Definitive Healthcare Corp. (NASDAQ:DH) Q4 2022 Earnings Call Transcript

Ryan Shanahan: Hey guys. This is Ryan Shanahan on for DJ. Congratulations on the quarter and the year. So, given these tighter sales environment, have you noticed, I guess, through RFPs or just word on the street, I guess, greater price competition between less specialized competitors? And is this affecting your win rates at all?

Robert Musslewhite: That’s a great question. And I’d say we haven’t really seen any different pricing that we traditionally have seen. Obviously, everyone — the discount to get a deal done. That’s typical. Business customers always push for the best price but it hasn’t really been a change in the pricing environment. That pricing environment has always had a little bit more competition at the sort of lower end, where people would be looking at substitutes that would be like just a list of people or telephone directories. If they’re not that focused on health care, sometimes that’s good enough for them. In general, people are focused on health care and succeeding in health care and growing in health care. They have to buy Definitive and so we don’t end up getting price eroded for the type of clients that we want to bring in. So, no, that hasn’t been a place that we’ve really seen any big change.

Ryan Shanahan: Okay, great. Thanks. Appreciate it.

Robert Musslewhite: Sure.

Operator: Thank you. Our next question comes from the line of Glen Santangelo from Jefferies. Please go ahead.

Glen Santangelo: Yes, thanks for taking my question. Hey Robert, I just had two. The first is on the enterprise client side. I mean, you grew almost 7% sequentially in the quarter from 3Q. And I was kind of curious if you can give us some color on the split between what percentage of that growth came from like new customers versus organic growth within your existing base, just sort of given all the incremental modules and offerings you now have on the platform. Just trying to get a better sense for where the growth is coming from?

Robert Musslewhite: Sorry. Thanks for the question. I’d say we saw both. I don’t know — I don’t have the exact number on the split and I don’t know if we normally disclose it. But I guess the best answer to your question is we had some very large new business wins that came in, in the quarter that went straight to enterprise. And then upsell. Upsell came in as expected and that generally results in kind of half the enterprise client growth through that as well, maybe a little bit more than half. So, I don’t know the exact mix for you, but we had a healthy performance on both sides of that in terms of getting people up to enterprise.

Glen Santangelo: Okay, perfect. That’s helpful color. Maybe if I could just follow up sort of on the 1Q commentary you made. You said sort of the conditions that you’ve seen in the second half have sort of continued maybe in the first — at least into 2023. And last quarter when we spoke, I think the commentary seemed to suggest that sequentially through the third quarter, things kind of got maybe incrementally weaker. I was wondering if you can give us some maybe sequential commentary on how 4Q, and maybe so far, we have two-thirds of 1Q already done, how things have been trending? Because I think what we’re all trying to get a sense for is maybe, have things sort of stabilized in the current environment as we try to assess either the conservatism or potential vulnerability in your 2023 revenue guidance, just kind of based on where we are now? Thanks.