Salt Lake City-based data and analytics company Health Catalyst reported second-quarter revenue of $36.8 million, beating Wall Steet estimates of $36.4 million.
In its first earnings call since going public on July 25, company executives reported last week their second-quarter revenue was up 60% year-over-year. The company's adjusted EBITDA in the second quarter was a loss of $5.7 million, which shows improvement from a loss of $8 million in the prior year, Health Catalyst CEO Dan Burton said during the earnings call on August 22.
The company's earnings per share, including a pro forma adjustment to share count for the IPO shares, came to -$0.21 for the quarter, beating Wall Street estimates of -0.32 earnings per share.
The company, which was founded in 2008, jumped in its trading debut on July 25 with its share price surging by at least 50% in midday trading.
Health Catalyst's shares dropped by about 10% on August 23 after announcing Q2 results. Shares remain about 50% above their opening initial public offering price on July 25.
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Health Catalyst expects third-quarter revenue between $36.8 million and $38.8 million. Revenue for all of 2019 is predicted to reach approximately $150 million.
The company expects annual revenue growth of over 20%, Burton said.
Health Catalyst's revenue is split between technology and professional services. Technology revenue totaled $20 million in the second quarter of 2019, an 87% increase year-over-year. Professional services revenue grew 36% to reach $16.7 million in the second quarter.
"We expect professional services to continue to be a meaningful portion of our revenue over the long run, because such professional services are critical in enabling our customers to drive to data-informed improvements," Health Catalyst chief financial officer Patrick Nelli said the earnings call.
"We are in the early innings of healthcare organizations adoption of robust analytics capabilities and while we continue to believe that the adoption of technology and healthcare industry moves more slowly than most other industries, we feel that the under-penetration will provide us with long-term sustainable growth," he said.
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The company acquired Medicity, a health information exchange technology company, in 2018. Medicity's flat to declining $25 million in annual revenue will slow overall company revenue growth, Nelli said. However, the company sees cross-selling opportunities with the Medicity platform.
"Our second-quarter results showcase consistent performance across the business. Strong organic revenue growth demonstrates the continued value our customers are realizing from our Solution," Dan Burton, CEO of Health Catalyst, said. "Our recent IPO will provide us with growth capital to continue to execute on our mission to be the catalyst for massive, measurable, data-informed healthcare improvement."
Looking at the data and analytics healthcare market, 1,000 companies offer an analytical application that cuts across the clinical, financial and operational categories, Burton said during the earnings call.
"We believe that highly fragmented space will represent a meaningful M&A opportunity for us in the future," he said.