UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
February 24, 2025
Definitive Healthcare Corp.
(Exact name of Registrant as Specified in Its Charter)
Commission File Number 001-40815 |
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Delaware |
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86-3988281 |
(State |
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(IRS Employer |
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492 Old Connecticut Path, Suite 401 |
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Framingham, Massachusetts 01701 |
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(Address of Principal Executive Offices) |
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508 720-4224 |
Registrant’s telephone number, including area code |
Not Applicable |
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class |
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Trading |
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Name of Each Exchange on Which Registered |
Class A Common Stock, $0.001 par value |
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DH |
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The NASDAQ Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On February 27, 2025, Definitive Healthcare Corp. (the “Company”) issued a press release announcing its financial results for the fourth quarter and fiscal year ended December 31, 2024. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference herein.
The information furnished in this Item 2.02 on this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, regardless of any general incorporation language in such filing.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On February 24, 2025, the Board of Directors (the “Board”) of the Company appointed Casey Heller to the position of Chief Financial Officer (“CFO”) effective June 2, 2025. The Company previously announced that Richard Booth, the Company’s current CFO, would be departing the Company effective June 1, 2025.
Ms. Heller, age 36, currently serves as the Company’s SVP of Finance, a role she has occupied since October 2024, having previously served as the Company’s VP of FP&A from January 2024 to October 2024. Before joining the Company, Ms. Heller spent 15 years in Finance at IBM between July 2009 and December 2023, holding progressive leadership roles across broad financial disciplines, including serving as VP of Investor Relations from August 2023 to December 2023, Director of Investor Relations from February 2022 to August 2023, and Director of Treasury Strategy from June 2019 to March 2022. During her time at IBM, Ms. Heller also served as the Chief of Staff to IBM’s CFO, led FP&A for the software business, was responsible for overall IBM forecasting, and was selected to help support strategic transactions, including the spin-off of IBM’s managed infrastructure services businesses and deleveraging after the Red Hat acquisition. Ms. Heller holds a B.S. in Business Administration with a concentration in Finance from Marist College.
Heller Promotion Offer Letter
In connection with Ms. Heller’s appointment as CFO, the Company entered into a promotion offer letter with Ms. Heller, dated as of February 24, 2025 (the “Offer Letter”). Pursuant to the terms of the Offer Letter, Ms. Heller is entitled to, among other things, in each case effective as of June 2, 2025, (i) an initial annual base salary of $375,000, (ii) a target bonus opportunity of 60% of her base salary, subject to the Company’s Cash Incentive Plan for Executives, to be pro-rated to account for base salary and bonus opportunity applicable during 2025, (iii) certain severance benefits as offset forth in the Offer Letter, (iv) an award of time-vesting restricted stock units (“RSUs”) (the “Initial Promotion RSUs”) with respect to the Company’s Class A Common Stock, par value $0.001 per share (the “Class A Common Stock”), and (v) an award of RSUs (the “Annual RSUs”) and performance-based restricted stock units (“PSUs”) (the “Annual PSUs”) consistent with annual equity awards issued to similarly-situated executives of the Company (together, the “Initial Annual Awards”). The Initial Promotion RSUs and the Initial Annual Awards will all be issued pursuant to the Company’s 2021 Equity Incentive Plan (the “2021 Plan”).
The Initial Promotion RSUs will have a target value at grant of $1,500,000, and the number of RSUs subject to the Initial Promotion RSUs will be determined by dividing such grant value by the average closing price of a share of Common Stock for the thirty (30) trading days preceding (but not including) June 2, 2025, rounded up to the nearest whole share. The RSUs subject to the Initial Promotion RSUs will vest over two years with the first vest of 50% occurring on the first of the month on which the 1-year anniversary of the CFO start date falls (i.e., June 1, 2026), with the remaining shares vesting quarterly in approximately equal installments thereafter.
The Annual RSUs will have a target value at grant of $1,462,500 and the Annual PSUs will have a target value at grant of $787,500. The actual number of RSUs or PSUs (at target), as applicable, subject to the Initial Annual Awards, will be determined by dividing such estimated value by the average closing price of a share of Common Stock for the thirty (30) trading days preceding (but not including) the date of grant, rounded up to the nearest whole share. The Initial Annual Awards will be granted to Ms. Heller on the later of (a) the date on which 2025 annual equity awards are granted to other similarly situated executives; and (b) a date that is on or promptly following June 2, 2025. The Annual RSUs will vest over a four-year period with 25% vesting after 1 year and then quarterly vesting thereafter over the remaining 3 years. The Annual PSUs will be subject to, and will vest in accordance with, the terms of 2025 annual performance-based equity awards established by the Board or the Human Capital Management & Compensation Committee of the Board for issuance to other similarly-situated executive officers of the Company.
Pursuant to Ms. Heller’s Offer Letter, she is entitled to certain severance benefits, as provided by the Company’s Severance Plan for Executives (Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 001-40815) filed with the SEC on November 21, 2023), as modified by the terms of the Offer Letter, and the Company’s Change in Control Severance Plan for Executives (Exhibit 10.36 to the Company's Annual Report on Form 10-K (File No. 001-40815) filed with the SEC on February 27, 2023).
If we terminate Ms. Heller’s employment without cause (as defined in the Offer Letter) and other than as a result of death or disability, or Ms. Heller terminates his employment for good reason (as defined in the Offer Letter) then we must provide Ms. Heller with (i) continuation of regular payments of salary at the rate in effect on the date of termination for a period of twelve months from the date of termination of employment, payable in accordance with our regular payroll schedule; (ii) payment of any unpaid amount of the annual bonus for the immediately preceding calendar year that Ms. Heller would have earned in accordance with the Bonus Plan had the termination not occurred, plus an amount equal to the target annual bonus to be earned by Ms. Heller during the year in which the termination occurs, payable in a lump sum; (iii) acceleration of the vesting of all forms of time-based equity awarded to Ms. Heller by the Company at any time, that would otherwise have vested during the twelve-month period following the termination date, and (iv) payment for twelve months of COBRA coverage, if applicable.
Ms. Heller is eligible for reimbursement of certain expenses and will be entitled to participate in the Company’s benefit plans that are generally available to the Company’s executive employees. Ms. Heller’s Offer Letter also entitles her to payment of up to $10,000 in legal fees in connection with the negotiation of her Offer Letter. Ms. Heller will also enter into the Company’s standard form of indemnity agreement in the form previously approved by the Board, which form is filed as Exhibit 10.6 to the Company’s Registration Statement on Form S-1 (File No. 333-258990) filed with the SEC on August 20, 2021.
The foregoing summary is not a complete description and is qualified in its entirety by reference to the full text and terms of the Offer Letter, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated by reference herein.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
10.1 |
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99.1 |
Press Release Dated February 27, 2025 (furnished herewith pursuant to Item 2.02) |
104 |
Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
DEFINITIVE HEALTHCARE CORP. |
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By: |
/s/ Richard Booth |
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Name: |
Richard Booth |
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Title: |
Chief Financial Officer |
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Date: February 27, 2025 |
Exhibit 10.1
February 24, 2025
Casey Heller
[**************************]
[****************]
[*******************]
Dear Casey:
We are thrilled to present you with the following letter outlining an offer to of promotion to the role of Chief Financial Officer of Definitive Healthcare, LLC, a Massachusetts limited liability company (the “Company”) and its parent company, Definitive Healthcare Corp., a Delaware corporation (“Parent”, and together with the Company, the “Company Group” or “Definitive Healthcare”). The effective date of your promotion will be June 2, 2025 (the “Start Date”). In this role, you will continue to be a hybrid employee based out of our Framingham, Massachusetts headquarters.
This role is considered exempt, and effective on the Start Date, your compensation package will comprise the following:
Each of the Initial Promotion RSUs and Initial Annual Awards shall be governed by the terms and conditions of Parent’s 2021 Equity Incentive Plan, and the relevant award agreements thereunder.
Promptly following your Start Date you will be required to acknowledge and agree to the Company’s policies applicable to similarly-situated executives, including the Definitive Healthcare Corp. Incentive Compensation Recoupment Policy and minimum stockholding guidelines applicable to executive officers. You also affirm and acknowledge your agreement to the terms and conditions of employment already applicable to you that were entered into or agreed to in connection with your initial employment with the Company including, among other things, your acknowledgement of employee handbooks, and your entry into the Company’s Assignment of Inventions, Non-Disclosure, Non-Solicitation, and Non-Competition Agreement.
You will be an at-will employee and as such you will be free to resign your employment with the Company at any time upon reasonable notice and the Company may terminate your employment at any time as well.
Please let us know of your decision to accept the promotion, contingent upon the effectiveness of the Start Date and the other terms and conditions set forth herein and in the documents and policies referenced herein, by signing a copy of this offer letter and returning it to us by February 26, 2025.
Sincerely,
By:
DEFINITIVE HEALTHCARE, LLC
DEFINITIVE HEALTHCARE CORP.
/s/ Kevin Coop |
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Kevin Coop
Title: Chief Executive Officer
Date: February 24, 2025
I accept this offer of employment and agree to be bound by the terms set forth herein understanding that my employment will be on an “at will” basis with nothing in this letter or elsewhere being intended as a promise of employment for any specific term:
By: |
/s/ Casey Heller |
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Print: |
Casey Heller |
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Date: |
February 24, 2025 |
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Exhibit 99.1
Definitive Healthcare Reports Financial Results for Fourth Quarter and Full Fiscal Year 2024
Fourth quarter and full year 2024 revenue exceeded guidance
Framingham, MA (February 27, 2025) – Definitive Healthcare Corp. (“Definitive Healthcare” or the “Company”) (Nasdaq: DH), an industry leader in healthcare commercial intelligence, today announced financial results for the quarter and full year ended December 31, 2024.
Fourth Quarter 2024 Financial Highlights:
Full Year 2024 Financial Highlights:
“Revenue and adjusted EBITDA were above the high end of our guided ranges despite challenging commercial conditions,” said Kevin Coop, CEO of Definitive Healthcare. “We executed on delivering new business growth, securing new logos and expanding relationships with existing customers through upsell and cross-sell opportunities. We are committed to building on this momentum as we move into 2025.
“I’m also pleased to announce that after a thorough search process, Casey Heller, our Senior Vice President of Finance, will assume the role of Chief Financial Officer, effective on June 2, 2025. We expect a smooth transition as she is already responsible for a significant portion of the company’s financial functions, including all aspects of commercial and operational finance, FP&A, and investor relations. In addition, Rick Booth will continue to serve as CFO until early June to give us time to backfill Casey’s current position and enable her to hit the ground running as CFO with a full team.”
Recent Business and Operating Highlights:
Customer Wins
In the fourth quarter, Definitive Healthcare continued to win new logos across all end-markets, by providing the data, insights, and integrations that drive their critical business use cases. Customer wins for the quarter included:
Business Outlook
Based on information as of February 27, 2025, the Company is issuing the following financial guidance.
First Quarter 2025:
Full Year 2025:
We do not provide a quantitative reconciliation of the forward-looking non-GAAP financial measures included in this press release to the most directly comparable GAAP measures due to the high variability and difficulty in predicting certain items excluded from these non-GAAP financial measures; in particular, the effects of equity-based compensation expense, taxes and amounts under the tax receivable agreement, deferred tax assets and deferred tax liabilities, and transaction, integration, and restructuring expenses. We expect the variability of these excluded items may have a significant, and potentially unpredictable, impact on our future GAAP financial results.
Conference Call Information
Definitive Healthcare will host a conference call today February 27, 2025, at 5:00 p.m. (Eastern Time) to discuss the Company's full financial results and current business outlook. Participants may access the call at 1-877-358-7298 or 1-848-488-9244. Shortly after the conclusion of the call, a replay of this conference call will be available through March 29, 2025, at 1-800-645-7964 or 1-757-849-6722. The replay passcode is 1765#. A live audio webcast of the event will be available on Definitive Healthcare’s Investor Relations website at https://ir.definitivehc.com/.
About Definitive Healthcare
At Definitive Healthcare, our passion is to transform data, analytics and expertise into healthcare commercial intelligence. We help clients uncover the right markets, opportunities and people, so they can shape tomorrow’s healthcare industry. Learn more at definitivehc.com.
Forward-Looking Statements
This press release includes forward-looking statements that reflect our current views with respect to future events and financial performance. Such statements are provided under the “safe harbor” protection of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include all statements that do not relate solely to historical or current facts, and can generally be identified by words or phrases written in the future tense and/or preceded by words such as “likely,” “will,” “should,” “may,” “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects,” “continues,” “assumes,” “would,” “potentially” or similar words or variations thereof, or the negative thereof, references to future periods, or by the inclusion of forecasts or projections, but these terms are not the exclusive means of identifying such statements. Examples of forward-looking statements include, but are not limited to, statements we make regarding our outlook, financial guidance, the benefits of our healthcare commercial intelligence solutions, our overall future prospects, customer behaviors and use of our solutions, the market, industry and macroeconomic environment, our plans to improve our operational and financial performance and our business, our ability to execute on our plans, customer growth, including our upsell and cross-sell opportunities, and our ability to successfully transition executive leadership. Forward-looking statements in this press release are based on our current expectations and assumptions regarding our business, the economy and other future conditions. Because forward-looking statements relate to the future, by their nature, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. As a result, our actual results may differ materially from those contemplated by the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include the following: global geopolitical tension and difficult macroeconomic conditions; actual or potential changes in international, national, regional and local economic, business and financial conditions, including trade tensions, recessions, inflation, high interest rates, volatility in the capital markets and related market uncertainty; our inability to acquire new customers and generate additional revenue from existing customers; our inability to generate sales of subscriptions to our platform or any decline in demand for our platform and the data we offer; the competitiveness of the market in which we operate and our ability to compete effectively; the failure to maintain and improve our platform, or develop new modules or insights for healthcare commercial intelligence; the inability to obtain and maintain accurate, comprehensive or reliable data, which could result in reduced demand for our platform; the loss of our access to our data providers; the failure to respond to advances in healthcare commercial intelligence; an inability to attract new customers and expand subscriptions of current customers; our ability to successfully transition executive leadership; the possibility that our security measures are breached or unauthorized access to data is otherwise obtained; and the risks of being required to collect sales or other related taxes for subscriptions to our platform in jurisdictions where we have not historically done so.
Additional factors or events that could cause our actual performance to differ from these forward-looking statements may emerge from time to time, and it is not possible for us to predict all of them. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, our actual financial condition, results of operations, future performance and business may vary in material respects from the performance projected in these forward-looking statements.
For additional discussion of factors that could impact our operational and financial results, refer to our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 that will be filed following this earnings release, as well as our Current Reports on Form 8-K and other subsequent SEC filings, which are or will be available on the Investor Relations page of our website at ir.definitivehc.com and on the SEC website at www.sec.gov.
All information in this press release speaks only as of the date on which it is made. We undertake no obligation to publicly update this information, whether as a result of new information, future developments or otherwise, except as may be required by law.
Website
Definitive Healthcare intends to use its website as a distribution channel of material company information. Financial and other important information regarding the Company is routinely posted on and accessible through the Company’s website at https://www.definitivehc.com/. Accordingly, you should monitor the investor relations portion of our website at https://ir.definitivehc.com/ in addition to following our press releases, SEC filings, and public conference calls and webcasts. In addition, you may automatically receive email alerts and other information about the Company when you enroll your email address by visiting the “Email Alerts” section of our investor relations page at https://ir.definitivehc.com/.
Non-GAAP Financial Measures
We have presented supplemental non-GAAP financial measures as part of this earnings release. We believe that these supplemental non-GAAP financial measures are useful to investors because they allow for an evaluation of the Company with a focus on the performance of its core operations, including providing meaningful comparisons of financial results to historical periods and to the financial results of peer and competitor companies. Our use of these non-GAAP terms may vary from the use of similar terms by other companies in our industry and accordingly may not be comparable to similarly titled measures used by other companies and are not measures of performance calculated in accordance with GAAP. Our presentation of these non-GAAP financial measures are intended as supplemental measures of our performance that are not required by, or presented in accordance with, GAAP. These non-GAAP financial measures should not be considered as alternatives to loss from operations, net loss, earnings per share, or any other performance measures derived in accordance with GAAP or as measures of operating cash flows or liquidity. A reconciliation of GAAP to non-GAAP results has been provided in the financial statement tables included at the end of this press release. In evaluating our non-GAAP financial measures, you should be aware that in the future, we may incur expenses similar to those eliminated in these presentations.
We refer to Unlevered Free Cash Flow, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Gross Profit, Adjusted Gross Margin, Adjusted Operating Income, Adjusted Net Income and Adjusted Net Income Per Diluted Share as non-GAAP financial measures. These non-GAAP financial measures are not required by or prepared in accordance with generally accepted accounting principles in the U.S. (“GAAP”). These are supplemental financial measures of our performance and should not be considered substitutes for cash provided by (used in) operating activities, loss from operations, net (loss) income, net (loss) income margin, gross profit, gross margin, or any other measure derived in accordance with GAAP.
We define Unlevered Free Cash Flow as net cash provided by operating activities less purchases of property, equipment and other assets, plus cash interest expense, and cash payments related to transaction, integration, and restructuring related expenses, earnouts, and other non-core items. Unlevered Free Cash Flow does not represent residual cash flow available for discretionary expenditures since, among other things, we have mandatory debt service requirements.
We define EBITDA as earnings before debt-related costs, including interest expense, net, income taxes and depreciation and amortization. Adjusted EBITDA is defined as EBITDA adjusted to exclude certain items of a significant or unusual nature, including other income, net, equity-based compensation, transaction, integration, and restructuring expenses, goodwill impairments and other non-core expenses. Adjusted EBITDA Margin is defined as Adjusted EBITDA as a percentage of revenue. Adjusted EBITDA and Adjusted EBITDA Margin are key metrics used by management and our board of directors to assess the profitability of our operations. We believe that Adjusted EBITDA and Adjusted EBITDA Margin provide useful information to help
investors to assess our operating performance because these metrics eliminate non-core and unusual items and non-cash expenses, which we do not consider indicative of ongoing operational performance. We believe that these metrics are helpful to investors in measuring the profitability of our operations on a consolidated level.
We define Adjusted Gross Profit as gross profit excluding acquisition-related amortization and equity-based compensation costs and Adjusted Gross Margin is defined as Adjusted Gross Profit as a percentage of revenue. Adjusted Gross Profit and Adjusted Gross Margin are key metrics used by management and our board of directors to assess our operations. We exclude acquisition-related depreciation and amortization expenses as they have no direct correlation to the cost of operating our business on an ongoing basis. A small portion of equity-based compensation is included in cost of revenue in accordance with GAAP but is excluded from our Adjusted Gross Profit calculations due to its non-cash nature.
We define Adjusted Operating Income as loss from operations plus acquisition related amortization, equity-based compensation, transaction, integration, and restructuring expenses, goodwill impairments and other non-core expenses. We define Adjusted Net Income as Adjusted Operating Income less interest (expense), income net, recurring income tax (provision) benefit, foreign currency gain (loss), and tax impacts of adjustments.
We define Adjusted Net Income Per Diluted Share as Adjusted Net Income divided by diluted outstanding shares.
In evaluating our non-GAAP financial measures, you should be aware that in the future we may incur expenses similar to those eliminated in these presentations.
Investor Contact:
Brian Denyeau
ICR for Definitive Healthcare
brian.denyeau@icrinc.com
646-277-1251
Media Contact:
Bethany Swackhamer
bswackhamer@definitivehc.com
Definitive Healthcare Corp. |
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Consolidated Balance Sheets |
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(amounts in thousands, except number of shares and par value; unaudited) |
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December 31, 2024 |
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December 31, 2023 |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
105,378 |
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$ |
130,976 |
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Short-term investments |
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184,786 |
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177,092 |
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Accounts receivable, net |
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53,232 |
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59,249 |
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Prepaid expenses and other assets |
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13,040 |
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13,120 |
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Deferred contract costs |
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13,736 |
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13,490 |
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Total current assets |
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370,172 |
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393,927 |
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Property and equipment, net |
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3,791 |
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4,471 |
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Operating lease right-of-use assets, net |
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7,521 |
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9,594 |
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Other assets |
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2,300 |
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2,388 |
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Deferred contract costs |
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14,389 |
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17,320 |
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Intangible assets, net |
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297,933 |
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323,121 |
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Goodwill |
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393,283 |
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1,075,080 |
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Total assets |
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$ |
1,089,389 |
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$ |
1,825,901 |
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Liabilities and Equity |
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Current liabilities: |
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Accounts payable |
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$ |
10,763 |
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$ |
5,787 |
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Accrued expenses and other liabilities |
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40,896 |
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51,529 |
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Deferred revenue |
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93,344 |
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97,377 |
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Term loan |
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13,750 |
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13,750 |
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Operating lease liabilities |
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2,408 |
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2,239 |
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Total current liabilities |
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161,161 |
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170,682 |
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Long-term liabilities: |
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Deferred revenue |
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32 |
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9 |
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Term loan |
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229,368 |
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242,567 |
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Operating lease liabilities |
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7,586 |
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9,372 |
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Tax receivable agreements liability |
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49,511 |
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127,000 |
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Deferred tax liabilities |
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25,088 |
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67,163 |
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Other liabilities |
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9,449 |
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9,934 |
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Total liabilities |
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482,195 |
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626,727 |
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Equity: |
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Class A Common Stock, par value $0.001, 600,000,000 shares authorized, 113,953,554 and 116,562,252 shares issued and outstanding at December 31, 2024 and 2023, respectively |
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114 |
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117 |
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Class B Common Stock, par value $0.00001, 65,000,000 shares authorized, 39,439,198 and 39,375,806 shares issued and outstanding, respectively, at December 31, 2024, and 39,762,700 and 39,168,047 shares issued and outstanding, respectively, at December 31, 2023 |
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— |
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— |
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Additional paid-in capital |
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1,085,445 |
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1,086,581 |
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Accumulated other comprehensive (deficit) income |
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(610 |
) |
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2,109 |
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Accumulated deficit |
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(640,574 |
) |
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(227,450 |
) |
Noncontrolling interests |
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162,819 |
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337,817 |
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Total equity |
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607,194 |
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1,199,174 |
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Total liabilities and equity |
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$ |
1,089,389 |
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$ |
1,825,901 |
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Definitive Healthcare Corp. |
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Consolidated Statements of Cash Flows |
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(amounts in thousands; unaudited) |
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Three Months Ended December 31, |
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Year Ended December 31, |
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2024 |
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2023 |
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2024 |
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2023 |
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Cash flows provided by (used in) operating activities: |
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Net loss |
$ |
(84,717 |
) |
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$ |
(13,362 |
) |
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$ |
(591,446 |
) |
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$ |
(289,627 |
) |
Adjustments to reconcile net loss to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
|
|
|
||||
Depreciation and amortization |
|
526 |
|
|
|
562 |
|
|
|
2,245 |
|
|
|
1,953 |
|
Amortization of intangible assets |
|
12,606 |
|
|
|
12,439 |
|
|
|
49,422 |
|
|
|
49,797 |
|
Amortization of deferred contract costs |
|
3,978 |
|
|
|
3,488 |
|
|
|
15,441 |
|
|
|
12,963 |
|
Equity-based compensation |
|
7,365 |
|
|
|
13,254 |
|
|
|
38,085 |
|
|
|
48,739 |
|
Amortization of debt issuance costs |
|
175 |
|
|
|
175 |
|
|
|
702 |
|
|
|
702 |
|
Provision for bad debt expense |
|
— |
|
|
|
554 |
|
|
|
947 |
|
|
|
1,374 |
|
Non-cash restructuring charges |
|
192 |
|
|
|
— |
|
|
|
1,239 |
|
|
|
155 |
|
Goodwill impairment charges |
|
97,060 |
|
|
|
— |
|
|
|
688,854 |
|
|
|
287,400 |
|
Tax receivable agreement remeasurement |
|
(8,758 |
) |
|
|
1,507 |
|
|
|
(76,909 |
) |
|
|
(23,470 |
) |
Changes in fair value of contingent consideration |
|
1,460 |
|
|
|
302 |
|
|
|
(1,780 |
) |
|
|
302 |
|
Deferred income taxes |
|
(6,061 |
) |
|
|
1,015 |
|
|
|
(42,670 |
) |
|
|
(18,713 |
) |
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
|
|
||||
Accounts receivable |
|
(17,455 |
) |
|
|
(18,559 |
) |
|
|
5,693 |
|
|
|
811 |
|
Prepaid expenses and other assets |
|
(627 |
) |
|
|
(1,348 |
) |
|
|
(7,832 |
) |
|
|
(7,156 |
) |
Deferred contract costs |
|
(4,481 |
) |
|
|
(5,770 |
) |
|
|
(12,756 |
) |
|
|
(18,790 |
) |
Contingent consideration |
|
— |
|
|
|
— |
|
|
|
(602 |
) |
|
|
— |
|
Accounts payable, accrued expenses, and other liabilities |
|
(285 |
) |
|
|
2,919 |
|
|
|
(5,458 |
) |
|
|
1,330 |
|
Deferred revenue |
|
7,157 |
|
|
|
7,533 |
|
|
|
(4,979 |
) |
|
|
(6,580 |
) |
Net cash provided by operating activities |
|
8,135 |
|
|
|
4,709 |
|
|
|
58,196 |
|
|
|
41,190 |
|
Cash flows (used in) provided by investing activities: |
|
|
|
|
|
|
|
|
|
|
|
||||
Purchases of property, equipment, and other assets |
|
(10,901 |
) |
|
|
(594 |
) |
|
|
(12,344 |
) |
|
|
(2,977 |
) |
Purchases of short-term investments |
|
(111,634 |
) |
|
|
(45,595 |
) |
|
|
(304,304 |
) |
|
|
(259,208 |
) |
Maturities of short-term investments |
|
96,265 |
|
|
|
100,596 |
|
|
|
303,769 |
|
|
|
275,426 |
|
Cash paid for acquisitions and investments, net of cash acquired |
|
— |
|
|
|
— |
|
|
|
(13,530 |
) |
|
|
(45,023 |
) |
Net cash (used in) provided by investing activities |
|
(26,270 |
) |
|
|
54,407 |
|
|
|
(26,409 |
) |
|
|
(31,782 |
) |
Cash flows used in financing activities: |
|
|
|
|
|
|
|
|
|
|
|
||||
Repayments of term loans |
|
(3,437 |
) |
|
|
(3,438 |
) |
|
|
(13,750 |
) |
|
|
(8,594 |
) |
Taxes paid related to net share settlement of equity awards |
|
(278 |
) |
|
|
(1,035 |
) |
|
|
(7,548 |
) |
|
|
(4,432 |
) |
Repurchases of Class A Common Stock |
|
(7,329 |
) |
|
|
— |
|
|
|
(22,366 |
) |
|
|
— |
|
Payments of contingent consideration |
|
— |
|
|
|
— |
|
|
|
(1,000 |
) |
|
|
— |
|
Payments under tax receivable agreement |
|
— |
|
|
|
— |
|
|
|
(6,950 |
) |
|
|
(246 |
) |
Payments of equity offering issuance costs |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(30 |
) |
Member distributions |
|
(2,324 |
) |
|
|
(1,589 |
) |
|
|
(5,135 |
) |
|
|
(12,282 |
) |
Net cash used in financing activities |
|
(13,368 |
) |
|
|
(6,062 |
) |
|
|
(56,749 |
) |
|
|
(25,584 |
) |
Net (decrease) increase in cash and cash equivalents |
|
(31,503 |
) |
|
|
53,054 |
|
|
|
(24,962 |
) |
|
|
(16,176 |
) |
Effect of exchange rate changes on cash and cash equivalents |
|
(728 |
) |
|
|
462 |
|
|
|
(636 |
) |
|
|
218 |
|
Cash and cash equivalents, beginning of year |
|
137,609 |
|
|
|
77,460 |
|
|
|
130,976 |
|
|
|
146,934 |
|
Cash and cash equivalents, end of year |
$ |
105,378 |
|
|
$ |
130,976 |
|
|
$ |
105,378 |
|
|
$ |
130,976 |
|
Supplemental cash flow disclosures: |
|
|
|
|
|
|
|
|
|
|
|
||||
Cash paid during the period for: |
|
|
|
|
|
|
|
|
|
|
|
||||
Interest |
$ |
3,310 |
|
|
$ |
3,684 |
|
|
$ |
14,196 |
|
|
$ |
14,456 |
|
Income taxes |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
136 |
|
Acquisitions: |
|
|
|
|
|
|
|
|
|
|
|
||||
Net assets acquired, net of cash acquired |
$ |
— |
|
|
$ |
— |
|
|
$ |
13,675 |
|
|
$ |
52,678 |
|
Working capital adjustment receivable |
|
— |
|
|
|
— |
|
|
|
(145 |
) |
|
|
145 |
|
Contingent consideration |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(7,800 |
) |
Net cash paid for acquisitions |
$ |
— |
|
|
$ |
— |
|
|
$ |
13,530 |
|
|
$ |
45,023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Supplemental disclosure of non-cash investing activities: |
|
|
|
|
|
|
|
|
|
|
|
||||
Capital expenditures included in accounts payable and accrued expenses and other liabilities |
$ |
6,870 |
|
|
$ |
47 |
|
|
$ |
6,870 |
|
|
$ |
47 |
|
Definitive Healthcare Corp.
Reconciliations of Non-GAAP Financial Measures to Closest GAAP Equivalent
Reconciliation of GAAP Operating Cash Flow to Unlevered Free Cash Flow |
|
||||||||||||||
(in thousands; unaudited) |
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Three Months Ended December 31, |
|
|
Year Ended December 31, |
|
||||||||||
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Net cash provided by operating activities |
$ |
8,135 |
|
|
$ |
4,709 |
|
|
$ |
58,196 |
|
|
$ |
41,190 |
|
Purchases of property, equipment, and other assets |
|
(10,901 |
) |
|
|
(594 |
) |
|
|
(12,344 |
) |
|
|
(2,977 |
) |
Interest paid in cash |
|
3,310 |
|
|
|
3,684 |
|
|
|
14,196 |
|
|
|
14,456 |
|
Transaction, integration, and restructuring expenses paid in cash(a) |
|
1,183 |
|
|
|
1,521 |
|
|
|
12,766 |
|
|
|
11,032 |
|
Earnout payment (b) |
|
— |
|
|
|
— |
|
|
|
602 |
|
|
|
— |
|
Other non-core items (c) |
|
(3,311 |
) |
|
|
1,803 |
|
|
|
(936 |
) |
|
|
4,875 |
|
Unlevered Free Cash Flow |
$ |
(1,584 |
) |
|
$ |
11,123 |
|
|
$ |
72,480 |
|
|
$ |
68,576 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
(a) Transaction and integration expenses paid in cash primarily represent legal, accounting, and consulting expenses related to our acquisitions. Restructuring expenses paid in cash relate to our restructuring plans announced in the first quarter of 2024 and the first and third quarters of 2023, along with exit costs related to office relocations. |
|
Reconciliation of GAAP Gross Profit and Margin to Adjusted Gross Profit and Margin |
|
|||||||||||||||||||||||||||||||
(in thousands; unaudited) |
|
|||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Three Months Ended December 31, |
|
|
Year Ended December 31, |
|
||||||||||||||||||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||||||||||||||||||
(in thousands) |
|
Amount |
|
|
% of Revenue |
|
|
Amount |
|
|
% of Revenue |
|
|
Amount |
|
|
% of Revenue |
|
|
Amount |
|
|
% of Revenue |
|
||||||||
Reported gross profit and margin |
|
$ |
47,602 |
|
|
|
76 |
% |
|
$ |
53,419 |
|
|
|
81 |
% |
|
$ |
197,469 |
|
|
|
78 |
% |
|
$ |
203,933 |
|
|
|
81 |
% |
Amortization of intangible assets resulting from acquisition-related purchase accounting adjustments |
|
|
2,483 |
|
|
|
4 |
% |
|
|
2,137 |
|
|
|
3 |
% |
|
|
9,866 |
|
|
|
4 |
% |
|
|
9,044 |
|
|
|
4 |
% |
Equity-based compensation costs |
|
|
171 |
|
|
|
0 |
% |
|
|
267 |
|
|
|
0 |
% |
|
|
839 |
|
|
|
0 |
% |
|
|
1,097 |
|
|
|
0 |
% |
Adjusted gross profit and margin |
|
$ |
50,256 |
|
|
|
81 |
% |
|
$ |
55,823 |
|
|
|
85 |
% |
|
$ |
208,174 |
|
|
|
83 |
% |
|
$ |
214,074 |
|
|
|
85 |
% |
Reconciliation of GAAP Net Loss to Adjusted EBITDA |
|
||||||||||||||||||||||||||||||
(in thousands; unaudited) |
|
||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Three Months Ended December 31, |
|
|
Year Ended December 31, |
|
||||||||||||||||||||||||||
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||||||||||||||||||
|
Amount |
|
|
% of Revenue |
|
|
Amount |
|
|
% of Revenue |
|
|
Amount |
|
|
% of Revenue |
|
|
Amount |
|
|
% of Revenue |
|
||||||||
Net loss and margin |
$ |
(84,717 |
) |
|
|
(136 |
)% |
|
$ |
(13,362 |
) |
|
|
(20 |
)% |
|
$ |
(591,446 |
) |
|
|
(235 |
)% |
|
$ |
(289,627 |
) |
|
|
(115 |
)% |
Interest expense, net |
|
303 |
|
|
|
0 |
% |
|
|
125 |
|
|
|
0 |
% |
|
|
245 |
|
|
|
0 |
% |
|
|
1,559 |
|
|
|
1 |
% |
Income tax (benefit) provision |
|
(5,895 |
) |
|
|
(9 |
)% |
|
|
1,175 |
|
|
|
2 |
% |
|
|
(42,299 |
) |
|
|
(17 |
)% |
|
|
(18,553 |
) |
|
|
(7 |
)% |
Depreciation & amortization |
|
13,132 |
|
|
|
21 |
% |
|
|
13,001 |
|
|
|
20 |
% |
|
|
51,667 |
|
|
|
20 |
% |
|
|
51,750 |
|
|
|
21 |
% |
EBITDA and margin |
|
(77,177 |
) |
|
|
(124 |
)% |
|
|
939 |
|
|
|
1 |
% |
|
|
(581,833 |
) |
|
|
(231 |
)% |
|
|
(254,871 |
) |
|
|
(101 |
)% |
Other (income) expense, net (a) |
|
(9,254 |
) |
|
|
(15 |
)% |
|
|
1,982 |
|
|
|
3 |
% |
|
|
(77,320 |
) |
|
|
(31 |
)% |
|
|
(23,179 |
) |
|
|
(9 |
)% |
Equity-based compensation (b) |
|
7,365 |
|
|
|
12 |
% |
|
|
13,254 |
|
|
|
20 |
% |
|
|
38,085 |
|
|
|
15 |
% |
|
|
48,739 |
|
|
|
19 |
% |
Transaction, integration, and restructuring expenses (c) |
|
2,835 |
|
|
|
5 |
% |
|
|
1,823 |
|
|
|
3 |
% |
|
|
12,225 |
|
|
|
5 |
% |
|
|
11,489 |
|
|
|
5 |
% |
Goodwill impairment (d) |
|
97,060 |
|
|
|
156 |
% |
|
|
— |
|
|
|
0 |
% |
|
|
688,854 |
|
|
|
273 |
% |
|
|
287,400 |
|
|
|
114 |
% |
Other non-core items (e) |
|
(3,311 |
) |
|
|
(5 |
)% |
|
|
1,803 |
|
|
|
3 |
% |
|
|
(936 |
) |
|
|
(0 |
)% |
|
|
4,875 |
|
|
|
2 |
% |
Adjusted EBITDA and margin |
$ |
17,518 |
|
|
|
28 |
% |
|
$ |
19,801 |
|
|
|
30 |
% |
|
$ |
79,075 |
|
|
|
31 |
% |
|
$ |
74,453 |
|
|
|
30 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
(a) Primarily represents TRA liability remeasurement and foreign exchange gains and losses. |
|
|
|
Three Months Ended December 31, |
|
|
Year Ended December 31, |
|
||||||||||
(in thousands) |
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Merger and acquisition due diligence and transaction costs |
|
$ |
919 |
|
|
$ |
1,309 |
|
|
$ |
3,329 |
|
|
$ |
5,419 |
|
Integration costs |
|
|
176 |
|
|
|
129 |
|
|
|
1,115 |
|
|
|
934 |
|
Fair value adjustment for contingent consideration |
|
|
1,460 |
|
|
|
302 |
|
|
|
(1,780 |
) |
|
|
302 |
|
Restructuring charges for severance and other separation costs |
|
|
88 |
|
|
|
83 |
|
|
|
8,097 |
|
|
|
4,679 |
|
Office closure and relocation restructuring charges and impairments |
|
|
192 |
|
|
|
— |
|
|
|
1,464 |
|
|
|
155 |
|
Total transaction, integration and restructuring expense |
|
$ |
2,835 |
|
|
$ |
1,823 |
|
|
$ |
12,225 |
|
|
$ |
11,489 |
|
(d) Goodwill impairment charges represent non-cash, pre-tax, goodwill impairment charges. We experienced declines in our market capitalization as a result of sustained decreases in our stock price, which represented triggering events requiring our management to perform quantitative goodwill impairment tests multiple times in 2024 and during the third quarter of 2023. As a result of the impairment tests conducted in each respective period, we determined that the fair value of our single reporting unit was lower than its carrying value and, accordingly, recorded these impairment charges.
(e) Other non-core items represent expenses driven by events that are typically by nature one-time, non-operational, and/or unrelated to our core operations. These expenses are comprised of non-core legal and regulatory costs isolated to unique and extraordinary litigation, legal and regulatory matters that are not considered normal and recurring business activity, including sales tax accrual adjustments inclusive of penalties and interest for sales taxes that we may have been required to collect from customers in 2024 and in certain previous years, and other non-recurring legal and regulatory matters. Other non-core items also include consulting fees and severance costs associated with strategic transition initiatives, as well as professional fees related to financing, capital structure changes, and other non-core items.
|
|
Three Months Ended December 31, |
|
|
Year Ended December 31, |
|
||||||||||
(in thousands) |
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Non-core legal and regulatory |
|
$ |
(3,438 |
) |
|
$ |
(60 |
) |
|
$ |
(3,439 |
) |
|
$ |
2,370 |
|
Consulting and severance costs for strategic transition initiatives |
|
|
1 |
|
|
|
1,977 |
|
|
|
2,219 |
|
|
|
1,977 |
|
Other non-core expenses |
|
|
126 |
|
|
|
(114 |
) |
|
|
284 |
|
|
|
528 |
|
Total other non-core items |
|
$ |
(3,311 |
) |
|
$ |
1,803 |
|
|
$ |
(936 |
) |
|
$ |
4,875 |
|