Definitive Healthcare NASDAQ: DH reported second-quarter fiscal 2026 revenue and profitability that met or exceeded its guidance ranges, while management pointed to improving retention trends and continued investments in artificial intelligence products as key components of its plan to return to growth.
Revenue for the quarter totaled $55.2 million, down 9% from the prior-year period. Adjusted EBITDA was $14.6 million, representing a 26% margin and modestly exceeding the high end of the company’s guidance, Chief Executive Officer Kevin Coop said. The company generated $11.6 million in unlevered free cash flow during the quarter and about $50 million over the trailing 12 months.
“We continue to do an effective job of managing expenses while investing in our core growth initiatives,” Coop said. He added that the company’s diversified and provider businesses, which account for more than 60% of revenue, are further along in their return to growth than its life sciences segment.
Retention Improves as Life Sciences Recovery Takes Longer
Coop said Definitive Healthcare’s trailing-12-month net dollar retention rate improved by several points year-over-year for the second consecutive quarter. The company said the trend positions it to sustain improvement for the full year.
Life sciences has been slower to recover, although management cited improving new-business activity in biopharma. Coop said the biopharma segment posted its strongest new-business quarter in three years outside of the fourth quarter, including four customers that had previously left the company before the beginning of 2025 and later returned.
Management also highlighted a six-figure, three-year win-back in its diversified business. The customer had left for a lower-cost competitor but ultimately expanded its relationship with Definitive Healthcare after reassessing the value of the company’s data, according to Coop.
During the question-and-answer session, CFO Casey Heller said the company has seen claims-data-related downselling begin to lessen after adding data sources in the fall and another source during the second quarter. However, Heller said it remains early to assess the full impact.
Heller also said Definitive Healthcare is not seeing a major change in spending by large pharmaceutical companies, though the stronger biopharma new-logo performance was encouraging.
AI Platform Turbo Enters Customer Pilot
Definitive Healthcare launched Turbo, an AI-powered healthcare intelligence platform designed to help healthcare teams access and act on the company’s data through natural-language queries. The platform combines data covering providers, organizations, claims, affiliations, key opinion leaders and consumers, the company said.
The company began an initial pilot with selected strategic customers during the month, including healthcare systems, life sciences organizations and diversified customers. Definitive Healthcare is targeting general availability before the end of 2026.
Coop said Turbo is expected to provide reusable capabilities tailored to commercial, sales, product, marketing and strategy users, with a future goal of supporting continuous monitoring, alerts and notifications.
Heller said the company does not expect Turbo to have a material effect on 2026 revenue, but management expects it to be more meaningful in 2027. The platform could support retention during the company’s largest renewal periods in December and January, he said.
Management is still evaluating Turbo’s pricing structure. Coop said the company is considering different approaches for customer cohorts, including data-module upsell opportunities for customers with more limited existing data access. The company also plans over time to introduce a usage-based component with tiered pricing.
Integration and Digital Activation Efforts Advance
The company said it completed more than 50% more customer integrations year-over-year during the quarter while reducing the time required for integrations by more than 50%.
Among its product efforts, Definitive Healthcare said customers are increasingly adopting conversational natural-language search. On its expert intelligence platform, multi-turn conversational searches accounted for roughly 40% of interactions with the AI search feature.
In digital activation, the company added 10 agency partners that were not active in 2025 and seven direct activation customers year to date. Coop said a longstanding population intelligence customer increased its commitment from an initial test to more than $300,000 in total activation spending.
Guidance Tightened as Professional Services Bookings Weaken
Subscription revenue was $52.8 million in the second quarter, also down 9% year-over-year. Professional services revenue fell short of management’s expectations because bookings for traditional analytics engagements were lighter, despite strength in digital activation.
Heller said the weaker analytics bookings will affect professional services expectations in the third quarter and second half. For the third quarter, Definitive Healthcare forecast revenue of $54 million to $55 million, representing an 8% to 10% year-over-year decline. It expects adjusted EBITDA of $13.5 million to $14.5 million, or a 25% to 27% margin.
For fiscal 2026, the company narrowed its revenue outlook to $220 million to $222 million, implying an 8% to 9% decline from the prior year. While revenue guidance was tightened around the lower end of the prior range, Definitive Healthcare raised the midpoint of its full-year profit outlook.
- Adjusted operating income is projected at $45.5 million to $47.5 million.
- Adjusted EBITDA is projected at $57 million to $59 million, representing a 26% to 27% margin.
- Adjusted net income is projected at $27 million to $29 million, or $0.18 to $0.20 per diluted share.
At the end of the second quarter, deferred revenue was $89 million, down 12% year-over-year. Total remaining performance obligations declined 18%, while current remaining performance obligations fell 12%. Heller attributed the trend in part to customers shifting toward single-year agreements rather than multiyear commitments.
Heller said the company is seeing some normalization in the balance between multiyear and single-year deals, but not a significant return to multiyear contracts. Definitive Healthcare will continue to prioritize margin preservation and targeted growth investments while working to improve customer retention and revenue growth, he said.
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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