GET DAILY SIGNALSHealth Catalyst (HCAT) Q3 2026 Earnings: Strong Beat Amid Divestiture and Migration Pressures
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 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.
Why the Report Matters Now
Health Catalyst’s third quarter results arrived at a critical juncture for the healthcare data and analytics firm. The company is working through the effects of the Vitalware divestiture while also handling customer migrations from its legacy DOS platform, both of which have weighed on revenue. With newly appointed President and CEO Simeon Kohl taking the helm in mid-September 2026, his first earnings call highlighted four priorities: client retention, cost alignment, reducing complexity, and steadier execution. From what I see, the update gives investors an early indication of whether HCAT can stabilize recurring revenue and move toward sustainable, profitable growth on a now debt-free balance sheet.
Quarterly Results in Detail
For the third quarter ended September 30, 2026, HCAT posted total revenue of $56.3 million, exceeding both guidance and consensus. Technology revenue reached $40.7 million while professional services contributed $15.6 million. Adjusted net loss per share was $0.03, better than the expected $0.05 loss. Adjusted EBITDA of $779,000 topped the guided range of breakeven to $500,000, though it fell sharply from $12.0 million a year earlier. Adjusted gross margin narrowed to 44.3% from 52.6%, with technology at 60.6% and professional services at just 1.7%. Management pointed to revenue declining faster than costs plus roughly $1.6 million in higher internal benefits expenses tied to medical claims.
GAAP results reflected the divestiture impact. GAAP net income attributable to common stockholders reached $40.5 million, or $0.53 per diluted share, versus a $22.2 million net loss, or $0.32 per share, in the prior-year quarter, largely due to the $65.9 million gain on the Vitalware sale that closed July 31, 2026. I also checked this using Tickeron’s AI Screener to see how the stock compares to others in the industry.
Market Reaction and Sentiment
Shares of HCAT closed around $1.50 on November 5, 2026, down more than 5% after the release as investors balanced the beat against ongoing revenue pressure. The stock had already declined roughly 49% over the prior twelve months amid the divestiture and platform migration issues. While the debt-free balance sheet and better-than-expected adjusted metrics offered some comfort, the implied fourth-quarter adjusted EBITDA loss and compressed services margin left sentiment measured.
Outlook and What to Watch
Management kept full-year 2026 guidance intact at $246 million to $249 million in revenue and $18 million to $18.5 million in adjusted EBITDA. That midpoint points to an adjusted EBITDA loss of roughly $1.8 million to $1.3 million in the fourth quarter, the first full quarter without Vitalware and including seasonally higher medical claims costs. Key areas to monitor include client retention progress, with management expecting migration-related churn to ease by the end of 2027; the path of professional services gross margins; and new bookings, where the company now anticipates exceeding the high end of its $22 million to $26 million target. Fourth-quarter cash flow, including a large hosting prepayment, will also shed light on liquidity on the strengthened balance sheet. The next update is expected after the close on a date still to be confirmed.
Exploring AI Tools for Earnings Analysis
I often turn to Tickeron’s AI Screener when reviewing quarterly results. It lets me quickly filter stocks by industry, fundamentals, technical patterns, and AI signals, helping surface relevant comparisons and context without manual effort. The tool has become a regular part of my process for understanding how individual earnings reports fit into broader sector trends.
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Contributor
Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.
HCAT's Indicator enters downward trend
The Aroon Indicator for HCAT entered a downward trend on October 28, 2026. Tickeron's A.I.dvisor identified a pattern where the AroonDown red line was above 70 while the AroonUp green line was below 30 for three straight days. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options. A.I.dvisor looked at 293 similar instances where the Aroon Indicator formed such a pattern. In 265 of the 293 cases the stock moved lower. This puts the odds of a downward move at 90%.
Technical Analysis (Indicators)
Bearish Trend Analysis
The Momentum Indicator moved below the 0 level on October 29, 2026. You may want to consider selling the stock, shorting the stock, or exploring put options on HCAT as a result. In 80 of 91 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are 88%.
The Moving Average Convergence Divergence Histogram (MACD) for HCAT turned negative on November 02, 2026. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 49 similar instances when the indicator turned negative. In 42 of the 49 cases the stock turned lower in the days that followed. This puts the odds of success at 86%.
HCAT moved below its 50-day moving average on October 30, 2026 date and that indicates a change from an upward trend to a downward trend.
The 10-day moving average for HCAT crossed bearishly below the 50-day moving average on October 29, 2026. This indicates that the trend has shifted lower and could be considered a sell signal. In 13 of 16 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are 81%.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where HCAT declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 87%.
Bullish Trend Analysis
The RSI Oscillator points to a transition from a downward trend to an upward trend -- in cases where HCAT's RSI Oscillator exited the oversold zone, 30 of 44 resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are 68%.
The Stochastic Oscillator demonstrated that the ticker has stayed in the oversold zone for 2 days, which means it's wise to expect a price bounce in the near future.
The 50-day moving average for HCAT moved above the 200-day moving average on October 30, 2026. This could be a long-term bullish signal for the stock as the stock shifts to an upward trend.
HCAT may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
Fundamental Analysis (Ratings)
The Tickeron PE Growth Rating for this company is 15 (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Valuation Rating of 38 (best 1 - 100 worst) indicates that the company is fair valued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (1.120) is normal, around the industry mean (4.793). P/E Ratio (-0.408) is within average values for comparable stocks, (13.685). Projected Growth (PEG Ratio) (0.000) is also within normal values, averaging (2.133). Dividend Yield (0.000) settles around the average of (0.011) among similar stocks. P/S Ratio (0.429) is also within normal values, averaging (6.065).
The Tickeron Price Growth Rating for this company is 64 (best 1 - 100 worst), indicating fairly steady price growth. HCAT’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron SMR rating for this company is 99 (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Profit vs. Risk Rating rating for this company is 100 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. HCAT’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 96, placing this stock worse than average.
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General Information
a provider of healthcare data warehousing and process improvement solutions.
Industry ServicestotheHealthIndustry