Definitive Healthcare Corp. (DH) stock plummeted 18.5% in pre-market trading on Friday, following the company's lackluster fourth-quarter 2024 earnings report and tepid guidance for 2025.
The healthcare data and analytics provider reported a 6% year-over-year decline in total revenue to $62.3 million for Q4 2024, citing challenges with customer retention and elevated churn rates. Adjusted EBITDA fell 12% year-over-year to $17.5 million, reflecting the pressure from declining revenue.
Notably, Definitive Healthcare experienced a decrease in enterprise customers, with a reduction of 21 year-over-year and 11 quarter-over-quarter. Net dollar retention, a key metric of customer retention and expansion, stood at 90% for enterprise customers and 85% overall, indicating continued struggles with churn.
Looking ahead, the company provided guidance for Q1 2025 revenue to decline 10% to 13% year-over-year, citing ongoing pressure on renewals. For the full year 2025, Definitive Healthcare expects revenue to drop 5% to 9% compared to 2024, with adjusted EBITDA margin guidance of 26% to 28%.
On the earnings call, management highlighted continued challenges in the life sciences sector, with churn more pronounced in this vertical. While new customer additions remained strong, the company faced pricing pressure on upsells and cross-sell opportunities with existing customers.
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