Definitive Healthcare (DH) 4 May 232023 Q1 Earnings call transcript

Greetings and welcome to the Definitive Healthcare First Quarter 2023 Earnings Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Matt Ruderman. Matt. you, Thank

begin. You may

and review thank us afternoon for you Healthcare’s quarterly to Definitive today financial Good joining results.

CFO. Chairman; Joining me Jason Rick Executive CEO; Robert are Booth, and on the Krantz, call Founder today Musslewhite, and

and not our During this call, opportunities, anticipated future on statements position, will the Solutions, make the and behaviors, planned benefits to market financial and Healthcare customer the limited Commercial and our global including our Intelligence healthcare of forward-looking related performance macroeconomic to, business, statements generally. our we investments clients but guidance, growth of on our and impacts our industry competitive conditions results

made Securities Any are pursuant forward-looking Private the of Litigation safe statements of harbor Act the provisions Reform to XXXX.

and risk with in to company those statements. required to may as arise risks update Forward-looking may undertakes after uncertainties, Actual including factor events any forward-looking that obligation by forward-looking and filings our statements materially conference the involve except the in call SEC. differ The law. this no elsewhere results discussed number any sections reflect or a from revise statements of

to For Investor our the please refer posted included portion statement the Relations release information, that have website. just cautionary earnings of we more in to the

website GAAP directly Additionally, reconciliation conference our most to our the Relations of measures earnings Investor their we tables these measure. to comparable release on discuss for financial call. will of portion in non-GAAP measures this Please refer financial on the

I’d over Robert. that, to With to turn like call the

wins of of first provide in some business review of latest first Matt. to some call, quarter this from and some product turn highlight On to discuss overview Jason afternoon we the are appreciate then Definitive our joining I’ll first our seeing all provide results. perspective us our results, trends over Thanks, Healthcare’s today’s and it the quarter on innovations. I what you to quarter, an market, key

end our of of the our financial in our profitability. we on adjusted and Let’s EBITDA was growth results. as guidance first line goal reviewing Revenue while balanced quarter deliver begin range, high exceeded by to continue

which solid and was Our million, a Overall, into off $XX.X given ongoing got the to to translates challenges. of year $XX.X total we the XX.X% the revenue XX% adjusted was start our margin. year-over-year million, EBITDA context represents which macroeconomic growth

to continue in customer demand platform. commercial strong We have generation interest and our intelligence

strength Healthcare generation resonating with Our be platform, conditions will development business market the in Definitive efforts the Healthcare demand go-to-market role their continued proposition as accelerating customers critical great their that the recognize our and and value validation is strategic platform the performance that of our in efforts, Definitive is that product The improve. solutions of customers. fundamental

quarter, pleased While I’m executed business environment remains in the with difficult. how we generally the

organizations a environment. of follow net Just continues to to quarters, comprehensive saw continue as we review scrutinize across to continue recent we see elevated the number an processes, as more due markets decisions of all deferred budgets. companies result The level purchasing be closely difficulty deal economic to in their

current perform we help macro, have do environment, effective working in not we several to managing we through should improvement put do that hard job challenges and strengthening expect We are a in meaningful of until place an see us to see changes these but from this dynamics.

markets wins From target and with both perspective, all our customers. a sales signed important we new of in existing

been required approval get top are the and our processes longer teams generation activity has of doing the through and adapting and comprehensive our strong mentioned, I sales more finish to a to good job commercial funnel transactions cycles line. As pipeline

with an plans. institute And even we sales our teams we’ve be engage changes more sales the will and account platform. customers As teams full cycles, I our to mentioned more on in-depth value our to proposition mature align of on our last moves these in made as and through better call, position vertically

can having their strategic the are conversations the with important platform Healthcare Definitive increasingly role we day-to-day reflects in operations. play customers The

investments in to As data of as to we believe the affiliation of mentioned the sales second Dataset cases in of provide healthcare our success on XX top the last quarter, to enables customers a that and probability proprietary use and generate for recent due independent each product cloud ranked ability launches. profitable and reference successful the actionable environment market thousands their or returns data. better research increase marketing first and We is Atlas

life the and Finding the U.S. the then diversified medical and groups all market. is of targeting healthcare device, understanding any science, provider right physicians, or trillion they success for hospitals physician company together critical how work $X

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had precious dollars to not highly a Analytics through channels competitive Analytics only to multiyear multinational marketing optimize plans company sales platform are a and Passport XXXX included our Life company. that spend our the in Science Suite. XXXX, presence the also investment Suite and biotechnology our business, win commitment This to marketing but Passport delivering at significant highest Also, This expanded a we from the customer churn to global deal reversed pharmaceutical that and reallocate return. its use

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provides QX Dataset In and played long-time product upsell our win. the HospitalView opportunity use United of upsell identify more to our relief U.S. A and Dataset assistance, that organization education The hospitals launch. this departments relationship. an reached preparedness internal Atlas an the following purchased across the than signs Moving of growth. user us out this strategy a the to role customer humanitarian and in our champion States agreement transform size sales also that offering Claims Atlas which first important organization A All-Payor non-profit the quarter, to disaster our emergency its Dataset, disaster most market. enterprise for doubled Atlas at and we’ll diversified

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use In to products this better core their company markets in team coverage our ConnectedCareView facilities. of insurance get addition, strategy long-term care will and hospitals

the of year, the full ahead remainder highly execution we and the to As on targets we our are focused year. look for hitting

thousands We in new of market, go-to-market that are time. are greatly success, operational to end, excellence our add increase and and forward. customer on focus our initiatives investment customer and continue at moving logos $XX penetrating the opportunities keep over early stages our ongoing to per tremendous to us ARR and To we platform billion-plus of there

continue strategies, road product our global on QX the in invest to in verticalization year. throughout team and progress great we’ll and account our made We map investments and

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the over support expanded economy have business margins growth we believe of improves. scalable proud both model faster and are We will built it the time and as

Jason I’d product our innovation. to over it discuss to now turn to like

two flywheel we to is details on quality and I’d product innovation our like Healthcare. are Thanks, key that enhancements. of focused to at Robert. recent competitive constantly significant continues the innovation here pace differentiator The spend The about product a expanding. Definitive share

form, three new offerings that available When enhance want integration make we is Commercial intelligence when our our that launched Two capabilities. in clients any to Intelligence, significantly weeks system. we deliver and goal our ago, data Healthcare it, any in where

platform systems can choose new services and and tools. day, to a data into seamlessly Salesforce CRM other integrate of make In they customers in-depth our Intelligence our including use their every internal have capabilities, integration asked IT addition infrastructure. options our support Commercial the and and Healthcare analytics, tools flexible best-in-class our With range to customers available to our on that us from

Salesforce integration Commercial This mission-critical are elements CRM Salesforce updated three app one, DefinitiveConnect. their our with on with data of clients. to interaction and Our Optimized data and offerings to are: XXX every provide than with our their physician data to depth Enlightened hospital available the directly now them AppExchange. in DefinitiveConnect Healthcare we is allows access they work DefinitiveConnect client Salesforce leverage platform, provides the automated through more data access in Intelligence that users have continuously environment to new sinking.

and they Intelligence prospects to data data with marketplace Snowflake, to have unite advanced analytics. work of Snowflake, access technology services Customers of can opt the to Snowflake. Existing the platforms, data secured team Second, Dataset. can clients to industry-leading professional the multiple three Healthcare to Atlas data on We more ingest example marts its into the Commercial already Snowflake create now one datasets leverage our sharing datasets, to with our need to perform warehouse showcase come.

launched commercial virtually to APIs. retrieve modern new range Definitive automated Healthcare data and of data Healthcare and Developers through systems. intelligence synchronization Third, warehouse. request a any data suite a to We’ve these Definitive applications of into software can support or CRM system business broad APIs APIs of use

within can Intelligence these ensuring while With the tools, our access working new their up-to-date efficiently they Commercial customers possible existing now are data. with workflows our quality most and Healthcare more highest that also

which to also I launch AI, just we announced last want the highlight week. of Atlas

to comprehensive always of had the investment built analytics and customer of the making our expert proprietary success which Dataset, and claims, vast our available AI services, throughout and base. we’ve reference, our the area we’re data longitudinal, affiliation is help contains Atlas even robust market. analytics provides this more in that current healthcare While picture on solutions and a deepening embedded Atlas these drive

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each team release The I’ll first by XX address challenge. of includes a data highlight specific analytics, here. our customer AI a few to science designed proprietary Atlas

ACE First, Projections.

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claims segment best vendor features on for We explanatory We no in the our to Dataset facility-level characteristics. pretty the activity can to techniques way ACE compensate to only data because the of U.S. the unique the of volume the and reliable transactions has we the that get provider to extrapolate machine or data data that of a providers Projections claims fact a our learning that of missing models. train claims However, claims every Claims much reference we variables AI Atlas our and that for drivers our view facilities projection part estimations in of believe healthcare happened represent all our has based market. and model advanced picture. U.S., of clinical data identified All-Payor groups entire generate ACE volumes is of as makes the XXX% Projections affiliation industry provider overall modeling that and which only apply that in the clients use clinical proprietary

networks, ranking. pouring ranking a and million according community insight Atlas that within experts immediately utilizes and by data to Expert experts leverages saves to their to our trial by results given activity, graph Claims the nearly natural Rather and a Definitive accurate and clinical proprietary work within system area. proprietary centrality more positions their expert and results and thousands language and processing a physicians at that scoring of applies Datasets, All-Payor allows identify through algorithm trying clients scientific we our across scores This create Healthcare’s on AI to clients solely Second, This team to a practice. publications, from experts top-ranked a clinical do the XX this of rank do experts. own scale than analytics, volume and it much therapeutic science Atlas prediction, specific it and in better claims of

clients. therapy, RxDecision the likely RxDecision These prescribers, therapy. critical a to is brand to clients prescribe from understand Insights competitor’s which physicians likely Third, our help insights biopharma Insights. which for our name prescribers are heaviest are and most more which are switch a

across team entire science scaled computational Claims RxDecision complex and data Prescription Dataset. Insights and from process derived Our it the a methodology Atlas

and better our individual opportunity their Our high sales them events. targeting, align and methodology patient processes teams. efficient and buckets longitudinal arrive commercial proprietary their insights them for most at claims, and of into journeys prescription research into billions curates decision-making the help refine These Salesforce their customers targets

believe to continuous which help smarter the each our advantage become dozens deepen the have analytics coming and enhancements of Atlas in out in development, more AR competitive will and roll efficient quarters offering we and and customers years. more of We marketplace. our plan our We

I’d in over Booth, to Definitive now Healthcare’s CFO, walk detail. to it like to performance more our financial Rick through turn

unless results QX our the before remarks, for for basis, my start In discussing Jason. a results of and year. be guidance noted. reconfirming QX guidance I on you, finishing I’ll a review otherwise will our our with all detailed Thank with non-GAAP full

economic business strong QX solid challenging results compare. conditions model a allowed deliver tough and to in Our us despite

EBITDA EBITDA. months. the for QX us XXXX, revenue using margin XX-month flow to was margin quarter flow flow on free an XX% margin XX cash or cash free highlights growth unlevered XX% and of at plus last compared free growth, Rule putting the include: Our the over adjusted Revenue unlevered XX the at basis XX% adjusted XX% cash financial unlevered XX%, trailing

Revenue continue million, XX% revenue the business XX% to X% in growth forma new guidance. quarter. the $XX.X in as and year Turning first to quarter, organic especially up of for our driven conditions. industry Pro was more due sciences was upsell from by first experience heightened and prior above was results performance providers – in life midpoint This churn, the and in we detail. to the quarter our growth

customers quarter XXX with the enterprise XX of nine ended customers a XX% or in we enterprise previous from with We customers, define which the as ARR. an least $XXX,XXX This customers year-over-year, quarter. with decrease of enterprise was at increase

Our total this XXXX, quarter. is conditions challenging X,XXX business continued at continue from remain from previous QX. we XX% Despite if be down Overall, realization of the opportunities in up slightly includes headwinds, expansion end QX in customer count, was smaller even strong environment. to the new delayed and X,XXX in QX, which but the economic customers, believe

$XX.X had profit of XXXX. decreased the XX.X% million, was basis from XXX QX communicated came previously. sources we as in And Gross Dataset Atlas the online, additional QX points up data as from XXXX XX% gross margin

as move that is to margin expect year. impact XXX basis the We see we to the year year points for gross expansion the so full XXX through full

and QX XXXX. marketing of And as of up million, up was development revenue, sales marketing $X.X from expense was with a expense Product QX percentage consistent XX% was XX% expense XXXX. and Sales XX% from QX revenue, $XX.X million, XXXX.

multiple opportunities map. and we our the to road deliver product and will we datasets a efficient products customers. revenue, long-term Investing Robert Jason XX% from of XXXX. way is to on we using expense or multiple to have touched invest percentage identified the launch examples and As and QX some for of earlier, platform our existing of development highly these a was in on product in enhance up XX% us effective to increase revenue, continue in value our

XXXX. QX X% QX as revenue, revenue, XXX was G&A a approximately of from $X.X basis G&A were expenses of XX.X% of from in million expense points percentage And XXXX. down XX% up

see continued expect are due to both ongoing leverage efforts lower to costs because G&A, from these costs. We to administrative and fixed relatively

$XX.X from of up X% QX income million XXXX. Operating was

XXX revenue, revenue, gross Dataset percentage the was year-over-year G&A a was of of the cost by Atlas decline down bps a impact As offset of margin of improvement. primarily XX% XXXX. operating income result The expansion, QX versus margin

basis. million EBITDA a and was QX guidance XX% $XX.X the at of increase end upper dollar of range XXXX Adjusted our from on a

XX% XXXX the with a As was to described in year. we were adjusted lower of due which basis investments earlier, in QX EBITDA percentage than revenue, points XXX revenue, the of planned how approximately line

As we $X.X expand, XXX.X move line margins deliver the shares based to million share allowing the with adjusted per guidance $X.XX impact in EBITDA on QX through Net to margin EBITDA pressure was XXXX, we despite expect weighted of the gross adjusted above. income in diluted outstanding. noted million or full us year average

company, free of so unlevered cash of requirements Turning year our XX% generation. slows, substantial high a basis, XX-month from TTM of $XX.X to cash does trailing were Definitive’s and provide We comparable upfront deferred EBITDA trailing a TTM a period to CapEx Like cash year growth flow. cash flow. million any million trailing Unlevered on basis, free down $XX.X focus $XX.X the on low was XX-month revenue, cash flow XX-month XX% cash XX% when ago. up ago. Unlevered was period converting from flows flows million million biggest free which a revenue billings on in is of effectively basis, flow the margins, due cash. Operating XX% bookings SaaS into cash flow driver adjusted $XX.X a comparable seasonality. on free the

should cash and As recover, unlevered stabilize growth free rates so flow.

million short-term of the investments. we inorganic positioned we’re in cash $XXX the well strong $XXX growth and to organic debt, sheet, million with of ended On only quarter both With fund profitability initiatives. and balance

performance obligations performance XX% were million revenue of of total were Current year-over-year. and up year-over-year. revenue year-over-year, million Deferred was obligations up $XXX.X up XX% revenue X% $XXX.X

revenue. deferred have up believe and we track upsells, financial new particularly for show cancellations primary those that from driver of been and immediately reductions to business providers, You’ll also in year. more saw and hit revenue the we The slowly grew than largely expected, CRPO. distress, sciences and and a of but CRPO note These as anticipated, that guidance is, on remain as CRPO the we course, continued factors life the

quarter it’s Moving continue prudent the and as now QX. believe conditions for well. to extend to assume current guidance We that through first

$XX.X this for million of million adjusted $X million diluted total $XX $XX.X case, million million XX% million, of $XX.X $XX a for QX, shares EBITDA a XX%, to rate growth $X.XX margin, of average share expect the Assuming to would to operating to XXX.X $X.XX we XX% adjusted per is in of of revenue million million adjusted or million outstanding. to $XX.X EBITDA $X income net XX% to to adjusted on weighted income

change previously to For our the there full year, guidance. communicated is no

diluted million We $XXX adjusted for continue million, adjusted to million full adjusted growth for and to profit share on million million outstanding. to of million $X.XX to shares million weighted of per $XX.X average $XX a XX% rate of to $XX $XXX year operating $X.XX XXX.X expect margin XX% XX%, to XX%, to million $XX.X net $XX of a of of a revenue earnings to of income million EBITDA $XX

the with annualization data growth people of of hired online selective increases highest wages key gross in the expected the employee priorities. cost-of-living very investment QX, of the expenses and guidance, on impact the impact this new early in associated in sources drivers are margin coming cost the XXXX, Within

associated these growth. expect directly efficiencies with We continued costs offset costs revenue that and will not be partially by

So was to Definitive uncertainty. for quarter economic solid headwinds summarize, and QX current despite a Healthcare

profitability and long a We of term clear do high and are large market the in attractive well capital growth, we because position believe predictable we that efficiency. levels positioned will revenue have leadership support a for

to closing I’ll back a take for that, thoughts it we few before hand questions. with Robert And

time want Definitive employee-centric energy all building recognize award-winning, has an Thanks, Healthcare to put and Rick. moment into and team our I the culture. take that a

and importance virtual self-advocacy of including in transgender opportunity by and both had of celebration Just our in the many honor to a events, of multiple expert we panel inclusive medical diverse attend these office the in data the holiday that of and a Women’s first quarter of the celebrated I events, on History had Hindu Holi, discussion culture. of visibility. talk remote, honor the in Month a Haseen global Ben alone,

had and has serve benefiting Definitive for fully Cook-off, judge stomach yet. to Cares, Definitive kidding I chance my aside, a the it’s even not first Chili a recovered as annual All Healthcare these they’re types of events across of so reason company, part that why of the as organization. and relationships consider forge a fortunate CEO serve this fabulous huge important to I the myself

Before opening the our to that and call are for XXXX solid in positioned want deliver the for questions, we start well I to a objectives reiterate to off on year.

Our doing meaningfully We’ve customers to shareholders. for for and initiatives. an substantial on years, and and a opportunity and in great large, business team our key we executing our our job value our is coming generate the revenue to the provides that great and confident our ability growth and incredible and in products scale focused remain market Definitive dynamic on a growing remaining built in incredibly profitability long-term opportunity Healthcare customers

With to like Q&A. that, would start the Operator? we now

Thank you. ahead. Blair. Daniels from Please first is William Ryan go Instructions] [Operator of question The

we’ve dynamics Rick a is it Thanks segment, some uptick for where what of bit mentioned suggests but coming pursuing could But organizations which I initiatives. there’s of are and And a that commentary particular. from wanted the some into it dynamics Robert, overall hoping Sciences seen I market in funding maybe start, we’ve dynamics, both Jared some mixed for there. think from in think Life taking you the little bit that you the of some seems you seen Ryan. Haase churn in of nice still a the pace just question. I seems over further headwinds like growth to M&A, and or the of This kind concern an also saw like dive

could So that of maybe segment particular? just some dynamics the into in you dive in

it’s we Jared. our end In sure. similar year. felt Yes, felt slower. sciences, at been segment that perspective, Thanks, pretty of life I’d to way the say last the

spending troublesome longer we some been out that scrutiny, smaller sales of played certainly dynamics about their that combination little talked a those been out with group – deal of greater difficulties a go cycles purchase. feel like a distress funding bit all Feel to kind our that’s if particularly Also, before. just and feeling from of that that’s tighter have We and in just segment. you like a and – financial group, tighter and biopharma, ability there have environment we’ve

is, still side demand of group. it flip there’s in The great that

Our top of funnel is great.

conversations. been buyers We’re incredibly a clients been base. we the we’re having and doing. work our about incredible the Atlas interest launched in would of been and across who Definitive ton enthusiastic client since We’ve still are There’s with what – it have marketing

no things good. interest, of and of there’s So just the shortage the dynamic been feels really progressing way same sales all that It’s through the cycle.

pushed also back. Like of I mentioned win year. We in nice a that last my win remarks, from we a something did have had

pace, come things these that. try to doing do It’s accelerate can a everything and at through. So we just slower we’re to

is deliver it’s great that value there still for a end The fantastic. we Longer-term, us. market

there. We have a lot of million-dollar clients

value. expanded of year. relationships A tons delivering of We’re with us this couple them

great where about. So I feel long-term, it’s place a medium,

the short-term have challenging. of some been Just dynamics

and that the appreciate specifically. takes I puts market in

us. from follow-up one Just

it bit gross lower a just anything could the there was of end registering that EBITDA the drive case, those came our quarter? still in curious, on to And targets towards the than So if were over into you the is the online. and the any coming appreciate that margin, around in timing EBITDA investments course the that just looked guidance, the with data the expectations I’m like efficiencies maybe of commentary I upside quarter. assets coming of Obviously, identified operating that that specifically high year?

sure making areas G&A. is from areas of been that key in we’ve away the pivoting the where So we’re investment

You saw the of automation nice a other managed that bps We combination expansion to do and with XXX efficiencies. year-over-year.

sustainable. is about talk the but raise outlook upside, to It’s very for we revenue early and that were we we year. too like small not to pleased beat year the the So able it feel a in on were provide

here. Congrats on update a solid

Jared. Thanks,

go Please ahead. from The Ryan & next question MacDonald is Needham Co. of

wanted relative I surprised Thanks with the market Matt weren’t higher on quarter, provider the churn end, to at tick at the touch end maybe for on lower XXX,XXX-plus weaker. totally see more taking being I about Shea in quarter-over-quarter, for the This the the down the we question. the commentary guess, Ryan. is Especially to and customers surprised customers. but to pharma

with if some haven’t prior. dynamics accounts churn curious of seen seeing just the we could bubble comment maybe some larger some seeing to on your that some if just or weakness you’re up kind bigger accounts you you’re of So of of of those

Answer ways. It’s good Yes. two a in question. Thanks.

think change of one, on number pace I sales upsells numbers churn. can and those and both based

of number level. many above not or enterprise dynamics, joining partially is as the obviously, impacted upselling XXX,XXX customers by So sales that

certainly that factor. a So was

little from there, That continue. see like characterize in unexpected, seen, churn this of it, quarter something they’re a that is we kind the than you think And I to themselves a across we we just bit was a just past. that’s did little seen the the in as not that where base. might if the well to slight people little I have said. unable what might saw more higher dynamics distress, uptick And And in find think financial where said, incidence position probably more of I quarter a the we have had

to this we some a to of of overall, have able where one deliver already churn, lost environment. good get really the on who’s lot a money for the we we dollars door we might stories the Again, in about stories still where and And in from we someone expand were feel relationship value have customers. us paying more of the bunch even enterprise

always like that been to will this keep a forward have customers great of So And enterprise proposition. and macro. our strive case with with going best. again, do to is our We typically feel value the all little a great some we normalized customers, a – more be – especially I continue have

plays customers. more within other customer base provider of is power the enterprise seeing to and proportionally, of customers how in depth enterprise the Yes, nuance the terms are of our and that science due the out life platform,

us. a be You small can and more very be $XXX,XXX or company from spending still

we we it were fourth bit about conservative talked think in in mind to on quarter one intuitively. said for consistent our churn you about bear this And that that’s assumptions where as little luckily, call, is with So XXXX. entered thing a allowing what more as we we

Got the it. Appreciate color.

to of Sounds like around great like wanted on datasets And this M&A Atlas. there to driving It that similar datasets module? other could more be an And baked Definitive sounds so out-of-the-box focus interesting lot what future Would in I like then maybe over a does lot might of thinking deals all purchase at your in. it’s and success on change an a add? Curious, be touch Atlas all? demand.

or investing clients is sources continue of expressed I finding interest we new One continue in to or perspective to changed those on clients in. on endeavors. do what cases our consider bit to little delivering have really on collection in to a ourselves bring by think that our capability nothing’s unique sort generally bring to about and We best-in-class asked the keep data and to that use our want different into I company. data. to fortify

So that’s particular, – endeavor in investments kind Atlas investment and our the in the the behind the claims uptick in this of year.

build part M&A. capability and out an clients, tends it From in through lot standpoint, a expanding into clients X,XXX to into across that to that which a create do. be an continue an same we source client our base. source, that additional brings then it on additional value of data find And an to could we itself capability, and new value platform It that of we can there. more do new that have dataset that take an the we can integral of like but what of M&A, such something additional becomes Accelerate, we M&A to our likely our is to out philosophy

is So two searching I’d that fact It’s for private valuation opportunities be we talked year. about the anticipate about – And the my starting one the year, to hadn’t continue we’ve really and driven the on lookout anticipate by to in in on valuations like to change. that. staying up always market I that’s the caught pace. market, many would public been on conversations per that gradually sense a Primarily us

get I’d next you pace. get over be we back – that year, optimistic on And the so

for Thanks Got guys. color, the it.

Thank you.

ahead. next is Please of The from go question Morgan Stanley. Craig Hettenbach

Yes. Thanks.

have get been complete, upsell. hasn’t nuances versus out of kind the you’re there like any new months call any you sounds and then this was year, the it hoping you month-to-month of seeing to So year on if backdrop growth changes to logo I meaningful your four now that backdrop. backdrop in But sense that particular, this in in what

Yes.

kind that, back we’re we’re first that there on. to slight new. Craig, uptick nothing with we say reporting around So is mentioned, I’d expected were we I’d on which expected. what coming of what say I’ll that’s the quarter on churn, projected quarter, year, Rick looking because line speak the had right in of on as what we course into maybe what a

not there’s that are a from coming year. into we expected of different So lot what the dynamics

a where first it answer, churn. both we and say was Sorry, but detailed of super on expected be that’s I’d quarter new to not kind upsell

Yes. No trend. discernible

came kind month in by month as And expected of well. as

then follow-up And just just margins. a Okay. on

in the and have in little you particularly about investments drag it’s just what see of year. talked operating the but reductions think think as about do we this know some guys model do you’re of of a XXXX, how early type leverage Rick, year? about to – some you and coming You I taking workforce have bit this a

Yes.

is the think I model economic very clean.

it’s fixed, investments margins investments. largely to We even talk data too but these early G&A about data high are continue to have gross in with XXXX. The still

we and and in think so product, done to terms for We’re combination going of we’re profitability to continuing that of continue never is optimal. to the improve the growth manage

add how of a provides growth of of I brings to model, think, future but that know time good revenue lot lot job a that, over reinvest to much is it And that in dollar both. model thinking incremental of deliver our you which profitability. room Craig, every do out, we do we would with we, I just about a and much the incremental how

Thanks.

you. Thank

Vruwink Baird. Please from of question ahead. go is next Joe The

things in everyone. Hi, but with prepared just the Maybe, Robert, within to performance, improvement said I’ll guiding your start within what be? internally on, could might some what actions maybe biggest you or some the of drive some in – remarks, implementing Can company, fruit mind, with elaborate doing to going something the actions changes maybe bear to not improvement. help of DH things meant those that certainly the your forward, you earliest

yes, will it’s like I’ll that confidently to in I are time we’re do off this those working to But to a over through hard things there time. right, know inflect state go Sure. some frame, specific And we’re upwards. within you’re environment lot, and pay things things hard to trying try those. but good

sure better and getting within full before, days, of The client we them in a get first, the getting planning decision-makers range early out is done. and in we’ve usually much the at talk could and really the mapping things a talked to and budget cycle. the of account person about couple being the we’re sales front get that old In authority it of

the a spread in sitting We’re the budget to of with earlier questions a tends to Booth’s case there somewhere back the don’t create at of there’s process. process Rick issues end if that person our lot finding talk and that the that’s at And is that sheet you a twin, usually has really who client, today.

and that’s about that. quarter of might those I doesn’t than decision I end at nice does still that, stuff us issues or It been So some we’ve better a processes make new of of have think better year. coming get immune last the it think slipping getting we job from much ahead in us done but the happening, a of

the second Life more Science moves The made and and verticalize is really segments. to that’s in particularly Provider we’ve

on a deeper the that as grown more in markets I those lines more – recognized little we’ve now. our of they’re and think obviously, challenged front we’ve bit right So segments But we our what in we speak in clients, our clients need can experience our people have markets. of greater those in those who a the and can do little markets with language of complex depth people

year where about that use we’ve – positive will a discussing conversations the we verticalization more cases and really the pay moves provide this to to each hear have a above I some know we’re the the just can of been those that we move markets. past. we’re to depth to click is made definitely which dividends, And in So little having

then great door. focus got and basically And saying, third, on can getting It’s funnel opportunities activity. let’s the think we we a top that’s of control, I know really what we’ve in

level those the renewal best opportunity on or converting And of team, behind leads opportunities, bringing as are – win we than true So our the and they’re the I think to whether in be of and on a the I’ve is teams business our think pushing them, depth and opportunities I on had right level into as engaging really being new that’s and upsell personal converting leads work good to involved at can more urgency. company sure that executive of opportunities. past, hard we’re the gotten those. One

macro us they the turning really are seen making to will kind upwards, off. blocking better. pay be just I’m it, corner on reluctant put things a as but we’ve time these look, So of the all it’s of it line kind that of stubbornly

quarter. XX% on so great all That’s I detail. wanted talk CRPO, Okay. growth this to

of backlog in was I analytical, may be How quarter, think may CRPO the should last there? stability be maybe organically, the on? in current CRPO similar accounting think remainder where a rates it is? there through expectation trend kind in of the be higher the growth of our inching about guide year, revenue we for that so Should rates the are bit the just goes given growth year as

little explain you just of CRPO me dynamics. bit Let to a the

quarter so as our fourth in quarter, go through the in we that lose year, normal earning CRPO and and renewals the In QX. the that dynamic, have consumes we remember more to then CRPO those addition

our therefore, year with in We guidance. based and, saw remain renewal and guide full an other also especially our life financial in guide deliver on track our financial We This shows and increased distress, We We rates up as planning. That CRPO itself. metrics. lower consistent particularly on against don’t was increase, sciences revenue providers. churn. to

you Thank much. Okay. very

Thanks, Joe.

next question of David from go Stifel. Please The is Grossman ahead.

like sounds because the to it And – progresses. just still some that that side acceleration is was asked the on challenging. just does wondering understand question you. stable could year revenue if revenue it demand if ask a Thank guidance do backdrop Good as I’m quick right, the I afternoon. your but sequential you I the follow-up imply

should – why a some revenue perhaps the in that? how CRPO a kind you us dynamic data products have were Does give of you get Just you as little more could want on quarter? you of particularly color there more given the talked introduced and us goes accelerate to the insight on give year to that what into on? new visibility first the do of little kind about, So you relate it just

David. in started visibility always, year year. guidance. favorability. year the Great question, raise increased the We revenue a the early year to little full we gain It’s as with We proceed through as do

in meet ability to confident We the are year full our guidance.

progresses I here there just, would in Right, Rick. half? you – some again, stability, are that guidance talking the that Because what give that’s dynamics the growth accelerate that is about revenue would But sequential year there implies. your as confidence think back

what currently That’s an we’ve on organic seen basis.

the it. the year David, place we said that out of of across the and just in at what’s kind seeing on And how about the ran of side what this put all assumed for that’s this, year. we’re we dynamics but came quarter-over-quarter, kind up assumptions rest I numbers level, means we with the macro the we guidance then – are and that the we’ve think, behind know a I high

don’t changed not, that we nothing’s we So if about at the gives in from it’s year. walked which of you or that. – helpful how context I for the set kind know least into but

Right.

OpEx we’ve implied is the what’s baseline commentary second expense of for out when should where baseline just we OpEx going at Is necessary? more being look kind there quarter the Okay. guess line? that run than And first was the second some really now expenses, I opportunity question operating you is of at the And about gross Or rate forward? this around as look perhaps and Well, the we the current quarter, on the I of for management. on leading for right margin thank the seen, had if that. the what

I cut think a first at reasonable the baseline. it’s

positions, have it’s some not Of course, baseline. we’ve you crazy additions open got some always and a but

Great. could squeeze And one last if I in. one just

what the like And when face company in before. environment don’t of But on versus downturn an history is environment pricing years if this this encountered you’ve the a like? impact has perspective growth prior what curious, you I any know the revenue pricing Just this? ever perhaps on year, like

Yes. is consistent pretty I quarter first with the pricing mean, past. what we’ve seen in on the

this seen year in has saw after really haven’t blip any So say seen COVID years. look I material we been well. XXXX. from as pretty extended downturn before. at that And prior change hit if what stability through the of company There would we’ve in was consistent year, that the you pricing levels

some now. our discount have it’s to little the they’re overall, you – continuing that a up do which always realized line, pricing, to across teams get to we So we things sales over would year, kind of at and certainly But have last our always look expected. finish discretion if

Thanks very good. much and good Very luck.

Thank you.

of of is next Lutz America. go Please Bank from The ahead. question Allen

the the end Thanks guess out year. same Thanks. of XQ? the for life those is non-healthcare? felt it changed that Robert, sciences providers, in all of of there systems, anything other taking call you the segments that the questions. basically same health there at at Was to I Did to improve mentioned from any medtech, XQ? anything XQ the Or segments, was kind all? versus

the to be but a sorry pretty biopharma science comparatively little more in much same. I’m life business. of part things our the boring, We’ve And were pressure seen Yes.

in we in emerged Although providers. they’ve think a lump sciences and I device, last Providers from pretty yet. rough don’t had year. fully together still those life med some it year

bad time, pretty a year Although, because year financials. again, we’re things optimistic will was that, last better around get over their all for

still bit obviously are there, software some relative within tougher also ride, well, in they’ve little had And those cycle but but relative the sales types tougher. that in and We a getting comparatively that of bit others. there less then a difficulties closed maybe have the are companies in others been has as stuff companies little it’s other the less. pockets diversified to dynamics there some do see the so and Again, have segments been better to we Again, diversified throughout. we

to XX the And be bit here. some the I at point. came you that for of peers if I’m about your something that that opportunistic or talked pressure know you’ve months some I of would less two kind to that sort maybe a little was six sort environment. be aggressively outlook one for think of versus just M&A capitalized you current historically, Robert think could the smaller, Rick. deals then kind in postulating the about you But one over some Do of talked more to under of next may fruition? that

successfully never mean three integrate, too but great to much, and that if criteria I to companies we we could our buy, fit kind want I do we onboard hypothesize of we felt and found like would it.

an one indication. guideline. to So of it’s not It’s a absolute two is general sort

the we’re all capitalize – I want associated when on enormous think a And does a not really are we company. we well it. synergies the on with as someone and it realities that board, it take do to bring

it. maximize opportunities there’s but those the in, the that to no, I say as would So Not want be we don’t to carefully really three, to to really look artificial do I value. on do we come barrier company-wide say couldn’t that some we’ll to find a And we M&A manage valuations sure nice But takes any front. think effort. could

Thank Great. you.

Sure.

question And your Peterson ahead. is Raymond of Brian from go Please James. next

seeds I’m maybe terms curious We’ll of Can macro? a unpredictable qualitatively of do therapy the just settling even on curious areas? keep typically NRR. on side kind drivers motion in is Brian. expanding longer-term just new and Good afternoon. of from we reach then where think you into of Johnathan the kind about cross-sell I’m rate of expansion other it This once just just Thanks. McCary And stack to NRR one. you the your

for number driver from to increase at what other of some out be companies you tertiary best with comes a the The of there. Yes. new from may used of divisions driver us. different and into client is seats biggest Very new products. existing in The revenue cross-selling

some And our because lot that’s in of a will have part enterprise times license. clients an

more functionality getting it. people opportunity them versus of more using the just if client So our big is use having the

you. Thank

Sure.

from ahead. Suisse. of is question Please Jonathan Yong next go Credit The

the taking question. for Thanks

I saw for you what Just the guidance to go for also of in And was churn again. kind the does consolidation of looking guess, be back in your quarter? then to that one, financially-distressed possible ahead, churn churn you additional where firms? with the account line the expected there outside the within quarter, may verticals,

Yes.

– we where about it case a other quarter year, would this reasonable M&A I macro. was the necessarily decline of we client on fight versus a be was long going We’ve amount can. the of we It’s manage just we we’ll was on as amount that to throughout quarter. always a more reasonable elevated had of at steady churn the expected be, a from keep any our always last always higher based pretty think a the the not amount end which to something or revenue And That’s with. what’s that as full base. little it saw in don’t than hard projected So we any amount.

synergy To sometimes and they to your find point, cost ways to inevitably, that’s a and come renegotiate. want the for acquirer, so

companies the opportunity an one it’s Sometimes and one other relationship if does. the doesn’t us have of expand to our

pacing wasn’t but it than it’s any But we some would So in there. terms to versus any consolidation other non-consolidation always not tend and a impact. different quarter negative, of prefer

we we variable XXXX. Right. looking as separate not did And at model that a as were

Great. of going the Okay. deals. And to then elongation just

guess that of in still just I So to that guess want guess a have were these point. little better my I are but was they as being the I now macroeconomic for understand you And pushed bit, that out reevaluate pipe. I ease, now? utilization it at deals will that basically this. are to deals everything seeing the completely But were off headwinds companies

we little now, months where six might a things And longer it’s once bit nine somewhat be where revenue a everything three, stopped. open, of cycle sales going Then maybe we reaccelerate after take to where point was that longer another to Thanks. that, overall, growth. months get to so it it’s

know. to fortune-telling. pretty That’s specific hard That’s Sure. a

the up lot next is, yes, So to close we Deals I pipelines. say I’d that one our have expect guess month. in what end a you’d in month

are Now year ago as closing either. did many plus they or as not a

in – those at COVID look be, So here, line, across My kind after you my would are downturn the downturn quickly and all historically people once you was decisions. not the they be getting finish the that which circumstance. COVID then downturns understanding sense would even reasonable if the delayed and prior of certainty like months, of a the pretty like what’s feel tends stability next feel to ahead to have experience there’s buying for lead that short XX

analogize and activity, spending we of with a that seeing external us, kind quickly. Once in outlook our had make based the would commercial that economy we’ve pretty started play very I spend. careful been on And that to decisions through we really clear

for about helps great about do people think help is clients we you sell. if and and that grow what – it So Healthcare, what’s people Definitive

start quickly. at sales ahead there’s think So used again, the business the them the to get pretty like growing of opportunity levels they minute people we dollars inflect feel or to their upwards were good a to I

Thanks.

expect a business to we’ve the pick to things up of things saying, stabilize Once think once seen certainly So pause. two another beyond – long I levels I right stabilize, think our there’s I’d four now. month way don’t

we Appreciate the have of top I that And hour. hit everyone’s time. the think

be out conferences you at and seeing in weeks to to going Goodbye. many We’re of upcoming the look in-person. the forward

you. Thank

and gentlemen, participation. has webcast Healthcare call you and the concluded. Ladies your Thank Definitive for

disconnect. You may