Health Catalyst (HCAT) Earnings Date & Reports

Key Takeaways

• Health Catalyst reported third quarter 2026 revenue of $56.3 million, above its guided range of $55 million to $56 million and ahead of the roughly $55.4 million consensus estimate.
• Revenue still declined 26% year over year from $76.3 million, reflecting the July 31, 2026 divestiture of its Vitalware business and continued migration-related client churn.
• Adjusted earnings per share (EPS) came in at a loss of $0.03, narrower than the consensus estimate of a $0.05 loss, while adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) of $779,000 beat the company's guidance of breakeven to $500,000.
• Reported generally accepted accounting principles (GAAP) net income swung to a profit of $40.5 million, or $0.53 per diluted share, driven primarily by a one-time $65.9 million gain on the sale of the Vitalware business.
• Management reaffirmed its full-year 2026 outlook for revenue of $246 million to $249 million and adjusted EBITDA of $18 million to $18.5 million, and said the company now expects to exceed the high end of its $22 million to $26 million bookings target.
• The company eliminated its debt and ended the quarter with approximately $79 million in cash, cash equivalents, and short-term investments.
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Earnings Context and Why It Matters

Health Catalyst's third quarter report landed at a pivotal moment. The healthcare data and analytics company is navigating the aftermath of its Vitalware divestiture while simultaneously managing customer migrations away from its legacy DOS platform, both of which have compressed the top line. Newly appointed President and CEO Simeon Kohl, who joined in mid-September 2026, used his first earnings call to outline four priorities: client retention, cost alignment, reducing complexity, and more consistent execution. For investors, the report offers an early read on whether the company can stabilize recurring revenue and return to durable, profitable growth while carrying a strengthened, debt-free balance sheet.

Reported Results

For the third quarter ended September 30, 2026, Health Catalyst reported total revenue of $56.3 million, above the high end of its guidance range and ahead of consensus. Technology revenue was $40.7 million and professional services revenue was $15.6 million. Adjusted net loss per share was $0.03, better than the consensus estimate of a $0.05 loss.

Adjusted EBITDA of $779,000 surpassed the company's guided range of breakeven to $500,000, though it was down sharply from $12.0 million in the prior-year period. Adjusted gross margin compressed to 44.3% from 52.6% a year earlier, with adjusted technology gross margin at 60.6% and adjusted professional services gross margin at just 1.7%. Management attributed the services margin pressure to revenue declining faster than delivery costs, along with roughly $1.6 million in higher-than-expected internal benefits costs tied to medical claims.

The headline GAAP results were distorted by the divestiture. GAAP net income attributable to common stockholders reached $40.5 million, or $0.53 per diluted share, compared with a net loss of $22.2 million, or $0.32 per share, in the prior-year quarter. This swing was largely driven by a $65.9 million gain on the sale of the Vitalware business, which closed on July 31, 2026.

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Market Reaction and Investor Sentiment

Shares of Health Catalyst closed around $1.50 on November 5, 2026, down more than 5% following the release, suggesting investors weighed the strong beat against guidance alongside the ongoing double-digit revenue decline. The stock had already fallen roughly 49% over the prior twelve months, reflecting persistent pressure from the Vitalware divestiture and platform migration churn. While the balance sheet transformation to a debt-free position and the better-than-expected adjusted results provided some reassurance, the implied adjusted EBITDA loss for the fourth quarter and the compressed professional services margin kept sentiment cautious heading into the report's aftermath.

Forward Outlook and Key Factors to Monitor

Management reaffirmed its full-year 2026 revenue guidance of $246 million to $249 million and adjusted EBITDA of $18 million to $18.5 million. That midpoint implies an adjusted EBITDA loss of roughly $1.8 million to $1.3 million in the fourth quarter, which represents the first full quarter without Vitalware and includes seasonally higher medical claims expense.

Investors should watch several forward-looking signals. First, client retention remains the central challenge, and management has said it expects to be "generally through" migration-related churn headwinds by the end of 2027. Second, the trajectory of adjusted professional services gross margin will indicate whether cost-alignment efforts are gaining traction. Third, new bookings and expansion within the existing client base are important leading indicators; the company now expects to exceed the high end of its full-year bookings target.

Finally, the fourth quarter's cash flow dynamics, including a large hosting infrastructure prepayment, will offer insight into liquidity management on the newly debt-free balance sheet. The company is expected to report fourth quarter results after the close on a date to be confirmed, providing the next checkpoint on its turnaround progress.

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