Executive Summary

Q2 2025 revenue of $60.8M (-5% y/y) and Adjusted EBITDA of $18.7M (31% margin) both exceeded the company’s guidance; management raised the full-year 2025 revenue midpoint and lifted Adjusted EBITDA guidance on improved retention trends and cost discipline .
Results beat Wall Street consensus: revenue $60.8M vs $59.2M* and Adjusted EPS $0.07 vs $0.050*; the outperformance was aided by modest renewal-rate improvement and nearly $2M of one-time credits in COGS tied to data agreement renegotiation .
Q3 2025 guide (revenue $59.0–$60.0M; Adjusted EPS $0.05–$0.06) sits roughly in line-to-slightly above consensus; full-year 2025 guide raised to revenue $237–$240M and Adjusted EBITDA $64–$67M (27–28% margin) .
Key catalysts: retention stabilizing at the highest rate since Q2 last year, traction in data integrations/digital activation, and a multi‑year data partnership contributing “a couple points” to growth; offsets include life sciences upsell pressure and elongated sales cycles .

What Went Well and What Went Wrong

What Went Well
- Above-guide quarter on both top and bottom lines; CEO: “our conviction that we are taking the right steps…has increased” .
- Retention improved to the best level since Q2 last year, driven by customer success, integrations, and earlier renewal engagement; integrated customers renew ~10% higher, per management .
- Strategic progress on digital activation and integrations; 15 agencies now contracted with six already activating campaigns; integrations cited in competitive wins .
What Went Wrong
- Revenue declined 5% y/y; subscription revenue under pressure (life sciences down-sells, upsell softness), though professional services grew 46% y/y (still a smaller mix) .
- Sales cycles remain elongated, particularly in life sciences, amid macro uncertainty and tight funding/interest rate backdrop .
- Adjusted gross margin declined ~110 bps y/y to 82% on lower revenue and fixed cost base; profit beat included ~$2M of one-time credits in COGS, not recurring .

Financial Results

Note: Growth rates are computed from company-reported figures.

Metric	Q4 2024	Q1 2025	Q2 2025
Revenue ($M)	$62.3	$59.2	$60.8
GAAP Net (Loss) ($M)	$(84.7)	$(155.1) (incl. $176.5M impairment)	$(9.3)
GAAP EPS (Class A, Basic & Diluted)	$(0.51)	$(0.95)	$(0.07)
Adjusted Net Income ($M)	$12.6	$7.0	$9.7
Adjusted EPS (Diluted)	$0.08	$0.05	$0.07
Adjusted EBITDA ($M)	$17.5	$14.7	$18.7
Adjusted EBITDA Margin (%)	28%	25%	31%
Adjusted Gross Margin (%)	81%	80%	82%

Q2 2025 vs estimates (S&P Global consensus):

Metric	Actual	Consensus	Surprise
Revenue ($M)	$60.8	$59.24*	+$1.56M / +2.6%
Adjusted EPS	$0.07	$0.0498*	+$0.0202 / +40%
Adjusted EBITDA ($M)	$18.7	$15.33*	+$3.37M / +22%

Values with asterisk (*) retrieved from S&P Global.

KPI and cash metrics:

KPI	Q2 2025	Commentary
CRPO (Current RPO)	~$170M; about flat y/y	Slightly better than internal expectations given renewal performance .
Total RPO	Up 1% y/y	Multi‑year data partnership impacts CRPO/RPO dynamics .
Deferred Revenue (End of Q2)	$100.9M, up 5% y/y	Also $100.874M in 8‑K balance sheet .
Operating Cash Flow (Quarter)	$9.3M	Strong collections; upfront billing model .
Unlevered FCF (Quarter)	$11.478M	TTM >$57M, ~80% conversion from Adjusted EBITDA ex‑CapEx .
Share Repurchases	~6M shares for ~$19M in Q2; $58M remain on authorization	Repurchase program announced Nov-2024 .

Segment breakdown: The company does not disclose formal revenue segments; subscription remains the core with professional services up 46% y/y in Q2 (smaller base) .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue ($M)	Q3 2025	n/a	$59.0 – $60.0	New
Adjusted Operating Income ($M)	Q3 2025	n/a	$12.5 – $13.5	New
Adjusted EBITDA ($M)	Q3 2025	n/a	$15.5 – $16.5 (26–28%)	New
Adjusted Net Income ($M)	Q3 2025	n/a	$7.5 – $8.5	New
Adjusted EPS (Diluted)	Q3 2025	n/a	$0.05 – $0.06 (146.1M shares)	New
Revenue ($M)	FY 2025	$234 – $240	$237 – $240	Raised (midpoint ↑ $1.5M; bottom ↑ $3M)
Adjusted Operating Income ($M)	FY 2025	$49 – $53	$52 – $55	Raised
Adjusted EBITDA ($M)	FY 2025	$61 – $65 (26–28%)	$64 – $67 (27–28%)	Raised
Adjusted Net Income ($M)	FY 2025	$30 – $34	$32.5 – $34.5	Raised (bottom ↑ $2.5M)
Adjusted EPS (Diluted)	FY 2025	$0.20 – $0.23 (148.8M shares)	$0.22 – $0.23 (147.9M shares)	Raised lower end; share count updated

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4’24, Q1’25)	Current Period (Q2’25)	Trend
Retention/renewals	Stabilization; focus on customer success and integrations ; Q1 emphasized operational efficiency, new logos, raising low end of FY guide	Highest retention since Q2 last year; integrated customers renew ~10% higher; earlier renewal engagement	Improving
Life sciences demand	Prior year noted impairments/macro pressures; Q1: macro uncertainty	Cycles elongated; continued down‑sell/upsell pressure in LS; cautious pipeline outlook	Mixed/pressured
Data partnerships	Noted strategic partnerships entering base by early 2025	Full quarter contribution; adds “a couple points” to revenue; multi‑year through 2027	Positive underpin
Digital activation	Q4’24–Q1’25: building partnerships and activation channels	15 agencies contracted, 6 activating; four provider wins; expect more visible in 4Q and 2026 ramp	Building
Integrations/API/data delivery	Customer wins on integration flexibility	Integrations cited in competitive displacements; match/append and DHID to embed into workflows	Strengthening
Profitability levers	FY24 adj EBITDA 31%; Q1 adj EBITDA 25%	Q2 adj EBITDA margin 31%; benefited from ~$2M one‑time COGS credit; expense discipline	Improving near-term
Capital return	$100M buyback program authorized 11/2024	Repurchased ~6M shares in Q2; $58M remaining	Ongoing

Management Commentary

“Our conviction that we are taking the right steps to improve the business has increased.” — Kevin Coop, CEO .
Renewals: “We saw a modest improvement… and the highest retention rate since the second quarter of last year.” — Coop .
COGS credits: “We ended up with just under $2 million of one-time credits within COGS in the quarter, contributing to the profit beat.” — Casey Heller, CFO .
Digital activation: “We’ve contracted with 15 agencies, with six already activating campaigns… expect to start to see that play into the fourth quarter and really start to pick up into 2026.” — Coop .
Competitive wins: “We beat a competitor in head‑to‑head bake‑off due to the flexibility of our integrations.” — Coop .

Q&A Highlights

Sales cycles: No significant change from last quarter; LS still elongated; macro (rates, regulatory uncertainty) cooling buying decisions .
Retention drivers: Talent, process, and visibility changes in customer success; integrated customers renew ~10% higher; earlier renewal engagement for large renewals .
CRPO/RPO: CRPO roughly in line/slightly better vs plan; data partnership has disproportionate CRPO impact; printed CRPO flat y/y; total RPO +1% y/y .
LS dynamics: Net dollar retention pressured by upsell softness; gross dollar retention improving; services/data science plus integrations are key to stemming down‑sells .
Capital allocation: ~6M shares repurchased in Q2; $58M remains on the authorization for continued flexibility .

Estimates Context

Q2 2025 beat: Revenue $60.8M vs $59.24M*; Adjusted EPS $0.07 vs $0.0498*; Adjusted EBITDA $18.7M vs $15.33M* (note: consensus EBITDA definitions may differ from company Adjusted EBITDA) .
Q3 2025 guide vs consensus: Revenue guide $59.0–$60.0M vs $59.51M*; Adjusted EPS guide $0.05–$0.06 vs $0.055* — broadly in line; implies limited near-term estimate movement, with FY raise skewing consensus modestly higher on revenue/EBITDA .
Full-year 2025 guide raised: Revenue to $237–$240M (midpoint +$1.5M) and Adjusted EBITDA to $64–$67M, implying consensus should move up on profitability and low-end revenue .

Values with asterisk (*) retrieved from S&P Global.

Key Takeaways for Investors

Near-term stabilization: Best retention since Q2 last year, modest sequential subscription improvement, and cost control underpin in-line/slightly better H2 setup .
FY guide raised: Increased revenue midpoint and higher Adjusted EBITDA range de‑risk the back half; watch December/January renewal cohorts for confirmation .
Growth scaffolding: Multi‑year data partnership, integration-led wins, and digital activation channel should drive incremental growth contribution into 2026 .
Mix headwinds: Life sciences upsell pressure and elongated cycles continue; pipeline prudence reflected in Q3 outlook .
Quality of beat: Q2 profit outperformance included ~$2M one‑time COGS credits; underlying expense discipline is encouraging but normalization could temper margins near-term .
Capital return: Active buybacks ($19M in Q2) and remaining authorization provide support while the model compacts around higher-margin revenue .
Actionable: Bias estimates modestly higher for FY25 revenue/EBITDA; monitor LS upsell trends and H2 retention outcomes as primary swing factors.

Appendix: Additional Data (for reference)

Prior quarter press releases and filings used for trend analysis:

Q1 2025: Revenue $59.2M; Adjusted EBITDA $14.7M (25%); Adjusted EPS $0.05; OCF $26.1M; UFCF $22.9M .
Q4 2024: Revenue $62.3M; Adjusted EBITDA $17.5M (28%); Adjusted EPS $0.08; OCF $8.1M; FY24 Adj EBITDA margin 31% .

Additional Q2 2025 disclosures:

Balance sheet and cash flow details including cash and equivalents $81.0M; OCF $9.3M; UFCF $11.478M .
Guidance mechanics and non‑GAAP definitions; reconciliations included in 8‑K exhibits .

Definitive Healthcare Corp. (DH)·Q2 2025 Earnings Summary