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Definitive Healthcare (DH) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Health Care· Aug 10, 2026

Source: earnings call transcript

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

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

Product announcements

ProductTypeDetails
Turbolaunch

Deals & partnerships

Multiple customers Win-back customers in biopharma and diversified business segments 6-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 account Early 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 partner Native 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

Slower return to growth in Life Sciences segment ongoing

Response has been slower than expected

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

Underperformance of Professional Services revenue Q2 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 RPO Q2 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 pressure Q2 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

Turbo Platform General Availability

before year-end
Current Pilot phase with select customers
Target General 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.

Find out whether DH delivers this. Inve re-checks your case every morning.

Q&A highlights

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 read 6 chapters

Detailed narrative

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.

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.

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.

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.

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.

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.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.