Definitive Healthcare Corp.

Welcome to the Definitive Healthcare Q2 2023 earnings call. Our host for today's call is Robert Musselwhite. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. I would now like to turn the call over to your host, Robert Musselwhite. You may begin.

Good afternoon, and thank you for joining us today to review Definitive Healthcare's quarterly financial results. Joining me on the call today are Robert Musselwhite, CEO, Jason Krantz, founder and executive chairman, and Rick Booth, CFO. During this call, we will make forward-looking statements, including but not limited to statements related to our market and future performance and growth opportunities, the benefits of our healthcare commercial intelligence solutions, our competitive position, customer behaviors, our financial guidance, our planned investments, the anticipated impacts of global macroeconomic conditions on our business results and clients, and on the healthcare industry generally. Product features, the anticipated benefits of our acquisition of Populi and the impact of the restatement of certain of our financial statements related to sales tax liability. Any forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve a number of risks and uncertainties, including those discussed in the risk factor sections and elsewhere in our filings with the SEC. Actual results may differ materially from any forward-looking statements. The company undertakes no obligation to revise or update any forward-looking statements to reflect events that may arise after this conference call, except as required by law. For more information, please refer to the cautionary statement included in the earnings release that we have just posted to the investor relations portion of our website. Additionally, we will discuss non-GAAP financial measures on this conference call. Please refer to the tables in our earnings release on the investor relations portion of our website for reconciliation of these measures to their most directly comparable GAAP financial measure. With that, I'd like to turn the call over to Robert.

Thanks, Matt, and thanks to all of you for joining us this afternoon to review Definitive Healthcare's second quarter financial results. On today's call, I'll provide an overview of our second quarter results, provide some perspective on business trends and what we are seeing in the market, and review some of our key wins from the second quarter. Then I will turn it over to Jason to highlight some of our latest product innovations, including our recently announced acquisition. I'll start by reviewing our second quarter financial results. Revenue and adjusted EBITDA for the quarter were in line with our expectations. Our ability to continue delivering on our goal of balanced growth and profitability in the midst of a difficult economy is an important reminder of the inherent value of our platform and the efficiency of our business model. Our total revenue was $61 million, which represents 12% year-over-year growth, and our adjusted EBITDA was $17 million, which translates into a 28% margin. Our adjusted EBITDA was $17 million, which translates into a 28% margin. Our performance in the quarter was driven by important customer wins in each of our target markets with both new and existing customers. We continue to see solid demand generation and are having an increasing number of strategic conversations with customers about their long-term investment priorities. This ongoing strength in demand generation gives us great confidence for our future growth prospects once economic conditions normalize. However, in the near term, the selling environment remains similar to what we have seen in recent quarters. Many customers and prospects remain stringent in their purchasing decisions and are deferring investments until they have clearer line of sight to when their business performance will begin to improve. In the meantime, we continue to focus intently on sales execution, value delivery, and investing in the products that we believe will drive sustainable long-term growth for the company. We have a lot of good work going on across all of these areas. A key driver of our current and future success is the growing demand for data and analytics to help drive strategic business decisions and daily sales and marketing effectiveness. The healthcare market is complex and continues to change rapidly with consolidation, introduction of new biopharmaceuticals, and development of new technologies to drive down costs and improve quality. All of these changes create challenges for our clients who are trying to develop and execute upon go-to-market strategies in healthcare. We help our clients understand this dynamic industry and provide the information they need to be successful competing in it. Whether it is helping sales and marketing teams more effectively target and create messaging for physicians with the highest propensity to write prescriptions, or an R&D team that needs to size its potential markets or identify the most important clinical trial researchers to accelerate drug commercialization, the cost of making business decisions with incomplete or uncontextualized data has never been higher. This challenge is especially true in a world where growth is harder to come by and operating capital costs are increasing. Our healthcare commercial intelligence platform is uniquely suited to address these challenges. This platform combines a large and expanding proprietary data set, sophisticated data science that ensures data quality, and an easy to use cloud interface to put the right information at the fingertips of business users or embed the information into their CRM or other systems. Simply put, with definitive healthcare, any company selling into the $4 trillion U.S. healthcare market will be able to make better data-driven business decisions in its go-to-market or product development initiatives. And as Jason will discuss in detail later, we are not standing still. The acquisition of Populi adds a number of purpose-built solutions for our healthcare provider clients that strengthen our competitive differentiation in that key market. Populi brings new data to our Atlas dataset. And later this month, we will release a significant update to our Atlas technology install data set. For all these reasons, we remain very bullish on the long-term growth opportunity in commercial healthcare intelligence. This is a $10 billion and growing market that is still in its early stage, and our offerings are well aligned with many of our customers' top strategic priorities. Now I'd like to spend a few minutes highlighting some exciting customer wins from the second quarter that demonstrate the numerous ways customers are generating business value from the Definitive Healthcare platform. A global immunology company chose Definitive Healthcare for a multi-year enterprise contract to profile key opinion leaders across multiple separate disease states using the Atlas AI tools that we introduced in the first quarter. This client will leverage claims-based specialty analysis, expert ranking, and key opinion leader industry collaborations to rank KOLs based on proprietary mix of clinical and scientific activity and drive greater efficiency for its medical affairs team. A Spanish multinational pharmaceutical and chemical manufacturer signed a three-year contract in excess of $1 million to gain better visibility into their market share and spot trends and opportunities in real time. Definitive Healthcare will allow them to easily identify the providers treating relevant patients and to track those providers back to the clinics, group practices, and IDNs they are affiliated with. In addition, by leveraging the new integration capabilities that we introduced in the first quarter of this year, this company will put this powerful data in the hands of their frontline employees to drive their daily efforts. An American on-demand financial and human capital management software vendor signed an enterprise agreement with us to integrate physician data from our Atlas data set into their Salesforce.com instance. This company intends to use the Atlas data set as its single source of truth as it increases its focus on the healthcare vertical. With the Atlas data set, they can size and segment their total market opportunity and build an integrated sales and marketing strategy, all while reducing the time and effort associated with deduping, updating, and maintaining key account and contact data. Turning to our passport analytics suite, which we acquired when we purchased Analytical Wizards in February 2022, we had a significant enterprise sale for passport planning and performance at a large biotech focused on developing and commercializing biopharmaceuticals for rare diseases driven by genetic causes. This company plans to use our solutions to help monitor and report upon a risk evaluation and mitigation strategy study for a drug currently in development. In addition, our solution will help this company develop a comprehensive patient journey and real-world evidence plan. Finally, turning to our provider business, we signed a multi-year enterprise deal with a nonprofit organization that provides reproductive health care and education in the United States. This organization plans to use our Atlas reference and affiliation data set in combination with our Atlas all-payer claims and latitude reporting suite to better understand where it can and should expand its services. based on the distance that patients travel for care and the services provided by existing OBGYNs in that region. In addition, the organization will utilize our solutions to identify care deserts or areas where there is limited or no access to care. And of course, there are many more examples, but I only had time to choose a few. With that, I'd like to turn it over to Jason.