Health Catalyst (HCAT) 6 Nov 242024 Q3 Earnings call transcript

Welcome to the Health Catalyst Third Quarter 2024 Earnings Conference Call. [Operator Instructions] I would now like to turn the call over to Jack Knight, Vice President of Investor Relations.

Good afternoon, and welcome to Health Catalyst's Earnings Conference Call for the Third Quarter of 2024, which ended on September 30, 2024. My name is Jack Knight. I'm the Vice President of Investor Relations for Health Catalyst. the Alger, Dan and our our Operating on Executive our Daniel me Chief Jason Officer; Chief Officer. with call Burton, is Chief LeSueur, And Financial Officer;

our results in section as related of Investor ir.healthcatalyst.com. which Form the at be our are as to our of furnished our both disclosure issued today. website complete found A Relations in SEC, press X-K available release well the can of on

available following a a be As today's replay call. being call conclusion and recorded, the reminder, is the of will

today's the call, the for of and the Litigation we pursuant During growth will make XXXX. outlook Act safe Private remainder statements forward-looking of Reform XXXX to future financial of regarding XXXX our harbor and provisions our year Securities full

representing not of business. to relied activity disclaim new update as analytics our or relationships performance tight of of statements and clients bookings, based outlook. forward-looking and expand obligation the current statements general any the for of our attract are conversion trends, strategies, data today subsequent impact and retain interest and rates, with should development the anticipated date. the M&A labor and on as expectations the of as and the on management's platform, our any clients, These rate to views the challenges, views our impact and be and environment, of We market, ability macroeconomic including pipeline deployment existing any Our our demand inflation forward-looking

SEC X, and Please quarter for be second the XXXX in Form of XX-Q filed the our that materially August the quarter may factors XXXX, will differ. the with XXXX XX-Q results to refer SEC. Form third risk the Actual with our filed for on

tool financial information for will for analytical is We investors. presented limitations refer should accordance with financial GAAP. in isolation a informational Non-GAAP to information substitute not financial information as to or as considered supplemental purposes presented an non-GAAP and has be measures to only additional certain provide in also

to of comparable release. third measures A provided measures XXXX is their most for XXXX and press reconciliation the GAAP our financial non-GAAP quarters of in

However, margin the GAAP directly net directly discussed margin, gross measure or professional the to we services adjusted services measure have for operating Technology professional today. comparable margin margin adjusted comparable discussed gross provided most guidance these not gross GAAP gross cash forward-looking most GAAP directly to from flow the activities, technology GAAP most measure not discussed forecasted. adjusted to comparable their not are are therefore comparable our that because have cannot cash measures of control most be or today items non-GAAP free to provided within related reasonably and measures reconciliations today, there

Dan? With call over that, Dan Burton. I turn the to will

And Thank has you joined you, afternoon. this thank everyone us Jack. who to

share today's summary third highlights. on XXXX quarter third We with are and quarter results our pleased our XXXX call will performance other and to I begin recent financial outlook. commentary

We financial of guidance. total adjusted including are which and exceeded of midpoint previous by encouraged our EBITDA revenue results $X.X $XX.X third both of quarter our the million, of XXXX million

anticipate rate. XXXX we On Additionally, client . Likewise, performance $XXX are revenue for of our retention additions between XXXX, year pleased and EBITDA, QX, will revenue, to for and net bookings through now we our we inclusive our revenue million. million $XX new raising EBITDA On both with are adjusted and expectations, and we million. full subscription XXXX. dollar-based expectations we between be $XX adjusted our are million bookings reiterating XXXX are $XXX platform expectations and updating XXXX

shortly. detail will in discuss greater We

items quarter. additional highlight me let Now from some the

we'll categories will discuss and of in our X with You each these calls, scale. we results the that earnings performance quarterly objective growth categories. of And from measure our previous you recall company's in our improvement, strategic

measurable ability maintaining improvements to improvement, member The focused industry-leading category, and engagement. realize client evaluating our massive, while is our also to on first enable team clients

me Let and challenging case unique data from improvement study. an for recently is published client sharing example archiving a complex a of health begin by systems.

health As costly data both which resides data in and multiple methods Traditional approaches recognized unstructured Foundation care data. efforts. Trust scalable need structured sorting for inefficient in be the can Thomas' archiving data and approach systems disparate years, hinders Guys includes and and to and utilization dating and NHS data as a to St. data. and but decommission accessing clinical The data quickly and archiving to from committed far it legacy sustainable of access systems. and lacks was accessing XX as historical organization clinical back maintaining scalable utilization sustainable archiving

which aging were breaches legacy data and Several technology, on system systems failures. increases of risk the built

data and initially Health result, a its to in access that a data. preserve Catalyst find from The solution, and an slowed in-house increasing attempted platform reliable the organization advantages combat As to systems platform the Guy's Health the storage better across data time. complications and the organization with many Catalyst continue Catalyst this development teams offers to platform a archiving to quickly XX historical cold Guys as and source our and into ensuring build data system, provides partnered to compared solution St. modern Thomas' processes. needed ingest data. To streamline but issue, secure, data Health Thomas costs to St. to

applications Guy's we and leveraging organization operational reporting created helps the improvement. Catalyst visualize Thomas' Together patient to built that and robust, with outcomes long-term Thomas', Health and comprehensive realize cost-effective By to platform, and St. data data efficiency. Guy's improve solution actionable help and a drive St. provide analytics scalable

over cost $X.X in in million savings. Resulting

data source fortunate to the in from Following these Also the we into to results, build platform. data category, have positive organization been more improvement and receive plans recognitions. additional external the systems analytics additional XX aggregate

tenth workplaces second the in honored a row as We Salt that in health list are be of Lake X the Tribune part Utah by for in [indiscernible] named the Utah Capital a Mountain year fastest-growing the excited to for we Utah. also includes greatest of of best XXX X were by First, companies in the for with America's a by people as disabilities at by the XXth and care workplaces Fortune year for the row in time, the Newsweek. West

share product to of President Women's expand was excited the health owner care.ai, the and AI that improve decision-making. work the recently of as catalysts awards hospitals Council. health care for Jessica are expert does use we for health Curran, named exceptional and our health Analytics help a dramatically by Jessica Recognizing Vice Data Tech suite the to of that a services Science finalist systems products AI Lastly, and WomenTech the

our objective over and category system is to strategic with few client we relationships relationships. expanding client new existing are encouraged last health next beginning Our quarters, what Consistent which growth. see have shared the operating includes improving improving we double robust our top to end stabilize. our in accelerate back margins our and will line pipeline and and growth steadily This XXXX. to market confidence digits expectation continued that contributes

additions XXXX our our platform rate expectations year net subscription and XXs As such, and reiterating of we inclusive the dollar-based retention bookings are new in low full between XXX% XXX%.

QX that reminder to see excited to additions solutions. XXs best for are anticipated the for Catalyst platform share me be year new a represent that year continue history demand the an expectations, Health low Related let would our subscription bookings years, XXXX our is bookings this we full to in net to important significant quarter. Underscoring prior We similar first client metric.

$X subscription average net and For new plus nonrecurring to revenue will for ARR clients the XXXX new clients, platform between we continue $XXX,XXX million. be anticipate

our relates on net are we expectations call where it XXX% our As bookings have and new our net on to retention reiterating XXXX shared XXXX. impact our to QX up end QX performance dollar-based dollar-based we significant will of for on XXX%. retention, a client

items their retention expansion as growth will client which existing nonrecurring margin services to of only expect X fall in net expansions our will drivers dollar-based retention as revenue. As categories definition a of base. professional to and revenue such outside the be non-platform adjusted growth, profile client reminder, XXs excludes these current of as XXXX. our Due anticipate contribute within dollar-based they also application of than meaningful We higher expansions. well we EBITDA

current important with into meaningful drivers. these and provide of outside growth insight categories our growth our to shareholders that of dollar-based Given fall desire retention, our definition

We are in to share XXXX. we early update would in historically a be We to whether metrics will we be the have it continuing this potential helpful position growth to consider shared. update anticipate

Given LeSueur, has Dan the platform our enabling with and earnings consistent and Officer, and our this next-generation strategy, importance product Operating last Ignite our quarter's joined growth Chief of call. earnings call,

he Dan LeSueur. join time and We turn expect updates provide answer that With will some to me that, future calls questions. status earnings to over related Ignite let help

Thank you, Dan.

demand with migrations implementing continue are among steady and underway. see migrate progress strong to existing Ignite to to We that clients

migrations. We on forecasted schedule lines to time are for relative generally

over Ignite will we a migrations, the have migrate years. and our of existing dedicated these couple team We clients is assisting DOS to anticipate that continue to next with we

the We new clients also Ignite directly continue welcome to onto platform.

a the of menu of compute their platform features. and improved Ignite and purchasing efficiencies. to to modularity, advantages expanding these by for related applications we're relationship offer include elastic flexible the from clients benefit options and Given additional spend to These options pleased

of same improvements migration and functionality Ignite. maintaining while capabilities realizing existing savings part functionality from price a or enhanced the maintaining through Immediate as the reduction the of and in spend operations

we of few options. spectrum the Over next along will our these years, course to of anticipate follow the clients X the continue

our while that provide cross-selling existing to additional this we upselling ensuring clients. during our to applications compelling within will continue to Importantly, we be and in expansion proactive base, value migration, drive client also

let that update, to Burton. it me turn With Dan back

that for you update, Thank Dan.

Has with of long-standing of technology cloud-native Health independent Ninja and information Wisconsin. like Catalyst the dedicated I an Ninja expansion to for benefits or patients Next, health meaningful expansion Ignite want with is interoperable technology with to health widespread to purpose-built and WISHIN help applications Wisconsin information Health highlight end-to-end Universe includes Information Statewide platform. exchanges not-for-profit caregivers client, WISHIN. multiyear interoperability expanded secure, throughout Catalyst. migration its organization Network to platform a services Universe partnership an This bringing a

the to opportunity We and grateful Wisconsin. . and excited shared to expand individuals communities and forward the for continuing in of look partnership help improve commitment our to Vision support to in our health are

also Health. Health partnership selected excited a Universe Additionally, I'm Sync announce to recently Ninja new Catalyst solution. with meaningful client Sync Health

technology By moving leveraging platform. mission interoperability Ninja health Sync excited data for help Ignite Health solutions forward. information we achieve trust its help Universe, creating by are to bring value and to Our to

provide analytics a them Ortho data pleased a to with are to to with robust we new initiatives. strategic and partnership signed we support infrastructure Nebraska announce their Ignite recently Additionally, that

And in adjusted We commentary adjusted after as compared prior to raising double-digit guidance. to growth return consistent and our with anticipate XXXX, XXXX XX% XXXX to in EBITDA revenue continue a our growth. EBITDA approximately even

against our an important achieving As execution our QX XXXX target contributor to growth expectations. always, bookings is

few past. have shared like we consistent what to also would the related to comments a in with I share strategy, acquisition our

cybersecurity Enterprise important are our clients, excited tech-enabled is and incident. We rankings offering agreement to services #X provider, the look is a including a signed platform definitive Class' help that enterprise are robust excited to manage Ignite security Enterprise and about its forward drive of of management cyber a cybersecurity infrastructure will Enterprise continue to how announce to welcoming protect areas recent part health. as and are catalysts help solution. to Cybersecurity area the event most . And a ranked and growth this in liability we category. to us combination critically address clients. to help clients in our have follow-on We an our end-to-end this an for from acquire attacks. is in risk important

by anticipate be and will our immaterial is this We and million term. in end will to combination price of the purchase of financial the $XX close year, the near it equity. cash a acquisition be statements will The and

last number strategic several the of acquisitions. a made Over years, we've

playbook training asset catalyst that our health efficiently new create maximum the and cost We our identifying us sales quickly playbook that to teams, have towards a structure. drive allows solution broader and cross value into That we value shareholders. redundancy integration driving for effectively can developed an for integration of ecosystem an and optimal maximum areas so clients integrate includes

more consolidating feedback our we new we will effective believe to with a clients their in to our that clients enable Further, a doesn't We've support platform a we relationship Catalyst. acquisition efforts. and continue as a have to an have consistent to that selling heard relationship they deepen continued relationships, of us strategy We and goals. to and acquisition relationships consolidation as our continue reminder, on compared a when their existing us cross-selling will with are that one Health these help strategic our Health clients to improvement opportunities our prospect be through from vendor long-term pipeline act which as well twice Catalyst positions will focus partners. be have Where, anticipate we consolidator, to we than of clients maintain a

also Jason, are XXXX. time joining effective Executive Queens the of share throughout announce extraordinary hospitals, Board want to Health in Dr. the honored December hospice that Chief leader Carolina. whose career includes the and oncology, turning transplant leading Hoggard Directors been former dedicated over to services Utah, is an units that Oregon ambulatory and improving Green career. be Officer Jill of her to bone registered will has health Catalyst the home Health we I X, Jill System North A to patient work marrow at programs care. and her life and and Jill has with nurse Before

and Directors her impactful for our the Board excited and to be significant years Jill over to join and of will are We months anticipate contributions come.

Jason. over call the that, Jason? me With turn let to

Dan. Thank you,

want say third performance. Dan to I what pleased am Before I diving echo that with financial our our results, and into shared quarterly quarter

a feel objective to chiming serve category I We our fortunate ] on our awarded I continued decade a Magazine. Women Dan as Burton's be if to work our by alongside scale. Council of category a company, [ Award recently didn't great Utah would I pleasure was of and objective such strategic leading highlight it's Business leadership, Tech by scale Dan leader. comment and commitment into the Before hero care tremendous both now Impact Dan will remiss of to health have a

it of $XX.X ], outperformance represents This generated the roughly growth of million our third million, [ in for X% quarter of Professional third year-over-year. XXXX and we revenue was flat was quarter the QX, $XX.XX million represents X% increase XXXX, the guidance XXXX an Technology revenue total For an of for midpoint $XX.X revenue. year-over-year. year-over-year. to representing services

For XX representing margin adjusted total approximately the third an increase and was of points quarter XX%, year-over-year. of gross basis XXXX,

year segment, This with margin line platform was In Ignite's QX, Universe, in and contract expectations. period which ramps XXXX the of XX%, upfront associated without previously with our X performance year-over-year of or more Ninja shared signing. decrease impacted months was and gross to after approximately mainly same technology basis the last relative Technology costs XXX by deployment the associated revenue, generally adjusted a points interoperability roughly

services our decrease XXX margin well due temporary of headwinds basis XXXX Catalyst the In adjusted QX year-over-year from DOS Ignite. XX%, an XXXX. As increase to Services was as to efforts migration to roughly points Health ongoing Professional points professional the segment, of the a approximately XXX basis gross representing and of relative second quarter

ongoing recognition were This a was arrangements of performance prior more on revenue operations. XXXX, costs quarterly primarily slightly adjusted ambulatory by operating resourcing $XX QX, in to In of combination total expenses tense driven project-based service and million.

guidance EBITDA and of our operating XX% increase total a period operating compares relative million, focus the last adjusted were million same XXXX midpoint to the $X.X and year. Adjusted and expenses As of to continued XX% favorably revenue, which exceeding discipline. driving in QX, $X.X representing additional and cost of on XXXX highlights in was percentage our an QX, leverage

XXXX the expenses out adjusted EBITDA we with driven quarterly to result outperformance This mentioned some along the mainly timing fourth previously, will by anticipate QX, quarter. revenue non-headcount that pushed be of the was

shares. basic adjusted number income of adjusted QX per was net XXXX The XX.X shares calculating in million share Our in $X.XX. per used income in share average weighted net was QX,

the to Turning balance sheet.

Compared us $XXX.X We with of the flexibility. investments. million of ended strength QX, our and cash Which XXXX financial meaningful $XXX.X are cash, strategic equivalents QX, XXXX. of We position. as to pleased with million and provides financial short-term with

of million face in principal due notes amount loan our term our the the end In and is initial April million. QX, of is convertible face value outstanding $XXX terms XXXX, of of of the XXXX value $XXX a of liabilities, as

year between range. As $XXX between top between million for $XX expect million, to increase and million. fourth $X.X million $XX million adjusted EBITDA it XXXX, between $X an full million to relates the XXXX, and and adjusted we of of our of revenue million financial quarter and the guidance, we represents the for total and the revenue $X.X and million million, total ends which $XX expect bottom And and $XXX EBITDA $XX

details me XXXX additional a guidance. let provide related Now few QX, our to

for helped anticipate of that wider-than-typical second range in half first revenue With of growth, the growth that said, We XXXX, the be our total QX. to higher a are XXXX. inform compared to continue and second year-over-year revenue seen have that will half dynamics we revenue which impacting our few QX our half

mentioned clients. international earnings Information to of we our the as First, on Health call, in more half related Exchange signed and prior we XXXX first contracts

than to as into traditional impact our these have of longer extended into take quarterly be contracts. could delayed lines some time early ramp on generally for Ignite the can expectations revenue recognition an contracts XXXX. revenue contracts -- These These would revenue

few Next, be early in XXXX. in finalized the would recognize allowed these we've which recognition result that also be revenue Where would a would forecasted projects in seen XXXX. us onetime revenue have we to pushed XXXX, that initially into

XXXX, have has bookings towards our Lastly, our previously, we lower in also than to guidance. adjusted focus which has in we are contributed our the as This shift of we have resulted we and shifted our solutions in TAMs ahead pleased our that mentioned EBITDA initial throughout this had is focus forecasted. higher-margin pipeline, initially proactively progress, mix

our has encouraged very with our lower profitability are revenue. XXXX and we a bookings this near-term performance While progress impact on in QX tons

QX clients continue be our on Ignite in to In adjusted will QX mentauniverse and our roughly line focus our terms we technology recognition. prior as migrating of costs adjusted with DOS we performance to gross from to gross anticipate margin margin, revenue continue as

margin our compared that anticipate to down QX, QX adjusted will we segment, services Services be Professional gross the XXXX. In professional

specifically relates decline of resourcing TAMs, incremental Some for ambulatory to of this operations.

medical disproportionately anticipate is hits which expenses such some moving QX. years, XXXX. performance in QX, as margin prior to services gross in improve there seasonality into claims, professional this similar Additionally, We will

we to operating will QX, material As compared to roughly flat it operating relates performance leverage to expenses, be our operating in moving see that to quarter-over-quarter forward categories our expense continue XXXX. expect generally anticipate and

our We thus far for our for encouraged which are expectations our progress profitability XXXX. adjusted EBITDA raise with very in XXXX, to informed decision

commitment flow and to will a discipline, through we our operating XXXX in XXXX, operating Additionally, free flow encouraged that we million, are cash cash anticipate $XX.X our is adjusted financial This growth. be positive meaningfully XXXX. QX, profitable and leverage our in to was testament

With Dan? prepared I remarks. will my that, conclude

like mission-aligned I for team our In our as our future. Thanks, and and thank members to recognize Jason. express optimism and my would contributions conclusion, and highly results to dedication committed as engaged these well this progress and with clients their

that, call operator will with turn And to the the I back questions. for

Our Haase with question Instructions] first from comes Jesse Blair. [Operator William

and a Yes. Ryan of a from in remarks return need bookings of here. fourth today opportunities of couple double-digit to the times as of period a hoping ask for quarter setup what profile kind importance in year's up around, I'll color Jared sales performance. just to On the in seeing the Blair. mentioned you to double-digit are hear next hit bit I you what that progressing Obviously, here of a just start sort growth. pipeline, the growth XXXX? little relative of Daniel how outlook to here those was you're for set I and to Haase guess, XXXX up on X kind Maybe the prepared the

the you question, for Yes. Jared. Thank

out see So X that and playing reiterate contributing growth did that in to confidence in building them talk XXXX as to profile we happy achieving. blocks we about those

prepared clients year that particular best that remarks, in terms additions. our And in we Health would in in mentioned we that So the the history the what net new we're Catalyst logos is subscription in of low we new and platform add the new that the add for metric, first track on as client be XXs.

to we block ARR on about we're then feel that growth. execute plus would we We that that NR pipeline We against And excited of well also between good average range, shared good first year-to-date. that range feel that and the we where about have, are and $X million contribute of ARR building to $XXX,XXX pipeline. average

block. building So that's the first

coming see The the building our margin progress pleased relative gross And tech churn it second clients, do those our this We're with with block encouraged pipeline block dollar-based signed moving profit our of clients. particularly year down last expansions, that do as those of of our to with existing and nonrecurring contracts higher being in but meaningfully expansions is retention, expansions existing meaningful building growth directly second as client within expansion rates continued strength to levels are expanding portfolio, definition nonrecurring relates that our areas forward. to as we're happening, and client year. see to current that contribute including part contracts nonetheless, to retention are existing of the fall outside

we're its that reiteration informed the our that perspective. growth And existing where And of small our into well revenue go and we growth now and new rate engine client be cross-selling announced has is year and rate each cross-sell as we conversion third here. that new the been own applications, productive in feel good the we've than that's inorganic very that while when into relationship. double have of those a on solutions an coming building engine, to and of see immaterially second from throughout efficient to proven conversion and then acquisition the And effective where end a metric contributes individual XXXX very a more particular, block has our those activities. we

layer, margin highest app the our when among that's the we're selling of portfolio. And at aspects profit

good -- So a you it growth, relates those for benefit into a we and initially effective that where in return feel line about growth any revenue so to acquisition will X blocks are. from smaller third in building individual cross-sell, benefit contribute that double us, get growth that a as engine flows from top of double-digit we to revenue it block to contribution, a building but which is of XXXX,

our have that that return pipeline, encouraged to by within a by in that reiterate case, the an quarter, but is pipeline QX always next growth decision we confidence the informed to level we're revenue and is the we're for double-digit year. always that As progression important

next Anderson Elizabeth question from our ISI. take We'll with Evercore

This is Elizabeth. thought Joanna

is, So base? international information looking 'XX, bookings customers traditional and to exchange health more my expecting 'XX, like in similar I question bookings you a the coming relative to system from mix guess are care with

question. Great Yes.

to XXXX. performance So high international base really those be health groups, year-to-date see encouraged some our opportunities. that in growth Among strong well expansions, are They we expansions. as like. are X tend higher technology -- exchange our And as margin revenue. revenue information of we growth is profit proportion to those meaningful opportunities a where which really there's that

the of the once term, get those that in initial predictability. that more ways is of will a behave as then a many more a our through And near-term the those their of to That's of is challenge. bit clients we a be same little more in implementation, clients implementations other terms dynamics at involved. little more bit bit One tend in little complex, challenging, least near

revenue recurring are Those relationships.

of Catalyst they of XX-plus to in lot of model so we a nature, being therefore, our And contribute percent Health and have the of recurring business visibility. overall revenue

want terms think And to I opportunities similarities as meaningful more we're international see lots implementations that brings complexity health the towards continue. and the you, advantages our that that of of see a space. a brings in leadership skew those information forward, opportunities, XXXX a among pipeline to a but market recurring share encouraged rest exchange technology in moving near-term we're long-term Now really Absolutely, encouraged in solution both meaningful we're fundamentally important about bit opportunities to some initial bit our to terms pipeline. of with the and of We pretty little revenue. lots of tends providing of of to see that meaningful I business set will information which in exchange of health that we little other revenue sticky, advantages

Jessica We with Piper question will take from Tassan our Sandler. next

Can first I'm I a points services or again, contracts international us help in I are would this, but to you strictly off, guess are think of And about should Or those think are with are of implementations those sort existing by these customers just I that are just nonrecurring because then you international you to the you've accompanying onetime customers? as contracts. XXXX new implementation? curious you we understand, to guided to they growth services? related me. or like software -- couple sense those of software And related think -- make in mentioned deals, secondarily,

great question, Yes, Jess.

has related So such relates seen an nonrecurring contracts question, really heavily and very as client the We've internationally. those a and dollars these contract it that of include to on those existing structure the component in though and towards they first relationships that more on And we skew really client nonrecurring starting that see contracts contracts structure nonrecurring clients an number a to relationships. point get top budget because to existing it U.S. services easier those a starting is stack more internally that approved appreciate initiatives recurring. And and other, for. nonrecurring ongoing And financial found to asking that point reoccurring the contract and improvements. and not are focused ongoing we have ending spend clinical, of we're we of that operational of they point a because it's the continuing there's finite of an ending each even expansion a our clients itself is point prefer of

nature. not its is onetime contract structure So is the just nonrecurring expansion even that's a what in though it in observing we're meaningful

In we're And well across is revenue as a seeing to revenue as accompanying international. there it a important complement often we is cases, tech an most the services signing. seeing are we're U.S. our So that, technology as at that that's component company. piece contracts services that

from will Stephanie with Davis Barclays. We next take question our

cybersecurity this in This Kruszenski, is year, and about acquisition. I breaches the And talk Catalyst's with about core more could given value we the on that to platform is proposition? synergies Stephanie. enterprise was more hoping while demand there be you Anna know for has all Health asset what

the Thank Anna. question, Great for question. Yes. you

and Health with to strategy we recurring keep Catalyst our have to short months is So we client of client of the we and absolutely talk one by that security or about to last of that's X every ear areas the try most ongoing that over a our have only on importance the that among incidents And CISO as essentially is discussions the some recent of that list we themes so. ground, follow them. occurred the every been base. strengthened And

provide huge because years, a health need. part technology system for an a strong other terms many reassurance platform. of to to Ignite of it clients. in are infrastructure and our important level of we're the we've visibility instances It's data it's area of we important that relates area a as for and So own focus Health clients to been And of before Catalyst our and infrastructure at our Ignite of really security the robust asked really

strong have a we fortunately, And very track long-term record.

we robust We and have and strong track record. a a meaningfully, have infrastructure been investing very

So a led bit one clients as the think that ask more us that us would was to usually synergies our question. of a X-part little broadly

we And and that's think natural our that was, strengthen extension to infrastructure own was as about is how your as infrastructure area solutions? of what then in a for and complementary technology relationships need us more clients got perspective they our well, and build to on the can extension, need really patients the of confidence clients certifications us that trust providing own then a your supporting by infrastructure ability A second showcase and to that security broadly? build and our services investment. that that strength offer real amount both first as strengthen the includes with what infrastructure. providing with already, this well members for help with security, you more to right they're do of question to an focused provide an their from their robust part led could we our could The And their more a that

to on And hard a system. attention paying They're health as area. your this own to do that's important

And these to us already naturally prioritizing catalyst platform. to natural the area clients to strengthen a to providing and able in received. this we're warmly our dug potential able because to And strategically and been thus so to to on far, an from into was environment clients, extend already risk we've our and a health and excited it Catalyst tested rely area. really guided own that offering very this be their that infrastructure perspective. of offering have data and that have sense perspective secure space encouraged as a And to really be led really of analytics strength more us we Health management for as certification this us we a

these these targets us as opportunity adjusted and cross-sell that grows over acquisitions are improve that us at improve to the near in profile. and company or be the synergies area Yes. Anna, revenue But that related comment, acquisition this And we're prepared expected a It is mention breakeven. did as one we to just gives at where focus is contribution remarks as from we give bringing to EBITDA looking opportunity immaterial. sales does do the financial standpoint, That to EBITDA we motion. one able

areas and that the being we've And just synergies X case meaningfully we've commonly we are combinations And and that in over and as up, Jason. It's have for in the motion knocking efficient thanks perspective, developing efficient. the marketing sales past and the we on have existing productive well line XXX marketing The we forward. more this that is think and perspective, and a in items. and from that is components found so door the their relationships than R&D to the so R&D that the outside. of cross-sell and technology have much pursued client appreciate, secondly, built, solution, really they these point, have from that moving fact We sales and discussed invested there And meaningful an positive. it's in we synergy cost there's most leverage where with the enterprise a from very it's there

that integration remarks not cross-sell increased can profitability so playbook that efficient more perspective contribute to engine. execute integration that against contribute we've that that leverage confidence we engine, -- these about in well from meaningful growth acquisitions see but our our time, and engine marketing really we over only provides that And to gained also can our talked playbook part often motion that's well. and And of we sales leverage a that prepared as

our We next John Pinney Genuity. from will take Canaccord with question

Close. Richard on Pinney John for

this you the some gross Is throw TEMS how to onetime Or base? TEMS expansion to resources? higher is there's a additional just mentioned term could is guess remarks could that near longer-term installed margin contracts. level some in be comment going clarification I costs higher I like something costs So potentially at wanted And get that costs? there. you about And for related that the prepared some to elevated just like

Yes, absolutely.

for the thank you So John. question,

analytics areas of encouraged and the do be a clients. management services with includes functions have managed meaningful been for low-level some in to and tech-enabled data most continue those areas chart and we the to that TEMS cases improvement that where decade we performing margin We see in like abstraction

that resources a through pooling lot of playbook that we've found and have improved and and we that through efficiencies, are We experience, the are use of meaningful of gained the there efficiencies improvements. of developed technology, process

the really feel have where areas experience. we about good most So those we

new ambulatory that while structure from partnership seeing We're overall and learning encouraged area, learning. a And the some in are the of perspective, still still a elements. which working fundamental We terms the at up operational progress the we're improvement coming a is operations pleased we're of client cost there. curve through still level with we're

it's Now part this a smaller is a area of and new TEMS.

and first years clients. space. we've -- base to providing within But the was a our as continue experience we're it's value And wanted few be just we steps that really X.X still that we're really meaningful providing what to we we to solution make expected a that so sure, So there, were taken our of and learn. that to or first foremost, into

be most areas including learning structure And experience TEMS encouraging some area. abstraction. we're AI, benefits encouraged focused continue the like in cost our meaningful continued we're then relationships But we'll those through our this of and we're and of to client areas progressing and chart of the in new seeing solutions nicely, TEMS use majority vast on represents in that in particular

We Daniel with will from Citi. question Grosslight take next our

for This is Luis on Daniel.

Steward? question. updates quick to and about continuation And assume has Just been expectations? there mentioned a auctions. you see should of defaultsnctions other some that Are we closed the any think how from of revenue you facilities previously There Steward? the And impact

Yes. share as please well. a Jason, and share few I'll then thoughts,

as -- So -- has all received receive that completed was grateful as Steward sale And critical and we and successful there meaningful really Health was client relationship assets the receive owed. in that that we were are have repayment that as full to partner. fortunate some to meaningful transferring such, did ambulatory Catalyst a of that a identified positive updates of we

those I so measures we in payments it that with to outcome. providing of can performance of platform Ignite terms think, of registries. to such I of perspective, incentive data all data testament qualify combination that like in a must-have right domain incentive positive bonus have as they that for that important Steward the with reality and the really solutions think from expertise way payments, the that importance relates the that the such we . That incentive the realized provide the complexity case then powers quality in those is measures that a right measures right solutions the informed, strategy meaningful of it infrastructure impact a payments and Health

difficult So how receive that would that repayment situation you at -- of of full of we our Health grateful we're for that that really and played what in specific Jason? did the solutions add, all out that even was Steward importance financial example a really

question, to the over of the Luis, process. years and a for Steward strived great during appreciate these have bankruptcy partner the I challenging few be we Yes. months,

assigned been looking a party. we're forward that new As and Dan to contract relationship mentioned, service. our forward the continuing has to And moving

guidance the statements. forward. that continued in moving repayment as include our pre-bankruptcy receivables the have balance impact of of part of contract to ongoing we prepetition our financial work QX through the our We'll to in So and expected revenue expectations related or

We Sean Capital Markets. with will Dodge RBC take our next question from

This is Sean. Thomas Kelliher for on

question newer wanted EBITDA remaining like kind to the any to size within up follow target of on these you us earlier. dollar of contracts those clients of Tim's contribution Can incremental give mature as Just margins? existing the indication potential ramp

also please then few and Yes. thoughts a Happy Jason, to share. share

in So manual at starting -- when we've gross X% a time, a the we that target our up towards gross see first begin And technology discussed over somewhere that were relationship, X% the or past, a the we processes profile year, as the X% automates as as we we're margin around introduce in introduce couple gains, other efficiency or that often of years, past, margin margin. we operating gross and XX%. in benefit from of -- from grow first that margin TEMS margin

relates another we Now gain. in the it What the abstraction we've any been we've efficiency of shared as implemented gains, efficiency we pursuing chart that as specific AI have improvements. was to some the before see that recent XX% AI XX%, innovations of past

would early the of have margin most So be use longer-term charter but abstraction. we're our profile just that AI additive implementation still in gross on and been cases of to focused that XX%

-- in traction towards TEMS beginning up Jason? of of have perspective So subsegment you gross those and that it X% charter see. experience it's track we add, we to footprint progression that [ nice most where that a we those are And relationships the overall analytics X, in of our XXs margin ] a on but X, areas from for see point would gross is encouraging in us mid- client years X from of margin relationship. a XX across What

bit QX, you covered still in would learning is still did as early tens relationships. mentioned as early only I and of professional add to Dan our think put on We are The previous services a have in which quarter. margin gross well, ambulatory we our investment third pressure pertains little are incremental in thing some the the on Dan. and still it resourcing those, I question, it

our take next David Larsen BTIG. will We with question from

what the of X you're It up. picking or demand broader example an in back is market? give you seeing like Can sounds

improved, thoughts here constraints inflation. great? be thoughts on be And around would the election may any Just that of the any labor impact

Yes, absolutely, question. for David. Thank you the

clients. mentioned, you I that of from we and first levels I And normalcy improvement for the those more X general So environment. back of of really labor factors think the are seeing continued really think an constraints pre-pandemic manageable margin operating across board, inflation factors becoming our to

very coming today. double rate seeing single that from makes the huge and our bottom labor where on improvements, down That think clients. impact significant they're we're most -- digits and I are digits very line on to the of low they're way inflation interrelated down huge, both low a supply the side, all the of

it majority external performance, range, operating the operating the a pretty allows for them think vast enough are relates spectrum. our the Now which innovations. find I provides And about innovation, sources room share our about with in territory of approaching that that monthly of margin positive would in a on and of of across Hall still them from show leverage to many to a future, is scalability a in and themselves X%, X%, to see it significant more AI progression, particular, where we're that to think presenting really wanting pleased our more about clients scalability perspective. Kaufman and cases X%, as to spectrum like what Ignite to a reading innovations, not-for-profits to footprint it a that's clients more where healthy require some But the they margins certainly Ignite clients solid holistically are our the might other technology AI-based report, use really pursue often think

is us. so that to certainly And, encouraging

election the of of as at candidate. improvement in was not election, focus the to enable for infrastructure particularly saw out terms and health the relates least health care we of portion technology play care, we play health it data primary As analytics, that a to the either election the care within

in a impact the as election. so anticipate relates it midterm to to don't significant we near And the

Ignite As the you would it add? Daniel, migrations. anything relates to

and use increased demand which and the Dan, up, excitement emerging into AI of seeing the of our and that. kind of interest a lot You around around that some brought capability, we're solutions and in application-oriented cases enthusiasm tap

think of cases. kind modular as of those that's use our with so And for we exciting tailwind an Ignite, enabling types us about capabilities

was said. yes, well think that I So

follow-up. Just one more quick

it like obviously are EBITDA used sort expansion of -- in just pulled your margin can what a what ballpark estimate 'XX, for your margin bit. be Or looks For little perhaps expectations? gross service

great? Just any thoughts would for on margins be 'XX

Yes.

the thank -- question, for David. continue you We

our XXX-plus year demonstrated really this margin last ability EBITDA, a track raise years of the the EBITDA progression the from about of with we're with record percent for this at feel our here meaningful year over We year-over-year of that the talking EBITDA per another pleased midpoint, an to in in year continued has meaningful points improvement XXX several company XXX, our to we're and continue in the basis progression EBITDA see meaningful million perspective, of growth EBITDA year-over-year growth of in $X confident EBITDA.

the grow comfortable approximately increase our meaningful the to perspective, that guidance, we gross see feel even that still can confident up. leverage we perspective to we include shared year reasons continue technology confident we margin see XX% that we base. at The that million with ramping feel EBITDA back growth and that When next on $XX

our our this that to a first growth. of this even true see shared it's growth ramp take second as You year seeing company more tech place true versus relates bit results. outpacing We've it half half it relates little of year, we're in overall our to the the as overall, QX a that's that

encouraging. That's

perspective overall I will shift gross help think will technology. will means an that's for a our trend company. that little towards mix the continue XXXX. bit That mix Which will more skew into a that from help that margin

bottom So that the that that's increased gives some a drop confidence that will to line. of some us tailwind

that years, And One in primary been other really leverage execute sales operating the is category. R&D, the there. able really last of is and X there's The number is second drivers over the tailwind well we've marketing. to against

to meaningful growth, As of to leverage our office. We're we think in It's in continue as that. success progress of a it seeing positive of and relates building capabilities, out operating to will see areas continue our R&D. particularly real offshore invest and to R&D, member our one be going really fastest-growing source that it to relates India team we're

[ clients next and door highly and engine through guide way we've the able year, those the as efficient, number than our ] Each to EBITDA add from client it years meaningful sales XX% and of And as is been relates we cross-sell continue And well. it when even to very acquisition especially our year. that existing are our already a demonstrated as more through this we're leverage. cross-sell that ability execute raise efforts begin sales then able confidence we see on where as knocking marketing items, to of inform productive Xx we'll we've that to Stop still marketing, a to productive motion again, as sales when but relationship, grow effective over outside. growth an just they our in be provides another items for and we of primary

Anything you'd add, Jason?

adjusted gross EBITDA providing Dave, margin color just after end. range was last to that to additional both on Dan. by important It adjusted expecting note end I on note, are bottom we grow top the with Then $X even going in I would million the Yes. thing we early XXXX. point, anticipate on the to that is tag still is raise EBITDA XX% other by Yes, -- and do roughly our early

question We Raymond Ransom will next take with John James. from our

not I've is always that sold, had opinion bought. the technology

hiring is or rep through with the the people hybrid a role talking where kind territories, what are but cycles world, as like and been doing face-to-face. rhythm Zoom. of we've a we some your the customers you're We're meeting your in? of so we you're new And are There's out now doing to hybrid look sales

is word Yes, good it's John. hybrid question, it. for great a a

pandemic as those that the have think have through opportunity to have we interactions. face-to-face we came I that missed we realized, really

a same of at I at meaningful And we financial work. that so our Health I health do good having themselves back in And face-to-face our clients system positive. together clients we truly really accomplished sit we talk face-to-face because quarterly use of we've is structure over room We of the a a the in of found opportunity we're think we've helpful extreme business and clients throughout least that, together there value rhythm to half continue progress that in, coupled relationship. And down and with. lot the larger last to what the with about very pressure lot a what XXXX. That's the together with be hybrid accomplished face-to-face and Catalyst what in quarter think planning review the how quarterly the with of face-to-face measured be our deepens work made to that them, with and of discussions found did where series XXXX model. a inflation forward a move of we've

virtually relationships, cadence in with regular I quarterly some in when sessions, that small I leveraging kind that have, found those we contact, going those think are between of those and layer following in initiatives also effective. would really, client motion we really to about share back found commentary, existing strengthening regular a and discussion how whatever relationships earlier just and we really good cross-sell even is our they're of up rhythm app

strengthens. efficient and because investment that our more in have And of component it's quite then maybe of a so effective virtually of there bit a so there's cadence, really again, that we that do and quarterly we're a And also and cross-sell so a focusing more on face-to-face work can motion. rhythm effectively

you you a let's you leading are versus today the longer for doing let's say do customer take Is of So large don't now it a relationship now? as standing that What Where started? conversely, mouth? what Dan, you lead And get with a relationship. it's then have system, hook. are word you then a long-standing And where with.

great X It's -- a questions, John. Yes. great scenarios and

relates it large system to relationship, of where increasingly So first we that's -- as have all, a a rare. becoming don't

our health acquisitions, organically have top the vast with organizations installed of through already. relationship care As both XXX the majority we have top XXX, grown and a base we

stronger So be place that's a in. already to

of just layer. I apps think what the are we're trying and to better. better Many do get those is relationships at

getting cross-sell the And specific better most getting already better adjacent that that's case so app the to motion use we're bought. they've at. and at whatever Is better

cycle chargemaster about to how a client let's our labor if and using you're management rev to that solution, adjacent management. talk So pivot really learn you're Vitalware and

within the side, it's On still cost finance management function. the

sure showcase you really of bolt and understand how in we the positive really solutions. a shine on through those up Let's individuals the make to can CFO that those help and way that ROI really

to of that, by So the I would have is long-staying or cross-sell of motion. in extension relationship, We already. same adjacent to long-standing relationships X clients, terms real things that are consuming Ignite talk is just X that often is more I in leverage think they track a of say And talk focus. things about kind more or a X those and our applications

So few natural cross-sell we to opportunities talk. have a

So face-to-face more to whereas about to expansion probably a really for talk different it's or and X relationship. and try when of with in it's a single there's to options dive there's more us them, client opportunity with smaller more app-only of and start limited X

that for capability house? the to you in And last that don't one anything me. your could wish customers you there sell Is have you

listening. where I just our would with have have John. up. we up think those be keeps told Like Well, ago, We we're listeners X excited a at segment always business to that you try because And clients security always I comes good what quarterly in reviews, you we're and months really to X night?

Security purchase. we really again, list. was that have our natural security infrastructure our had for And offering strength we but didn't an where was there was that to solid, client always on a own

now with have talk adjacency excited we're we about. that to can And so clients that

Yes.

maybe double [indiscernible]. All So Thank recommend you. authentication. right.

next our KeyBanc. We with Schoenhaus from Scott will take question

over brief know going And here. we're I'll now be here. I

you're I pipeline. again, being choosy within your So comments prepared in actually your you mentioned think that

margin higher-margin versus services lower business. on focused tech You business

continue end trying your Just for platform. these if think into about and Ignite to healthy XXXX demand how plays strong markets out to be that

algorithm. revenue old technology of higher that growth mentioned growth could of You up being in end part more a that

think for next Just could after, higher tech pipeline, you mean does elevation year? to your which really in can if choose to trying projects much versus growth see we services that go

Yes. Great Scott. questions, comments and

right, think growth. we you're think I about how our that's and

that sitting want we we solution to we to full they our And in across down a the are, quarterly cases financial true parts isn't be half that that at And portfolio prefer of of higher-margin environment, XXXX, of point, for that ROI. offerings, back of and hard to our every Of in there dollar always the if always in near-term them some some want portfolio so sell, business openness savings XXXX. had measurable other have grateful something that open. would really in portfolio buy. course, is about an there that review, was a that offer And where guaranteed we that there's But an cost that and our was parts we're was was when talking that I we clients for to meet of meaningful, opportunity true portfolio. really lot

wasn't Now an consider. that and other a for tended of of parts the towards a our parts openness lot other or an portfolio that of and example, TEMS, ability few to portfolio just really

choosing be that P&L trajectory. growth an from for point, in tech Those onto your growth all towards you're rate. existing that where we've of more the an expansion that But So grew reasons adding play also within one can faster our And Ignite. prioritize way. in to is course, or example, that are meaningfully tech. to a logo why And are we're really grateful really to just client of those great to overall was areas ROI base like additions, of that starting at our profitable. to existing areas means out the new seen shared back apps see layer tech most we be clients. that's a areas expanding to normal But now full the skew discussion. And than that which provide that pipeline overperformance. our we QX, portfolio And And client overall more

QX, that continue through likely will in into XXXX. continue think and could I it

that. like relates that a then tailwind opportunity an shareholder us lot this as a schedule it fundamental We that year for of And for of going margin value. get of gross and EBITDA of growth, a from profitable we are us perspective. to more drives more performance. we to It's to for opportunity our like That's mix provide ahead believe an

Wells take from with Berenshteyn our question will Fargo. Stan final We

should here wanted mean, as prepared remarks, last clients, the quickly the on live displaying impacts discussed the -- for regarding we the in comments so the twice about new Just to as these of you go the follow think how up growth reiterated client timing-related I -- on in outside that's anticipated clients the about many year.

So any or timing the changes in on goal the pacing here? the lives

question, Stan. Good Yes.

think performed I exchange been factors the has strongly -- relates So information we the it as market. to that in have -- one to XXXX spoken health we of really

to a tend new we complex and meaningful a the Now Those that existing bit some new be little or expansions client have large as has as take client manifested well. well both when more do expansion. bit little side on as implementations longer a client a

XXXX. in we to that hope So dominate continue of market. subsegment been that has that that continues that, the factored I

And and a could would the that for component so XXXX. be and to way plan that about we think

rest element where live, is that getting then X recognized like affects business. once revenue near-term -- where of go-live Now a it's ratably be But dynamic we're our to that revenue. a tends the to much recurring near-term

then and to so manage very and it And becomes very, easier understand. predictable

impact. So I a it's material think don't significant

performance we had revenue us we over pipeline ramping how over of an the of still portfolio, seen revenue that in the overall same a representation, our what see than to our subsegment of nature, going that being we've our in as dynamics see forecasted little even higher we throughout P&L to enables lot visibility have year. of which displaying next recurring XX% as into a and And

those of we So we out. little because bit to a a QX bit see we There than of our revenue we in on complex that's guide our you'd implementation revenue add, play a that guide Anything how margin. and more a lot little wider range confidence will And work still think more year terms have you normally our just in where full of do implementations. Jason? the feel is

take deploy to Then that Ignite The deal Yes. revenue. few a it us is line months time the Ignite would typically add to in, shorter. deploy thing into of a and but universe deal health an deals, only couple I is ramp information standard a types to would these

of XXXX. going revenue timing deal on will ramp impact depending that that So closures, into

as we And keep well. try go making also focus artificially share just implementations an And a the to I would rush sure on that comment, to those don't want implementation. continue to really final we really,

sense and of clients sure a think that if And We'll in the revenue quarter. more take But that we that some the us that our client into then after pushes predictable so very to still relationship, of right smooth. revenue means We it make weeks. those makes trade to that few the great for relationship. complete, the And the next extra spirit recognize complex focus client to implementation keep feel implementations. becomes want And very is on the revenue. about that that's

that us. will continue to for north star So be a

no further at time. Dan Burton to are back or There questions over turn floor for I'll the this closing remarks. additional

touch to right. Catalyst. continued appreciate update to All opportunity look in for Thank care, the provide everyone. an and interest you all in Health you forward Take in We keeping your this future.

Third This Call. Earnings disconnect concludes Health at wonderful day. Quarter Please today's a lines your this time, you. Thank Catalyst Conference XXXX have and