Definitive Healthcare Corp. Earnings Call Highlights

Definitive Healthcare Corp. Class A ((DH)) has held its Q1 earnings call. Read on for the main highlights of the call.

Definitive Healthcare Corp. Class A’s recent earnings call conveyed a sentiment of cautious optimism. The company showcased strong financial execution and operational improvements, especially in data integration and strategic partnerships. However, challenges such as a year-over-year revenue decline and pressures in the life sciences segment were also highlighted. The overall sentiment reflects a company working through these challenges while showing signs of stabilization and strategic progress.

Exceeded Q1 Financial Guidance

Definitive Healthcare Corp. reported a total revenue of $59.2 million for Q1 2025, surpassing the high end of their guidance range. This achievement was largely driven by outperformance in professional services and in-period subscription revenue, indicating robust financial execution.

Strong Adjusted EBITDA

The company’s adjusted EBITDA for Q1 stood at $14.7 million, representing a 25% margin, which was significantly ahead of expectations. This strong performance underscores the company’s effective cost management and operational efficiency.

Operational Improvements

Significant progress was made in stabilizing renewal rates and securing strong new logo wins across all end markets. These operational improvements are critical for the company’s long-term growth and customer retention strategies.

Successful Data Integration

Definitive Healthcare experienced strong double-digit growth in customer engagements that integrated their data with customer systems. This integration has led to higher retention rates, showcasing the value of their data solutions.

Strategic Partnerships

The company expanded its go-to-market reach through partnerships with healthcare advertising agencies and direct deals. These strategic partnerships are expected to drive momentum in the latter half of 2025.

Year-over-Year Revenue Decline

Despite the positive outcomes, the company faced a 7% decline in total revenue year over year, primarily due to lower retention rates. This decline highlights the challenges in maintaining consistent revenue growth.

Pressure on Adjusted Operating Income

Adjusted operating income was reported at $12 million, down 35% from Q1 2024. This decline reflects the revenue pressures the company is currently facing.

Consistent Pressure on Net Dollar Retention Rate

Renewal rates remained consistent with the latter half of 2024 but were down compared to Q1 2024, impacting the net dollar retention rates. This consistency indicates ongoing challenges in customer retention.

Challenges in Life Sciences

The life sciences segment continues to face pressures due to the current funding environment, interest rates, and regulatory uncertainty. These challenges are significant hurdles for the company’s growth in this segment.

Forward-Looking Guidance

Definitive Healthcare Corp. provided forward-looking guidance that exceeded expectations. For Q2 2025, they project revenue between $58.5 and $60 million, with an adjusted EBITDA margin of 25% to 27%. For the full year, revenue guidance is tightened to $234 million to $240 million, aiming for an adjusted EBITDA margin of 26% to 28%. The company remains focused on improving retention, leveraging differentiated data, seamless data integration, and customer success, while navigating macroeconomic uncertainties.

In conclusion, Definitive Healthcare Corp.’s earnings call reflects a sentiment of cautious optimism. While the company faces challenges such as revenue decline and pressures in the life sciences segment, it has demonstrated strong financial execution and operational improvements. The forward-looking guidance suggests a strategic focus on stabilization and growth, positioning the company for future success.