Bryan Hunt: Sure. Yes. So the LifePoint contract was essentially fully ramped, almost nearly fully ramped in Q4, Jess, in terms of revenue. And then on the tech-enabled managed services side, so of our total professional services revenue around 35% to 40% is this tech-enabled managed services component across those clients €“ that we’ve shared those DOS clients with the majority of it being this traditional professional services consulting that we’ve had in the past, and then a small amount of implementation revenue as well.
Jessica Tassan: Awesome. Thank you.
Bryan Hunt: Thanks, Jess.
Operator: Thank you. Our next question will come from Daniel Grosslight with Citi. Your line is open.
Daniel Grosslight: Hi. Thanks for taking the question. I just want to make sure I understand the cadence of net new DOS adds in 2023. So if I look at 2022, you likely had around five-ish or so net adds in the second half of the year and call it around three or four life sciences clients roll off. So if I gross that up, I get to around eight or nine-ish gross adds in the second half of 2022. So if I annualize that gross number eight or nine gross adds for 2023, I get to around mid to high-teens, which is higher than your low-double-digit guidance. So, my question is, do you still anticipate having a bit higher than normal attrition this year to get that high to mid-teens gross adds down to low-double-digit net adds? Or is there a bit of conservatism in that guide?
And then a larger question for 2024 and beyond. Are we operating in a new environment where more of your growth is going to come from existing client expansion over net new DOS adds, or is this just a temporary factor of those health system headwinds you’ve laid out?
Dan Burton: Yes. Great questions, Daniel. So I’ll make a few comments and Bryan, please feel free to add as well. So I think you’re general assessment of the way to think about 2022 is directionally a fair assessment of what happened. We did have a very strong comeback in terms of our second half 2022 performance, and Q4 in particular was very strong for the company. So we were encouraged by that. At the same time, I’ve certainly heard over and over again across those 80 plus visits that I’ve had face-to-face with C-suite executives that there still is a very real financial pressure that’s significant. Now among our larger clients, we continue to sense and feel that they want to continue to expand their existing relationships with us.
And that is one of the reasons why longer-term we’re excited about the foundational element of our growth coming from existing client expansion, and we see a lot of expansion opportunity there long-term. So we’re encouraged by that. On the new client side, we do want to recognize that that there is still a different kind of conversation that you have in entering a relationship when the health system client €“ this health system perspective client doesn’t have a track record of success with Health Catalyst than the kind of relationship you can €“ discussion you can have where the relationship is multi-year and we’ve already had a strong ROI and success together. So that is a dynamic. And while we had a strong Q4 and we were encouraged by that.
And while we do anticipate with our larger DOS subscription clients that that those will continue to maintain and expand their relationships with us, as we mentioned in the prepared remarks, we do expect in some of our smaller, more modular client relationships, both on the DOS side and the non-DOS side to experience some level of churn. It’ll still be progress relative to where we were in 2022 but it’ll still be a little elevated relative to what we might expect as a more steady state. And so we wanted to factor that in as well as we thought about a projection or a range of net DOS subscription clients for 2023. Bryan, what would you add?
