Health Catalyst (HCAT) Q3 2026 earnings summary

Executive summary

• Q3 revenue of $56.3M and adjusted EBITDA of $779K exceeded guidance; FY26 revenue and adjusted EBITDA outlook was reaffirmed.

• Revenue fell 26% YoY amid the Vitalware divestiture and DOS-to-Ignite migration churn/downsell; net income of $40.5M included a $65.9M Vitalware sale gain.

• Priorities include improving client retention, aligning costs, simplifying operations and offerings, and strengthening execution for more predictable, profitable growth.

Financial highlights

• Q3 revenue was $56.3M vs. $76.3M YoY; gross profit was $17.3M vs. $30.0M, with GAAP gross margin of 31% vs. 39%.

• Net income was $40.5M, or $0.53 diluted EPS, vs. a $22.2M net loss and $(0.32) EPS; results included the $65.9M Vitalware sale gain.

• Adjusted gross profit was $24.9M and adjusted gross margin 44% vs. $40.1M and 53%; adjusted EBITDA was $779K vs. $12.0M.

• 9M revenue was $197.5M vs. $236.5M; 9M net loss was $111.1M vs. $86.9M, and adjusted EBITDA was $19.8M vs. $27.6M.

Outlook and guidance

• FY26 revenue guidance of $246M–$249M and adjusted EBITDA guidance of $18M–$18.5M reaffirmed.

• Q4 adjusted EBITDA expected at a loss of $1.8M–$1.3M; the quarter has no Vitalware revenue and includes churn and seasonally higher medical claims expense.

• FY26 adjusted gross margin expected below 50%; technology margin in the low 60s and professional services margin in the low-to-mid teens.

• Bookings expected to exceed the high end of the $22M–$26M FY target, with churn pressure offsetting the positive bookings result in reported figures.

• More than 90% of revenue is recurring; future gross bookings are expected to include a higher share from existing clients than historically.