Definitive Healthcare Q1 Earnings Call Highlights

Key Points

• Definitive reported Q1 revenue of $55.9 million, down 6% year-over-year, but delivered strong profitability with adjusted EBITDA of $15.3 million (a 27% margin), adjusted EPS of $0.06, and unlevered free cash flow of $18 million for the quarter.
• Product and customer trends were mixed: the provider and diversified businesses (over 60% of revenue) showed modest growth while life sciences continued to decline amid prior claims disruption—management says the claims data supply chain is now repaired and integration velocity and AI-driven data initiatives are improving customer wins and retention.
• Guidance and balance-sheet notes: Q2 revenue is guided to $55–56 million (an 8–9% decline) and FY revenue to $220–226 million (down 6–9%), while adjusted EBITDA was raised to $55–59 million; management also disclosed a non-cash $197 million goodwill impairment and noted declining deferred revenue/RPO tied to a shift to single-year deals.

Definitive Healthcare NASDAQ: DH reported first-quarter fiscal 2026 results that management said came in “at or above the high end” of guidance on both revenue and profitability, while reiterating that the company remains in a transition period as it works to return to consistent top-line growth.

Q1 results: revenue down, margins up

CEO Kevin Coop said total revenue was $55.9 million, down 6% year-over-year, while adjusted EBITDA was $15.3 million, representing a 27% margin. Coop attributed the EBITDA outperformance versus guidance to “ongoing success in driving expense discipline across the business while investing in initiatives that we believe will return the business to topline growth.”

CFO Casey Heller added that adjusted net income was $8.5 million, or $0.06 in non-GAAP earnings per share, and that unlevered free cash flow was $18 million in the quarter and “nearly $50 million” over the trailing 12 months.

Heller said adjusted gross profit was $45.2 million, down 4% year-over-year, but adjusted gross margin expanded to 81%, up nearly 150 basis points. He tied the margin benefit primarily to a “short-term gap between removing one data source and onboarding an additional source.” Adjusted EBITDA margin expanded by approximately 260 basis points year-over-year, which Heller said was driven by that same timing gap, broader operating efficiencies, and a shift in product development that reduced R&D expense while increasing capitalized software development.

Segment trends: provider/diversified growing, life sciences still pressured

Coop said the company’s diversified and provider businesses—together “over 60% of total revenue”—delivered “modest growth” again after returning to growth in the prior quarter. By contrast, he said the life sciences businesses “continued to decline,” citing the claims disruption the company has discussed previously as well as a challenging macro environment.

Heller echoed that mix shift, saying the revenue decline “is driven by life sciences,” while diversified and provider end markets “continued to grow year-over-year.” Subscription revenue was $53.6 million, down 7% year-over-year. He also noted the company still had “about 2 points of benefit” in Q1 from the timing of revenue recognition on a data partnership agreement and expects to be “fully wrapped on the benefit in Q2.”

Management also pointed to signs of improving customer metrics. Coop said net dollar retention improved year-over-year in the first quarter on a trailing-12-month basis, and that the company had its “highest win-back quarter in over three years.” He said several six-figure win-backs in diversified and med tech reflected customers’ dissatisfaction with “the breadth and quality of our datasets” offered by competitors and a realization that “the cost of an inferior dataset far outweighed the trade-off.”

Operational priorities: data, integrations, customer success, and innovation

Coop framed execution around four strategic pillars: data differentiation, integrations, customer success, and innovation.

• Data differentiation: Coop said the company’s fall “expansion pack” improved claims data breadth and quality and generated “overwhelmingly positive feedback.” He also said Definitive Healthcare is increasingly using AI to increase the “velocity of data collection and quality assurance.” As one example, he described a six-figure, multi-year life sciences win where a customer sought better affiliation data, prescription patterns, and key opinion leader identification.
• Integrations: Coop said the company completed “nearly 50 new integrations” in Q1 and reduced integration time by “nearly 50%” year-over-year. In the Q&A, he added the average days to integrate fell from “over 100 days” to about 45 days in Q1, and that the company completed 75% more integrations in the last six months than in the prior six months. He highlighted a new HubSpot integration and prior Salesforce enhancements, saying integrated customers use the product more frequently and tend to renew at higher rates.
• Customer success: Coop said aligning functional teams that support the customer journey has made the organization “more proactive and engaged,” helping identify issues earlier and uncover upsell opportunities. He cited an upsell with a Monocl biopharma customer following that customer’s acquisition by a larger organization.
• Innovation and digital activation: Coop said the company expects to launch its first AI-enabled solutions “later this quarter,” focused on embedding a natural-language interface into the platform. He positioned this as a way to make the data easier to use and to support workflow-driven actions. Separately, he said the company now has “more than 30 agencies signed up” for digital activation, with “more than half” actively generating bookings, up from roughly a third the prior quarter. Coop also referenced a benchmark from a “leading biopharma solutions company” indicating Definitive audiences delivered a 63% higher click-through rate than a leading competitor.

On monetization, Coop said the initial impact of AI features is expected to be improved retention by “democratiz[ing] access” to the platform and increasing value realization. He added that pricing power could become more meaningful as more AI functionality is released over time, along with upsell and cross-sell opportunities.

Claims remediation and life sciences demand environment

During the Q&A, Coop said the company has repaired its claims data supply chain and is now “at or above historical levels” for claims data, and later said the company is “now above historical levels” in Q1. He suggested this should reduce downsell pressure tied to reduced record counts, though he cautioned that renewal timing matters and said the company expects to see how the next couple of quarters of renewals play out.

Coop also discussed biopharma demand dynamics, emphasizing that Definitive primarily serves “phase II” commercialization use cases, while noting that some customers are shifting dollars toward earlier-stage R&D spending. He said muted commercialization activity in the current macro environment has been difficult to offset, but could translate into future demand as assets move toward commercialization.

Guidance and balance sheet items

For the second quarter, Heller guided to revenue of $55 million to $56 million, representing an 8% to 9% year-over-year decline, which he said reflects the full wrap of the earlier data partnership benefit. The company expects adjusted EBITDA of $13.5 million to $14.5 million, implying a 24% to 26% margin, and non-GAAP EPS of approximately $0.03 to $0.04.

For full-year fiscal 2026, the company reiterated revenue guidance of $220 million to $226 million (a 6% to 9% decline year-over-year). Heller raised adjusted EBITDA guidance to $55 million to $59 million, saying the midpoint increased by $1.5 million based on the “strong start to the year” and continued focus on margins while investing in growth initiatives. Full-year non-GAAP EPS guidance was $0.16 to $0.19.

Heller also pointed to contracting dynamics affecting forward-looking metrics. Deferred revenue was $99 million, down 12% year-over-year, and total remaining performance obligations declined 18% year-over-year, which he said continued to reflect a shift toward single-year deals versus multi-year commitments. In response to an analyst question, Heller said the company expects double-digit declines in current RPO for the “next couple of quarters” given the mix, with the potential for stabilization depending on future signing mix.

Finally, Heller disclosed a non-cash accounting charge: a $197 million goodwill impairment as of March 31 tied to the stock price decline, along with a $6.6 million gain on remeasurement of the TRA liability and a $3.6 million deferred income tax benefit. He said these items do not impact debt covenants and are excluded from adjusted earnings.

About Definitive Healthcare NASDAQ: DH

Definitive Healthcare NASDAQ: DH is a leading provider of intelligence and analytics on healthcare providers, organizations and the professionals who treat patients. Through its cloud-based platform, the company aggregates data from multiple sources—including claims, government registries, commercial filings and proprietary research—to deliver a unified view of the healthcare landscape. Its solutions enable life sciences companies, healthcare providers, payers and consulting firms to identify market opportunities, optimize sales and marketing efforts, improve operational efficiency and support better patient outcomes.

The company's flagship offering is a subscription-based data platform that features detailed profiles on physicians, hospitals, health systems and post-acute care facilities.

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