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    DH
    Earnings call· Jun 2026(Q2 FY26)

    Definitive Healthcare Q2 FY26 earnings call DH

    Aug 10, 2026 Source

    Executive summary

    Definitive Healthcare Q2 FY26 — AI Platform Launch and Retention Improvement

    Definitive Healthcare reported Q2 FY26 results in line with revenue guidance and above profit expectations, driven by effective expense management and strong cash flow generation. While total revenue declined and the life sciences segment showed slower improvement, the company highlighted a second consecutive quarter of year-over-year net dollar retention rate improvement and the strategic launch of its AI-powered Turbo platform, aiming to enhance customer value and drive future growth.

    Highlights

    5

    • Adjusted EBITDA of $14.6 million, representing a 26% margin, was modestly above the high end of guidance.

    • Generated $50 million of unlevered free cash flow on a trailing 12-month basis.

    • Net dollar retention rate was up several points year-over-year on a trailing 12-month basis, marking the second consecutive quarter of improvement.

    • Biopharma segment had its strongest new business quarter in 3 years outside of Q4.

    • Completed over 50% more integrations year-over-year while reducing the time to integrate by more than 50%.

    Concerns

    5

    • Total revenue was $55.2 million, down 9% year-over-year.

    • Life sciences segment response has been slower than anticipated in returning to growth.

    • Professional services revenue underperformed expectations due to lighter bookings for traditional analytics engagements.

    • Deferred revenue of $89 million was down 12% year-over-year.

    • Total remaining performance obligations declined 18% year-over-year, impacted by a shift towards single-year deals.

    Guidance & targets

    12
    CategoryTargetConfidence
    Total Revenue
    $54M to $55M
    high materiality
    High
    Subscription Revenue
    flat sequentially
    medium materiality
    High
    Professional Services Revenue Growth
    double-digit growth
    medium materiality
    Medium
    Adjusted Operating Income
    $10.5M to $11.5M
    high materiality
    High
    Adjusted EBITDA
    $13.5M to $14.5M
    high materiality
    High
    Adjusted Net Income
    $5.5M to $6.5M
    medium materiality
    High
    Diluted EPS
    $0.04 to $0.05
    high materiality
    High
    Total Revenue
    $220M to $222M
    high materiality
    High
    Adjusted Operating Income
    $45.5M to $47.5M
    high materiality
    High
    Adjusted EBITDA
    $57M to $59M
    high materiality
    High
    Adjusted Net Income
    $27M to $29M
    medium materiality
    High
    Diluted EPS
    $0.18 to $0.20
    high materiality
    High

    Operational metrics

    14
    Total Revenue Growth
    9%YoY decline
    Q2 FY26

    Total revenue was $55.2 million, down 9% year-over-year.

    Adjusted Gross Profit
    $44.2Mdown 12% YoY
    Q2 FY26

    Adjusted gross profit in the quarter was $44.2 million, which is down 12% year-over-year. Adjusted gross profit margin of 80% contracted 230 basis points as reported, but expanded 100 basis points year-over-year when adjusting for a one-time credit in Q2 2025.

    Adjusted Net Income
    $7.5M
    Q2 FY26

    Adjusted net income was $7.5 million in the period.

    Non-GAAP Earnings Per Share
    $0.05
    Q2 FY26

    Resulted in $0.05 of non-GAAP earnings per share in the period.

    Capitalized Software Development Spend
    $2Mup $700,000 from the prior year
    Q2 FY26

    Increased capitalized software development spend, totaling over $2 million, up about $700,000 from the prior year.

    Deferred Revenue
    $89Mdown 12% YoY
    Q2 FY26 end

    At the end of Q2, deferred revenue of $89 million was down 12% year-over-year.

    Current Remaining Performance Obligations
    $150Mdeclined 12% YoY
    Q2 FY26 end

    Current remaining performance obligation of $150 million declined 12% year-over-year, impacted by the shift towards single-year deals.

    Integrations Completed
    50%more YoY
    Q2 FY26

    Compared to the second quarter of last year, the company completed over 50% more integrations year-over-year.

    Time to Integrate
    50%reduced by more than 50%
    Q2 FY26

    The time to integrate was reduced by more than 50% compared to the second quarter of last year.

    New Agency Partners Activating
    10new
    2026

    Added 10 new agency partners activating in 2026 that were not active in 2025.

    New Direct Activation Customers
    7new
    YTD

    Added 7 new direct activation customers year-to-date.

    Population Intelligence Customer Activation Commitment
    $300,000more than
    initial test to total commitment

    One longstanding population intelligence customer moved from an initial test into a total activation commitment of more than $300,000.

    Verified Provider Practice Locations
    4.4 million
    current

    Expanded practice location data to more than 4.4 million verified provider locations.

    Multi-turn Conversational Search Interactions
    40%
    current

    In the Expert Intelligence Platform, multi-turn conversational search now accounts for roughly 40% of interactions with the AI search feature.

    Industry KPIs

    8
    MetricValueDetails
    Free cash flow$11.6M (Q2), $50M (TTM)USD
    Adjusted EBITDA$14.6M (Q2), $57M-$59M (FY26 guidance)USD
    Net revenue retentionup several points%
    Healthcare client count—
    Bookings billings growth—
    Network life sciences revenue—
    Revenue adjusted EBITDA guidance$220M-$222M (revenue), $57M-$59M (adjusted EBITDA)USD
    Subscription recurring revenue growth$52.8MUSD

    Product announcements

    1
    ProductTypeDetails
    Turbolaunch

    Deals & partnerships

    3
    Multiple customersWin-back customers in biopharma and diversified business segments6-figure, 3-year (for one diversified business customer)3 years (for one diversified business customer)

    Included 4 important win-back customers in the biopharma segment who had left prior to 2025. A 6-figure, 3-year win-back occurred in the diversified business from a customer who left for a lower-cost competitor but returned after recognizing the cost of an inferior data set.

    Large diversified accountEarly renewal and expansion with Salesforce-embedded connector

    An early renewal and expansion with a large diversified account involved adding a Salesforce-embedded connector for their enterprise healthcare team, transforming a manual process into a workflow-native experience and expanding their annual commitment.

    Top-tier biopharma partnerNative integration of key opinion leader intelligence data into Veeva Vault CRM

    In collaboration with a top-tier biopharma partner, the company successfully launched a native integration that embeds its key opinion leader intelligence data directly into the Veeva Vault CRM, a platform widely used by life sciences, clinical, and medical affairs teams.

    Risks & headwinds

    4
    Slower return to growth in Life Sciences segmentongoing

    Response has been slower than expected

    Mitigation: Implementing changes to the business, confident in meaningful benefit over time.

    Underperformance of Professional Services revenueQ2 FY26, impacting Q3 FY26 and full-year outlook

    Lighter bookings for traditional analytics engagements

    Mitigation: Reflected in tightened full-year revenue guidance range.

    Impact of shift to single-year deals on RPOQ2 FY26

    Total RPO declined 18% YoY; Current RPO declined 12% YoY

    Mitigation: Monitoring trends, always looking at ways to incentivize multi-year deals, but not a critical dependency for progress.

    Overall top-line pressureQ2 FY26

    Total revenue down 9% YoY

    Mitigation: Maintaining disciplined expense management and focusing investments on initiatives to return to consistent, predictable revenue growth.

    What to watch in Q3 FY26

    5

    Turbo Platform General Availability

    before year-end
    CurrentPilot phase with select customers
    TargetGeneral Availability announcement and initial commercial model details

    Why it matters

    The successful launch and commercialization of Turbo is key to future growth and customer retention, especially impacting December and January renewals.

    We are targeting general availability before the end of the year, and our commercial teams are preparing broad market conversations this quarter to align demand with launch.

    Q&A highlights

    3

    Will the Turbo platform contribute to 2026 revenue guidance, and what is the planned commercial model (bundled, premium SKU, usage-based)?

    The company does not anticipate material impact to 2026 revenue from Turbo, but expects it to help with retention for December/January renewals. The pricing model is still being evaluated, with a thoughtful approach to different structures by customer cohort, and plans to introduce a usage-based element with tiered pricing over time.

    “we're not anticipating any material impact to the 2026 top-line revenue. Definitely expected to be more impactful in 2027, but what we do expect it to have an impact on, given the rollout later in the year, as we're introducing it to customers, we do think that it has the opportunity to help with retention, and given December and January are our largest renewal periods, we're really hopeful that we'll get a chance to influence some of those early as we're spending time with customers on the new platform.”

    asked by Matthew Shea · answered by Casey Heller

    2 min read6 chapters

    Detailed Narrative

    01

    Q2 Financial Performance

    Definitive Healthcare reported Q2 FY26 revenue of $55.2 million, which was within its guidance range, despite a 9% year-over-year decline. Adjusted EBITDA reached $14.6 million, exceeding the high end of guidance with a 26% margin, reflecting effective expense management. The company generated $11.6 million in unlevered free cash flow for the quarter and $50 million on a trailing 12-month basis, demonstrating strong cash generation capabilities.

    02

    Strategic Pillars and Operational Progress

    The company is actively executing against its four key strategic pillars: data differentiation, seamless integrations, customer success, and innovation. Significant progress includes expanding practice location data to over 4.4 million verified locations, improving data precision. Integrations increased by over 50% year-over-year, while the time required for integration was reduced by more than 50%, enhancing customer value and stickiness. A unified commercial organization has improved customer success, leading to successful retention of at-risk accounts.

    03

    Data Differentiation and AI Adoption

    Definitive Healthcare continues to invest in proprietary data types and leverage AI to enhance data collection and quality assurance, including the introduction of ACE 3.0 for claims estimation. This data differentiation has resulted in competitive wins, such as a major financial services institution and a behavioral health claims deal. AI is also being embedded across the company's data value chain and internal tools to improve productivity and decision-making.

    04

    Turbo Platform Launch

    A major milestone in Q2 was the launch of Turbo, a new AI-powered healthcare intelligence platform. Turbo unifies proprietary data to enable autonomous decision-making and natural language queries for complex questions, moving beyond simple data retrieval. The platform is currently in a pilot phase with a select group of strategic customers across healthcare systems, life sciences, and diversified segments, with general availability targeted before the end of the year.

    05

    Life Sciences and Retention Trends

    While the life sciences segment's return to growth has been slower than expected, the biopharma segment showed encouraging signs with its strongest new business quarter in three years (excluding Q4). The company also reported a second consecutive quarter of year-over-year improvement in its net dollar retention rate on a trailing 12-month basis, driven by customer win-backs who recognized the superior value of Definitive's data quality over lower-cost alternatives.

    06

    Professional Services and RPO Trends

    Professional services revenue underperformed expectations due to lighter bookings for traditional analytics engagements, which is expected to impact Q3 and full-year outlooks. Deferred revenue of $89 million and total remaining performance obligations (RPO) declined 12% and 18% year-over-year, respectively. This trend is primarily attributed to a continued shift towards single-year deals rather than multi-year commitments, impacting the visibility of future revenue.

    AI-generated summary of the company’s earnings call. Not investment advice.