b) 7,319 12% 15,582 25% Transaction, integration, and restructuring expenses (c) 1,265 2% 8,534 13% Goodwill impairment (d) 176,531 298% — 0% Other non-core items (e) 560 1% (528) (1)% Adjusted EBITDA and margin$14,706 25% $20,023 32% (a) Primarily represents foreign exchange and Tax Receivable Agreement liability remeasurement gains and losses.(b) Equity-based compensation represents non-cash compensation expense recognized in association with equity awards made to employees and directors.(c) Transaction and integration expenses primarily represent legal, accounting, and consulting expenses and fair value adjustments for contingent consideration related to our acquisitions and strategic partnerships.
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