Definitive Healthcare Corp. (DH)

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited Condensed Consolidated Financial Statements and related notes included elsewhere in this Quarterly Report and with our audited Consolidated Financial Statements, “Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our 2025 Form 10-K.

As discussed in “Cautionary Note Regarding Forward-Looking Statements,” the following discussion and analysis contains forward-looking statements that involve risks and uncertainties. Our actual results may materially differ from those discussed in such forward-looking statements. Factors that could cause or contribute to these differences include, but are not limited to, those identified below and those discussed in “Risk Factors” under Part II, Item 1A in this Quarterly Report and in Part I, Item 1A of our 2025 Form 10-K.

Overview

Definitive Healthcare is a leading provider of healthcare data and analytics. We provide accurate, comprehensive information on healthcare providers and their activities, enabling customers to make informed decisions across product development, go-to-market planning, and sales and marketing execution. We also offer claims and consumer analytics built from modeled data on millions of unique consumers to help healthcare organizations target, message, and engage specific healthcare audiences. Delivered through our software as a service products and solutions, our data is important to the commercial success of our approximately 2,200 customers as of June 30, 2026. We generally define a customer as a company that maintains one or more active paid subscriptions.

We serve three primary end markets: Life Sciences, Provider, and Diversified. Our Life Sciences customers comprise biopharmaceutical and medical device companies. Providers comprise hospitals, health systems, and other care delivery organizations. Diversified customers include healthcare information technology companies and other organizations operating within the healthcare market, such as staffing firms, commercial real estate firms, financial institutions, and marketing and advertising agencies. Within these organizations, our data serves a broad set of functional groups, including sales, marketing, clinical research, product development, strategy, talent acquisition, and physician network management. Customers access our data products on a subscription basis, and we generate substantially all our revenue from subscription fees.

We were founded in 2011 by our Executive Chairman, Jason Krantz. Mr. Krantz founded the company to provide healthcare commercial intelligence designed to drive commercial success for companies that sell into or compete in the healthcare ecosystem, creating large end-markets for us, including life sciences, healthcare information technology ("HCIT"), 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.

We believe any company selling or competing within the healthcare ecosystem is a potential customer for us and contributes to our estimated current total addressable market of over $11 billion that includes a more focused serviceable addressable market of approximately $7 billion. In total, our target universe includes more than 100,000 potential customers that we believe could benefit from our products.

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Recent Developments

Goodwill Impairment

In the first quarter of 2026 and during fiscal year 2025, we experienced declines in our market capitalization as a result of sustained decreases in our stock price, which represented triggering events requiring management to perform quantitative goodwill impairment tests as of the end of the impacted reporting periods. As a result of the impairment tests, we determined that the fair value of our single reporting unit was lower than its carrying value and, accordingly, recorded non-cash, pretax, goodwill impairment charges of $197.2 million during the first quarter of 2026 and $196.1 million during fiscal year 2025. See Note 7. Goodwill and Intangible Assets to our accompanying unaudited condensed consolidated financial statements.

The goodwill impairment charges did not affect our liquidity or the financial covenants in our outstanding debt agreement.

Restructuring Charges

In the first quarter of 2026, we committed to a restructuring plan (the “2026 Restructuring Plan”) intended to reduce operating costs, improve operating margins, and continue advancing the Company’s ongoing commitment to profitable growth. The 2026 Restructuring Plan provided for a reduction of our current workforce by approximately 40 people. During the first quarter of 2026, we incurred restructuring and related charges of approximately $1.1 million, consisting of severance payments, employee benefits, and related cash expenses. No additional charges were incurred during the three months ended June 30, 2026. As of June 30, 2026, $0.1 million was included in accrued expenses and other liabilities in the unaudited condensed consolidated balance sheets. We expect these payments will be made over the next three months. In addition, we do not expect to incur further material charges associated with the 2026 Restructuring Plan. There were no charges incurred during the three months ended June 30, 2025 related to previous restructuring plans, and charges incurred during the six months ended June 30, 2025 were not material.

In the second quarter of 2026, we incurred $0.2 million in impairment charges of the operating lease right-of-use assets (“ROU assets”) related to a previous consolidation of certain leased office space at our corporate headquarters. These charges were recognized within transaction, integration, and restructuring expenses in our unaudited condensed consolidated statements of operations.

Sales Execution Challenges

In 2024, we made significant changes to our go-to-market team that reduced overlay expenses, created a separate group and sales motion for our small and medium sized customers, and allocated more resources to our Enterprise Customers (as the term is defined below). These changes created disruptions to our sales efforts beginning in 2024, impacting both new customer acquisition and upsell to existing customers. These factors, in addition to the lower than historical renewal rates we observed through fiscal year 2025, have impacted, and we expect will continue to impact, our results in 2026.

Product Innovation and AI Strategy

Throughout the year, we have been investing in the build of Turbo, our AI-powered healthcare intelligence platform, and we are beginning an initial pilot in the third quarter with select strategic customers. Turbo is designed to provide a conversational experience that enables customers to leverage our proprietary healthcare intelligence and data assets to support commercial, strategic and product decision-making. We expect customer feedback from the pilot program to inform the platform's broader market launch.

Non-Compliance with Nasdaq’s Minimum Bid Requirement

On June 18, 2026, we received a written notice from the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”) indicating that we were not in compliance with the minimum bid price requirement for continued listing on The Nasdaq Global Select Market because the closing bid price of our common stock was below $1.00 per share for 30 consecutive business days. The notice has no immediate effect on the listing or trading of our common stock, which continues to trade under the symbol “DH.”

The notice states that we have a compliance period of 180 calendar days, or until December 15, 2026, to regain compliance with the minimum bid price requirement. The notice further states that if we do not regain compliance during the initial 180-calendar-day compliance period, we may be eligible for an additional 180-calendar-day compliance period, provided that we meet certain listing requirements. If it appears to Nasdaq staff that we will not be able to cure the deficiency, or if we are otherwise not eligible for the additional compliance period, Nasdaq will provide notice that our securities will be subject to delisting.

We intend to actively monitor the closing bid price of our common stock and consider available options to regain compliance with the minimum bid price requirement. There can be no assurance that we will be able to regain compliance with the minimum bid price requirement during the initial compliance period or any additional compliance period, or that we will otherwise maintain compliance with the other Nasdaq listing requirements.

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Macroeconomic Conditions

Since 2022, our current and prospective customers, along with their business spending, have been affected by challenging macroeconomic conditions to varying degrees. This has contributed to heightened customer churn relative to historical levels. These trends have been particularly pronounced for smaller customers and in the Life Sciences market. The elevated churn has impacted our revenue growth since 2023, and we expect this will continue to have an impact on our growth in 2026. However, late in 2025 and through the first half of 2026, we have been seeing modest signs of improvement in the macroeconomic backdrop, with healthier demand trends, more normalized procurement cycles, improving customer retention dynamics, and increased visibility into customer budgets, all of which are encouraging signs we will continue to monitor.

As a corporation with a global footprint, we are subject to risks and exposures caused by significant events and their macroeconomic impacts, including, but not limited to, fluctuating inflation and high interest rates, volatility in the capital markets, international trade policies, including tariffs, sanctions, and trade barriers, and related market uncertainty, the conflict in Ukraine and the regional instability in the Middle East, and global geopolitical tensions. We continuously monitor the direct and indirect impacts, and the potential for future impacts, of these circumstances on our business and financial results, as well as the overall global economy and geopolitical landscape. While our revenue and earnings have historically been relatively predictable as a result of our subscription-based business model, the potential implications of these macroeconomic events on our business, results of operations and overall financial position, particularly in the long term, introduce additional uncertainty.

We have been observing changes in the healthcare claims data market as a result of data source disruption in calendar year 2024, including how data providers are reviewing pricing, data availability, and use terms, all of which may negatively impact the prices at which we acquire such data. We are continuing to evaluate these and other past and potential future direct and indirect impacts on our business and results of operations. We worked throughout 2025 to mitigate potential risk through renegotiation of select existing agreements and the addition of new data sources, which includes new data sources introduced into our offerings in 2026.

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Key Factors Affecting Our Performance

We believe that the growth and future success of our business depend on many factors, including the following:

Acquiring New Customers

We plan to organically grow the number of customers that use our platform by increasing demand for our platform and penetrating our addressable market. Our results of operations and growth prospects will depend, in part, on our ability to attract new customers. We intend to drive new customer acquisition w

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion includes a comparison of our results of operations, financial condition, and liquidity and capital resources for fiscal years 2025, 2024 and 2023. This discussion is provided as a supplement to, and should be read in conjunction with, our consolidated financial statements and accompanying Notes to the Financial Statements found in Part II, Item 8 of this Form 10-K. It contains forward-looking statements that involve risks and uncertainties and our actual results may differ materially from those discussed. Factors that could cause or contribute to these differences include, but are not limited to, those identified below and those discussed in “Risk Factors” under Part I, Item 1A of this Annual Report.

Overview

Definitive Healthcare is a leading provider of healthcare commercial intelligence. Our solutions are designed to 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 important to the commercial success of our approximately 2,330 customers as of December 31, 2025. We generally define a customer as a company that maintains one or more active paid subscriptions to our platform.

We sell into three end markets: Life Sciences, Provider, and Diversified. Life Sciences is made up of biopharmaceutical and medical device companies; Providers are the healthcare providers; and Diversified includes healthcare information technology companies and other organizations seeking commercial success in the attractive but complex healthcare ecosystem, such as staffing firms, commercial real estate firms, and financial institutions. Within these organizations, our platform is leveraged by a broad set of functional groups, including sales, marketing, clinical research and product development, strategy, talent acquisition, and physician network management. We offer access to our platform on a subscription basis, and we generate substantially all of our revenue from subscription fees.

We were founded in 2011 by our Executive Chairman, Jason Krantz. Mr. Krantz founded the Company to provide healthcare commercial intelligence that enables companies that compete within or sell into the healthcare ecosystem to make better, informed decisions and be more successful. Over time, we have expanded our platform with new intelligence modules, innovative analytics, workflow capabilities and additional data sources.

We believe any company selling or competing within the healthcare ecosystem is a potential customer for us and contributes to our estimated current total addressable market of over $11 billion and our serviceable addressable market of approximately $7 billion. In total, we have identified more than 100,000 potential customers that we believe could benefit from our platform.

Recent Developments

Acquisitions

On January 16, 2024, we completed the purchase of assets comprising the Carevoyance (as the term is defined below) business line of H1 Insights, Inc., a product that helps medical technology (“MedTech”) customers to improve segmentation, targeting, and prospect engagement for $13.7 million, subject to closing adjustments. We finalized the purchase price allocations of the Carevoyance acquisition during the fourth quarter of 2024.

On July 21, 2023, we completed the acquisition of Populi, a provider-focused data and analytics company that works with healthcare organizations to optimize physician relationships, reduce network leakage, and expand market share, for total consideration of $54.1 million, consisting of approximately $46.4 million of cash paid at closing, a $0.1 million reimbursement from sellers for working capital adjustments, and up to $28.0 million of contingent consideration, with an initial estimated fair value of $7.8 million, subject to meeting certain revenue metrics during calendar years 2024 and 2025. We finalized the purchase price allocations of the Populi acquisition during the first quarter of 2024. See Note 3. Acquisitions to our accompanying consolidated financial statements.

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Goodwill Impairment

Over the past three years, we have experienced declines in our market capitalization as a result of sustained decreases in our stock price, which represented triggering events requiring our management to perform quantitative goodwill impairment tests. As a result of each impairment test, we determined that the fair value of our single reporting unit was lower than its carrying value and, accordingly, recorded non-cash, pre-tax, goodwill impairment charges of $196.1 million, $688.9 million, and $287.4 million during the years ended December 31, 2025, 2024, and 2023, respectively. The goodwill impairment charges did not affect our liquidity or the financial covenants in our outstanding debt agreement.

We will continue to monitor for potential impairment should impairment indicators arise. See Note 10. Goodwill and Intangible Assets to our accompanying consolidated financial statements. Our reporting unit is at risk for future goodwill impairments if we experience a continued decline in our market capitalization or worsening macroeconomic conditions.

Restructuring Charges

During the first quarter of 2024, we committed to a restructuring plan intended to reduce operating costs, improve operating margins, and continue advancing our ongoing commitment to profitable growth (the “2024 Restructuring Plan”). The 2024 Restructuring Plan provided for a reduction of the Company’s current workforce by approximately 150 people. During the year ended December 31, 2024, we incurred restructuring and related charges of $8.1 million, consisting primarily of severance payments, employee benefits, and related cash expenses. These charges were recognized within transaction, integration, and restructuring expenses in our consolidated statements of operations. We do not expect to incur any additional material charges associated with the 2024 Restructuring Plan.

In fiscal year 2024, we recorded impairment charges of $1.2 million related to the consolidation of certain leased office space at our corporate headquarters. These charges comprised $0.9 million relating to the operating lease right-of-use assets and $0.3 million relating to the leasehold improvements. During the year ended December 31, 2025, we incurred additional impairment charges of $0.6 million related to the operating lease right-of-use assets. These charges were recognized within transaction, integration, and restructuring expenses in our consolidated statements of operations for each respective period.

During the first and third quarters of 2023, we committed to restructuring plans intended to reduce operating costs, improve operating margins, and continue advancing our ongoing commitment to profitable growth by reducing our workforce by approximately 100 people and, as a result, incurred restructuring and related charges of $4.7 million during the year ended December 31, 2023. These charges consisted primarily of severance payments, employee benefits, and related cash expenses. These charges were recognized within transaction, integration, and restructuring expenses in the accompanying consolidated statements of operations.

Sales Execution Challenges

As part of the 2024 Restructuring Plan, we made significant changes to our go-to-market team that reduced overlay expenses, created a separate group and sales motion for our small and medium sized customers, and allocated more resources to our Enterprise Customers (as the term is defined below). These changes initially created disruptions to our sales efforts in fiscal year 2024, impacting both new customer acquisition and upsell to existing customers. These factors, in addition to the lower than historical renewal rates we observed throughout fiscal year 2025, impacted our results in 2025, and we expect will continue to impact our results into 2026.

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Executive Transitions

As part of the Company’s ongoing review of its organizational design with respect to executive leadership, we have recently experienced several executive transitions.

On November 7, 2024, we announced that our former Chief Financial Officer, Richard Booth, would be leaving the Company effective June 1, 2025. After a thorough search process, our Board appointed Casey Heller, our former Senior Vice President of Finance, to the role of Chief Financial Officer effective June 2, 2025.

On June 25, 2025, we announced that the Chief Operating Officer position, held by Kate Shamsuddin Jensen, would be eliminated. Ms. Shamsuddin Jensen’s departure constituted a termination of employment without “cause” for purposes of any employment, equity compensation, or benefit agreement, plan, or arrangement of the Company and its subsidiaries to which Ms. Shamsuddin Jensen was a party or in which she otherwise participated.

Additionally, on July 20, 2025, Jill Larsen resigned from the Board and as a member and chair of the human capital management and compensation committee (the “Compensation Committee”) of the Board, effective July 21, 2025. Ms. Larsen’s resignation was related to increased responsibilities at her present employer and not the result of any disagreements with the Company relating to the Company’s operations, policies, or practices. Due to Ms. Larsen’s resignation, the size of the Board was reduced from 10 members to 9 members. In addition, the Board appointed Scott Stephenson as a member and Chair of the Compensation Committee.

Macroeconomic Conditions

Since 2022, our current and prospective customers, along with their business spending, have been affected by challenging macroeconomic conditions to varying degrees. This has contributed to heightened customer churn relative to historical levels. These trends have been particularly pronounced for smaller customers and in the Life Sciences market. The elevated churn has impacted our revenue growth since 2023, and we expect this will continue to have an impact on our growth in 2026. However, late in 2025, we began seeing modest signs of improvement in the macroeconomic backdrop, with healthier demand trends, more normalized procurement cycles, improving customer retention dynamics, and increased visibility into customer budgets, all of which are encouraging signs we will continue to monitor.

As a corporation with a global footprint, we are subject to risks and exposures caused by significant events and their macroeconomic impacts, including, but not limited to, fluctuating inflation and high interest rates, volatility in the capital markets, international trade policies, including tariffs, sanctions, and trade barriers, and related market uncertainty, the conflict in Ukraine and the regional instability in the Middle East, and global geopolitical tensions. We continuously monitor the direct and indirect impacts, and the potential for future impacts, of these circumstances on our business and financial results, as well as the overall global economy and geopolitical landscape. While our revenue and earnings have historically been relatively predictable as a result of our subscription-based business model, the potential implications of these macroeconomic events on our business, results of operations and overall financial position, particularly in the long term, introduce additional uncertainty.

We have been observing changes in the healthcare claims data market as a result of data source disruption in calendar year 2024, including how data providers are reviewing pricing, data availability, and use terms, all of which may negatively impact the prices at which we acquire such data. We are continuing to evaluate these and other past and potential future direct and indirect

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