Definitive Healthcare Corp. Class A Common Stock 2026 Q2 Earnings Call
Review the key takeaways and the transcript of this earnings call.
- Definitive Healthcare reported second quarter 2026 revenue of $55.2 million, down 9% year over year, and adjusted EBITDA of $14.6 million with a 26% margin, modestly above guidance.
- Subscription revenue declined 9% year over year to $52.8 million, while services revenue underperformed expectations due to lighter bookings for traditional analytics engagements.
- Net dollar retention improved year over year for the second consecutive quarter, driven by strong new business in the biopharma segment and notable customer win backs across multiple segments.
- Adjusted gross profit was $44.2 million, down 12% year over year, with an adjusted gross margin of 80%, which expanded 100 basis points year over year after adjusting for one-time credits in the prior year.
- The company generated $11.6 million of unlevered free cash flow in Q2 and $50 million on a trailing 12-month basis, with a 75% conversion rate of adjusted EBITDA to free cash flow.
- Deferred revenue was $89 million, down 12% year over year, and total remaining performance obligations declined 18% year over year, reflecting a shift towards single-year deals.
- Operationally, Definitive Healthcare made progress on its four strategic pillars: data differentiation, seamless integrations, customer success, and innovation, including the launch of Turbo, an AI-powered healthcare intelligence platform.
- Turbo is in pilot with select customers and targets general availability before year-end 2026, aiming to accelerate decision-making through AI and natural language search capabilities.
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Transcript
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Good day everyone, and welcome to Definitive Healthcare's Q2 FY 2026 earnings call. At this time, all participants are in a listen only mode. Later, we'll conduct a question and answer session. Now, I'll turn the call over to your host, Jonathan Paris.
Please go ahead. Good afternoon, and thank you for joining us to review Definitive Healthcare's financial results.
Joining me on today's call are Kevin Coop, our Chief Executive Officer, and Casey Heller, our Chief Financial Officer. Before we begin, I'd like to remind you that today's discussion may include forward-looking statements within the meaning of the federal securities laws, including the Private Securities Litigation Reform Act of 1995. These statements include, among others, statements about our market opportunity, future performance, growth and financial guidance, the benefits of our data and healthcare commercial intelligence solutions, our competitive position, customer behavior, adoption, growth, renewals and retention, planned investments and operating strategy, value creation for customers and shareholders, and the expected impact of macroeconomic conditions on our business, customers, and the healthcare industry.
Forward-looking statements are based on our current expectations and assumptions as of today and are subject to risks and uncertainties that could cause actual results to differ materially. For more information, please refer to the cautionary statement in today's earning release, as well as the risk factors and other information included in our filings with the SEC, including our most recent Form 10-K and Form 10-Q. You should not place undue reliance on forward-looking statements, and Definitive Healthcare undertakes no obligation to update them except as required by law. During the call, we may also discuss certain non-GAAP financial measures. Reconciliation to the most directly comparable GAAP measures, along with related definitions and limitations, are included in today's earnings release and investor presentation, each of which is available on the investor relations section of our website.
For any forward-looking non-GAAP measures, the earnings release also explains why quantitative reconciliation is not available without unreasonable efforts and identifies the relevant unavailable items. With that, I'll turn the call over to Kevin.
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