Summary
Health Catalyst closed fiscal 2021 with fourth-quarter total revenue of $64.7 million, up 21.5% from the prior-year quarter. Full-year revenue reached $241.9 million, up 28.1% from 2020. The top line grew, but the company remained deeply unprofitable. Fourth-quarter operating loss was $44.8 million, and the loss widened from the prior-year quarter. Full-year operating loss was $143.7 million, and that loss also widened. Fourth-quarter net loss was $49.0 million, and the loss widened. Full-year net loss was $153.2 million, and the loss widened. Full-year diluted EPS loss was $3.23, and the loss widened from 2020.
Cash generation remained negative. Fourth-quarter operating cash flow was negative $9.8 million, down from the prior-year quarter. Full-year operating cash flow was negative $23.1 million, up from 2020. Capital expenditures were $0.6 million in the fourth quarter, down 90.3% from the prior-year quarter. Full-year capital expenditures were $10.5 million, up 34.4% from 2020. Deferred revenue at December 31, 2021 was $57.6 million, up 17.6% from December 31, 2020. Remaining performance obligations were $77.0 million, down 13.9% from a year earlier. Fourth-quarter operating margin was -69.2%, up 3.9 percentage points from the prior-year quarter. Full-year operating margin was -59.4%, down 8.5 percentage points from 2020.
Non-GAAP results showed some improvement. Fourth-quarter Adjusted EBITDA was negative $6.3 million, down 34% from the prior-year quarter. Full-year Adjusted EBITDA was negative $11.2 million, up 47% from 2020. Total Adjusted Gross Margin was 52% in the fourth quarter, flat with the prior-year quarter. For the full year, Total Adjusted Gross Margin was 53%, up from 50% in 2020. The customer base expanded. DOS Subscription Customers totaled 90 as of December 31, 2021, up from 74 in 2020 and 65 in 2019. The dollar-based retention rate was 112% for 2021, up from 102% in 2020 and 109% in 2019. Management said technology dollar-based retention saw minimal COVID-19 impact, while professional services retention improved after the company stopped offering COVID-19-related discounts in 2021.
Guidance points to continued growth. For the first quarter of 2022, management guided Adjusted EBITDA between negative $2.5 million and negative $0.5 million. For the full year of 2022, Adjusted EBITDA is guided to negative $4.0 million to negative $2.0 million. The company also provides forward-looking guidance on total revenue, a GAAP measure, but it did not reconcile Adjusted EBITDA guidance to net loss because items such as stock-based compensation are outside its control or cannot be reasonably predicted.
Risks remain substantial. COVID-19 variants, including Delta and Omicron, could keep healthcare providers under operational and budgetary strain. A tight labor market could make it harder to recruit and retain team members. The transition of customers to Microsoft Azure hosting is raising technology costs and pressuring Adjusted Technology Gross Margin. Medicity customers generate lower dollar-based retention, and the company expects flat to declining revenue from them. Integration of recent acquisitions, including Twistle, brings duplicative and integration-related costs. The loss of one or more key customers or partners, litigation, or a security incident could also hurt results.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2021 | Q3 FY2021 | QoQ | Q4 FY2020 | YoY |
|---|---|---|---|---|---|
| Revenue | $64.7M | $61.7M | +4.8% | $53.3M | +21.5% |
| Research & development | $17.5M | $16.4M | +6.7% | $15.0M | +16.7% |
| Sales & marketing | $21.9M | $20.8M | +5.1% | $14.8M | +47.8% |
| General & administrative | $25.3M | $23.1M | +9.9% | $28.1M | -9.9% |
| Total operating expenses | $75.6M | $70.9M | +6.6% | $65.7M | +15.1% |
| Operating income (loss) | -$44.8M | -$42.2M | -6.0% | -$38.9M | -15.0% |
| Operating margin | -69.2% | -68.4% | -0.7 pp | -73.0% | +3.9 pp |
| Net income (loss) | -$49.0M | -$40.0M | -22.4% | -$43.0M | -13.9% |
| Net margin | -75.7% | -64.8% | -10.9 pp | -80.7% | +5.0 pp |
| Diluted EPS | -$1.03 | -$0.82 | -$0.21 | — | — |
Risks
The healthcare analytics market is intensely competitive, with competitors such as Epic Systems, Cerner, Optum Analytics, and IBM having greater resources, name recognition, and distribution. Increased competition is likely to result in pricing pressures that could negatively impact sales, profitability, or market share.
Analytics applications may be used to support clinical decision-making, patient treatment plans, and care management, so faulty clinical decisions or inaccurate content could lead to product liability, medical malpractice, or other claims. Insurance may not be available in sufficient amounts to cover large claims.
The ongoing COVID-19 pandemic, including Delta and Omicron variants, could decrease healthcare industry spending, cause customers to file for bankruptcy or terminate contracts, and disrupt sales and professional services travel. MD&A states there is continued uncertainty over the duration and magnitude of these effects.
The sales cycle for a new DOS subscription customer is estimated at approximately one year and in some cases has exceeded two years, requiring substantial time and expense before any sale. MD&A notes long procurement cycles may lead to declines in the pace of new customer additions.
The three largest customers comprised 4.5%, 4.2%, and 3.5% of 2021 revenue, or 12.2% in aggregate, down from 14.1% in 2020. Loss, termination, or renegotiation of any largest customer contract could adversely affect results.
The company acquired Twistle in July 2021 for $91.9 million and previously acquired Vitalware, Healthfinch, and Able Health, and is integrating them. Integration difficulties, cross-selling challenges, or goodwill impairment could disrupt operations and harm results.
Migration of on-premise and managed data center customers to Microsoft Azure is more costly per customer and has resulted in higher cost of technology revenue and reduced Adjusted Technology Gross Margin. MD&A expects Adjusted Technology Gross Margin to fluctuate and potentially decline in the near term.
Competition for senior sales executives and software engineers with healthcare and analytics experience is intense, and the company has experienced difficulty hiring and retaining highly skilled employees. The risk is heightened by reliance on key executives, including co-founder Steven Barlow who previously took a leave of absence for a church service.
SaaS KPIs
All quarters →Adjusted EBITDA
Adjusted Professional Services Gross Margin
Adjusted Technology Gross Margin
Total Adjusted Gross Margin
Summary, forecast, risks and KPIs are extracted from Health Catalyst, Inc.'s SEC filings for Q4 FY2021 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 1, 2026.