Health Catalyst Q2 2025 Earnings Call Highlights: Revenue Exceeds Guidance, Restructuring Efforts Underway

Health Catalyst Inc reported Q2 2025 revenue of $80.7 million and adjusted EBITDA of $9.3 million, exceeding guidance. The Technology segment saw an 11% year-over-year revenue growth, driven by recurring revenue from new and acquired clients. The company revised its full-year 2025 revenue guidance down to $310 million due to significant Medicaid and research funding cuts. It also announced a workforce reduction impacting approximately 9% of its total workforce as part of its restructuring efforts.

Health Catalyst Inc (HCAT) released its Q2 2025 financial results, showing a mix of positive and negative outcomes. The company reported revenue of $80.7 million and adjusted EBITDA of $9.3 million, both exceeding guidance. The Technology segment saw an 11% year-over-year revenue growth, driven by recurring revenue from new and acquired clients.

However, the company's stock price declined by 3.4% in after-hours trading following the earnings release. This was primarily due to a significant earnings per share (EPS) miss. HCAT reported an EPS of -$0.59, missing the forecast of $0.04, resulting in a negative earnings surprise of -1575%.

The company revised its full-year 2025 revenue guidance down to $310 million due to significant Medicaid and research funding cuts. Despite the downward revision, HCAT maintained its adjusted EBITDA guidance of $41 million for 2025.

In addition to the financial challenges, HCAT announced a workforce reduction impacting approximately 9% of its total workforce as part of its restructuring efforts. The company is undergoing restructuring to improve profitability and operating leverage.

The earnings call highlighted several key takeaways and risks. CEO Dan Burton emphasized the company's focus on profitability and the disconnect between its intrinsic value and public market value. The company expects double-digit growth in applications revenue and is focused on enhancing profitability and operating leverage.

Investors should be aware of the potential risks, including future earnings consistency, a significant drop in cash reserves, and the impact of Medicaid and research funding cuts on operations. The company's conservative revenue forecast approach and potential growth challenges in the coming years were also discussed.

References:
[1] https://au.investing.com/news/transcripts/earnings-call-transcript-health-catalyst-q2-2025-results-show-significant-eps-miss-93CH-3968446