Health Catalyst (HCAT) Q3 2025 earnings summary

Executive summary

• Q3 2025 revenue was $76.3 million, flat year-over-year, with technology segment growth offset by a decline in professional services revenue.

• Adjusted EBITDA improved to $12.0 million, up 64% year-over-year, exceeding guidance.

• Net loss widened to $22.2 million in Q3 2025, primarily due to $6.9 million in lease-related impairment charges and $4.8 million in restructuring costs.

• Leadership changes and operational focus are driving measurable client value, especially in cost control and efficiency.

Financial highlights

• Technology revenue grew 7% year-over-year to $52.1 million; professional services revenue declined 12% to $24.3 million.

• Adjusted gross margin improved to 53% (+510 bps year-over-year); gross margin rose to 39%.

• Adjusted net income per share was $0.06; cash and equivalents at quarter end were $91.5 million.

• Paid off $230 million convertible notes in April 2025; new $225 million term loan facility established.

• For the nine months ended September 30, 2025, revenue was $236.5 million (+4% year-over-year); net loss was $86.9 million, impacted by a $28.8 million goodwill impairment.

Outlook and guidance

• Q4 2025 revenue expected at $73.5 million; adjusted EBITDA at $13.4 million.

• Full-year 2025 guidance reaffirmed: revenue $310 million (+1% year-over-year), adjusted EBITDA $41 million (+57% year-over-year).

• 2026 revenue anticipated to be a few points lower than 2025, with further EBITDA improvement expected.

• Dollar-based retention for 2025 expected in the low 90% range; migration of DOS clients to Ignite to continue impacting retention and gross margin into 2026.

• Near-term revenue growth faces headwinds from Medicaid and research funding reductions and elongated sales cycles.