Definitive Healthcare (DH) Earnings Transcript

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Date

Feb. 26, 2026 at 5 p.m. ET

Call Participants

• Chief Executive Officer — Kevin D. Coop
• Chief Financial Officer — Casey Heller

Takeaways

• Total Revenue -- $61.5 million, a 1% decrease year over year, and above the high end of internal guidance.
• Adjusted EBITDA -- $18.1 million in Q4, representing a 29% margin, 120 basis points higher than prior year, and $1.1 million above guidance range.
• Subscription Revenue -- $58.5 million, down 3% year over year, or down 7% excluding data partnership contributions.
• Professional Services Revenue -- Up 49% year over year, driven by both traditional analytics and increased digital activations activity.
• Adjusted Gross Profit -- $50.2 million, flat versus prior year, with an adjusted gross margin of 82%, expanding 100 basis points year over year due to temporary lower COGS.
• Unlevered Free Cash Flow -- $2.5 million in Q4; $54.9 million for the trailing twelve months.
• Gross Dollar Retention -- Improved by approximately 2 percentage points year over year, with enterprise accounts as the primary driver.
• Net Dollar Retention -- Declined by a couple of points, attributed to fewer upsell opportunities.
• Deferred Revenue -- $99 million at quarter end, up 6% year over year.
• Total Full-Year Revenue -- $241.5 million, a 4% decline year over year.
• Full-Year Adjusted EBITDA -- $70.4 million, with a 29% margin.
• Full-Year Operating Cash Flow -- $53.8 million, an 8% decrease compared to prior year, reflecting the revenue decline.
• Adjusted EBITDA to Unlevered Free Cash Flow Conversion -- 78%, down 14 points year over year; 87% excluding one-time CapEx activity.
• Capitalized Software Development Spend -- $6 million for the year, up $5 million versus the prior year.
• Q4 Integrated Customer Additions -- Over 60 new integrated customers added in Q4, totaling 160 for the full year.
• Customer Mix -- Growth in diversified and provider segments in Q4, while life sciences faced upsell and downsell pressure.
• Q1 2026 Guidance -- Revenue expected at $54 million to $56 million, representing a 5%-9% decline year over year; adjusted EBITDA guidance is $12 million to $13 million, for a 22%-23% margin.
• Full-Year 2026 Guidance -- Revenue expected at $220 million to $226 million, or a 6%-9% decline; adjusted EBITDA projected at $53 million to $58 million (24%-26% margin), with flat sequential revenue through the year, and a slight uptick in the second half.
• Current Remaining Performance Obligations -- $165 million, flat quarter over quarter, but down 12% year over year.
• Strategic Priority—Claims Data Remediation -- Claims data volumes were restored to above historical levels, following industry-wide disruption over the past 12-18 months.
• Operational Efficiency -- Integration time for customers shortened about 25% through automation efforts in 2025.
• AI and Product Roadmap -- GenAI integration for the flagship Vue platform planned to launch next quarter, targeting increased upsell and cross-sell opportunities in 2026.
• Digital Activation Business -- Nearly 30 agencies signed in 2025, with over a third generating bookings; outperformed internal activation business growth targets.
• Contract Portfolio Duration -- $85 million of current remaining performance obligations now extend beyond 2026, $15 million lower than prior year, reflecting shift toward more one-year contracts.

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Risks

• Casey Heller said, "For the full year 2026, we expect revenue of $220 million to $226 million, for a 6% to 9% decline year over year," citing ongoing revenue pressure and negative operating leverage from primarily fixed costs.
• Current remaining performance obligations declined 12% year over year, and total remaining performance obligations declined 18% year over year, reflecting fewer multi-year commitments and lower average contract duration.
• Casey Heller noted, "The sequential decline in revenue reflects that the improvement in renewal rates in Q4 only modestly improved year over year," indicating slow momentum in retention.
• Unlevered free cash flow conversion dropped to 78% for 2025, down 14 points year over year, due to one-time CapEx spend, and lower revenue, with cash generation remaining but at a lower conversion rate.

Summary

Definitive Healthcare Corp. (NASDAQ:DH) reported Q4 revenue and adjusted EBITDA above internal guidance, despite a 1% revenue decline year over year. Management completed the remediation of claims data disruptions, restoring volumes to above historical levels and improving retention trends across key client cohorts. Q4 benefited from record professional services growth and strong digital activation bookings, while integration efforts led to improved implementation speed and higher renewal rates among integrated customers. Looking ahead, the company issued guidance for continued revenue contraction in 2026, paired with lower margins due to fixed costs and the fading of one-time expense credits. Ongoing product innovation, including accelerated GenAI integration, is central to future cross-sell and upsell efforts, but near-term guidance reflects only modest expected improvement in performance metrics.

• Management specifically called out that "gross dollar retention improved two points year-over-year," and that diversified and provider segments "printed growth in Q4," in contrast to continued upsell pressures in life sciences.
• The new claims data infusion, and fall expansion pack are expected to provide further opportunity for upsell as the year progresses, with guidance incorporating only cautious near-term uplift assumptions.
• Kevin D. Coop described the AI and GenAI initiative, stating, "As we integrate GenAI into our products, beginning with our flagship Vue platform next quarter, our deep relationships with approximately 2,300 customers provide integration points for rapid deployment."
• Casey Heller emphasized that ongoing improvements have yet to fully benefit 2026 financials, saying, "based on the timing of when these changes will be implemented, we will not see the full impact of these investments in 2026."
• There was a material shift toward shorter contract durations, affecting recognized performance obligations, and near-term visibility into multi-year revenue streams.

Industry Glossary

• Claims Data: De-identified medical billing records used to analyze healthcare provider activity, essential for sales targeting and analytics.
• GenAI: Generative artificial intelligence capabilities integrated into data platforms to automate analytics and workflow tasks.
• Population Intelligence Platform: Definitive Healthcare Corp.'s solution for healthcare segmentation and patient volume analytics.
• CRPO: Current Remaining Performance Obligations, representing the value of contracted but undelivered services expected to be recognized as revenue within 12 months.

Full Conference Call Transcript

Kevin D. Coop: Thank you, Jonathan, and thanks to all of you for joining us this afternoon to review Definitive Healthcare Corp.'s fourth quarter 2025 financial results. On today's call, I will provide highlights from our fourth quarter performance, review the operational progress we have made in 2025, and outline our key strategic priorities for 2026. Let me begin by reviewing our financial results for the fourth quarter, which were at or above the high end of our guidance ranges on both the top and bottom line. Total revenue was $61.5 million, down 1% year over year. We outperformed our revenue expectations on both subscription and professional services revenues.

Adjusted EBITDA was $18.1 million, representing a margin of 29%, which was $1.1 million above the high end of our guidance. Our continued strong profitability performance is a testament to the underlying power of our business model and our ongoing expense discipline. We continue to generate solid cash flow, delivering approximately $55 million of unlevered free cash flow for the trailing twelve months. Our financial performance for 2025 compares favorably to the initial guidance we provided to investors last February. Setting appropriate expectations and delivering consistent financial results with transparency was one of the promises I made to investors when I became CEO, and I am pleased that we were able to meet that objective in 2025.

I would now like to review our operational performance for the year, supported by the four strategic pillars of data differentiation, integrations, customer success, and innovation that we laid out for investors at the beginning of 2025. Before going into more detail, I do want to emphasize that we have made strong, meaningful progress in each area and can confidently report that as we enter 2026, we have a much stronger foundation for the future. While we are seeing improvements in all areas of focus, the expected benefits from these improvements will take time to be fully realized, and that improvement trajectory is reflected in the 2026 guidance that Casey will review later.

Starting with data differentiation, we delivered an important milestone in the second half of the year with the release of our fall expansion pack, which included bringing online a new claims data source. As you know, the claims market underwent a significant data disruption over the past twelve to eighteen months, and with these releases, we have now restored our claims data volumes to above historical levels. Continuing to expand and strengthen our data assets with new elements that are not easily sourced remains foundational to our strategy. For example, we recently strengthened our core reference and affiliation data for healthcare executives and healthcare providers by adding mobile phone data.

Overall, I am pleased with the progress we made in remediating the claims data market disruption, expanding our core data assets with new elements, ensuring our focus remains on maintaining our data differentiation and quality, and expanding the value of our data over the course of 2025. This will remain a foundational priority going forward into 2026 and beyond. Our second pillar focused on seamless integrations. A core part of our strategy is ensuring it is as simple as possible for customers to utilize our datasets, proprietary software, and analytical capabilities.

Being an open platform is a foundational tenet of our product strategy, and we have successfully deepened the number of our integrations in 2025, including Snowflake, Databricks, and the recent introduction of an important HubSpot integration in Q4. We launched a new pilot program with physician data in Salesforce, which we expect to be generally available this quarter, and we have been focused on increasing the automation of our integrations, which has dramatically shortened the time to integrate by about 25% over the course of 2025. This improves customer satisfaction and gets our data into the hands of our customers faster.

Ensuring ease of integration to our customers' systems of record and systems of insight effectively improves retention, as we know that those customers that are integrated will renew at higher rates than those that are not integrated. We are already seeing examples of this in action, including an important win in Q4. A large nonprofit academic-affiliated integrated health system operating multiple hospitals, outpatient clinics, and specialty service lines selected our Population Intelligence platform to enable more targeted segmentation within the region and surrounding markets. They needed to drive patient volumes across key inpatient and outpatient service lines while capturing additional market share.

A core pain point was the significant internal effort required for data mining, layering, modeling, and assumption-based analysis, which limited their ability to align resources around broader growth and strategy initiatives. Our seamless approach to integration and our agnostic capabilities that enabled flexible access to their systems were critical to this win, where we delivered clean, enriched, and actionable data directly into their existing workflows, allowing them to hydrate records and uncover incremental patient leads more efficiently. Turning to our third pillar, customer success, I am pleased with the improvement we have made throughout the year to improve customer satisfaction, ease of use, and value-added services that will increase the stickiness of our solutions.

While we will always be looking to iterate and improve our processes, I am confident that the steps we took in 2025 have built a strong, durable, and repeatable customer engagement process. Retention improvement is more than just a customer success effort, though. Product development, data quality, and GTM execution all play a significant role. The realignment of our focus across all functional groups working in service to a shared goal of improving the customer journey, including how they are compensated, is making a difference. Importantly, we have seen retention rates improve year over year for each of the past three quarters, including with the larger cohort of renewals we have in the fourth quarter.

The impact of our coordinated customer-facing effort can be seen where our newly integrated commercial teams collaborated on an early risk identification, which proved critical in converting what was forecast as a churn risk into a successful multiyear renewal. This example shows how proactive focus on addressing customer concerns will deliver tailored solutions that restore confidence in service of retention, not individual objectives. The integrated team approach with sales, support, and success working together with a shared goal of producing happy customers benefits both the customer and our own retention goals. These changes are complex and took the early part of the year to put into effect, with the impact showing improvement in the second half of the year.

Intuitively, the improved sales, onboarding, training, and success process will begin to show up as those customers experience the benefits in time. Therefore, we expect that the improved trajectory that we can already see will continue to accelerate, especially as the impact begins to show up in the new business we are signing now and starts renewing later this year without the legacy impact of prior disruptions from the claims situation or past organizational miscues. Finally, we had a notably successful year delivering against our fourth pillar, innovation and our focus on digital engagement. This pillar has been focused on several distinct sub-areas.

The first is digital activations, which enables customers to combine our data with other digital assets to generate actionable customer engagement. Over the course of the year, we signed nearly 30 agencies and already have more than a third of them actively generating bookings for Definitive Healthcare Corp. As a reminder, there is a natural lag between signing up an activation customer or partner and when they begin generating revenue. We had ambitious growth plans for our activation business in 2025, and I am pleased to report that we outperformed this target.

We are also tracking excellent progress building from the agency activation channel, and we expect our early successes in this channel will make it easier to directly sign customer activation programs in 2026. Second is partnerships, where we are building a dedicated partnership team that will help customers seeking syndication rights and new distribution channels. One example of this type of partnership was launched last quarter with Bombora and their curated ecosystem audiences. This platform helps distribute off-the-shelf and fully customizable audiences for activation on a variety of platforms such as The Trade Desk, Yahoo DSP, Reddit, or data marketplaces like LiveRamp.

It extends the reach of our specialized intelligence and addressable audiences to the customer bases of these platforms that need to access comprehensive views of the healthcare organizations and professionals across the entire ecosystem. In addition, we see AI as a core enabling technology for growth that Definitive Healthcare Corp. can harness with several important incumbent advantages. First, our proprietary data is our powerful foundation. Definitive Healthcare Corp. is a data company first. AI presents a way to retrieve, analyze, and harness data. Our advantage is the proprietary data itself, much of which is not publicly available, as well as within our data curation system and processes.

An AI model is only as good as the data it ingests, and our advantage is taking today's high-performing AI models and applying them to our domain-specific proprietary and differentiated data. Second, in addition to the proprietary nature of our data, the longitudinal aspect of our data from over fifteen years of intensive accumulation cannot be recreated. This data is critical to a customer that needs to understand how the healthcare ecosystem and its affiliations have changed over time. Third, contextual expertise. In-depth domain expertise is required to effectively operate as a trusted partner in healthcare, and our customers rely on us for that expertise. Competing in healthcare is complex.

To provide effective AI workflow and analytics, it is essential to have that deep understanding of the complex relationships among the healthcare providers and their corresponding use cases, which require years of expertise to develop. Contextual relevancy and accuracy is required by this industry. The importance is evidenced by the fact that 60% of our largest life sciences customers leverage our advanced analytics expertise in addition to our data, and half of our top 20 customers across all verticals rely on contextual domain expertise and advanced analytical insights. Finally, embedded customer relationships. As we integrate GenAI into our products, beginning with our flagship Vue platform next quarter, our deep relationships with approximately 2,300 customers provide integration points for rapid deployment.

Because our pricing and packaging strategy is based on value, not seats, the increased capabilities unlocked with GenAI will drive both new use cases and adoption of new offerings such as digital activation. Almost 50% of our customers already integrate our data directly into their systems of insight and record, via CRM connectors, APIs, or lake-to-lake, and our next-gen SaaS platform will offer another accelerant to our integrated strategic focus area, which we know drives increased retention. Overall, we have accomplished much in 2025, and I want to thank the entire Definitive team for delivering these improvements and advancing our strategy. In 2026, we expect to build upon the progress we made last year.

The signs of success, especially in the second half of the year, have reinforced our belief that we have the right strategy in place. As we look ahead to 2026, our key priorities remain unchanged from our 2025 pillars. As noted above, different pillars are in different phases of maturation and delivering success, but as the year unfolds, we will be focused on investing incremental dollars in those areas showing the most promise.

Given the success ramp we are seeing, we anticipate there will be opportunity to accelerate digital activation with our customers, extend our partnership and distribution efforts, and we have confidence that our GenAI enablement of Vue will provide new and incremental upsell and cross-sell opportunities later this year. Our primary strategic objective remains that of returning the business to consistent revenue growth. The fundamental to that objective is improving retention, and we remain confident that the steps we are taking can and will deliver that outcome over time. While the macro environment remains challenging, we will continue to focus on those areas we can control, and we will be making the investments necessary to steadily improve operational performance.

With that, I will now turn the call over to Casey to discuss our financial results in greater detail.

Casey Heller: Thank you, Kevin. In all my remarks, I will be discussing our results on a non-GAAP basis, unless otherwise noted. As Kevin mentioned, 2025 was an important year for Definitive Healthcare Corp. that saw tangible improvement on our four strategic pillars and put us in a better position to meet our long-term objectives. I am pleased by our ability to close 2025 by outperforming on both revenue and adjusted EBITDA while executing against those core strategic objectives. This reflects the continuation of our disciplined approach to managing the business while we have continued to face top-line pressures in a dynamic macro environment.

In the fourth quarter, we delivered revenue of $61.5 million, down 1% year over year, adjusted EBITDA of $18 million, reflecting a 29% margin and expanding approximately 120 basis points year over year, and adjusted net income of $8.6 million, resulting in $0.06 of non-GAAP earnings per share in the period, all of which were at or above the high end of our guidance for the quarter. We also delivered $2.5 million of unlevered free cash flow in the quarter and $54.9 million on a trailing twelve-month basis. Turning to our results in more detail, revenue of $61.5 million was above the high end of our guidance range and represents a 1% decline year over year.

Subscription revenues of $58.5 million declined 3% year over year, or declined 7% excluding data partnership contributions, and were modestly ahead of our expectations for the quarter. We did again see modest improvements in our Q4 renewal rates year over year, but not to the extent we had hoped. Professional services revenue in the quarter was strong, up 49% year over year, and outperformed our expectations. This was a combination of delivering on traditional analytics engagements as well as a ramp-up in our digital activations activity. Adjusted gross profit in the fourth quarter was $50.2 million, which was flat from Q4 2024.

As a percentage of revenue, the adjusted gross profit margin of 82% expanded about 100 basis points year over year, driven by some short-term benefit to our cost structure in the period as we had removed one data source from product but were still in the process of onboarding an additional source that will come online in the next month or two. This temporarily reduced COGS in Q4. Adjusted EBITDA was $18 million and reflects a 29% margin, which, as I mentioned, expanded about 120 basis points versus 2024 and was above the high end of our guidance, boosted by the revenue beat.

Looking quickly at our full-year results, total revenue was $241.5 million, a 4% decline year over year, adjusted EBITDA was $70.4 million, a 29% margin, and unlevered free cash flow was $54.9 million. In terms of operating metrics, we saw gross dollar retention improve about two points year over year, reflecting the initial impact of the actions we have been taking to stabilize the business. At the same time, net dollar retention declined due to the ongoing pressure in our upsell motion. As we discussed throughout the year, the lower upsell opportunities put downward pressure on NDR in 2025.

We are confident that the combination of the actions we have taken to restore claims volume and the innovation in product we will be releasing in Q2 will provide exciting new upsell and cross-sell opportunities that will positively improve net dollar retention in 2026. Turning to cash flow, our business continues to generate strong free cash flow due to our high-margin model, upfront billing, and low recurring CapEx requirements. Operating cash flows for full-year 2025 were $53.8 million, down 8% from the prior year, reflecting the revenue decline but partially offset by strong working capital performance, and we generated $54.9 million of unlevered free cash flow in 2025.

Our conversion rate of adjusted EBITDA to unlevered free cash flow was 78%, which is down about 14 points year over year. Adjusting for some one-time CapEx spend that largely occurred in Q1 2025, the conversion rate is 87% over the last twelve months. This cash generation provides flexibility to continue investing in growth, as noted by the uptick in capitalized software spend, as we restarted our organic innovation engine in 2025. As a result of that, we capitalized about $6 million of software development spend, a $5 million increase over the prior year. At the end of Q4, deferred revenue of $99 million was up 6% year over year, and total remaining performance obligations declined 18% year over year.

Current remaining performance obligations of $165 million were flat quarter over quarter but declined 12% year over year. As mentioned last quarter, we have now lapped the initial contributions from our data partnership agreement, which explained the favorable year-over-year CRPO growth that we printed exiting Q3. There are other dynamics impacting CRPO as well. In 2025, we saw a greater percentage of our new logo additions sign one-year versus multiyear commitments than in prior years. This impacts both RPO as well as CRPO. If you went back to the end of 2024, there was approximately $100 million of CRPO on our books related to commitments that extended beyond 2025. As we enter 2026, this amount is $85 million.

This $15 million difference reflects the lower average duration of our contract portfolio entering the year and is a drag to CRPO growth. Before providing guidance on Q1 and the full year, I would like to take a moment to frame where we believe the business is as we enter 2026. We made significant progress in 2025 across each of our strategic priorities and are confident we have set a solid foundation for the business to return to growth in the future. However, as Kevin mentioned, based on the timing of when these changes will be implemented, we will not see the full impact of these investments in 2026. This is reflected in our guidance for the year.

Now moving to guidance for Q1, we expect total Q1 revenue of $54 million to $56 million, a revenue decrease of 5% to 9% year over year compared to Q1 2025. The sequential decline in revenue reflects that the improvement in renewal rates in Q4 only modestly improved year over year. As a reminder, a substantial portion of our yearly renewals occur in this timeframe. Also keep in mind that there will be a partial period benefit to growth this quarter from the data partnership that began generating revenue during Q1 2025.

Taking these factors into account, in Q1 we expect adjusted operating income of $9.5 million to $10.5 million, adjusted EBITDA of $12 million to $13 million, or a 22% to 23% adjusted EBITDA margin in Q1, and adjusted net income of $4 million to $5 million, or approximately $0.03 per diluted share on 143.2 million weighted average shares outstanding. For the full year 2026, we expect revenue of $220 million to $226 million, for a 6% to 9% decline year over year.

For the full year, we expect total revenue dollars to be roughly flat sequentially through the year, with a modest uptick in the second half relative to the first half, and we have continued to proactively manage our cost base while making targeted investments in growth areas. From a non-GAAP profitability perspective, the largely fixed nature of our costs means that most of the revenue decrease will flow through and create negative operating leverage. We expect sales and marketing expense of 32% to 33% of revenue, development expense of 12% to 13% of revenue, and G&A expense of 12% to 13% of revenue.

We expect development expense to be modestly higher year over year as we make targeted investments for growth, while we expect to see sales and marketing as well as G&A expense reduce year over year as we drive efficiencies across support functions in each area. Translating that into dollars, in 2026 we expect adjusted operating income of $41.5 million to $46.5 million and adjusted EBITDA of $53 million to $58 million, for a full-year margin of 24% to 26%. This guide reflects our ongoing commitment to maintaining strong margins while investing in our key growth areas.

The decline from 2025 levels is due to a combination of ongoing pressure on revenue and more than a point of impact from the one-time expense credits we recognized in 2025 that will not repeat this year. Adjusted net income is expected to be between $21 million to $26 million, and earnings per share are expected to be $0.14 to $0.17 on 145.4 million weighted average shares outstanding. And while we do not explicitly guide on unlevered free cash flow, it is important to note that we do expect to see adjusted EBITDA to unlevered free cash flow conversion improving by several points in 2026 relative to 2025, given lower planned CapEx spend.

We are confident that we have the right strategy and are committed to continuing to make progress against our key initiatives that, over time, we expect will improve customer retention, return Definitive Healthcare Corp. to growth, and drive long-term shareholder value. And with that, we will now open for questions.

Operator: If you would like to ask a question, please press 1 on your phone now. You will be placed into the queue in the order received. Again, 1 for a question, and we will pause briefly to form our queue. Our first question today comes from Craig Hettenbach of Morgan Stanley.

Jay (for Craig Hettenbach): Hi, this is Jay on for Craig Hettenbach. Thanks for taking my question. I was just wondering, can you provide a quick update on the demand environment across your three end markets? And then any other common themes you can share from the large cohort of renewals from December and January?

Kevin D. Coop: Sure. Let me start with the integration strategy and the renewal impact that we are seeing come through our focus on churn improvement. As we have noted previously, a significant portion of our retention trends were impacted by the industry-wide claims disruption, and we are confident that the actions that we took to remediate the claims data throughout the year will drive improvement in our performance as we move into 2026. As we look at the business from a cohort perspective, the first cohort of renewals, excluding the 2024 disruption cohort, was posted this last quarter in Q4.

That performance on a business sold post Q1 2024 basis and up for renewal through 2025 shows about a 200 basis points improvement over the previous comparison quarters, even extending back to 2022. This indicates not only is our strategy that is focused on data quality, integrations, and improved customer experience working, we are now very confident that it will continue to build in 2026, and it gives us support for confidence in our plan.

Casey Heller: The only other component that I would layer on there is that we did see, as I mentioned, improvement in our renewal rates in Q4 year over year. They were modest, and what we are seeing in January is fully incorporated into our 2026 guide. More broadly in the demand environment, there is no significant change, but certainly a couple of green shoots that we are continuing to monitor. We have started to see sales cycles condense, as I think Kevin mentioned earlier in the prepared remarks. Those are some of the encouraging signs that pair a bit of what we are starting to monitor from a macro perspective with some of our stronger own sales execution.

Kevin D. Coop: One other data point which I think would be helpful. We have been focused on integrations, as we know that integrated customers will renew at a higher rate than those that are not. I mentioned that in the prepared remarks. In Q4, we added over 60 integrated customers. To give you perspective on that, we added 160 for the full year. We are seeing the integration focus starting to accelerate.

Our commercial teams are promoting that because it is good for the customer as well as good for us, and we are very confident that performance in the fourth quarter, which often is a more difficult quarter to get moving, was actually very positive, especially in comparison to the full year.

Operator: From Needham, we have Ryan McDuff.

Matt Shea (for Ryan McDuff): Hey, this is Matt Shea on for Ryan. I appreciate you taking the question. I would love to double-click on the last question. Anything you can parse out between end markets as you went through the renewal cycle—any end markets that maybe surprised you either positive or negative? And then I know in the past, downsells have been more of an issue in the life sciences and pharma end market, so I would love an update on how that end market in particular is doing.

Casey Heller: Let me give you a little bit of color as far as what we are seeing in terms of the renewal profile across the business. 2025 for us was a year we were really focused on stabilizing the business, and I think that we were able to accomplish that across a number of metrics. If we look at gross dollar retention, gross dollar retention improved two points year over year. That was largely driven by our enterprise customers, which are strongly weighted towards the life sciences space, given the size of the customers that we tend to deal with within life sciences. That is an encouraging component.

But exactly as you mentioned and as we have continued to talk about, we were seeing the flip side of that in terms of net dollar retention, which declined a couple of points year over year due to fewer opportunities around upsell and cross-sell. As we stand here today entering 2026, we are in a much stronger position. We remediated the claims data disruption by bringing on a new data source late in 2025. We have an additional data source ready to come online in the next couple of weeks to further add to our claims volume.

Kevin touched on some of the additional new data that we have added into product as well, plus more broadly restarting our overall product innovation engine. We have a lot more tools in the kit as we stand here at the start of 2026 than we did at the start of 2025, and that gives us confidence to continue to build upon the stabilization in gross dollar retention and start to build back net dollar retention improvement into 2026.

Matt Shea (for Ryan McDuff): Maybe if we think about the inputs to the growth outlook for 2026—I know understanding churn is still a topic—but if I assume customer count declines in the 6% to 7% range like it did in 2025, to get to the midpoint of the 2026 guidance, I have to then assume year-over-year declines in revenue per customer. Despite the downsell pressure you have experienced in the last year or two, you have been able to consistently grow ARPU through that headwind. Help us reconcile that. Is there more churn in store for 2026 than 2025? Or is it more that the downsells have finally reached the point where we should start to expect ARPU declines?

Casey Heller: I think there is an element here that over the last couple of years we have continued to put more focus on our larger enterprise accounts. That is still very much aligned to our strategy, but there is also a mix element. Diversified and provider are smaller than life sciences accounts. We are actually growing in diversified and provider, and both of those printed growth in Q4. So we have 60% of the business that has returned to growth, which is really encouraging for us.

I think what you are capturing there is less of a churn issue and more a business mix element of the diversified and provider pieces of the business returning to growth and us continuing to add new customers there that typically come in at a lower dollar value than some of the larger life sciences clients.

Operator: Next, we will hear from Brian Peterson of Raymond James.

Brian Peterson: Maybe just to start on AI. I wanted to understand how much of your customer conversations are impacted by AI and what you would be able to deliver through your data assets. I can also see scenarios where AI might be distracting or capturing share of budget away from traditional vendors. I would love to understand how you are thinking about the net impact of AI so far, at least through 2025.

Kevin D. Coop: The helpful aspect of our solution set and the type of use cases that we sell into is that it is very healthcare-specific workflow. These are purpose-built solutions, and the data is collected in a way to be delivered in these purpose-built workflows. It is around sales and marketing intelligence for contact-level targeting and territory design, population and condition modeling, market sizing, medical affairs planning, key opinion leader mapping related to influence patterns and how that evolves over time, and automating risk related to things like legal affairs. The types of use cases that we are solving are not really optional. They are very much around commercial execution, product, or strategy.

Then you look at it from the standpoint I mentioned in my prepared remarks: AI modeling is only as good as the data it can mine, and we know that our differentiated data, founded on our best-in-class reference and affiliation dataset, gives us a clear advantage. The conversations we are having are more around how we apply and harness AI as it relates to the existing use cases and workflows in healthcare, which is why we believe AI is a competitive advantage and a tailwind as opposed to a headwind for us today.

Brian Peterson: Got it. Thanks, Kevin. I appreciate all the comments on the NDR and the customer dynamics. Are you able at this point to say when you think NDR may hit a bottom? It is good that you have seen gross revenue retention improve. When should that KPI inflect?

Casey Heller: It is fully our expectation that we are able to improve NDR within 2026, so we view 2025 as the bottom. There is a lot of work that we did in 2025 that really positioned us to be starting 2026 on a stronger footing from a product innovation standpoint, as well as the work we have done to add additional data, remediate the claims data issue, and enhance components within our crown jewel—our reference and affiliation data.

Kevin D. Coop: To add on, the contextual expertise is why we see AI as a tailwind. As we bring the GenAI layer to what is already a highly effective front-end platform, it democratizes use. While the platforms are very powerful, they do require a certain level of expertise and super users to access. What we are doing this quarter will allow more users to have more access and unlock more value. Because we are value-based pricing, not seat-based, unlocking more value will be helpful, especially as we focus on net dollar retention in addition to gross dollar retention.

That will unlock more cross-sell, upsell, and value as we delight our customers with more value from the products and platforms that we already have.

Operator: Our next question comes from Jared Haas of William Blair.

Jared Haas: Thanks for taking the question. Maybe I will follow up on that point related to NDR. I appreciate the underlying drivers that give you confidence that 2025 can mark the bottom. I just wanted to put a fine point on whether you are planning any refinement in your go-to-market specifically targeted towards the sales motion to drive better upsells as well, in addition to the product innovation.

Kevin D. Coop: Yes. Think of it in five prongs. First, we continue to have extremely valuable, differentiated data that improves our customers' business performance. Second, we are investing to develop purpose-built solutions on top of our solutions with AI, which will make it easier for customers to create value from our data. Third, we have completed our go-to-market and customer success integration, which allows us to impact the business positively with higher run rates and shorter sales cycles. With a consolidated commercial organization, we are seeing greater alignment, which is showing up in radically improved implementation timelines that have decreased by over 25% year to date.

Fourth, with our extending AI investments in product, data, and end-user development within our 2026 product roadmap—which is already reflected in the financials that Casey took you through—accelerated investment will start to produce real tangible outcomes as we bring these innovations to market starting later this quarter. Finally, our integration strategy, which we know is having a positive impact—you can see we had 60 integrations in Q4 versus 160 for the full year—continues to help. When we look at retention rates, integrated customers’ rates are only going up.

We should not underestimate the value we have as an agnostic platform that integrates with customers’ systems of insight and systems of record regardless of what those are and often in multiple ways, whether lake-to-lake, via direct APIs, or directly through our state-of-the-art, soon-to-be AI-enabled workflow products.

Jared Haas: As my follow-up, you mentioned the fall expansion pack and the new claims data source in Q4. When you have big product refreshes or updates like that, how quickly are you able to communicate those upgraded features to the market? How much did that factor into the year-end renewal discussions in the December/January timeframe? Is that more of an incremental tailwind in 2026 selling discussions?

Casey Heller: That is an excellent question. Given the timing of the fall expansion pack—it came in at the start of Q4—most of our customers have already made most of their renewal decisions largely 90 days out. I do not think we are seeing the impact and benefit from that showing up in Q4 renewals yet. We will learn more about the extent that it boosts renewals in Q1 and Q2. Our guidance assumes a modest improvement in renewal rates, but there is still opportunity we will continue to monitor based on how quickly we see additional uplift and impact on renewals. It is not just renewals.

Historically, we did a really good job of selling claims as an upsell and cross-sell motion into our customers. We did not really do that last year because we needed to address the data disruption. Now that has been addressed, that opens up that avenue for us as well. That will be a boost to us in 2026. There is a component of it baked into our 2026 guide, and we will monitor results for more potential upside and talk about that more as the year goes on.

Operator: Once again, everyone, press 1 for a question. Next up, we have George Hill of Deutsche Bank.

George Hill: Good afternoon, and thanks for taking the questions. I have two quick ones. Casey, you talked about the NDR bottoming in 2025 and improving in 2026. Are you willing to talk about order of magnitude as you think about the recovery? Kevin, on the claims data, can you talk about what amount of enterprise revenue the claims data underpins across product revenue? Is the disruption enough to consider that product significantly impaired, or is there a reintroduction process? Are you able to go back to market with the patches you have made?

Kevin D. Coop: I get the intent. Philosophically, the claims data issue depends on the customer because it was not universally spread evenly across the country. When you have, say, 30% of records that suddenly evaporate from the market, and if you have entitled your customers to expect a certain number of records and now there is 30% less, regardless of the reason, there is going to be pressure on right-sizing and downsell pressure at renewal, or customers want to be made right. Remediating the claims data was twofold. First, we needed to get the actual counts back up to historical or better-than-historical averages, which is where we are now—above historical averages. Second, it gave us the opportunity to increase quality.

The single biggest reason our customers select Definitive Healthcare Corp. is because they rely on us for accuracy and quality. Our data needs to be as pristine and accurate as possible. Claims that had been cross-sold effectively in earlier years created dissatisfaction even if the direct revenue component was less, because it can impair perceptions. Remediating both volume and quality at the same time was very important, and we are claiming “job complete” on that. We feel very good about it, and it is starting to show up in the green shoots going forward.

Casey Heller: As far as what is assumed in our guide around NDR, it is a modest improvement—it's a couple of points. We will monitor as we go through the year to show if we are on track for that or if there is opportunity to do better. We are confident in being able to deliver a couple of points of improvement on an NDR basis for 2026.

Operator: Next, we have Jeff Garro of Stephens Incorporated.

Jeff Garro: Good afternoon. Thanks for taking the question. I want to ask about renewals and sales activity in the life sciences end market. You mentioned positive activity in December year over year, but we have heard from others that some life sciences companies were distracted around December as they negotiated most favored nation pricing agreements with the administration. To what extent did you see that, and what can you tell us about pipeline development in the first 50 days or so of 2026 as we get past year-end 2025 and look forward, as there is more budget certainty for large pharma?

Casey Heller: Around the dynamics we have seen in life sciences, there has not been a ton of change from what we talked about all year. In Q4, there was still pressure around lack of upsell activity. But we talked about gross dollar retention improving about 200 bps at a total company level. That is a pretty consistent level within life sciences as well. That stabilization and improvement is really important. When we got diversified and provider back to growth, the focus shifts to the slope of the life sciences recovery. That is what we are focused on executing against while continuing to nurture the growth we are seeing within diversified and provider. Our relationships in life sciences are very long-standing.

Our logo retention rates are extremely high in life sciences. These customers have been with us for a long period of time and value high-quality data. We had downsell pressures throughout 2024 and 2025 as a result of claims data disruption, and we feel really good about where we are today in being able to build back revenue within these accounts over time. From a guidance perspective, we are being prudent on assumptions within life sciences until we get a few more green shoots under our belt.

Jeff Garro: One more quick one. On the return to organic innovation spend, can you add more around the focus areas and timing of product releases and eventual return on that investment? You mentioned one release later this quarter. Help us with the cadence from there.

Kevin D. Coop: As we look at compute capacity management and how we are deploying our resources, we are balancing internal resources by focusing our engineering and problem-solving teams primarily on our AI-enabled product roadmap. If I were to give guidance on timing, think in terms of Q2 for moving into a broader GA cycle, even though we are launching certain beta programs currently in this quarter. I would look at it from a Q2 perspective.

Operator: We have no further questions at this time.

Kevin D. Coop: Thanks everyone for joining.

Operator: This concludes today's call. Thank you for your participation. You may now disconnect.

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