Health Catalyst (HCAT) Q4 2024 earnings summary

Executive summary

• Total revenue for 2024 reached $307 million, up 4% year-over-year, with Q4 revenue at $80 million, a 6% increase year-over-year.

• Adjusted EBITDA for 2024 was $26 million, up from $11 million in 2023, representing 137% year-over-year growth.

• Technology segment revenue was $195 million for 2024, growing 4% year-over-year, and $52 million in Q4, up 10% year-over-year.

• Platform clients increased to 130 as of December 31, 2024, with 100%+ dollar-based retention rates and 21 net new platform client additions in 2024.

• Leadership changes include Dr. Jill Hoggard-Green joining the board and executive promotions.

Financial highlights

• Adjusted gross margin for 2024 was 49%, up 10 basis points year-over-year; Q4 adjusted gross margin was 47%.

• Adjusted technology gross margin for 2024 was 66%, down 180 basis points year-over-year due to Ignite migration and deployment costs.

• Adjusted professional services gross margin for 2024 was 18%, up 320 basis points year-over-year.

• Adjusted net income for 2024 was $16.9 million, or $0.28 per diluted share.

• Ended Q4 2024 with $249.6 million in cash and cash equivalents.

Outlook and guidance

• 2025 revenue guidance: $335 million total, $220 million technology revenue, and $41 million adjusted EBITDA.

• Technology revenue expected to grow 13% year-over-year in 2025; professional services revenue expected to be flat.

• Anticipate 40 net new platform client additions in 2025, with average ARR plus non-recurring revenue of $300,000-$700,000.

• Dollar-based retention rate projected at 103% for 2025 under the updated definition.

• Ignite migration expected to be largely complete by mid-2026, with related headwinds subsiding.