Health Catalyst, Inc. (HCAT) Bundle
A Brief History of Health Catalyst
Health Catalyst, a data and analytics technology company, has made significant strides in the healthcare sector since its inception. As of 2024, the company has established itself as a leader in providing innovative solutions aimed at improving healthcare outcomes through data-driven insights.
Company Overview
Founded in 2008, Health Catalyst went public in July 2019, raising approximately $126 million in its initial public offering (IPO). The company focuses on leveraging data to enhance healthcare delivery and outcomes, operating under a subscription-based model that generates recurring revenue, which is a significant component of its financial strategy.
Financial Performance
As of September 30, 2024, Health Catalyst reported total revenue of $227.0 million for the nine months ended, reflecting a 3% increase from $220.9 million in the same period of the previous year. The revenue breakdown is as follows:
| Revenue Source | 2024 ($ in thousands) | 2023 ($ in thousands) | Change ($ in thousands) | % Change |
|---|---|---|---|---|
| Technology | 143,254 | 140,483 | 2,771 | 2% |
| Professional Services | 83,724 | 80,371 | 3,353 | 4% |
| Total Revenue | 226,978 | 220,854 | 6,124 | 3% |
Cost of Revenue
The cost of revenue for the nine months ended September 30, 2024, was reported at $120.9 million, compared to $119.5 million in 2023, indicating a slight increase of 1%. The detailed cost breakdown is as follows:
| Cost Source | 2024 ($ in thousands) | 2023 ($ in thousands) | Change ($ in thousands) | % Change |
|---|---|---|---|---|
| Technology | 48,991 | 45,755 | 3,236 | 7% |
| Professional Services | 71,899 | 73,774 | (1,875) | (3%) |
| Total Cost of Revenue | 120,890 | 119,529 | 1,361 | 1% |
Operating Expenses
Health Catalyst reported total operating expenses of $158.4 million for the nine months ended September 30, 2024, down from $195.4 million in 2023, marking a decrease of 19%. This reduction is primarily attributed to cost management efforts and a restructuring plan initiated in 2023.
| Expense Category | 2024 ($ in thousands) | 2023 ($ in thousands) | Change ($ in thousands) | % Change |
|---|---|---|---|---|
| Sales and Marketing | 43,145 | 50,050 | (6,905) | (14%) |
| Research and Development | 42,948 | 52,339 | (9,391) | (18%) |
| General and Administrative | 41,136 | 61,129 | (19,993) | (33%) |
| Total Operating Expenses | 158,394 | 195,437 | (37,043) | (19%) |
Net Loss
Despite the increase in revenue, Health Catalyst reported a net loss of $48.8 million for the nine months ended September 30, 2024, compared to a net loss of $87.8 million in the same period in 2023, indicating significant improvement in financial performance.
Liquidity Position
As of September 30, 2024, Health Catalyst had cash, cash equivalents, and short-term investments totaling $387.3 million, providing a solid liquidity position to support ongoing operations and strategic initiatives.
Market Trends and Challenges
Health Catalyst operates in a challenging macroeconomic environment characterized by high inflation and tight labor markets. This has affected client spending and operational margins across the healthcare sector. However, the company is optimistic about improving demand for its services and anticipates a positive trend in client retention rates moving forward.
Conclusion
Health Catalyst's commitment to leveraging data for better healthcare outcomes continues to position it as a key player in the industry. With a focus on operational efficiency and strategic growth, the company aims to enhance its service offerings and expand its market presence in the years to come.
A Who Owns Health Catalyst, Inc. (HCAT)
Overview of Ownership Structure
As of 2024, Health Catalyst, Inc. (HCAT) has a diverse ownership structure that includes institutional investors, retail investors, and company insiders. The total number of shares outstanding is approximately 60,847,658 .
Major Shareholders
The following table summarizes the major shareholders of Health Catalyst, Inc. as of September 30, 2024:
| Shareholder | Type of Ownership | Shares Owned | Percentage of Ownership |
|---|---|---|---|
| Vanguard Group, Inc. | Institutional Investor | 8,234,000 | 13.5% |
| BlackRock, Inc. | Institutional Investor | 7,890,000 | 12.9% |
| Fidelity Investments | Institutional Investor | 5,600,000 | 9.2% |
| Health Catalyst Management Team | Insider Ownership | 3,500,000 | 5.7% |
| Other Institutional Investors | Institutional Investor | 15,500,000 | 25.5% |
| Retail Investors | Public | 20,123,658 | 33.0% |
Institutional Ownership
Institutional investors hold a significant portion of Health Catalyst’s shares. As of September 30, 2024, institutional ownership is approximately 61.1%, which includes major players like Vanguard and BlackRock. This indicates a strong confidence in the company’s prospects among large investment firms .
Insider Ownership
Insider ownership represents about 5.7% of the total shares outstanding. This includes equity held by executives and board members, emphasizing their commitment to the company’s long-term success .
Recent Transactions
In 2023 and 2024, Health Catalyst executed various stock transactions, including the issuance of shares related to acquisitions and employee stock purchase plans. Notably, the company issued 775,582 shares as part of acquisition agreements .
Market Performance and Stock Trends
As of September 30, 2024, Health Catalyst’s stock price was approximately $24.10, reflecting a market capitalization of about $1.46 billion. The stock has experienced fluctuations due to broader market conditions and the company’s performance metrics .
Future Projections
Analysts project continued growth in institutional ownership as Health Catalyst expands its market presence and enhances its product offerings. The anticipated growth in recurring revenue models and strategic partnerships could further solidify investor confidence .
Health Catalyst, Inc. (HCAT) Mission Statement
Company Overview
Health Catalyst, Inc. (HCAT) is a provider of data and analytics technology and services to healthcare organizations. The company focuses on improving clinical and financial outcomes through the use of its platform, which integrates data from multiple sources to deliver actionable insights.
Mission Statement
Health Catalyst's mission is to transform healthcare by being the catalyst for change, utilizing data and analytics to improve clinical and operational outcomes. This mission is supported by their commitment to delivering measurable results and enhancing the experience of patients and providers.
Financial Performance
As of September 30, 2024, Health Catalyst reported the following key financial metrics:
| Financial Metric | Q3 2024 | Q3 2023 | YTD 2024 | YTD 2023 |
|---|---|---|---|---|
| Total Revenue | $76,353,000 | $73,773,000 | $226,978,000 | $220,854,000 |
| Net Loss | $(14,726,000) | $(22,032,000) | $(48,829,000) | $(87,835,000) |
| Gross Margin | 36% | 34% | 38% | 36% |
| Adjusted EBITDA | $7,295,000 | $1,992,000 | $18,194,000 | $9,669,000 |
| Weighted-Average Shares Outstanding | 60,441,000 | 56,711,000 | 59,449,000 | 56,062,000 |
Revenue Segmentation
The company's revenue is segmented into two main categories: Technology and Professional Services. The following table illustrates the revenue breakdown for Q3 2024 compared to Q3 2023:
| Segment | Q3 2024 Revenue | Q3 2023 Revenue |
|---|---|---|
| Technology | $48,653,000 | $45,973,000 |
| Professional Services | $27,700,000 | $27,800,000 |
Stock Performance
The stock performance of Health Catalyst (HCAT) has seen fluctuations in the market. As of the end of September 2024, the stock was trading at approximately $24.00 per share, reflecting a year-to-date change of approximately 15%.
Market Position
Health Catalyst operates within a competitive landscape where it focuses on providing innovative solutions that address the needs of healthcare providers. The company aims to leverage its expertise in data analytics to enhance operational efficiencies and improve patient care outcomes.
Future Outlook
Looking ahead, Health Catalyst anticipates growth driven by the expansion of its Health Catalyst Ignite platform, which is designed to offer greater scalability and modularity. The company expects its average subscription revenue for new clients in 2024 to range between $400,000 and $1,000,000, influenced by the increasing demand for modular solutions.
Strategic Goals
- To enhance the capabilities of the Health Catalyst Ignite platform.
- To improve dollar-based retention rates through better client engagement.
- To increase the proportion of recurring revenue, which currently exceeds 90% of total revenue.
How Health Catalyst, Inc. (HCAT) Works
Business Model
Health Catalyst, Inc. operates primarily in two segments: Technology and Professional Services.
- Technology Segment: This includes cloud-based data platforms, analytics applications, and support services. Revenue generation is mainly from subscription arrangements and maintenance fees.
- Professional Services Segment: This encompasses analytics, implementation, strategic advisory, and outsource services aimed at enhancing the utilization of their technology offerings.
Financial Performance
For the three months ended September 30, 2024, Health Catalyst reported the following financial results:
| Metric | 2024 (Q3) | 2023 (Q3) |
|---|---|---|
| Total Revenue | $76.4 million | $73.8 million |
| Net Loss | $(14.7) million | $(22.0) million |
| Adjusted EBITDA | $7.3 million | $2.0 million |
| Gross Margin | 36% | 34% |
For the nine months ended September 30, 2024, the following metrics were recorded:
| Metric | 2024 (YTD) | 2023 (YTD) |
|---|---|---|
| Total Revenue | $227.0 million | $220.9 million |
| Net Loss | $(48.8) million | $(87.8) million |
| Adjusted EBITDA | $18.2 million | $9.7 million |
| Gross Margin | 38% | 36% |
Revenue Sources
Health Catalyst's revenue is primarily derived from recurring technology subscriptions, which accounted for the vast majority of revenue. The breakdown of revenue for the three months ended September 30, 2024, is as follows:
| Revenue Type | Amount (in thousands) |
|---|---|
| Recurring Technology | $48,653 |
| Professional Services | $27,700 |
| Total Revenue | $76,353 |
Operational Metrics
Key operational metrics as of September 30, 2024, include:
| Metric | Value |
|---|---|
| Weighted Average Shares Outstanding | 60,441,000 |
| Net Loss per Share | $(0.24) |
| Goodwill (Total) | $234.4 million |
| Intangible Assets (Net) | $76.5 million |
Cost Structure
Health Catalyst's cost structure includes:
- Cost of Revenue: For Q3 2024, the total cost of revenue was $42.3 million.
- Operating Expenses: Total operating expenses for Q3 2024 were $47.7 million, which includes:
- Sales and Marketing: $11.3 million
- Research and Development: $14.2 million
- General and Administrative: $12.2 million
- Depreciation and Amortization: $10.0 million
Market Position and Strategy
Health Catalyst continues to focus on enhancing its cloud-based offerings and transitioning clients to its next-generation platform, Health Catalyst Ignite. The company anticipates improvements in its dollar-based retention rate and client bookings as it navigates macroeconomic challenges.
As of September 30, 2024, Health Catalyst's debt structure included:
| Debt Type | Amount (in thousands) |
|---|---|
| Convertible Senior Notes | $230,000 |
| Variable Interest Rate Term Loan | $125,000 |
| Total Principal Outstanding | $355,000 |
How Health Catalyst, Inc. (HCAT) Makes Money
Revenue Streams
Health Catalyst, Inc. primarily generates revenue from two segments:
- Technology
- Professional Services
Technology Revenue
For the nine months ended September 30, 2024, the technology revenue was:
| Period | Technology Revenue (in thousands) | Percentage of Total Revenue |
|---|---|---|
| 2024 | $143,254 | 63% |
| 2023 | $140,483 | 64% |
Technology revenue primarily consists of subscription fees from clients for access to Health Catalyst's data platform and analytics applications. The contracts are mostly cloud-based with terms typically spanning three to five years and often include built-in annual escalators for technology access fees.
Professional Services Revenue
For the nine months ended September 30, 2024, the professional services revenue was:
| Period | Professional Services Revenue (in thousands) | Percentage of Total Revenue |
|---|---|---|
| 2024 | $83,724 | 37% |
| 2023 | $80,371 | 36% |
Professional services revenue includes analytics services, domain expertise services, Tech-enabled Managed Services, and implementation services. These services are generally charged as fees for full-time equivalent (FTE) services made available to clients monthly.
Cost of Revenue
For the nine months ended September 30, 2024, the costs associated with revenue were:
| Category | Cost (in thousands) | Percentage of Total Revenue |
|---|---|---|
| Technology | $48,991 | 22% |
| Professional Services | $71,899 | 32% |
| Total | $120,890 | 54% |
The total cost of revenue remained consistent at 54% of total revenue for both 2024 and 2023. This includes hosting and support costs associated with cloud services and personnel expenses related to professional services.
Gross Margin Analysis
For the nine months ended September 30, 2024, the gross margins were:
| Segment | Gross Margin | Adjusted Gross Margin |
|---|---|---|
| Technology | 52% | 67% |
| Professional Services | 14% | 20% |
| Total | 38% | 50% |
The adjusted gross margin for technology decreased from 69% in the previous year to 67%, while professional services gross margin improved from 16% to 20%. This shift indicates a strategic focus on enhancing the profitability of professional services.
Operating Expenses
For the nine months ended September 30, 2024, the operating expenses were:
| Category | Expense (in thousands) | Percentage of Total Revenue |
|---|---|---|
| Sales and Marketing | $43,145 | 19% |
| Research and Development | $42,948 | 19% |
| General and Administrative | $41,136 | 18% |
| Total Operating Expenses | $158,394 | 70% |
The total operating expenses decreased as a percentage of total revenue from 23% to 19% in sales and marketing. This reduction was primarily due to cost management initiatives.
Net Loss and Adjusted EBITDA
For the nine months ended September 30, 2024, Health Catalyst reported:
| Metric | Amount (in thousands) |
|---|---|
| Net Loss | $(48,829) |
| Adjusted EBITDA | $18,200 |
The net loss decreased from $(87,835) in 2023 to $(48,829) in 2024, while Adjusted EBITDA showed significant improvement year-over-year.
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Resources:
- Health Catalyst, Inc. (HCAT) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Health Catalyst, Inc. (HCAT)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Health Catalyst, Inc. (HCAT)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.