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

David Larsen: When I look at the dollar-based retention rate guidance of 102% to 110%, if we use the midpoint of that at 6% doesn’t that imply 6% top line growth in 2023 without adding any new clients? And if so, doesn’t that sort of mean that your guidance for 2023 is somewhat conservative? Or what am I missing?

Dan Burton: Yes. Thanks for the question, David. So think of it as a one-year lag where that bookings guidance that we are providing would be where we end 2023 relative to the start of 2023. So that would be a good building block for 2024 growth. That 6% at the midpoint would be the first foundational part of the growth expectation for 2024. And then you add to that the expectation around net new DOS subscription client adds and any in-year revenue growth. But that would be for 2024. And then for building blocks for 2023 growth, you take our dollar-based retention that we just shared, which was 100% with existing clients as a good building block for 2023. Add to that the net new DOS subscription clients that we shared was at a little bit lower starting point because we had a little bit more of those DOS Lite. So more like that $1 million of ARR per client plus some in-year revenue growth to kind of get you to that revenue guide that we shared that’s around that 6%.

Bryan Hunt: Just to add to that, David, in-year revenue component, that last piece that Dan mentioned is a little bit more muted this year, just given like we’ve talked about, we have assumed a heavier weighting of our 2023 bookings towards the back half of the year in the second half with a heavier weighting towards Q4 as well.

David Larsen: Okay. Great. That’s very helpful. And then to the best of your knowledge, are you retaining all of your existing DOS customers? You haven’t like gotten any notice or anything from any of your DOS customers about expectations to convert to a competing platform or anything like that or taking it in-house?

Dan Burton: Yes, we’re pleased, as I mentioned just, just a few minutes ago, after more than 80 face-to-face C-suite visits with our top 100 health system clients, we’re pleased to see, especially with our larger clients that have a more deep relationship with us, that there’s a strong desire to continue to do business with Health Catalyst and to expand with Health Catalyst. Now, as we also mentioned, I think with our smaller more modular even the smaller of the DOS clients, there may be a little bit more of a possibility of churn. And then certainly our non DOS more modular clients, they’re even more modular. We expect some churn as it relates to the financial pressures that they’re under. But those larger DOS subscription clients we’ve been pleased to see that they are continuing and even and excited about expanding the relationship with Health Catalyst.

David Larsen: Okay, great. Thanks very much.