Summary
Health Catalyst closed fiscal 2025 with fourth-quarter revenue of $74.68 million, down 6.2% from the prior-year quarter. Full-year revenue reached $311.14 million, up 1.5%. The bottom line deteriorated sharply. The fourth-quarter net loss was $91.02 million, and the full-year net loss was $177.97 million. Both figures widened from the prior-year periods. The fourth-quarter operating loss was $86.08 million, and the full-year operating loss was $160.85 million. Operating margin was -115.3% in the quarter and -51.7% for the full year. Diluted EPS for the full year was -$2.55. The loss increase was largely driven by impairment charges tied to declines in the company's stock price and market capitalization.
Cash generation improved in the fourth quarter. Operating cash flow was $9.91 million, up 381.0% from the prior-year quarter. For the full year, operating cash flow was $0.73 million, down 95.0%. Capital expenditures were $0.27 million in the quarter, down 33.9%, and $0.97 million for the full year, down 40.1%. Deferred revenue stood at $56.50 million, up 5.6% from the prior-year quarter. Remaining performance obligations were $254.40 million, down 8.3%. Adjusted EBITDA, a non-GAAP measure, was $41.4 million for 2025, compared with $26.1 million for 2024 and $11.0 million for 2023. That improvement came from revenue growth and cost reduction initiatives.
Operational metrics showed mixed trends. Platform Clients totaled 162 as of December 31, 2025, up from 130 a year earlier. The company added 32 net new Platform Clients, compared with its target of 30. Average ARR plus non-recurring revenue for those new clients landed near the midpoint of the $300,000 to $700,000 range. Dollar-Based Retention Rate was 93% for 2025, down from 102% for 2024. The company served over 1,000 App Clients and employed more than 1,200 team members. More than 90% of revenue was recurring. Approximately two-thirds of DOS client migrations were complete by the end of 2025. Guidance for full-year 2025 was for total revenue to slightly exceed its prior guidance and Adjusted EBITDA to be in line with its prior guidance of approximately $41 million. For 2026, management expects to add a greater level of overall bookings than in 2025, invest in India and AI, and see a higher cost structure earlier in the year before optimization lowers it later. The company also expects migration progress by the end of the first half of 2026.
Risks remain substantial. The OBBBA is projected to reduce federal Medicaid spending by nearly $1 trillion over 10 years, creating financial strain for clients and prospective clients. Sales cycles have elongated, and some Life Sciences opportunities have been pushed, which hurt 2025 bookings and 2026 revenue expectations. Health Catalyst has been notified of approximately $12.5 million in DOS-related ARR down-sell and churn that will negatively impact 2026 and 2027 technology revenue. Up to approximately $52 million in DOS-related ARR may be subject to negotiation in 2026 and 2027, with up to approximately $35 million of that tied to data platform infrastructure ARR. Macroeconomic challenges include high inflation, high interest rates, tariffs, and a tight labor market. Migration costs are expected to pressure technology gross margin in the near term. The company also faces integration costs from acquisitions, including the $80.0 million Upfront acquisition. It plans to invest in India and prioritize AI across teams in 2026. Those efforts are expected to increase the cost structure earlier in the year while allowing for optimization and a lower overall cost structure as the year progresses. These factors could keep revenue growth and profitability under pressure.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2025 | Q3 FY2025 | QoQ | Q4 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $74.7M | $76.3M | -2.2% | $79.6M | -6.2% |
| Research & development | $9.9M | $12.3M | -19.3% | $15.0M | -33.9% |
| Sales & marketing | $10.2M | $14.4M | -29.2% | $11.2M | -9.5% |
| General & administrative | $11.0M | $16.1M | -31.3% | $15.7M | -29.6% |
| Total operating expenses | $125.5M | $55.3M | +126.8% | $52.2M | +140.4% |
| Operating income (loss) | -$86.1M | -$17.5M | -391.6% | -$17.5M | -391.9% |
| Operating margin | -115.3% | -22.9% | -92.3 pp | -22.0% | -93.3 pp |
| Net income (loss) | -$91.0M | -$22.2M | -309.5% | -$20.7M | -340.3% |
| Net margin | -121.9% | -29.1% | -92.8 pp | -26.0% | -95.9 pp |
| Diluted EPS | -$1.30 | -$0.32 | -$0.98 | -$0.34 | -$0.96 |
Risks
FY2025 net loss widened to $178.0 million from $69.5 million in FY2024, largely driven by $105.4 million of goodwill impairment due to declines in stock price and market capitalization. FY2025 operating loss also widened to $160.9 million from $69.8 million in FY2024.
The DOS to Health Catalyst Ignite migration is causing churn and down-sell, with approximately $12.5 million in DOS-related ARR down-sell and churn expected to negatively impact 2026 and 2027 technology revenue. Up to approximately $52 million in DOS-related ARR may be subject to negotiation in 2026 and 2027, including up to approximately $35 million of data platform infrastructure ARR, and Dollar-based Retention Rate was 93% for 2025 compared with 102% for 2024.
The OBBBA is projected to reduce federal Medicaid spending by nearly $1 trillion over 10 years, creating additional financial strain for clients and prospective clients. Certain sales cycles have elongated and some opportunities, such as Life Sciences, have pushed, negatively impacting 2025 bookings achievement and 2026 revenue expectations.
The sales cycle for a new platform client is estimated at approximately one year and in some cases has exceeded two years. Medicaid and research funding reductions and the evolving tariff landscape have caused potential delays in client decisions.
High inflation, high interest rates, uncertainty with tariffs, cuts in Medicaid and research funding, and regional or global conflicts continue to strain health system clients. These factors have decreased healthcare industry spending, adversely affected demand, and caused potential delays in client decisions.
The January 2025 restructuring plan reduced the global workforce by approximately 4% and the August 2025 plan by approximately 9%, primarily in research and development and sales and marketing. These actions create risks of reduced morale, difficulty hiring, and unintended attrition.
Increasing reliance on AI and generative AI technologies exposes the company to risks from hallucinatory outputs, third-party AI availability and pricing, and evolving federal and state AI laws such as Colorado's Artificial Intelligence Act and the Texas Responsible Artificial Intelligence Governance Act.
The company faces intense competition from EHR companies such as Epic Systems and Oracle Health, industry-agnostic analytics companies such as Optum Analytics and IBM, and point solution vendors. Increased competition is likely to result in pricing pressures that could negatively impact sales, profitability, or market share.
The three largest clients during 2025 comprised 5.7%, 4.4%, and 3.5% of revenue, or 13.6% in the aggregate. The sudden loss of any largest client or renegotiation of any largest client contract could adversely affect results of operations.
Growth initiatives, business strategies, operating plans, and cost reduction and restructuring initiatives are under an ongoing internal strategic and operational review in connection with the CEO transition. The company may not successfully complete these efforts or realize expected benefits, including growth targets and cost savings.
SaaS KPIs
All quarters →Recurring revenue
App Clients
Summary, forecast, risks and KPIs are extracted from Health Catalyst, Inc.'s SEC filings for Q4 FY2025 (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.