Health Catalyst, Inc. (NASDAQ:HCAT) Q4 2022 Earnings Call Transcript

Dan Burton: Thanks, David.

Operator: Thank you. Our next question will come from Jack Wallace with Guggenheim Securities. Your line is open.

Jack Wallace: Hey, thanks for taking my questions. Two here. One, if you could remind us what the mix of for the tech revenue that is for the modular clients only. And then, if I’m thinking about the upsells within the base this year, how much of that is your DOS light and your modular customers applying more modules versus upgrading to more of a full DOS relationship? And I’d imagine it’s probably more the former, but just want to get your take on that. Thank you.

Dan Burton: Yes, thank you, Jack. It was a little bit hard to hear, but I think we €“ I think we got the two questions. So I’ll make a couple comments and Bryan please free to share. So I’ll maybe comment on the second of your questions. In terms of the way we think about the expansion, I would share that we do anticipate some meaningful expansion, especially associated with tech-enabled managed services deals where, like we saw with Carle Health, like we saw with INTEGRIS. We were able to take the tech relationship and move it from a more modular to an all access tech relationship. And that’s definitely a pattern that we want to follow and see some meaningful tech growth from that. There’ll also be in our larger DOS customers, the contribution of those built-in contractual escalators that will continue to add to our growth in technology.

And then we are excited about the opportunity to cross sell among our DOS light customer base as well as our non DOS customer base both at the DOS level and at the apps level. And we are focused there. We are excited about getting better and better at that cross-sell motion. What would you add on?

Bryan Hunt: Yes. Just that on your first question, Jack. So the €“ of our technology revenue, the majority of that technology revenue is related to our horizontal offering, our data platform offering on the technology side. And then we do have, in addition to that kind of platform revenue, application revenue that’s in three main domains. So one is clinical and quality use cases. The second is Pop Health use cases, and the third is our financial empowerment use cases. And so that’s a decent way to kind of proxy for the revenue kind of attribution of those categories where we’re seeing more of the headwind that Dan described is on our clinical and quality offerings, just given there is less of a near-term financial ROI for those offerings.

And as well as a little bit in our Population Health offering around patient engagement, which again is less of a kind of hard dollar savings, while we’re still selling, seeing good demand in terms of the financial empowerment suite.

Jack Wallace: Thank you. That’s helpful.

Bryan Hunt: Jack.

Operator: Thank you. Our last question will come from Scott Schulze with KeyBank. Your line is open.