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DH

Definitive Healthcare Corp. (DH)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 delivered at or above the high end of guidance: revenue $60.0M (-4% YoY) and Adjusted EBITDA $18.9M (32% margin), with profitability materially above guidance as CFO noted ~$1.5M one-time COGS credit and ~$1M run-rate COGS savings; management raised full-year revenue/EBITDA guidance midpoints .
  • Beats vs S&P consensus: revenue modestly above and non-GAAP EPS $0.07 above $0.055 estimate; sequential growth trajectory improved in subscriptions with stabilization in absolute dollars; enterprise customer count grew by 10 to 520, total customers ~2,400 .
  • Guidance: Q4 revenue $59–$60M; FY25 revenue $239–$240M (raised bottom by $2M) and Adjusted EBITDA $68–$69M (raised midpoint by $3M) .
  • Key catalysts: profitability beat (cost actions + data contract renegotiation), improving renewal metrics/enterprise mix, progress on claims data remediation and digital activation partnerships (LiveRamp, Bombora) that can drive medium-term expansion .

What Went Well and What Went Wrong

  • What Went Well

    • Profitability outperformance: Adjusted EBITDA $18.9M (32% margin) vs guide $15.5–$16.5M; CEO: “Adjusted EBITDA exceeding expectations by $2 million” .
    • Early demand/mix improvements: total customers ~2,400; enterprise customers +10 q/q to 520; “new logo production continues to respond the fastest... highest level since Q3 last year” .
    • Cost optimization and data progress: ~$1.5M one-time data contract credit and ~$1M net COGS reduction from claims source replacement; another claims source going live to exceed historical levels .

  • What Went Wrong

    • Top-line still contracting: revenue $60.0M (-4% YoY); Adjusted Net Income $9.7M vs $15.4M YoY; adjusted gross margin flat at 82% YoY .
    • Life sciences headwinds persist: downsell and challenged upsell in life sciences continue to pressure NDR despite improved renewal rates; management remains cautious into heavy Dec/Jan renewals (>30% of annual) .
    • Underlying demand indicator softer ex-partnership: current RPO $165M up ~1% YoY; excluding data partnership contributions, CRPO growth declined mid-single digits .

Financial Results

MetricQ1 2025Q2 2025Q3 2025
Revenue ($M)$59.191 $60.750 $60.046
GAAP Net Loss ($M)$(155.093) $(9.265) $(17.792)
GAAP EPS ($)$(0.95) $(0.07) $(0.14)
Adjusted Net Income ($M)$6.972 $9.676 $9.673
Adjusted EPS ($)$0.05 $0.07 $0.07
Adjusted EBITDA ($M)$14.706 $18.656 $18.949
Adjusted EBITDA Margin %25% 31% 32%
Adjusted Gross Margin %80% 82% 82%

Notes:

  • YoY: Q3 revenue -4% YoY; Adjusted EBITDA $18.9M vs $20.6M YoY; Adjusted EPS $0.07 vs $0.10 YoY .
  • Sequential: subscription dollars stabilized q/q; two-point improvement in subscription growth trajectory vs Q2 .

Q3 vs S&P consensus and company guidance

MetricQ3 2025 ActualQ3 2025 S&P Consensus*Company Q3 Guidance (issued Aug 7)
Revenue ($M)$60.046 $59.509*$59.0–$60.0
Adjusted EPS ($)$0.07 $0.055*$0.05–$0.06

*Values retrieved from S&P Global.

KPIs and cash/contracting indicators (Q3 2025 unless noted)

KPIQ3 2025
Total customers (approx.)~2,400
Enterprise customers520
Deferred revenue~$92M
Current RPO (CRPO)~$165M
Unlevered Free Cash Flow (quarter)$17.941M
Unlevered Free Cash Flow (TTM)~$51M
Cash from Operations (quarter)$15.687M
Cash & Equivalents (9/30/25)$108.317M
Share repurchase (Q3)~2M shares for about $9M

Guidance Changes

Q4 2025 snapshot (new this quarter)

MetricPeriodCurrent Guidance
Revenue ($M)Q4 2025$59.0–$60.0
Adjusted Operating Income ($M)Q4 2025$13.5–$14.5
Adjusted EBITDA ($M)Q4 2025$16.0–$17.0 (27–29% margin)
Adjusted Net Income ($M)Q4 2025$8.0–$9.0
Adjusted EPS ($)Q4 2025$0.05–$0.06 (WASO ~145.8M)

Full-year 2025 guidance change

MetricPeriodPrevious Guidance (Aug 7)Current Guidance (Nov 6)Change
Revenue ($M)FY 2025$237.0–$240.0 $239.0–$240.0 Raised bottom end
Adjusted Operating Income ($M)FY 2025$52.0–$55.0 $57.5–$58.5 Raised
Adjusted EBITDA ($M)FY 2025$64.0–$67.0 $68.0–$69.0 Raised
Adjusted Net Income ($M)FY 2025$32.5–$34.5 $34.0–$35.0 Raised
Adjusted EPS ($)FY 2025$0.22–$0.23 $0.23–$0.24 Raised

Earnings Call Themes & Trends

TopicQ1 2025Q2 2025Q3 2025Trend
Retention/renewalsStabilized vs 2H24; priority to improve Highest retention since Q2 last year; cautious on Dec/Jan seasonality Another YoY improvement; Dec/Jan >30% of annual renewals; caution maintained Improving but watch 4Q/1Q cohort
Claims data remediationExpanding/diversifying claims sources Continued development of new sources New source added; another coming to exceed historical levels Rebuilding to >historical
Digital activation & agenciesSigned 2 agencies; direct digital deal 15 agencies (6 activating); direct wins LiveRamp syndicated audiences; Bombora curated marketplace; +8 agencies; strong hospital expansion Building ecosystem, early revenue ramps
Integrations/MDM/APIDouble-digit growth in integrations; integrated customers renew ~10 pts higher Integration wins aiding retention and new logos API/Salesforce integration example; data embedded in workflows; higher retention with integrations Positive for stickiness/upsell
Macro & tariffsElongated cycles; focus on controllables Similar caution; industry-wide pressures No notable tariff/MFN impacts; budgets still tight in biopharma Macro overhang persists
CRPO & data partnershipCRPO ~$182M at Q1-end CRPO flat YoY; data partnership boosts CRPO CRPO ~$165M (+~1% YoY); ex-partnership mid-single-digit decline Underlying demand soft ex-partnership
Cost/marginsOne-time investments pressured conversion; EBITDA 25% ~$2M COGS credit aided margins; EBITDA 31% ~$1.5M credit + ~$1M run-rate savings; EBITDA 32% Cost discipline supports profitability

Management Commentary

  • “We delivered third quarter results at or above the high end of our guidance ranges, with Adjusted EBITDA exceeding expectations by $2 million” — Kevin Coop, CEO .
  • “Enterprise customer count grew by 10 since last quarter to 520 enterprise customers… the highest level we have achieved since Q3 of last year” — CEO .
  • “We experienced approximately $2.5 million in cost savings in the third quarter… ~$1.5 million one-time benefit due to a data contract renegotiation [and] a net cost reduction of approximately $1 million due to replacing an existing data source” — CFO .
  • “We are on track to add another new claims data source later this quarter that will return Definitive Healthcare to above historical data levels” — CEO .
  • “At the end of Q3, deferred revenue of $92 million was up 7% year-over-year, and current remaining performance obligations of $165 million were up about 1% year-over-year… excluding the data partnership, CRPO declined mid-single digits” — CFO .

Q&A Highlights

  • Competitive wins and integrations: New logos benefited from quality of data and ease of integration into systems of record; API/Salesforce example noted; emphasis on integrations to drive higher retention and win rate .
  • Claims data strategy: Replaced disrupted source, back to parity; adding another to exceed historical levels to re-accelerate upsell/cross-sell use cases .
  • Life sciences dynamics: Downsells and upsell pressure remain concentrated in life sciences; gross dollar retention improving YoY, NDR expected down in 2025; improvement expected over time with attached services and integration .
  • Renewal season risk: Dec/Jan renewals >30% of annual; management focused but remains cautious; CRPO ex-partnership mid-single-digit decline underscores prudent outlook into 2026 .
  • Digital activation channel ramp: LiveRamp “AlwaysOn” and Bombora partnerships extend reach; agencies take time to scale, with more near-term traction in direct activations .

Estimates Context

  • Q3 2025: Revenue $60.046M vs S&P consensus $59.509M*; Adjusted EPS $0.07 vs $0.055* — modest top-line and clear EPS beat .
  • Q4 2025: S&P consensus revenue $59.56M* and EPS $0.0598* sit within company guidance ranges ($59–$60M revenue; $0.05–$0.06 EPS), suggesting in-line quarter unless renewal dynamics swing late .
  • FY 2025: S&P consensus revenue $239.54M* aligns with guidance $239–$240M; S&P EPS $0.238* within guidance $0.23–$0.24 .

*Values retrieved from S&P Global.

Key Takeaways for Investors

  • Profitability execution is outpacing plan; one-time credits helped, but underlying cost discipline and data vendor renegotiations improved margins, enabling a full-year guidance raise — a positive quality-of-earnings signal .
  • The core narrative is stabilization with early green shoots: enterprise mix improved (+10 enterprise customers), renewal rates up YoY, subscription dollars stabilized q/q; but life sciences upsell remains pressured — expect choppy NDR near term .
  • December/January renewals are the swing factor for 2026 setup; CRPO ex-partnership softness implies cautious expectations until renewals land .
  • Data moat rebuilding: claims data remediation back to parity, on track to exceed historical levels in Q4 — critical for upsell and competitive displacement narratives into 2026 .
  • Digital activation partnerships (LiveRamp, Bombora) and agency channel expansion extend the TAM and create incremental revenue streams; expect gradual build with more immediate traction in direct activations .
  • Near-term trading: stock likely responds to guidance raise and EPS beat; medium term hinges on Dec/Jan renewals, sustained retention gains, and monetization of data/digital initiatives .

Appendix: Additional Context and Cross-Checks

  • Press release timing confirmation for Q3 call (Nov 6) .
  • Q2 baseline: revenue $60.8M (-5% YoY), Adjusted EBITDA $18.7M (31%); Q3 came in at high end for revenue and above for EBITDA .
  • Non-GAAP add-backs: Q3 “transaction, integration, and restructuring” included an integration charge to recognize a liability for a data contract from a prior acquisition with no economic benefit; continued write-offs/non-core expenses detailed in reconciliations .