HCAT

Health Catalyst’s second quarter was marked by a notable decline in sales, which management attributed primarily to the ongoing impact of client migrations and a reduction in lower-margin services. The company’s decision to divest Vitalware, its revenue cycle management business, was described by CEO Ben Albert as necessary to focus on areas of highest conviction, despite the near-term revenue impact. Albert acknowledged the structural challenges facing health systems and emphasized that the divestiture provided immediate benefits, including significant debt elimination and a cleaner balance sheet. Management’s tone was cautious, highlighting the early stages of a multiyear transformation and the need to navigate persistent revenue headwinds. Is now the time to buy HCAT? Find out in our full research report (it’s free). Revenue: $70.49 million vs analyst estimates of $69.05 million (12.7% year-on-year decline, 2.1% beat) Adjusted EPS: $0.04 vs analyst estimates of $0.03 (in line) Adjusted EBITDA: $9.92 million vs analyst estimates of $9.43 million (14.1% margin, 5.2% beat) The company dropped its revenue guidance for the full year to $247.5 million at the midpoint from $262.5 million, a 5.7% decrease EBITDA guidance for the full year is $18.25 million at the midpoint, below analyst estimates of $32.09 million Operating Margin: -51.8%, down from -46% in the same quarter last year Billings: $54.75 million at quarter end, down 28.1% year on year Market Capitalization: $134.7 million While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Luis (Citi): asked whether the decline in guidance, excluding the Vitalware divestiture, would have been reiterated. CFO Jason Alger clarified that the main driver was the removal of Vitalware, but also noted increased investment in team members and core products. Luis (Citi): questioned whether additional divestitures are under consideration following the Vitalware sale. Alger responded that the current focus is on executing the transformation and validating the company’s highest-conviction opportunities, not on further portfolio changes. Looking ahead, our analysts will be watching (1) progress on Project Nexus and the resulting cost savings, (2) the pace and impact of client migrations to the Ignite platform and related churn trends, and (3) the company’s ability to deliver new analytics and AI-driven products that resonate with health system clients. Additionally, we will monitor whether the company can maintain a strong balance sheet and adapt its services business to shifting customer needs. Health Catalyst currently trades at $1.76, down from $2.31 just before the earnings. Is there an opportunity in the stock? See for yourself in our full research report (it’s free for active Edge members). ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time. Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.

Image source: The Motley Fool. Thursday, Aug. 6, 2026 at 5:00 p.m. ET Senior Vice President of Finance and Investor Relations - Stephanie St. Clair Chief Executive Officer - Benjamin Albert Chief Financial Officer - Jason Alger Operator: Welcome to the Health Catalyst Second Quarter 2026 Earnings Conference Call. [Operator Instructions] I would now like to turn the call over to Stephanie St. Clair, Senior Vice President of Finance and Investor Relations. Please go ahead, ma'am. Stephanie St. Clair: Good afternoon, and welcome to Health Catalyst's earnings conference call for the second quarter of 2026, which ended June 30, 2026. My name is Stephanie St. Clair, Finance and Investor Relations, Senior Vice President. With me on the call today are Ben Albert, our Chief Executive Officer; and Jason Alger, our Chief Financial Officer. A complete disclosure of our results can be found in our press release issued today, as well as in our latest Form 8-K furnished to the SEC, both of which are available on the Investor Relations section of our website at ir.healthcatalyst.com. As a reminder, today's call is being recorded, and a replay will be available following the conclusion of the call. During today's call, we will make forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including regarding our future growth and priorities, financial outlook and expectations for the third quarter and full year 2026, market conditions, AI initiatives, bookings, retention, operational priorities, strategic and restructuring initiatives, cost savings, debt elimination, client migrations, the impact of the Vitalware divestiture and the general anticipated performance of our business. These forward-looking statements are based on management's current views and expectations as of today and should not be relied on as representing our views as of any subsequent date. We disclaim any obligation to update any forward-looking statements or outlook. Actual results may materially differ. Please refer to the risk factors in our most recent Form 10-K for the full year 2025 filed with the SEC on March 12, 2026, and our Form 10-Q for the second quarter of 2026 filed today. We will also refer to certain non-GAAP financial measures to provide additional information to investors. Non-GAAP financial information is presented for supplemental purposes only, has limitations as an analytical tool and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP. A reconciliation of non-GAAP financial measures to the most comparable GAAP measures is provided in our press release. We will provide forward-looking guidance for certain non-GAAP financial measures in this earnings call and are not providing forward-looking guidance for the most directly comparable GAAP measures and therefore, have not provided reconciliations because there are items that may impact the comparable GAAP measures that are not within our control or cannot be reasonably forecasted. With that, I'll turn the call over to Ben. Benjamin Albert: Thank you, Stephanie, and thank you to everyone for joining us today. We had a very productive second quarter, exceeding the high end of our revenue guidance and the midpoint of our adjusted EBITDA guidance. But the headline is that we closed the Vitalware divestiture on July 31 and fully repaid our credit facility debt. On our Q1 earnings call, I talked about simplifying our business, focusing on our highest conviction technology opportunities and putting the right capital structure in place to execute. This is exactly that. It's the next step in the strategy I described 3 months ago. Let me walk through why we made this decision and what it means going forward. Then Jason will take you through the numbers. Vitalware is a strong business, but it sits outside our highest conviction technology opportunities. The RCM market has gotten more competitive, and we believe growing the business would have required significant incremental investment. We determined that we should focus and invest in our core business while transforming our balance sheet. The divestiture delivered immediate benefits. We used the proceeds plus cash on hand to retire roughly $160 million in credit facility debt and going forward, eliminate approximately $19 million in annual GAAP interest expense based upon annualizing the first half of 2026. That's not just a cleaner balance sheet. It provides us with the time to get the fundamentals right and the capacity to validate where our conviction is highest and invest behind it. Put simply, we are prioritizing the foundation for what we believe is durable long-term transformation rather than chasing short-term results. As we have stated consistently, we will continue to operate with discipline and as of close of the Vitalware divestiture without expensive interest payments and restrictive debt covenants. One of our priorities is to stay in a strong cash position throughout our transformation. The restructuring, the divestiture and the debt repayment are the same plan executed in sequence under Project Nexus, our strategic initiative designed to fundamentally transform our operating model and to deliberately reposition the business. As we consider what's happening in the market, health systems are under immense pressure, eroding margins, a less favorable payer mix and rising labor and clinical costs. These challenges are structural, not cyclical and increasingly urgent. Systems must move quickly to reduce costs, improve clinical quality, accelerate ambulatory growth and win consumers in parallel. We believe our deep domain expertise and 18 years of improvement data position us well to address these pressing areas of need through our intelligence products, pairing analytics and expertise with improvement agents to identify the biggest opportunities, prioritize where to act and help execute. Each change can compound into sustainable improvement. We believe the result is what one client calls a culture of improvement that converts into outcomes. Consistent with what we have said on prior calls, we'll continue the evaluation of our revenue outlook and expense structure and sharpen where our conviction is highest. We're not afraid to make difficult decisions and move quickly when needed. Before I hand it to Jason, I want to set expectations for what's ahead. We are early in a multiyear transformation, and we're continuing to evaluate the best path forward. Two things are true at the same time right now. One, we're hearing real enthusiasm about where we are headed, and we're deliberately investing in the products and the people needed to turn that enthusiasm into high conviction bets. And two, we're working through previously discussed revenue headwinds primarily related to our platform migrations and some of the lower-margin services work. We're prioritizing target investments in what we believe are our most promising opportunities, doing so in a measured, disciplined way that keeps us in a strong cash position while focusing on driving long-term shareholder value. While there is plenty of work ahead, we are making real progress. I would like to thank the Health Catalyst team and clients for their hard work and partnership. Together, we can have a tremendous impact on health care's biggest challenges. With that, I'll turn it over to Jason. Jason Alger: Thank you, Ben. Before we get into the details of the Vitalware divestiture and our updated guidance for the second half, let me start with a quick review of our second quarter results. Overall, our results came in at or ahead of our expectations. Project Nexus is starting to take hold, and our bookings are tracking as we anticipated. For the second quarter of 2026, total revenue was $70.5 million, exceeding the high end of our guided range of $68 million to $70 million. Technology revenue was $48.8 million and professional services revenue was $21.7 million. Adjusted gross margin for the second quarter was 51% compared to 50% in the prior year period. Adjusted technology gross margin was 63% compared to 66% and adjusted professional services gross margin was 22% compared to 18%. The year-over-year change in technology margin continues to reflect costs associated with migrating clients to Ignite and deployment costs incurred prior to the commencement of revenue recognition. We expect this to continue fluctuating in the near term as that work continues. Adjusted operating expenses in Q2 were $25.9 million, representing 37% of revenue compared to $30.6 million or 38% of revenue in the prior year period. Project Nexus is tracking to plan with partial month savings reflected this quarter and the full quarterly run rate still to be realized in the back half of the year. Adjusted EBITDA for the second quarter was $9.9 million, coming in at the high end of our guided range of $9 million to $10 million. Adjusted net income per share was $0.04 with the weighted average share count of 74 million. Turning to the balance sheet. We ended the quarter with approximately $103.4 million of cash, cash equivalents and short-term investments, down slightly from the first quarter, but still above where we ended last year. Due to the timing of client billings, we generally expect to see working capital improvement early in the year and working capital usage around midyear in the second and third quarters. As Ben said, cash discipline remains front and center for us, and that carries through in our rationale for the Vitalware transaction. We divested Vitalware to Med-Metrix for $147 million in total cash consideration with net proceeds of $145.5 million after transaction costs, each subject to customary adjustments. We used those proceeds together with cash on hand to fully retire approximately $160 million in credit facility debt plus accrued interest and prepayment premium. Going forward, this eliminates approximately $19 million of annual interest expense on a GAAP basis and approximately $16.5 million of annual cash interest payments based on annualizing the first half of 2026. On a pro forma basis, giving effect to the transaction and the credit facility repayment, we would have ended the quarter with cash, cash equivalents and short-term investments of approximately $82 million and 0 debt. We also have a transition services agreement in place with Med-Metrix for up to 6 months, which will provide a modest income offset during that period. Additional transaction details can be found in our recently filed 8-K. Now let me turn to guidance. As a result of the divestiture, we are updating our full year 2026 outlook. For full year 2026, we now expect total revenue of $246 million to $249 million and adjusted EBITDA of $18 million to $18.5 million. For the third quarter, we expect total revenue of $55 million to $56 million and adjusted EBITDA of breakeven to $500,000. I want to walk through what's behind this guidance. The largest single driver of the guidance update is the removal of Vitalware's revenue and adjusted EBITDA contribution following close. Our updated guidance reflects the removal of 5 months of Vitalware revenue, consistent with the July 31 close. Vitalware is a carve-out and doesn't carry the cost of a stand-alone RCM business. As such, it was a higher adjusted EBITDA margin business with a first half adjusted EBITDA of $11.4 million. That said, we did not expect this elevated margin to continue. As we assess the Vitalware business, we validated that significant investment would be needed to grow the business, which we believe would negatively impact adjusted EBITDA and put pressure on our ability to meet our debt covenants and invest in core areas of the business. As we move forward post divestiture, we are continuing to invest in the transformation of our business, and we are continuing to work through the current churn dynamics, both show up in our numbers. On the investment side, guidance reflects continued investment across several fronts, new products and the proprietary intelligence layer that they're built on, AI-driven automation and efficiency initiatives, continued build-out of our Ignite and interoperability platform and the migration efforts already underway. Our investment in the migration efforts includes, at times, the overallocation of resources in performing migration efforts, duplicate hosting costs in running 2 environments side by side and processing costs for the loading of historical data. This creates near-term cost pressure that we wouldn't expect following the migrations. As we focus on team member retention in a period of significant transition, we're making deliberate investments to retain and motivate the team. This is our direct investment in the talent that leads us through this transformation. We believe it's the right call for the business over the long-term. Digging into gross margin, we expect overall adjusted gross margin to come in below 50% for the full year. Vitalware was a higher-margin business and removing it brings the full year average down even as the underlying trends in our continuing business are consistent with our prior commentary. Within that, we expect adjusted technology gross margin to finish the year in the low 60s, slightly below what we communicated pre-divestiture and adjusted professional services gross margin to finish in the low to mid-teens, in line with our previous commentary. Both continue to be impacted by the migrations with technology margin also carrying the heavy data loading costs associated with HIE client deployments, consistent with what we've discussed on prior calls. As our revenue mix continues to shift towards technology, we expect overall adjusted gross margin to trend higher over the long-term relative to adjusted gross margin levels seen in the second half of 2026. On the expense side, we've made significant progress on Project Nexus and are on track to exceed our original savings target. Factoring in the intentional team-related investments that brings our net expectation down slightly to the lower end of our original $3 million to $4 million estimate for cost savings. This is separate from the additional OpEx reduction we'll see from no longer carrying Vitalware's cost base. We also continue to make progress in reducing stock-based compensation. We expect it to be down significantly in 2026 in absolute dollars and to be in the mid-single digits as a percentage of revenue for the full year, which is in line with prior commentary. Coming back to the DOS to Ignite migration. There's no material change to what we shared with you last quarter. As a reminder, we had $12.5 million of notified ARR down-sell and churn related to the migration and had identified approximately $52 million of additional at-risk ARR, of which we expected to retain $22 million. We were hopeful to be able to improve upon the information provided as we've continued our client-by-client retention work, we continue to see significant pressure in this area. We are not updating the framework previously outlined this quarter, but we'll continue to monitor progress. Some of the migration churn, including associated services revenue has pulled forward, which has put pressure on our second half numbers. As we've said before, we expect to generally be through the migration-related churn headwinds by the end of 2027. On services, we're also evaluating this part of the business and aligning it to our highest areas of conviction. We believe there may be high conviction areas of services in partnership with our technology. And part of what's informing that view is what we're seeing from clients who continue to bring certain managed services work back in-house. As we've continued to work closely with our clients and gather data, we now anticipate that we'll exit the year at the lower end of the range we previously discussed, closer to $55 million in services revenue annually. Finally, on bookings. We're holding our full year target of $22 million to $26 million, which includes Vitalware bookings through the transaction date. Stepping back, we recognize the challenges of this multiyear transformation that is underway, but look forward to the business that we're building, one that is currently debt-free, has a strong balance sheet and is focused on providing solutions that solve the biggest challenges facing health systems today. With that, I'll turn the call back to Ben. Benjamin Albert: Thanks, Jason. Our team has put in real work this quarter through the divestiture, through Nexus and everything in between, and it reflects real conviction in and commitment to our transformation. In summary, we're currently debt-free with capacity to invest in what we believe in. We're working on validating our highest conviction bets before we scale them, and we're focused on creating durable value creation, working through short-term pressure as part of a multiyear transformation we're still early in. Operator, we are now ready to take questions. Operator: [Operator Instructions] Our first question will come from Daniel Grosslight with Citi. Unknown Analyst: This is [ Luis ] on for Daniel. I guess the Vitalware was the biggest driver for the move in guidance, I just wanted to confirm something real quick. Excluding that divestiture, how would guidance would have been reiterated? Jason Alger: Yes. Thanks for the question, Luis. Yes, as we look at revenue, it was a direct reflection of the removal of Vitalware from the guidance. You could use the pro forma Vitalware information that was provided as part of the 8-K as an indicator there on the level of Vitalware revenue in 2026. And then from an EBITDA standpoint, similarly, the biggest driver was the removal of the Vitalware EBITDA contribution. Our EBITDA also reflects certain deliberate investments that we are making in our team members as well as in those core products that we discussed, including the intelligence products. And so that is another impact from an adjusted EBITDA standpoint. Operator: [Operator Instructions] We do have a follow-up from Daniel Grosslight with Citi. Unknown Analyst: I guess I'll ask another one. I think since the start of 2020, you've done about 10 acquisitions, excluding Vitalware, give or take. Are you currently reviewing the portfolio to do potentially more divestitures following this transaction? Jason Alger: Thanks for the question. At this stage, we're really, as I mentioned before, focused on the fundamentals. We looked at -- if we look back over the first half of this year, we've accomplished a divestiture to really retire our debt. We're really getting the business focused on where we believe we have the best opportunities to win going forward. And ultimately, we want to back those bets that we're looking as we go forward, and we're validating that in market now. And that's really the focus for us right now is to execute this transformation. Operator: [Operator Instructions] At this time, this concludes our Q&A session. I'll now turn the meeting back over to Ben Albert for any final or closing remarks. Benjamin Albert: Great. Thank you, everyone. We appreciate you working through this transformation with us. We're excited about where we're headed, and we look forward to updating you on our progress as we go. Operator: Thank you. This concludes today's Health Catalyst second quarter 2026 earnings conference call. Please disconnect your lines at this time, and have a wonderful day. Before you buy stock in Health Catalyst, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Health Catalyst wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $400,209!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,375,393!* That performance is why people listen. With a track record of beating the S&P 500 by 4x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of August 13, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Health Catalyst (HCAT) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management divested the Vitalware business for $147 million to Med-Metrix, citing a need to focus on core technology conviction rather than the increasingly competitive RCM market. The divestiture enabled the full repayment of approximately $160 million in credit facility debt, eliminating roughly $19 million in annual GAAP interest expense. Performance is currently driven by a 'Project Nexus' strategy, which prioritizes long-term foundational transformation over short-term results through business simplification. Health systems are facing structural challenges including eroding margins and rising labor costs, which management believes creates urgent demand for their intelligence products. The company is navigating a multiyear transformation characterized by enthusiasm for new products alongside significant revenue headwinds from platform migrations. Management is deliberately prioritizing a strong cash position and disciplined spending to maintain flexibility during the early stages of this multiyear pivot. Guidance for the second half of 2026 reflects the removal of five months of Vitalware revenue and its higher-margin EBITDA contribution following the July 31 close. Management expects to be generally through migration-related churn headwinds by the end of 2027, with $12.5 million in notified down-sell already identified. Future investments will focus on a proprietary intelligence layer, AI-driven automation, and the continued build-out of the Ignite interoperability platform. Professional services revenue is expected to exit the year at the lower end of previous ranges, approximately $55 million annually, as clients bring managed services back in-house. Adjusted technology gross margins are expected to remain in the low 60s for the full year, impacted by duplicate hosting and data loading costs during client migrations. The Vitalware divestiture removes a high-margin business unit that generated $11.4 million in adjusted EBITDA during the first half of 2026. Project Nexus cost savings are now expected at the lower end of the $3 million to $4 million range due to intentional investments in team member retention. A transition services agreement with Med-Metrix will provide a modest income offset for up to six months following the divestiture. Stock-based compensation is projected to decrease significantly in 2026, targeting mid-single digits as a percentage of total revenue. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management confirmed the revenue guidance update was a direct reflection of removing Vitalware's contribution for the remainder of the year. EBITDA guidance also reflects deliberate investments in team members and core intelligence products rather than just the divestiture impact. Management deflected on specific future divestitures, stating the current focus is on executing the transformation and validating 'highest conviction' market bets. The primary goal of recent actions was to retire debt and focus the business on where they have the best opportunities to win.

Interested in Health Catalyst, Inc.? Here are five stocks we like better. Q2 revenue reached $70.5 million, above guidance, while adjusted EBITDA of $9.9 million landed at the high end of expectations. Operating expenses declined as Project Nexus savings began to take effect. Health Catalyst sold Vitalware and Med-Metrix for $147 million and used the proceeds to repay roughly $160 million of debt, leaving the company debt-free on a pro forma basis and reducing annual cash interest expense by approximately $16.5 million. The company lowered its 2026 outlook to $246 million-$249 million in revenue and $18 million-$18.5 million in adjusted EBITDA, citing the divestiture, customer migration-related churn, services pressure and continued investment in Ignite, AI and other technology initiatives. Health-Tech Revival: 3 Stocks Set for a Big 2025 Rebound Health Catalyst (NASDAQ:HCAT) reported second-quarter 2026 revenue above the high end of its guidance range and adjusted EBITDA at the high end of its outlook, while outlining a strategic shift following the July 31 divestiture of its Vitalware and Med-Metrix businesses. Chief Executive Officer Ben Albert said the company’s second-quarter performance reflected progress under Project Nexus, an initiative aimed at simplifying operations, reducing costs and focusing investment on its core technology opportunities. He said the company is in the early stages of a multiyear transformation and continues to face revenue pressure tied to platform migrations and certain lower-margin services work. → Meta’s Earnings Drop Shows Wall Street Wants More Than Ad Growth The 10 Top-Rated Stocks by Wall Street Analysts in June 2021 For the quarter ended June 30, Health Catalyst reported total revenue of $70.5 million, exceeding its prior guidance range of $68 million to $70 million. Technology revenue was $48.8 million, while professional services revenue was $21.7 million. Adjusted gross margin was 51%, compared with 50% in the year-earlier period. Adjusted technology gross margin declined to 63% from 66%, which Chief Financial Officer Jason Alger attributed to costs associated with migrating customers to the Ignite platform and deployment costs incurred before revenue recognition begins. Adjusted professional services gross margin increased to 22% from 18% a year earlier. → Visa’s BioCatch Deal Could Make Fraud Prevention a Bigger Business Adjusted operating expenses fell to $25.9 million, or 37% of revenue, from $30.6 million, or 38% of revenue, in the prior-year quarter. Alger said Project Nexus savings were partially reflected in the quarter, with the full quarterly run rate expected in the second half. Adjusted EBITDA totaled $9.9 million, at the high end of the company’s $9 million to $10 million guidance range. Adjusted net income per share was $0.04, based on a weighted-average share count of 74 million. → Dodging Deutsche Telekom: T-Mobile's Strategic Win Health Catalyst completed the divestiture of Vitalware and Med-Metrix on July 31 for $147 million in total cash consideration. Net proceeds were $145.5 million after transaction costs, subject to customary adjustments. The company used the sale proceeds and cash on hand to fully repay approximately $160 million in credit-facility debt, including accrued interest and a prepayment premium. On a pro forma basis, assuming the transaction and debt repayment had occurred at quarter-end, Health Catalyst would have held about $82 million of cash equivalents and short-term investments and carried no debt, Alger said. Albert said Vitalware was a strong business but was outside the company’s highest-conviction technology opportunities. He added that the revenue-cycle-management market had become more competitive and that growing Vitalware would have required significant additional investment. Alger said the debt repayment is expected to eliminate approximately $19 million in annual GAAP interest expense and about $16.5 million in annual cash interest payments, based on annualizing the first half of 2026. Health Catalyst also has a transition services agreement with Med-Metrix for up to six months that is expected to provide a modest income offset during that period. Following the divestiture, Health Catalyst reduced its full-year outlook. The company now expects 2026 revenue of $246 million to $249 million and adjusted EBITDA of $18 million to $18.5 million. For the third quarter, it forecast revenue of $55 million to $56 million and adjusted EBITDA ranging from breakeven to $500,000. Alger said the primary factor behind the updated outlook was the removal of five months of Vitalware revenue and adjusted EBITDA following the July 31 closing. Vitalware generated $11.4 million in adjusted EBITDA during the first half, although Alger said the business’s elevated margin was not expected to continue because of the investment required to grow it. The outlook also includes continued investments in new products, a proprietary intelligence layer, AI-driven automation, the Ignite and interoperability platform, and ongoing customer migrations. The migration efforts have created near-term cost pressure from additional staffing, duplicate hosting costs for operating two environments and the cost of loading historical data, Alger said. Full-year adjusted gross margin is expected to be below 50% following the sale of higher-margin Vitalware. Adjusted technology gross margin is expected in the low 60% range. Adjusted professional services gross margin is expected in the low- to mid-teens. Project Nexus cost savings are expected at the lower end of the company’s prior $3 million to $4 million estimate after accounting for intentional team-related investments. Health Catalyst reiterated that it is working through customer churn and downsell associated with the migration from DOS to Ignite. The company previously disclosed $12.5 million in notified annual recurring revenue downsell and churn related to the migration, along with approximately $52 million of additional at-risk ARR, of which it expected to retain $22 million. Alger said the company continues to see significant pressure in this area and is not updating that framework. Some migration-related churn, including associated services revenue, has occurred earlier than expected and weighed on second-half expectations. The company expects to be generally through migration-related churn headwinds by the end of 2027. Health Catalyst is also evaluating its services business and aligning it with areas where it sees the highest conviction alongside its technology offerings. The company now expects to exit 2026 near the lower end of its previously discussed services revenue range, at about $55 million annually, as some clients bring managed-services work back in-house. On bookings, the company maintained its full-year target of $22 million to $26 million, including Vitalware bookings through the transaction date. Albert said Health Catalyst’s immediate focus is on validating its highest-conviction opportunities in the market and executing its transformation while maintaining a strong cash position. Health Catalyst (NASDAQ: HCAT) is a healthcare data and analytics technology company founded in 2008 and headquartered in Salt Lake City, Utah. The company went public in 2019 and has since focused on delivering a unified data platform that helps healthcare organizations aggregate and analyze clinical, financial and operational information. The core of Health Catalyst's offering is the Data Operating System (DOS), a modular data management platform that integrates disparate data sources—from electronic health records to claims and patient-generated data—into a single analytics environment. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Health Catalyst Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

SALT LAKE CITY, Aug. 06, 2026 (GLOBE NEWSWIRE) -- Health Catalyst, Inc. (“Health Catalyst,” Nasdaq: HCAT), a healthcare intelligence company designed to accelerate measurable improvement for health systems, today reported financial results for the quarter ended June 30, 2026. “We delivered a very productive second quarter, exceeding the high end of our revenue guidance and the midpoint of our adjusted EBITDA guidance," said Ben Albert, Chief Executive Officer of Health Catalyst. "More importantly, we recently closed the Vitalware divestiture and fully repaid our credit facility debt, which significantly improves our balance sheet and provides flexibility to make measured near-term bets in the work we believe in most. After eighteen years working with health systems, we know how to drive outcomes. We believe our intelligence products can help them improve outcomes faster. That's the company we're working to build.” Financial Highlights for the Three Months Ended June 30, 2026 Key Financial Metrics ________________________(1) These measures are not calculated in accordance with generally accepted accounting principles in the United States (GAAP). See the accompanying "Non-GAAP Financial Measures" section below for more information about these financial measures, including the limitations of such measures, and for a reconciliation of each measure to the most directly comparable measure calculated in accordance with GAAP. Financial Outlook Health Catalyst provides forward-looking guidance on total revenue, a GAAP measure, and Adjusted EBITDA, a non-GAAP measure. For the third quarter of 2026, we expect: Total revenue of $55 million to $56 million, and Adjusted EBITDA of $0 to $0.5 million. For the full year of 2026, we expect: Total revenue of $246 million to $249 million, and Adjusted EBITDA of $18 million to $18.5 million. We have not provided forward-looking guidance for net loss, the most directly comparable GAAP measure to Adjusted EBITDA, and therefore have not reconciled guidance for Adjusted EBITDA to net loss, because there are items that may impact net loss, including stock-based compensation, that are not within our control or cannot be reasonably forecasted. Quarterly Conference Call Details We will host a conference call to review the results today, Thursday, August 6, 2026, at 5:00 p.m. E.T. The conference call can be accessed by dialing (800) 343-5172 for U.S. participants, or (203) 518-9856 for international participants, and referencing conference ID “HCATQ226.” A live audio webcast will be available online at https://ir.healthcatalyst.com/. A replay of the call will be available via webcast for on-demand listening shortly after the completion of the call, at the same web link, and will remain available for approximately 90 days. About Health Catalyst Health Catalyst, Inc. (Nasdaq: HCAT) is a healthcare intelligence company designed to accelerate measurable improvement for health systems across cost, clinical, and consumer performance. Backed by deep domain expertise, proprietary AI-driven technology, and $2.8 billion in documented outcomes, Health Catalyst helps health systems move from data to confident, measurable action. Available Information Our investors and others should note that we announce material information to the public about our company, products and services, and other matters related to our company through a variety of means, including our website (https://www.healthcatalyst.com/), our investor relations website (https://ir.healthcatalyst.com/), press releases, SEC filings, public conference calls, and social media, including our (https://www.linkedin.com/company/healthcatalyst) and our CEO’s social media accounts such as LinkedIn (https://www.linkedin.com/in/ben-albert-0a763b1/), in order to achieve broad, non-exclusionary distribution of information to the public and to comply with our disclosure obligations under Regulation FD. Forward-Looking Statements This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, as amended. These forward-looking statements include statements regarding our future growth, our growth and transformation strategies, our strategic priorities, our expectations related to the impact of the Vitalware divestiture, our liquidity, and our financial outlook for the third quarter and full year 2026. Forward-looking statements are subject to risks and uncertainties and are based on potentially inaccurate assumptions that could cause actual results to differ materially from those expected or implied by the forward-looking statements. Actual results may differ materially from the results predicted, and reported results should not be considered as an indication of future performance. Important risks and uncertainties that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: (i) changes in laws and regulations applicable to our business model; (ii) changes in market or industry conditions, regulatory environment, and receptivity to our technology and services; (iii) results of litigation or a security incident; (iv) the loss of one or more key clients or partners, clients reducing or eliminating their spend with us, client churn or down-selling in connection with the migration to Ignite or otherwise; (v) fluctuations in our project-based, non-recurring revenue, (vi) macroeconomic challenges (including high inflationary and/or high interest rate environments, tariffs, or market volatility and measures taken in response thereto), natural disasters or any new public health crises, and regional or global conflicts (including in the Middle East); (vii) the divestiture of Vitalware may not achieve some or all of the expected benefits and may adversely affect our business; and (viii) changes to our abilities to recruit and retain qualified team members. For a detailed discussion of the risk factors that could affect our actual results, please refer to the risk factors identified in our SEC reports, including, but not limited to the Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2026, expected to be filed with the SEC on or about August 6, 2026, and the Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on March 12, 2026. All information provided in this release and in the attachments is as of the date hereof, and we undertake no duty to update or revise this information unless required by law. _______________(1)  Includes stock-based compensation expense as follows: (2)  Includes acquisition-related costs, net, as follows: (3)  Includes restructuring costs as follows: Non-GAAP Financial Measures To supplement our financial information presented in accordance with GAAP, we believe certain non-GAAP financial measures, including Adjusted Gross Profit, Adjusted Gross Margin, Adjusted EBITDA, Adjusted Cost of Revenue, Adjusted Operating Expenses, Adjusted Net Income, and Adjusted Net Income per share, basic and diluted, and Vitalware Adjusted EBITDA are useful in evaluating our operating performance. For example, we exclude stock-based compensation expense because it is non-cash in nature and excluding this expense provides meaningful supplemental information regarding our operational performance and allows investors the ability to make more meaningful comparisons between our operating results and those of other companies. We use this non-GAAP financial information to evaluate our ongoing operations, as a component in determining employee bonus compensation, and for internal planning and forecasting purposes. We believe that non-GAAP financial information, when taken collectively, may be helpful to investors because it provides consistency and comparability with past financial performance. However, non-GAAP financial information is presented for supplemental informational purposes only, has limitations as an analytical tool and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP. In addition, other companies, including companies in our industry, may calculate similarly-titled non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison. A reconciliation is provided below for each non-GAAP financial measure to the most directly comparable financial measure stated in accordance with GAAP. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures, and not to rely on any single financial measure to evaluate our business. Adjusted Gross Profit and Adjusted Gross Margin Gross profit is a GAAP financial measure that is calculated as revenue less cost of revenue, including depreciation and amortization of capitalized software development costs and acquired technology. We calculate gross margin as gross profit divided by our revenue. Adjusted Gross Profit is a non-GAAP financial measure that we define as gross profit, adjusted for (i) depreciation and amortization, (ii) stock-based compensation, (iii) acquisition-related costs, net, and (iv) restructuring costs, as applicable. We define Adjusted Gross Margin as our Adjusted Gross Profit divided by our revenue. We believe Adjusted Gross Profit and Adjusted Gross Margin are useful to investors as they eliminate the impact of certain non-cash expenses and allow a direct comparison of these measures between periods without the impact of non-cash expenses and certain other non-recurring operating expenses. We present both of these measures for our technology and professional services business. We believe these non-GAAP financial measures are useful in evaluating our operating performance compared to that of other companies in our industry, as these metrics generally eliminate the effects of certain items that may vary from company to company for reasons unrelated to overall profitability. The following is a reconciliation of our Adjusted Gross Profit and Adjusted Gross Margin, in total and for technology and professional services, to gross profit and gross margin, the most directly comparable financial measures calculated in accordance with GAAP for the three months ended June 30, 2026 and 2025. ___________________(1)  Restructuring costs include severance and other team member costs from workforce reductions and restructuring. For additional details, refer to Note 20 -Restructuring Costs in our condensed consolidated financial statements. ___________________(1)  Acquisition-related costs, net include deferred retention expenses attributable to the Upfront, Intraprise, ARMUS and KPI Ninja acquisitions. For additional details refer to notes 1 and 3 in our condensed consolidated financial statements.(2)  Restructuring costs include severance and other team member costs from workforce reductions and restructuring. For additional details, refer to Note 20-Restructuring Costs in our condensed consolidated financial statements. Adjusted EBITDA Adjusted EBITDA is a non-GAAP financial measure that we define as net loss adjusted for (i) interest and other expense, net, (ii) income tax provision, (iii) depreciation and amortization, (iv) stock-based compensation, (v) acquisition-related costs, net, including the change in fair value of contingent consideration liabilities for potential earn-out payments, (vi) restructuring costs, (vii) goodwill impairment, and (viii) non-recurring lease-related charges, as applicable. We view acquisition-related expenses when applicable, such as transaction costs (including third-party fees associated with due diligence, deferred retention expenses, post-acquisition restructuring costs incurred as part of business combinations) and changes in the fair value of contingent consideration liabilities that are directly related to business combinations, as costs that are unpredictable, dependent upon factors outside of our control, and are not necessarily reflective of operational performance during a period. We believe that excluding restructuring costs, impairment of goodwill and intangible assets, and non-recurring lease-related charges, as applicable, allows for more meaningful comparisons between operating results from period to period as these are separate from the core activities that arise in the ordinary course of our business and are not part of our ongoing operations. We believe Adjusted EBITDA provides investors with useful information on period-to-period performance as evaluated by management and a comparison with our past financial performance, and is useful in evaluating our operating performance compared to that of other companies in our industry, as this metric generally eliminates the effects of certain items that may vary from company to company for reasons unrelated to overall operating performance. The following is a reconciliation of our Adjusted EBITDA to net loss, the most directly comparable financial measure calculated in accordance with GAAP, for the three months ended June 30, 2026 and 2025. __________________(1)  Acquisition-related costs, net include third-party fees associated with due diligence, deferred retention expenses, post-acquisition restructuring costs incurred as part of business combinations, and changes in fair value of contingent consideration liabilities for potential earn-out payments. During the three months ended June 30, 2025, the fair value of the contingent consideration related to the Upfront acquisition earnout decreased, resulting in a net reduction in expense. For additional details refer to Notes 1, 3, and 8 in our condensed consolidated financial statements.(2)  Restructuring costs include severance and other team member costs from workforce reductions, as well as legal and advisory fees related to significant board of director refreshment that are non-recurring and outside the ordinary course of our business. For additional details, refer to Notes 1 and 20 in our condensed consolidated financial statements.(3)  Goodwill impairment was recognized as a result of impairment indicators and quantitative tests indicating the fair values of the following were below the carrying values: (i) Technology reporting unit as of June 4, 2026, and (ii) the Technology reporting unit and the Professional Services reporting unit as of June 30, 2025. For additional details, refer to Note 5 in our condensed consolidated financial statements. Adjusted Cost of Revenue Adjusted Cost of Revenue is a non-GAAP financial measure that we define as cost of revenue adjusted for (i) depreciation and amortization, (ii) stock-based compensation, (iii) acquisition-related costs, net, and (iv) restructuring costs, as applicable. We view these adjustments to allow for more meaningful comparisons between operating results from period-to-period as these are separate from the core activities that arise in the ordinary course of our business. Adjusted Cost of Revenue is also computable by subtracting Adjusted Gross Profit from revenue. We believe Adjusted Cost of Revenue provides investors with useful information on period-to-period performance as evaluated by management and a comparison with our past financial performance, and is useful in evaluating our operating performance compared to that of other companies in our industry, as this metric generally eliminates the effects of certain items that may vary from company to company for reasons unrelated to overall operating performance. The following is a reconciliation of Adjusted Cost of Revenue to our cost of revenue, the most directly comparable financial measure calculated in accordance with GAAP, for the three months ended June 30, 2026 and 2025. __________________(1)  Acquisition-related costs, net include deferred retention expenses incurred as part of business combinations.(2)  Restructuring costs include severance and other team member costs from workforce reductions and restructuring. For additional details, refer to Note 20-Restructuring Costs in our condensed consolidated financial statements. Adjusted Operating Expenses Adjusted Operating Expenses is a non-GAAP financial measure that we define as total operating expenses adjusted for (i) depreciation and amortization, (ii) stock-based compensation, (iii) acquisition-related costs, net, including the change in fair value of contingent consideration liabilities for potential earn-out payments, (iv) goodwill impairment, and (v) restructuring costs, as applicable. We view these adjustments to allow for more meaningful comparisons between operating results from period-to-period as these are separate from the core activities that arise in the ordinary course of our business. We believe Adjusted Operating Expenses provides investors with useful information on period-to-period performance as evaluated by management and a comparison with our past financial performance, and is useful in evaluating our operating performance compared to that of other companies in our industry, as this metric generally eliminates the effects of certain items that may vary from company to company for reasons unrelated to overall operating performance. The following is a reconciliation of Adjusted Operating Expenses to our total operating expenses, the most directly comparable financial measure calculated in accordance with GAAP, as well as a calculation of total operating expenses and Adjusted Operating Expenses as a percentage of total revenue, for the three months ended June 30, 2026 and 2025. __________________(1)  Acquisition-related costs, net include third-party fees associated with due diligence, deferred retention expenses, post-acquisition restructuring costs incurred as part of business combinations, and changes in fair value of contingent consideration liabilities for potential earn-out payments. For additional details refer to Notes 1, 3 and 8 in our condensed consolidated financial statements.(2)  Goodwill impairment was recognized as a result of impairment indicators and a quantitative tests indicating the fair values of the following were below the carrying values: (i) Technology reporting unit as of June 4, 2026, and (ii) the Technology reporting unit and the Professional Services reporting unit as of June 30, 2025. For additional details, refer to Note 5 in our condensed consolidated financial statements.(3)  Restructuring costs include severance and other team member costs from workforce reductions, as well as legal and advisory fees related to significant board of director refreshment that are non-recurring and outside the ordinary course of our business. For additional details, refer to Notes 1 and 20 in our condensed consolidated financial statements. Adjusted Net Income and Adjusted Net Income Per Share Adjusted Net Income is a non-GAAP financial measure that we define as net loss adjusted for (i) stock-based compensation, (ii) amortization of acquired intangibles, (iii) restructuring costs, (iv) acquisition-related costs, net, including the change in fair value of contingent consideration liabilities, (v) goodwill impairment, and (vi) non-cash interest expense related to debt facilities, as applicable. We believe Adjusted Net Income provides investors with useful information on period-to-period performance as evaluated by management and comparison with our past financial performance and is useful in evaluating our operating performance compared to that of other companies in our industry, as this metric generally eliminates the effects of certain items that may vary from company to company for reasons unrelated to overall operating performance. The following is a reconciliation of Adjusted Net Income to our net loss, the most directly comparable financial measure calculated in accordance with GAAP, for the three months ended June 30, 2026 and 2025. ______________(1)  Restructuring costs include severance and other team member costs from workforce reductions, as well as legal and advisory fees related to significant board of director refreshment that are non-recurring and outside the ordinary course of our business. For additional details, refer to Notes 1 and 20 in our condensed consolidated financial statements.(2)  Acquisition-related costs, net includes third-party fees associated with due diligence, deferred retention expenses, post-acquisition restructuring costs incurred as part of business combinations, and changes in fair value of contingent consideration liabilities for potential earn-out payments. For additional details refer to Notes 1, 3 and 8 in our condensed consolidated financial statements.(3)  Goodwill impairment was recognized as a result of impairment indicators and a quantitative tests indicating the fair values of the following were below the carrying values: (i) Technology reporting unit as of June 4, 2026, and (ii) the Technology reporting unit and the Professional Services reporting unit as of June 30, 2025. For additional details, refer to Note 5 in our condensed consolidated financial statements. Vitalware Adjusted EBITDA Vitalware Adjusted EBITDA is a non-GAAP financial measure that we define as Vitalware net income adjusted for (i) depreciation and amortization, (ii) stock-based compensation, (iii) and acquisition-related costs. We view acquisition-related expenses when applicable, including third-party fees associated with tail insurance policies that are directly related to business combinations, as costs that are not necessarily reflective of operational performance during a period. Vitalware Adjusted EBITDA, Vitalware net income and the reconciliation below are derived from our unaudited condensed consolidated financial information and related records and reflects certain assumptions and adjustments that management believes are reasonable under the circumstances and given the information available at this time. As a result, Vitalware Adjusted EBITDA, Vitalware net income and the reconciliation below does not necessarily reflect what Vitalware’s Adjusted EBITDA, net income, and related reconciliation would have been on a standalone basis and is not necessarily indicative of future results of operations. We believe Adjusted EBITDA provides investors with useful information on performance as evaluated by management, and is useful in evaluating Vitalware's operating performance compared to that of other business units or companies in our industry, as this metric generally eliminates the effects of certain items that may vary from company to company and business unit to business unit for reasons unrelated to overall operating performance. The following is a reconciliation of our Vitalware Adjusted EBITDA to Vitalware net income, the most directly comparable financial measure calculated in accordance with GAAP, for the six months ended June 30, 2026: __________________(1)  Acquisition-related costs include third-party fees associated with tail insurance policies incurred as part of the Vitalware business combination. For additional details refer to Note 1 in our condensed consolidated financial statements. Health Catalyst Investor Relations Contact:Stephanie St. ClairFinance and Investor Relations, SVP+1 (855)[email protected] Health Catalyst Media Contact:Kathryn LarsonDirector, Public Relations and [email protected]

Health Catalyst (HCAT) came out with quarterly earnings of $0.04 per share, beating the Zacks Consensus Estimate of $0.02 per share. This compares to earnings of $0.04 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +100.00%. A quarter ago, it was expected that this provider of data analytics for the health care industry would post earnings of $0.01 per share when it actually produced earnings of $0.02, delivering a surprise of +100%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. Health Catalyst, which belongs to the Zacks Medical Info Systems industry, posted revenues of $70.49 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 2.33%. This compares to year-ago revenues of $80.72 million. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Health Catalyst shares have not added anything since the beginning of the year versus the S&P 500's gain of 12.8%. While Health Catalyst has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Health Catalyst was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is -$0.02 on $62.49 million in revenues for the coming quarter and $0.01 on $262.39 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Medical Info Systems is currently in the top 28% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the broader Zacks Medical sector, OrganiGram (OGI), has yet to report results for the quarter ended June 2026. The results are expected to be released on August 11. This cannabis producer is expected to post quarterly loss of $0.01 per share in its upcoming report, which represents a year-over-year change of +66.7%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. OrganiGram's revenues are expected to be $67.66 million, up 32.2% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Health Catalyst, Inc. (HCAT) : Free Stock Analysis Report Organigram Global Inc. (OGI) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Health Catalyst’s first quarter results were shaped by ongoing efforts to streamline its operations and address challenges from its previous client migration strategy, with management highlighting that a rigid migration timeline led to client churn and revenue pressure. CEO Benjamin Albert noted, “Setting a rigid timeline for migration efforts over the last 2 years has created a churn dynamic.” Despite these headwinds, the company reported strong bookings and progress on cost-saving initiatives, which contributed to a positive market reaction. Is now the time to buy HCAT? Find out in our full research report (it’s free). Revenue: $70.76 million vs analyst estimates of $69.19 million (10.9% year-on-year decline, 2.3% beat) Adjusted EPS: $0.02 vs analyst estimates of $0.01 (in line) Adjusted Operating Income: -$2.98 million vs analyst estimates of -$10.81 million (-4.2% margin, 72.4% beat) Revenue Guidance for the full year is $262.5 million at the midpoint, below analyst estimates of $278.9 million EBITDA guidance for the full year is $31.5 million at the midpoint, below analyst estimates of $34.2 million Operating Margin: -150%, down from -25.4% in the same quarter last year Billings: $84.21 million at quarter end, down 11.7% year on year Market Capitalization: $87.93 million While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Stanislav Berenshteyn (Wells Fargo) asked about the shrinking services mix. CEO Benjamin Albert explained services will decline as a percentage of revenue, but value-added services like chart abstraction will remain, often enhanced by AI. Richard Close (Canaccord Genuity) questioned client hesitancy to migrate from DAS to Ignite. Albert clarified that clients derive significant value from DAS and that transitions require substantial effort, so the company is now meeting clients where they are, rather than imposing rigid migration timelines. Jeffrey Garro (Stephens) inquired about customer feedback on Ignite Intelligence and AI budgeting. Management reported strong early feedback, citing the unique value of its proprietary improvement data and positive reception to cost management AI applications. Jessica Tassan (Piper Sandler) sought details on customer counts and ARR by platform. Management declined to disclose logo counts but noted that application relationships are often retained even after data infrastructure churn, emphasizing that intelligence layers distinguish their offering from commoditized data platforms. Eden Conniff (Stifel) asked about the composition of anticipated churn and bookings conversion. CFO Jason Alger confirmed churn is primarily from the data infrastructure side and stated bookings typically convert to revenue within three to six months, depending on the deployment. In the coming quarters, the StockStory team will be monitoring (1) the pace and effectiveness of Project NEXUS restructuring and cost savings, (2) progress in stabilizing revenue as the migration-related churn is absorbed, and (3) adoption and monetization of new AI-powered analytics solutions. The ability to convert strong bookings into recurring revenue and improve technology segment margins will also be key milestones to watch. Health Catalyst currently trades at $1.19, down from $1.38 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it’s free for active Edge members). WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don't just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses. But our AI platform says the party isn't over. Find out which 9 stocks made the cut this week - FREE. Get Our Top 9 Market-Beating Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.