Health Catalyst (HCAT) Q2 2026 earnings summary

Executive summary

• Q2 2026 revenue was $70.5M, exceeding the high end of guidance but down 13% year-over-year due to churn from platform migrations and exit from lower-margin services.

• Adjusted EBITDA reached $9.9M, at the high end of guidance and up 6% year-over-year, reflecting cost reduction initiatives.

• Completed Vitalware divestiture in July 2026 for $147M, using proceeds to fully repay $160M in credit facility debt, resulting in a debt-free balance sheet.

• Recognized $122.5M goodwill impairment in H1 2026, primarily due to stock price declines and the Vitalware divestiture.

• Focus remains on core technology, AI-enabled solutions, and long-term value creation for health systems.

Financial highlights

• Q2 2026 total revenue: $70.5M (down 13% YoY), with technology revenue at $48.8M and professional services at $21.7M.

• Adjusted gross margin: 51% (up from 50% YoY); technology adjusted gross margin: 63% (down from 66%); professional services: 22% (up from 18%).

• Adjusted operating expenses: $25.9M (37% of revenue), down from $30.6M (38%).

• Adjusted EBITDA: $9.9M; adjusted net income per share: $0.04.

• Cash, cash equivalents, and short-term investments totaled $103.4M as of June 30, 2026.

Outlook and guidance

• Full-year 2026 revenue guidance: $246M–$249M; adjusted EBITDA: $18M–$18.5M.

• Q3 2026 guidance: revenue $55M–$56M; adjusted EBITDA breakeven to $0.5M.

• Full-year adjusted gross margin expected below 50% due to Vitalware removal; technology gross margin in low 60s, professional services in low to mid-teens.

• Bookings target for 2026: $22M–$26M, including Vitalware through transaction date.

• Near-term revenue and margin growth expected to be negatively impacted by Medicaid/research funding cuts, Vitalware divestiture, and migration churn.