1. Investment Snapshot
2. Thesis
3. Valuation & Price Target
4. Business & Product Moat
5. People & Governance
6. Market & Macro
7. Financial Quality
8. Risk Register
9. Prediction Market
10. 𝕏 Posts
Discussion
1. Investment Snapshot
2. Thesis
3. Valuation & Price Target
4. Business & Product Moat
5. People & Governance
6. Market & Macro
7. Financial Quality
8. Risk Register
9. Prediction Market
10. 𝕏 Posts
Discussion
1. Investment Snapshot
2. Valuation
Discussion
Symbol
DH
Event Date
2021-09-15
Sector
Information Technology
Subsector
Software
Offer Range
$27.00-$27.00
Shares Offered
15.56M
152.52M
$3.7B
10.2%
Implied Upside vs Midpoint
Description
Our mission is to make the complex healthcare ecosystem easier to analyze, navigate and sell into by providing a comprehensive, cloud-based healthcare commercial intelligence platform. Definitive Healthcare is a leading provider of healthcare commercial intelligence. Our solutions provide accurate and comprehensive information on healthcare providers and their activities to help our customers optimize everything from product development to go-to-market planning and sales and marketing execution. Delivered through our software as a service (“SaaS”) platform, our intelligence has become critical to the commercial success of our over 2,600 customers as of June 30, 2021. Commercial success within the healthcare ecosystem is difficult to achieve. The complex relationships between physicians, hospitals, providers, healthcare insurance companies, government regulators and patients make it particularly difficult to develop products for and sell products into the healthcare ecosystem. To succeed in the industry, companies benefit from deep healthcare commercial intelligence that maps all the major players in the healthcare ecosystem, knowledge of the affiliations and relationships between the industry participants and an ability to size patient populations by disease area, geography and health system. Companies that compete within or sell into this ecosystem can utilize the Definitive Healthcare platform to navigate these complexities, enhance go-to-marketstrategies and access the provider and decision maker information needed to succeed. Our customers include biopharmaceutical and medical device (“Life Sciences”) companies, Healthcare Information Technology (“HCIT”) companies, healthcare providers and other diversified companies, such as staffing firms, commercial real estate firms, financial institutions and other organizations seeking commercial success in the attractive but complex healthcare ecosystem. Within these organizations, our platform is leveraged by a broad set of functional groups, including Sales, Marketing, Clinical Research & Product Development, Strategy, Talent Acquisition and Physician Network Management. Our customers use the Definitive Healthcare platform in many ways to drive commercial success, including: • Sales. Size markets, build efficient go-to-market strategies and generate actionable intelligence including prospect and decision maker intelligence. • Marketing. Develop highly targeted marketing campaigns and gain contextual intelligence to quantify Return on Investment (“ROI”) for their products and services. • Clinical Research & Product Development. Identify experts within a specific disease area to find important sites for clinical trials and make data-driven investment decisions. • Strategy. Size patient populations and identify market opportunities for new therapeutics, diagnostics and medical devices. • Talent Acquisition. Identify and conduct outreach to candidates for healthcare-specific roles including physicians, nurses and hospital executives. • Physician Network Management. Analyze opportunities to keep patients within a healthcare network and identify attractive physicians from whom to source patient referrals. Our healthcare commercial intelligence platform brings together three powerful elements, which have been built, modified and improved upon over the last 11 years, to create a highly differentiated offering. These three elements are: • Comprehensive, In-depth and High-qualityIntelligence on healthcare providers across the U.S.; • An Artificial Intelligence (“A.I.”) Engine, built by our team of data scientists, that cleanses, links and creates new information and intelligence; and • An Intuitive Front-end SaaS Platform that provides customers with the ability to analyze the healthcare ecosystem in real-time, generate actionable insights and create a path to commercial success. Any company selling or competing within the healthcare ecosystem is a potential customer for us and contributes to our estimated current Total Addressable Market (“TAM”) of over $10 billion. In total, we have identified over 100,000 companies in our primary target markets—a number that continues to grow as more companies seek to compete within the attractive healthcare ecosystem, and we develop new and innovative analytics that appeal to a broader number of companies and use cases. We reach these customers through a highly efficient sales and marketing engine as demonstrated by our LTV to CAC ratio of over 10x. Once these customers are on our platform, we are able to expand our relationships with them over time by selling additional users, data modules and new analytical features. Only approximately one-third of a sales representative’s day is spent selling. We were founded in 2011 by our CEO, Jason Krantz, who has cultivated a culture of innovation that attracts and retains a highly talented team. Our seasoned executive team and over 550 employees are committed to growing a platform that delivers meaningful insights to our customers. This has resulted in a highly scalable business model and strong financial performance, including: • History of Significant Revenue Growth at Scale. We generated revenue of $118.3 million and $85.5 million in the years ended December 31, 2020 and December 31, 2019, respectively, representing 38% growth. We generated revenue of $76.8 million and $54.6 million in the six months ended June 30, 2021 and 2020, respectively, representing 41% growth. • Subscription-based Business Model with Significant Visibility. We generate substantially all of our revenue from subscription fees, which accounted for 99% of our revenue for the year ended December 31, 2020 and the six months ended June 30, 2021. • Diversified Customer Base. Over 2,600 companies use our platform to help sell into or compete in the healthcare ecosystem as of June 30, 2021. No single customer made up more than 2% of our revenue for the six months ended June 30, 2021 or the year ended December 31, 2020. • Strong Retention and Growth of Existing Customers. Our ability to retain and grow existing customer relationships is reflected in our growing number of Enterprise Customers, which we define as customers generating more than $100,000 in ARR (“Enterprise Customers”). For the year ended December 31, 2020, we had 292 Enterprise Customers, compared to 221 Enterprise Customers for the year ended December 31, 2019, with an average Net Dollar Retention Rate of 124%. For the trailing 12 months ended June 30, 2021, our NDR for our 349 Enterprise Customers was 125% and our NDR for all customers over $17,500 in ARR was 111%. • History of Strong Financial Performance. Our business model generates strong financial performance and cash flows. Our net loss was $51.2 million for the year ended December 31, 2020 as compared to a net loss of $49.3 million for the period from July 16, 2019 to December 31, 2019 and net income of $12.9 million for the period from January 1, 2019 to July 15, 2019. Our net loss was $25.5 million and $25.3 million for the six months ended June 30, 2021 and 2020, respectively. For the year ended December 31, 2020, our Net Loss Margin was (43)% and our Gross Margin was 74%. For the six months ended June 30, 2021, our Net Loss Margin was (33)% and our Gross Margin was 75%. For the six months ended June 30, 2021 and the year ended December 31, 2020, our Adjusted Gross Margin was 88% and 91%, respectively, and our Adjusted EBITDA was $28.5 million and $53.5 million, respectively, reflecting Adjusted EBITDA Margins of 45% for 2020 and 37% for the six months ended June 30, 2021. This strong financial performance allows us to continue to invest for growth to scale the organization. --- Definitive Healthcare Corp. was incorporated in Delaware on May 5, 2021. Our principal executive offices are located at 550 Cochituate Rd, Framingham, Massachusetts 01701, and our telephone number is (508) 720-4224. Our corporate website address is www.definitivehc.com.
Definitive Healthcare Corp. annual income statement and balance sheet, FY 2022 to FY 2025, as reported in SEC filings.
| Metric | FY 2022 | FY 2023 | FY 2024 | FY 2025 |
|---|---|---|---|---|
| Revenue | $223M | $251M | $252M | — |
| Gross profit | $180M | $204M | $197M | — |
| Operating income | ($41.3M) | ($330M) | ($711M) | — |
| Net income | ($6.0M) | ($202M) | ($413M) | — |
| Metric | FY 2022 | FY 2023 | FY 2024 | FY 2025 |
|---|---|---|---|---|
| Total assets | $2.1B | — | $1.1B | $735M |
| Total liabilities | $634M | — | $482M | $357M |
| Total equity | $1.5B | — | $607M | $379M |
| Cash & equivalents | $147M | $131M | $105M | $164M |