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What changed in Definitive Healthcare Corp.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Definitive Healthcare Corp.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+434 added−355 removedSource: 10-K (2025-02-27) vs 10-K (2024-02-28)

Top changes in Definitive Healthcare Corp.'s 2024 10-K

434 paragraphs added · 355 removed · 298 edited across 3 sections

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

167 edited+80 added−26 removed378 unchanged
Biggest changeOur customers’ or third parties’ misuse of our platform, inconsistent with its permitted use, could result in reputational damage, adversely affect our ability to attract new customers, expose us to potential litigation and cause existing customers to reduce or discontinue the use of our platform, any of which could have a material adverse effect on our business, financial condition and results of operations. 12 Our brand may be negatively affected by the actions of persons using our platform that are hostile or inappropriate, by the actions of individuals acting under false or inauthentic identities, by the use of our platform to disseminate information that is misleading (or intended to manipulate opinions), by perceived or actual efforts by governments to obtain access to user information for security-related purposes or to censor certain content on our platform, or by the use of our platform for illicit, objectionable or illegal ends.
Biggest changeOur brand may be negatively affected by the actions of persons using our platform that are hostile or inappropriate, by the actions of individuals acting under false or inauthentic identities, by the use of our platform to disseminate information that is misleading (or intended to manipulate opinions), by perceived or actual efforts by governments to obtain access to user information for security-related purposes or to censor certain content on our platform, or by the use of our platform for illicit, objectionable or illegal ends.
Our customers may or may not renew their subscriptions as a result of a number of factors, including their satisfaction or dissatisfaction with our platform, decreases in the number of users at the 10 organization, our pricing or pricing structure, the pricing or capabilities of the products and services offered by our competitors, the effects of economic conditions (including as a result of general economic downturns and difficult macroeconomic conditions) or reductions in our paying customers’ spending levels.
Our customers may or may not renew their subscriptions as a result of a number of factors, including their satisfaction or dissatisfaction with our platform, decreases in the number of users at the organization, our pricing or pricing structure, the pricing or capabilities of the products and services offered by our competitors, the effects of economic conditions (including as a result of general economic downturns and difficult 10 macroeconomic conditions) or reductions in our paying customers’ spending levels.
Some of the factors that could negatively affect our share price or result in fluctuations in the price or trading volume of our Class A Common Stock include: • variations in our quarterly or annual results of operations; • changes in our earnings estimates (if provided) or differences between our actual results of operations and those expected by investors and analysts; • the contents of published research reports about us or our industry or the failure of securities analysts to cover our Class A Common Stock; 41 • additions or departures of key management personnel; • any increased indebtedness we may incur in the future; • announcements by us or others and developments affecting us; • actions by institutional stockholders; • litigation and governmental investigations; • legislative or regulatory changes; • judicial pronouncements interpreting laws and regulations; • changes in government programs; • changes in market valuations of similar companies; • sales of substantial amounts of our Class A Common Stock in the public markets; • speculation or reports by the press or investment community with respect to us or our industry in general; • announcements by us or our competitors of significant contracts, acquisitions, dispositions, strategic relationships, joint ventures or capital commitments; and • general market, political and economic conditions, including local conditions in the markets in which we operate.
Some of the factors that could negatively affect our share price or result in fluctuations in the price or trading volume of our Class A Common Stock include: • variations in our quarterly or annual results of operations; • changes in our earnings estimates (if provided) or differences between our actual results of operations and those expected by investors and analysts; • the contents of published research reports about us or our industry or the failure of securities analysts to cover our Class A Common Stock; • additions or departures of key management personnel; • any increased indebtedness we may incur in the future; • announcements by us or others and developments affecting us; • actions by institutional stockholders; • litigation and governmental investigations; • legislative or regulatory changes; • judicial pronouncements interpreting laws and regulations; • changes in government programs; • changes in market valuations of similar companies; • sales of substantial amounts of our Class A Common Stock in the public markets; • speculation or reports by the press or investment community with respect to us or our industry in general; • announcements by us or our competitors of significant contracts, acquisitions, dispositions, strategic relationships, joint ventures or capital commitments; and • general market, political and economic conditions, including local conditions in the markets in which we operate.
If there is no lawful manner for us to transfer personal data from the EEA, the UK or other jurisdictions to the United States, or if the requirements for a legally-compliant transfer are too onerous, we could face significant adverse consequences, including the interruption or degradation of our operations, the need to relocate part of or all of our business or data processing activities to other jurisdictions (such as Europe) at significant expense, increased exposure to regulatory actions, substantial fines and penalties, the inability to transfer data and work with partners, vendors and other third parties, and injunctions against our processing or transferring of personal data necessary to operate our business.
If there is no lawful manner for us to transfer personal data from the EEA, the UK or other jurisdictions to the United States, or if the requirements for a legally-compliant transfer are too onerous, we could face significant adverse consequences, including the interruption or degradation of our operations, the need to relocate part of or all of our business or data processing activities to other jurisdictions (such as Europe) at significant expense, increased exposure to regulatory actions, substantial fines and 25 penalties, the inability to transfer data and work with partners, vendors and other third parties, and injunctions against our processing or transferring of personal data necessary to operate our business.
If we do not adequately scale our customer experience operations to meet the demands of our growing customer base, an increase in large Enterprise Customers and large customer subscriptions, or if we otherwise fail to provide an overall high-quality customer experience, fewer customers could renew or upgrade their subscriptions, and our reputation could suffer, negatively impacting our ability to acquire new customers, which could have a material adverse effect on our business, financial condition and results of operations.
If we do not adequately scale our customer experience operations to meet the 12 demands of our growing customer base, an increase in large Enterprise Customers and large customer subscriptions, or if we otherwise fail to provide an overall high-quality customer experience, fewer customers could renew or upgrade their subscriptions, and our reputation could suffer, negatively impacting our ability to acquire new customers, which could have a material adverse effect on our business, financial condition and results of operations.
The accuracy of these judgments may be adversely affected by several factors, including significant: • underperformance relative to historical or projected future operating results; 34 • changes in the manner of our use of acquired assets or the strategy for our overall business; • negative industry or economic trends; or • decline in our market capitalization relative to net book value for a sustained period.
The accuracy of these judgments may be adversely affected by several factors, including significant: • underperformance relative to historical or projected future operating results; • changes in the manner of our use of acquired assets or the strategy for our overall business; • negative industry or economic trends; or • decline in our market capitalization relative to net book value for a sustained period.
As our customer base continues to grow, we will need to increase our account management, customer service and other personnel, which will require more complex management and systems. Additionally, since a significant portion of our new business is derived from customer referrals, customers may be less likely to refer new customers if they are not satisfied with our platform.
If our customer base continues to grow, we will need to increase our account management, customer service, and other personnel, which will require more complex management and systems. Additionally, since a significant portion of our new business is derived from customer referrals, customers may be less likely to refer new customers if they are not satisfied with our platform.
Further, we cannot provide assurance that we will be able to obtain adequate data on commercially acceptable terms from alternative sources if our current sources become unavailable. Our ability to introduce new features, intelligence modules, updates, integrations, capabilities and enhancements to our existing platform is dependent on innovation and our research and product development resources.
Further, we cannot provide assurance that we will be able to obtain adequate data on commercially acceptable terms from alternative sources if our current sources become unavailable. 9 Our ability to introduce new features, intelligence modules, updates, integrations, capabilities and enhancements to our existing platform is dependent on innovation and our research and product development resources.
In addition, if our mix of features and capabilities on our platform changes or if we develop additional intelligence modules for specific use cases or additional premium versions, then we may need or choose to revise our pricing. In deploying our solutions, we rely upon third-party providers of cloud-based infrastructure (“Cloud Providers”) to provide our services.
In addition, if our mix of features and capabilities on our platform changes or if we develop additional intelligence modules for specific use cases or additional premium versions, then we may need or choose to revise our pricing. 11 In deploying our solutions, we rely upon third-party providers of cloud-based infrastructure (“Cloud Providers”) to provide our services.
Because our EU subsidiary, Monocl AB, operates under a Swedish publishing certificate issued in accordance with Swedish national law, such processing of personal data by our EU subsidiary comes under the Swedish constitutional protection enshrining freedom of expression and consequently falls within the scope of Article 85 EU GDPR and is exempt from certain core provisions of the EU GDPR.
Because our EU subsidiary, Monocl AB, operates under a Swedish publishing certificate (database protection) issued in accordance with Swedish national law, such processing of personal data by our EU subsidiary comes under the Swedish constitutional protection enshrining freedom of expression and consequently falls within the scope of Article 85 EU GDPR and is exempt from certain core provisions of the EU GDPR.
Controls intended to prevent access to our platform from certain geographies may not be effective in all cases. 27 Any violation or allegation of violations of economic and trade sanctions laws, export controls, the FCPA or other applicable anti-corruption laws, or anti-money laundering laws could subject us to significant sanctions, including civil or criminal fines and penalties, disgorgement of profits, injunctions and debarment from government contracts, as well as related stockholder lawsuits and other remedial measures, all of which could adversely affect our reputation, business, financial condition and results of operations, and could also result in whistleblower complaints, adverse media coverage, investigations, loss of export privileges, any of which could have a material adverse effect on our reputation, business, results of operations and prospects.
Controls intended to prevent access to our platform from certain geographies may not be effective in all cases. 28 Any violation or allegation of violations of economic and trade sanctions laws, export controls, the FCPA or other applicable anti-corruption laws, or anti-money laundering laws could subject us to significant sanctions, including civil or criminal fines and penalties, disgorgement of profits, injunctions and debarment from government contracts, as well as related stockholder lawsuits and other remedial measures, all of which could adversely affect our reputation, business, financial condition and results of operations, and could also result in whistleblower complaints, adverse media coverage, investigations, loss of export privileges, any of which could have a material adverse effect on our reputation, business, results of operations and prospects.
Changes in public perception regarding the practices of the healthcare ecosystem may result in political pressure to increase the regulation of healthcare companies in one or more of the areas described above, which may negatively impact demand for our platform. 16 • Our business depends on the overall economic health of our existing and prospective customers.
Changes in public perception regarding the practices of the healthcare ecosystem may result in political pressure to increase the regulation of healthcare companies in one or more of the areas described above, which may negatively impact demand for our platform. • Our business depends on the overall economic health of our existing and prospective customers.
Though our business practices are designed to mitigate many of these risks, if we enable or offer A.I. solutions that are controversial because of their purported or real impact on human rights, privacy, employment, or other social issues, we may experience brand or reputational harm.
Though our business practices are designed to mitigate many of these risks, if we enable or offer A.I. solutions that are controversial because of their purported or real impact on human rights, data privacy, employment, or other social issues, we may experience brand or reputational harm.
If our competitors are able to purchase similar external data on 9 better terms, our ability to compete would be harmed. We cannot provide assurance that we will be successful in maintaining our relationships with these external data providers or that we will be able to continue to obtain data from them on acceptable terms or at all.
If our competitors are able to purchase similar external data on better terms, our ability to compete would be harmed. We cannot provide assurance that we will be successful in maintaining our relationships with these external data providers or that we will be able to continue to obtain data from them on acceptable terms or at all.
In particular, legislation or regulatory changes regarding data analytics companies has continued to be a topic of discussion by political leaders and regulators in the U.S. and elsewhere. • Consolidation within the healthcare ecosystem has accelerated in recent years, and this trend could continue.
In particular, legislation or regulatory changes regarding data analytics companies has continued to be a topic of discussion by political leaders and regulators in the U.S. and elsewhere. 16 • Consolidation within the healthcare ecosystem has accelerated in recent years, and this trend could continue.
The loss of one or more of our executive officers or key employees could have a material adverse effect on our business, financial condition and results of operations. In addition, to execute our growth plan, we must attract and retain highly qualified employees.
The loss of one or more of our executive officers or key employees could have a material adverse effect on our business, financial condition and results of operations. 15 In addition, to execute our growth plan, we must attract and retain highly qualified employees.
While in light of macroeconomic conditions we have made efforts to contain our operating expenses, including implementation of restructuring plans (the "Plans") in the first and third quarters of 2023 and in the first quarter of 2024, such efforts may not achieve the cost savings that we expect.
While in light of macroeconomic conditions we have made efforts to contain our operating expenses, including implementation of restructuring plans (the “Plans”) in the first and third quarters of 2023 and in the first quarter of 2024, such efforts may not achieve the cost savings that we expect.
We may not be able to refinance our debt or sell additional debt or equity securities or our assets on favorable terms, if at all, and if we must sell our assets, it could have a material adverse effect on our business, financial condition and results of operation. 36 Pursuant to our 2021 Credit Agreement, we are required to maintain, commencing on the last day of the fiscal quarter ending December 31, 2021, on a consolidated basis, a maximum ratio of consolidated net debt to consolidated EBITDA (with certain adjustments as set forth in the 2021 Credit Agreement), tested as of the last day of any fiscal quarter.
We may not be able to refinance our debt or sell additional debt or equity securities or our assets on favorable terms, if at all, and if we must sell our assets, it could have a material adverse effect on our business, financial condition and results of operation. 39 Pursuant to our 2021 Credit Agreement, we are required to maintain, commencing on the last day of the fiscal quarter ending December 31, 2021, on a consolidated basis, a maximum ratio of consolidated net debt to consolidated EBITDA (with certain adjustments as set forth in the 2021 Credit Agreement), tested as of the last day of any fiscal quarter.
Any of these events could have a material adverse effect on our reputation, business, or financial condition, including but not limited to: loss of customers; inability to process personal data or to operate in certain jurisdictions; limited ability to develop or commercialize our products; expenditure of time and resources to defend any claim or inquiry; adverse publicity; or substantial changes to our business model or operations. 26 Legal and Regulatory Risks Our platform addresses heavily regulated functions within the healthcare ecosystem and such regulations and laws are subject to change.
Any of these events could have a material adverse effect on our reputation, business, or financial condition, including but not limited to: loss of customers; inability to process personal data or to operate in certain jurisdictions; limited ability to develop or commercialize our products; expenditure of time and resources to defend any claim or inquiry; adverse publicity; or substantial changes to our business model or operations. 27 Legal and Regulatory Risks Our platform addresses heavily regulated functions within the healthcare ecosystem and such regulations and laws are subject to change.
We have seen this happen in response to difficult macroeconomic conditions and expect it will continue until they improve. In particular, these trends have been more pronounced for our existing and prospective life science and provider customers.
We have seen this happen in response to difficult macroeconomic conditions and expect it will continue until they improve. In particular, these trends have been more pronounced for our existing and prospective Life Science customers.
Under the Tax Receivable Agreement, we are 38 required to make cash payments to the TRA Parties equal to 85% of the tax benefits, if any, that Definitive Healthcare Corp. actually realizes, or in certain circumstances are deemed to realize, as a result of (i) certain tax attributes that Definitive Healthcare Corp. acquired from the Blocker Companies, (ii) certain tax basis adjustments resulting from (a) acquisitions by Definitive Healthcare Corp. of LLC Units from existing holders and (b) future redemptions or exchanges of LLC Units by holders of LLC Units for Class A Common Stock or other consideration and (iii) certain payments made under the Tax Receivable Agreement.
Under the Tax Receivable Agreement, we are 41 required to make cash payments to the TRA Parties equal to 85% of the tax benefits, if any, that Definitive Healthcare Corp. actually realizes, or in certain circumstances are deemed to realize, as a result of (i) certain tax attributes that Definitive Healthcare Corp. acquired from the Blocker Companies, (ii) certain tax basis adjustments resulting from (a) acquisitions by Definitive Healthcare Corp. of LLC Units from existing holders and (b) future redemptions or exchanges of LLC Units by holders of LLC Units for Class A Common Stock or other consideration and (iii) certain payments made under the Tax Receivable Agreement.
Acquisitions and other transactions, arrangements and investments involve numerous risks and could create unforeseen operating difficulties and expenditures, including: • potential failure to achieve the expected benefits on a timely basis or at all; • difficulties in, and the cost of, integrating operations, technologies, solutions and platforms; • diversion of financial and managerial resources from existing operations; • the potential entry into new markets in which we have little or no experience or where competitors may have stronger market positions; • potential write-offs of acquired assets or investments and potential financial and credit risks associated with acquired customers; • differences between our values and those of our acquired companies; • difficulties in re-training key employees of acquired companies and integrating them into our organizational structure and corporate culture; • difficulties in, and financial costs of, addressing acquired compensation structures inconsistent with our compensation structure; • inability to generate sufficient revenue to offset acquisition or investment costs; • inability to maintain, or changes in, relationships with customers and partners of the acquired business and costs to optimize any redundant data provider agreements; • challenges converting and forecasting the acquired company’s revenue recognition policies including subscription-based revenue and revenue based on the transfer of control, as well as appropriate allocation of the customer consideration to the individual deliverables; • difficulty with, and costs related to, transitioning the acquired technology onto our existing platform and customer acceptance of a new or changed platform on a temporary or permanent basis; • augmenting the acquired technologies and platforms to the levels that are consistent with our brand and reputation; • potential for acquired platforms to impact the financial performance of existing platform; • increasing or maintaining the security standards for acquired technology consistent with our platform; 13 • potential unknown liabilities associated with the acquired businesses, including risks associated with acquired technologies; • challenges relating to the structure of an investment, such as governance, accountability and decision-making conflicts that may arise in the context of a joint venture or other majority ownership investments; • a material adverse effect on our results of operations because of the depreciation and amortization of amounts related to acquired intangible assets, fixed assets and deferred compensation; • additional stock-based compensation; • the loss of acquired unearned revenue and unbilled unearned revenue; • delays in customer purchases due to uncertainty related to any acquisition; • ineffective or inadequate controls, procedures and policies at the acquired company; • in the case of foreign acquisitions, challenges caused by integrating operations over distance and across different languages, cultures and political environments; • currency and regulatory risks and potential additional cybersecurity and compliance risks resulting from entry into new markets; • tax effects and costs of any such acquisitions, including the related integration into our tax structure and assessment of the impact on the realizability of our future tax assets or liabilities; and • potential challenges by governmental authorities, including the U.S.
Any partnership we complete could be viewed negatively by customers, users or investors, and could have adverse effects on our existing business relationships. 13 Acquisitions and other transactions, arrangements and investments involve numerous risks and could create unforeseen operating difficulties and expenditures, including: • potential failure to achieve the expected benefits on a timely basis or at all; • difficulties in, and the cost of, integrating operations, technologies, solutions and platforms; • diversion of financial and managerial resources from existing operations; • the potential entry into new markets in which we have little or no experience or where competitors may have stronger market positions; • potential write-offs of acquired assets or investments and potential financial and credit risks associated with acquired customers; • differences between our values and those of our acquired companies; • difficulties in re-training key employees of acquired companies and integrating them into our organizational structure and corporate culture; • difficulties in, and financial costs of, addressing acquired compensation structures inconsistent with our compensation structure; • inability to generate sufficient revenue to offset acquisition or investment costs; • inability to maintain, or changes in, relationships with customers and partners of the acquired business and costs to optimize any redundant data provider agreements; • challenges converting and forecasting the acquired company’s revenue recognition policies including subscription-based revenue and revenue based on the transfer of control, as well as appropriate allocation of the customer consideration to the individual deliverables; • difficulty with, and costs related to, transitioning the acquired technology onto our existing platform and customer acceptance of a new or changed platform on a temporary or permanent basis; • augmenting the acquired technologies and platforms to the levels that are consistent with our brand and reputation; • potential for acquired platforms to impact the financial performance of existing platform; • increasing or maintaining the security standards for acquired technology consistent with our platform; • potential unknown liabilities associated with the acquired businesses, including risks associated with acquired technologies; • challenges relating to the structure of an investment, such as governance, accountability and decision-making conflicts that may arise in the context of a joint venture or other majority ownership investments; • a material adverse effect on our results of operations because of the depreciation and amortization of amounts related to acquired intangible assets, fixed assets and deferred compensation; • additional stock-based compensation; • the loss of acquired unearned revenue and unbilled unearned revenue; • delays in customer purchases due to uncertainty related to any acquisition; • ineffective or inadequate controls, procedures and policies at the acquired company; • in the case of foreign acquisitions, challenges caused by integrating operations over distance and across different languages, cultures and political environments; • currency and regulatory risks and potential additional cybersecurity and compliance risks resulting from entry into new markets; • tax effects and costs of any such acquisitions, including the related integration into our tax structure and assessment of the impact on the realizability of our future tax assets or liabilities; and • potential challenges by governmental authorities, including the U.S.
Any measures that we may take to enforce our rights could require us to expend significant financial or other resources. 30 We may be subject to claims by others that we are infringing on their intellectual property rights.
Any measures that we may take to enforce our rights could require us to expend significant financial or other resources. We may be subject to claims by others that we are infringing on their intellectual property rights.
If we were required to register as an investment company, restrictions imposed by the 1940 Act, including limitations on our capital structure and our ability to transact with affiliates, could make it impractical for us to continue our business as contemplated and could have a material adverse effect on our business. 40 Risks Related to Ownership of Our Class A Common Stock Future offerings of debt or equity securities by us may have a material adverse effect on the market price of our Class A Common Stock.
If we were required to register as an investment company, restrictions imposed by the 1940 Act, including limitations on our capital structure and our ability to transact with affiliates, could make it impractical for us to continue our business as contemplated and could have a material adverse effect on our business. 43 Risks Related to Ownership of Our Class A Common Stock Future offerings of debt or equity securities by us may have a material adverse effect on the market price of our Class A Common Stock.
Additionally, we rely on our network and third-party infrastructure and enterprise applications, internal technology systems and our website, for our product development, analytics innovation, marketing, operational support, hosted services and sales activities.
Additionally, we rely on our network and third-party infrastructure and enterprise applications, internal technology systems and our website, for our product development, analytics 19 innovation, marketing, operational support, hosted services and sales activities.
Further, our rapid growth may make it difficult to evaluate our future prospects. Our ability to forecast our future results of operations is subject to a number of uncertainties, including our ability to effectively plan for and model future growth.
Further, our growth may make it difficult to evaluate our future prospects. Our ability to forecast our future results of operations is subject to a number of uncertainties, including our ability to effectively plan for and model future growth.
If we fail to maintain adequate operational and financial resources, particularly if we continue to grow rapidly, we may be unable to execute our business plan or maintain high levels of service and customer satisfaction.
If we fail to maintain adequate operational and financial resources, particularly if we grow rapidly, we may be unable to execute our business plan or maintain high levels of service and customer satisfaction.
Any successful action by state or foreign taxing authorities to compel us to collect and remit sales tax, use tax, VAT or other taxes, either retroactively and/or prospectively, could have a material adverse effect on our business, financial condition and results of operations. 33 Risks Related to Accounting and Financial Reporting Matters Deferred revenue and change in deferred revenue may not be accurate indicators of our future financial results.
Any successful action by state or foreign taxing authorities to compel us to collect and remit sales tax, use tax, VAT or other taxes, either retroactively and/or prospectively, could have a material adverse effect on our business, financial condition and results of operations. 35 Risks Related to Accounting and Financial Reporting Matters Deferred revenue and change in deferred revenue may not be accurate indicators of our future financial results.
Additionally, if PHI is inadvertently introduced into our systems without being properly de-identified, we may be directly liable for mishandling PHI and for failing to comply with HIPAA as a “business associate.” The U.S. Department of Health and Human Services Office for Civil Rights, or OCR, may impose penalties for a failure to comply with applicable requirement of HIPAA.
Additionally, if PHI is inadvertently introduced into our systems without being properly de-identified, we may be directly liable for mishandling PHI and for failing to comply with HIPAA as a “business associate.” The U.S. Department of Health and Human Services Office for Civil Rights, or OCR, may impose penalties for a failure to comply with applicable requirements of HIPAA.
In addition, our insurance may not cover all claims made against us, and defending a suit, regardless of its merit, could be costly and divert management’s attention. Further, such insurance may not be available to us in the future on economically reasonable terms, or at all. 28 We may be subject to legal liability for collecting, displaying or distributing information.
In addition, our insurance may not cover all claims made against us, and defending a suit, regardless of its merit, could be costly and divert management’s attention. Further, such insurance may not be available to us in the future on economically reasonable terms, or at all. 29 We may be subject to legal liability for collecting, displaying or distributing information.
Any claims for indemnification by our directors and officers may reduce our available funds to satisfy successful third-party claims against us and may reduce the amount of money available to us.
Claims for indemnification by our directors and officers may reduce our available funds to satisfy successful third-party claims against us and may reduce the amount of money available to us.
Our potential liability for information distributed by us to others could require us to implement measures to reduce our exposure to such liability, which may require us to expend substantial resources and limit the attractiveness of our analytics to users. 29 Risks Related to Intellectual Property We may not be able to adequately protect our proprietary and intellectual property rights in our data analytics or data science.
Our potential liability for information distributed by us to others could require us to implement measures to reduce our exposure to such liability, which may require us to expend substantial resources and limit the attractiveness of our analytics to users. 30 Risks Related to Intellectual Property We may not be able to adequately protect our proprietary and intellectual property rights in our data analytics or data science.
We cannot assure you that the measures we have taken to date, or any measures we may take in the future, will be sufficient to avoid potential future material weaknesses. 35 Risks Related to Our Indebtedness We may not be able to secure sufficient additional financing on favorable terms, or at all, to meet our future capital needs.
We cannot assure you that the measures we have taken to date, or any measures we may take in the future, will be sufficient to avoid potential future material weaknesses. 38 Risks Related to Our Indebtedness We may not be able to secure sufficient additional financing on favorable terms, or at all, to meet our future capital needs.
Our data providers could stop providing data, provide outdated data or inaccurate data or increase the costs for their data for a variety of reasons, including a perception that our systems are insecure as a result of a data security breach, budgetary constraints, a desire to generate additional revenue or for regulatory or competitive reasons.
Our data providers could stop providing data for any reason, provide outdated data or inaccurate data or increase the costs for their data for a variety of reasons, including a perception that our systems are insecure as a result of a data security breach, budgetary constraints, a desire to generate additional revenue or for regulatory or competitive reasons.
We and the third parties upon which we rely are subject to a variety of evolving threats, including but not limited to social-engineering attacks (including through deep fakes, which may be increasingly more difficult to identify as fake, and phishing attacks), malicious code (such as viruses and worms), malware (including as a result of advanced persistent threat intrusions), credential harvesting, personnel misconduct or error, ransomware attacks, supply-chain attacks, software bugs, server malfunctions, software or hardware failures, loss of data or other information technology assets, adware, attacks enhanced or facilitated by AI, telecommunications failures, earthquakes, fire, flood, power loss, system failures, computer viruses, software errors, physical or electronic break-ins or malicious hacks or attacks on our systems (such as denial of service attacks), and other similar threats.
We and the third parties with whom we work are subject to a variety of evolving threats, including but not limited to social-engineering attacks (including through deep fakes, which may be increasingly more difficult to identify as fake, and phishing attacks), malicious code (such as viruses and worms), malware (including as a result of advanced persistent threat intrusions), credential harvesting, personnel misconduct or error, ransomware attacks, supply-chain attacks, software bugs, server malfunctions, software or hardware failures, loss of data or other information technology assets, adware, attacks enhanced or facilitated by AI, telecommunications failures, earthquakes, fire, flood, power loss, system failures, computer viruses, software errors, physical or electronic break-ins or malicious hacks or attacks on our systems (such as denial of service attacks), and other similar threats.
Remote work has become more common and has increased risks to our information technology systems and data, as more of our employees utilize network connections, computers, and devices outside our premises or network, including working at home, while in transit, and in public locations.
Remote work has increased risks to our information technology systems and data, as more of our employees utilize network connections, computers, and devices outside our premises or network, including working at home, while in transit, and in public locations.
Instead, any excess cash payments made by us to a TRA Party will be netted against any future cash payments that we might 39 otherwise be required to make to such TRA Party, as applicable, under the terms of the Tax Receivable Agreement.
Instead, any excess cash payments made by us to a TRA Party will be netted against any future cash payments that we might 42 otherwise be required to make to such TRA Party, as applicable, under the terms of the Tax Receivable Agreement.
If we (or a third party upon whom we rely) experience a security incident or are unable to protect our computer systems, software, networks, sensitive data and other technology assets, or there is a perception that we have failed to do so, we may experience adverse consequences, such as government enforcement actions (for example, investigations, fines, penalties, audits, and inspections); additional reporting requirements and/or oversight; restrictions on processing sensitive data (including personal data); litigation (including class claims); indemnification obligations; negative publicity; reputational harm; monetary fund diversions; diversion of management attention; interruptions in our operations (including availability of data); financial loss; and other similar harms.
If we (or a third party with whom we work) experience a security incident or are unable to protect our computer systems, software, networks, sensitive data and other technology assets, or there is a perception that we have failed to do so, we may experience material adverse consequences, such as government enforcement actions (for example, investigations, fines, penalties, audits, and inspections); additional reporting requirements and/or oversight; restrictions on processing sensitive data (including personal data); litigation (including class claims); indemnification obligations; negative publicity; reputational harm; monetary fund diversions; diversion of management attention; interruptions in our operations (including availability of data); financial loss; and other similar harms.
Department of Justice, for anti-competitive or other reasons. Any of these risks could harm our business.
Department of Justice, for anti-competitive or other reasons. 14 Any of these risks could harm our business.
Although we have no present intention to issue any shares of our preferred stock, we may do so in the future under appropriate circumstances. 45 It em 1B. Unresolved Staff Comments. None.
Although we have no present intention to issue any shares of our preferred stock, we may do so in the future under appropriate circumstances. 48 It em 1B. Unresolved Staff Comments. None.
To the extent there are disruptions in our third-party subscription and payment processing systems, we could experience revenue loss, accounting issues and harm to our reputation and customer relationships, which could have a material adverse effect on our business, financial condition and results of operations. 20 Risks Related to Data Privacy and Cybersecurity If our information technology systems or those of third parties upon which we rely, or our data are or were compromised, we could experience material adverse consequences resulting from such compromise, including but not limited to regulatory investigations or actions; litigation; fines and penalties; disruptions of our business operations; reputational harm; loss of revenue or profits; and other adverse consequences.
To the extent there are disruptions in our third-party subscription and payment processing systems, we could experience revenue loss, accounting issues and harm to our reputation and customer relationships, which could have a material adverse effect on our business, financial condition and results of operations. 20 Risks Related to Data Privacy and Cybersecurity If our information technology systems or those of third parties with whom we work, or our data are or were compromised, we could experience material adverse consequences resulting from such compromise, including but not limited to regulatory investigations or actions; litigation; fines and penalties; disruptions of our business operations; reputational harm; loss of revenue or profits; and other adverse consequences.
The failure to comply with the covenants under our 2021 Credit Agreement or volatility in the credit and capital markets could have a material adverse effect on our business, financial condition, liquidity and results of operation. Our ability to manage our debt is dependent on our level of positive cash flow from the sale of our platform.
The failure to comply with the covenants under our credit agreements or volatility in the credit and capital markets could have a material adverse effect on our business, financial condition, liquidity and results of operation. Our ability to manage our debt is dependent on our level of positive cash flow from the sale of our platform.
For the year ended December 31, 2023, we derived 97% of our revenue from subscription services, and we expect to continue to generate substantially all of our revenue from the sale of subscriptions to our platform.
For the year ended December 31, 2024, we derived 97% of our revenue from subscription services, and we expect to continue to generate substantially all of our revenue from the sale of subscriptions to our platform.
We may not complete the current or any future restructuring activities on the anticipated timetable, and even if successfully completed, we may not achieve the anticipated cost savings, operating efficiencies or other benefits of such activities. Catastrophic events could disrupt our business and adversely affect our operating results.
We may not complete the current or any future restructuring activities on the anticipated timetable, and even if successfully completed, we may not achieve the anticipated cost savings, operating efficiencies or other benefits of such activities. Catastrophic events and geopolitical and trade tensions could disrupt our business and adversely affect our operating results.
These events may have a material adverse effect on our business, financial condition, and results of operations. Our contracts may not contain limitations of liability, and even where they do, there can be no assurance that limitations of liability in our contracts are sufficient to protect us from liabilities, damages, or claims related to our data privacy and security obligations.
These events may have a material adverse effect on our business, financial condition, and results of operations. 22 Our contracts may not contain limitations of liability, and even where they do, there can be no assurance that limitations of liability in our contracts are sufficient to protect us from regulatory fines and sanctions, liabilities, damages, or claims related to our data privacy and security obligations.
The market price of our Class A Common Stock may fluctuate or may decline significantly in the future and you could lose all or part of your investment.
The market price of our Class A Common Stock may fluctuate or may continue to decline significantly in the future and you could lose all or part of your investment.
In connection with the completion of our IPO, we entered into a Registration Rights Agreement with certain pre-IPO owners, including Advent, Spectrum Equity, 22C Capital and our founder.
In connection with the completion of our IPO, we entered into a Registration Rights Agreement with certain pre-IPO owners, including Advent, Spectrum Equity, and our founder.
We take steps designed to detect, mitigate, and remediate vulnerabilities in our information systems (such as our hardware and/or software, including that of third parties upon which we rely). We may not, however, detect and remediate all such vulnerabilities including on a timely basis.
We take steps designed to detect, mitigate, and remediate vulnerabilities in our information systems (such as our hardware and/or software, including that of third parties upon which we rely). We have not and may not in the future, however, detect and remediate all such vulnerabilities including on a timely basis.
Our failure to comply with the covenants under the 2021 Credit Agreement or to have sufficient liquidity to make interest and other payments required by our debt could result in a default of such debt and acceleration of our borrowings, which could have a material adverse effect on our business, financial condition and results of operations. 37 Risks Related to Our Organizational Structure We are a holding company, and our principal asset is our 74.9% ownership interest in Definitive OpCo, and we are accordingly dependent upon distributions from Definitive OpCo to pay dividends, if any, and taxes, make payments under the Tax Receivable Agreement and pay other expenses.
Our failure to comply with the covenants under our credit agreements or to have sufficient liquidity to make interest and other payments required by our debt could result in a default of such debt and acceleration of our borrowings, which could have a material adverse effect on our business, financial condition and results of operations. 40 Risks Related to Our Organizational Structure We are a holding company, and our principal asset is our 74.3% ownership interest in Definitive OpCo, and we are accordingly dependent upon distributions from Definitive OpCo to pay dividends, if any, and taxes, make payments under the Tax Receivable Agreement and pay other expenses.
In the event of a major weather event or threatened public health emergency (e.g., the COVID-19 pandemic), or other catastrophic event such as fire, power loss, telecommunications failure, cyber-attack, war or terrorist attack, we may be unable to continue our operations at full capacity or at all and may experience system interruptions, reputational harm, delays in our solution development, lengthy interruptions in our services, breaches of data security, loss of key employees and loss of critical data.
In the event of a major weather event or threatened public health emergency, or other catastrophic event such as fire, power loss, telecommunications failure, cyber-attack, war or terrorist attack, we may be unable to continue our operations at full capacity or at all and may experience system interruptions, reputational harm, delays in our solution development, lengthy interruptions in our services, breaches of data security, loss of key employees and loss of critical data.
This evolution may create uncertainty in our business, affect our ability to operate in certain jurisdictions or to process personal data, necessitate the acceptance of more onerous obligations in our contracts, result in liability or impose additional costs on us.
This evolution creates uncertainty in our business and may affect our ability to operate in certain jurisdictions or to process personal data, necessitate the acceptance of more onerous obligations in our contracts, or result in liability or impose additional costs on us.
Our attrition rates may increase or fluctuate as a result of a number of factors, including customer dissatisfaction with our services, customers’ spending levels, mix of customer base, decreases in the number of users at our customers, competition, pricing increases or changing or deteriorating general economic conditions.
Our attrition rates have, and may continue to, increase or fluctuate as a result of a number of factors, including customer dissatisfaction with our services, customers’ spending levels, mix of customer base, decreases in the number of users at our customers, competition, pricing increases or changing or deteriorating general economic conditions.
Many data privacy and security obligations protect more than health-related information, and although they vary by jurisdiction, these obligations can extend to employee information, business information, healthcare provider information and other information relating to individuals.
Many data privacy and security obligations protect more than health-related information, and although they vary by jurisdiction, these obligations can extend to employee information, business information, healthcare provider information and other information relating to individual consumers.
Global geopolitical tension may also be disruptive to our business, including as a result of the military conflict between Russia and Ukraine and the evolving conflict in Israel and surrounding areas.
Global geopolitical and trade tensions may also be disruptive to our business, including as a result of the military conflict between Russia and Ukraine and the evolving conflict in Israel and surrounding areas.
Our revenue growth may slow or our revenue may decline for a number of other reasons, including reduced demand for our platform, increased competition, a decrease in the growth or reduction in size of our overall market, failure to capitalize on growth opportunities, and the impacts to our business from macroeconomic factors such as the Russia-Ukraine war, the evolving conflict in Israel and surrounding areas, global geopolitical tension, and more recently, inflation and high interest rates, volatility in the capital markets and related market uncertainty.
Our revenue growth has in the past slowed and may in the future slow or our revenue may decline for a number of other reasons, including reduced demand for our platform, increased competition, a decrease in the growth or reduction in size of our overall market, failure to capitalize on growth opportunities, and the impacts to our business from macroeconomic factors such as the Russia-Ukraine war, the evolving conflict in Israel and surrounding areas, global geopolitical and trade tensions, and more recently, inflation and high interest rates, volatility in the capital markets and related market uncertainty.
If we or the third parties on which we rely fail, or are perceived to have failed, to address or comply with applicable data privacy and security obligations, we could face significant consequences, including but not limited to: government enforcement actions (e.g., investigations, fines, penalties, audits, inspections, and similar); litigation (including class-action claims) and mass arbitration demands; additional reporting requirements and/or oversight; bans on processing personal data; and orders to destroy or not use personal data.
If we or the third parties with whom we work fail, or are perceived to have failed, to address or comply with applicable data privacy and security obligations, we could face significant 26 consequences, including but not limited to: government enforcement actions (e.g., investigations, fines (including regulatory fines and sanctions), penalties, audits, inspections, and similar); litigation (including class-action claims) and mass arbitration demands; additional reporting requirements and/or oversight; bans on processing personal data; and orders to destroy or not use personal data.
Numerous other factors may also impede our ability to add new customers and retain and expand existing customer subscriptions, including failure to hire effective sales personnel, adequately train new sales personnel, provide a high-quality customer experience and ensure the effectiveness of our go-to-market programs that drive customer referrals.
Numerous other factors have in the past impeded, and may also in the future impede, our ability to add new customers and retain and expand existing customer subscriptions, including failure to hire effective sales personnel, adequately train new sales personnel, provide a high-quality customer experience and ensure the effectiveness of our go-to-market programs that drive customer referrals.
Further, these agreements do not prevent our competitors from independently developing technologies that are substantially equivalent or superior to our platform. Additionally, certain unauthorized use of our intellectual property may go undetected, or we may face legal or practical barriers to enforcing our legal rights even where unauthorized use is detected.
Further, these confidentiality, non-disclosure, or invention assignment agreements do not prevent our competitors from independently developing technologies that are substantially equivalent or superior to our platform. Additionally, certain unauthorized use of our intellectual property may go undetected, or we may face legal or practical barriers to enforcing our legal rights even where unauthorized use is detected.
To manage growth in our operations and personnel, we will need to continue to expand and improve our operational, financial and management controls and our reporting systems and procedures. We will require significant capital expenditures and the allocation of valuable management resources to grow and change in these areas.
To manage future growth in our operations and personnel, we may need to expand and improve our operational, financial, and management controls and our reporting systems and procedures. We may require significant capital expenditures and the allocation of valuable management resources to grow and change in these areas.
Shares of our Class A Common Stock may experience significant volatility. An active, liquid and orderly market for our Class A Common Stock may not be sustained, which could depress the trading price of our Class A Common Stock or cause it to be highly volatile or subject to wide fluctuations.
An active, liquid and orderly market for our Class A Common Stock may not be sustained, which could depress the trading price of our Class A Common Stock or cause it to be highly volatile or subject to wide fluctuations.
Our contracts typically require advance notice to terminate a contract in the absence of a default by the Company. In addition, our customers may renew for shorter contract lengths if they were previously on multi-year contracts or switch to lower cost offerings of our platform.
Our contracts typically require advance notice to terminate a contract in the absence of a default by the Company. In addition, our customers have in the past, and may continue to in the future, renew for shorter contract lengths if they were previously on multi-year contracts or switch to lower cost offerings of our platform.
As we acquire and invest in companies or technologies, we may not realize expected business or financial benefits and the acquisitions or investments could prove difficult to integrate, disrupt our business, dilute stockholder value and adversely affect our business, financial condition and results of operations.
As we acquire and invest in companies or technologies, including through partnerships with other companies, we may not realize expected business or financial benefits and the acquisitions or investments could prove difficult to integrate, disrupt our business, dilute stockholder value and adversely affect our business, financial condition and results of operations.
We are a holding company and our principal asset is our ownership of 74.9% of the outstanding LLC Units (as of December 31, 2023), exclusive of unvested LLC Units. We have no independent means of generating revenue.
We are a holding company and our principal asset is our ownership of 74.3% of the outstanding LLC Units (as of December 31, 2024), exclusive of unvested LLC Units. We have no independent means of generating revenue.
In addition, as of December 31, 2023, our pre-IPO owners held directly or indirectly a total of 39,762,700 LLC Units that, subject to applicable time-vesting conditions (some of which have already been met), can ultimately be redeemed or exchanged for our Class A Common Stock.
In addition, as of December 31, 2024, our pre-IPO owners held directly or indirectly a total of 39,439,198 LLC Units that, subject to applicable time-vesting conditions (some of which have already been met), can ultimately be redeemed or exchanged for our Class A Common Stock.
Enterprise Customers are a key focus of our go-to-market programs. As we target more of our sales efforts at larger Enterprise Customers, we may face longer sales cycles, greater competition, more complex customer due diligence, less favorable contractual terms and less predictability in completing some of our sales.
Enterprise Customers are a key focus of our go-to-market programs. As we target more of our sales efforts at larger Enterprise Customers, we have in the past faced, and may continue to in the future face, longer sales cycles, greater competition, more complex customer due diligence, less favorable contractual terms, and less predictability in completing some of our sales.
Additionally, California’s Delete Act requires the CPPA to establish, by January 1, 2026, a mechanism to allow California consumers to submit a single, verifiable request to delete all of their personal data held by all registered data brokers and their service providers.
Additionally, California’s Delete Act requires the California Privacy Protection Agency (“CPPA”) to establish, by January 1, 2026, a mechanism to allow California consumers to submit a single, verifiable request to delete all of their personal data held by all registered data brokers and their service providers.
During times of war and other major conflicts, we and the third parties upon which we rely may be vulnerable to a heightened risk of these attacks, including retaliatory cyber-attacks, that could materially disrupt our systems and operations, supply chain, and ability to produce, sell and distribute our services.
During times of war and other major conflicts, we and the third parties with whom we work may be vulnerable to a heightened risk of these attacks, including retaliatory cyber-attacks, that could materially disrupt our systems and operations, supply chain, and ability to produce, sell and distribute our services.
Our expansion has placed, and our expected future growth will continue to place, a significant strain on our management, customer experience, innovation, sales and marketing, administrative, financial and other resources.
Our expansion has placed, and our potential future growth may continue to place, a significant strain on our management, customer experience, innovation, sales and marketing, administrative, financial, and other resources.
For example, the California Consumer Privacy Act of 2018, as amended by the California Privacy Rights Act of 2020 (“CPRA”) (collectively, “CCPA”), applies to personal data of consumers, business representatives, and employees who are California residents, and requires businesses to provide specific disclosures in privacy notices and honor requests of such individuals to exercise certain privacy rights.
For example, the California Consumer Privacy Act of 2018, (“CCPA”), applies to personal data of consumers, business representatives, and employees who are California residents, and requires businesses to provide specific disclosures in privacy notices and honor requests of such individuals to exercise certain privacy rights.
Our level of indebtedness could have a material adverse effect on our business, financial condition and results of operations. The total principal amount of debt outstanding, excluding unamortized debt issuance costs, under the 2021 Credit Agreement as of December 31, 2023 was $257.8 million.
Our level of indebtedness could have a material adverse effect on our business, financial condition and results of operations. The total principal amount of debt outstanding, excluding unamortized debt issuance costs, under the 2021 Credit Agreement as of December 31, 2024 was $244.1 million.
Our customers could use our platform for purposes beyond the scope of their contractual terms or applicable laws or regulations. For example, our customers are subject to broad healthcare fraud and abuse laws that may limit their appropriate use of our platform and information obtained therein.
Our customers could use our platform for purposes beyond the scope of their contractual terms or applicable laws or regulations which may retain Company data post termination. For example, our customers are subject to broad healthcare fraud and abuse laws that may limit their appropriate use of our platform and information obtained therein.
It also requires the introduction of compelling new features, intelligence modules and capabilities that reflect the changing nature of our market to maintain and improve the quality and value of our platform, which depends on our ability to continue investing in innovation and our successful execution and our efforts to improve and enhance our platform.
It also requires the introduction of compelling new features, intelligence modules and capabilities that reflect the changing nature of our market and available novel technologies (such as A.I. technologies) to maintain and improve the quality and value of our platform, which depends on our ability to continue investing in innovation and our successful execution and our efforts to improve and enhance our platform.
Any of the foregoing could disrupt and harm our business. 19 Additionally, the use of certain open-source software in certain manners requires that other licensees be granted the right to make any derivative works of any proprietary software linked to or used with the open-source code, or make such proprietary software available to others on terms that are unfavorable to such licensee or at no cost.
Additionally, the use of certain open-source software in certain manners requires that other licensees be granted the right to make any derivative works of any proprietary software linked to or used with the open-source code, or make such proprietary software available to others on terms that are unfavorable to such licensee or at no cost.
Cyber-attacks, malicious internet-based activity, online and offline fraud, and other similar activities threaten the confidentiality, integrity, and availability of our sensitive data and information technology systems, and those of the third parties upon which we rely.
Cyber-attacks, malicious internet-based activity, online and offline fraud, and other similar activities threaten the confidentiality, integrity, and availability of our sensitive data and information technology systems, and those of the third parties with whom we work.
Our amended and restated certificate of incorporation designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, and designates the federal district courts of the United States as the sole and exclusive forum for claims arising under the Securities Act, which, in each case could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers employees, agents or other stockholders.
Any claims for indemnification by our directors and officers may reduce our available funds to satisfy successful third-party claims against us and may reduce the amount of money available to us. 47 Our amended and restated certificate of incorporation designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, and designates the federal district courts of the United States as the sole and exclusive forum for claims arising under the Securities Act, which, in each case could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers employees, agents or other stockholders.
Operations outside the U.S. expose us to risks inherent in international operations. Our Monocl business, along with the acquisition of AW in 2022, create exposure to risks inherent in international operations. Any new markets or countries into which we attempt to sell subscriptions to our platform may not be as receptive to our solutions as we anticipate.
Operations outside the U.S. expose us to risks inherent in international operations. Our Monocl and AW businesses create exposure to risks inherent in international operations. Any new markets or countries into which we attempt to sell subscriptions to our platform may not be as receptive to our solutions as we anticipate.
Goodwill and Intangible Assets for further information. Our reporting unit is at risk of future goodwill impairments if we again experience a continued decline in our market capitalization or if macroeconomic conditions worsen, which could represent potential indicators of impairment requiring further impairment analysis in 2024. We continue to monitor for potential impairment should impairment indicators arise.
Refer to Note 9. Goodwill and Intangible Assets for further information. Our reporting unit is at risk of future goodwill impairments if we again experience a continued decline in our market capitalization or if macroeconomic conditions worsen, which could represent potential indicators of impairment requiring further impairment analysis in 2025.
We may not achieve or sustain profitability in the future compared to historical levels as we increase investments in our business. We have incurred operating losses in the past and may continue to incur net losses in the future.
We may not achieve or sustain profitability in the future as we increase investments in our business or experience operational challenges. We have incurred operating losses in the past and may continue to incur net losses in the future.
If we need additional capital and cannot raise it on acceptable terms, or at all, we may not be able to, among other things: • develop new features, intelligence modules, updates, integrations, capabilities and enhancements; • continue to provide synthesis of real-time data; • hire, train and retain employees; • respond to competitive pressures or unanticipated working capital requirements; or • pursue acquisition opportunities. 18 We have recently undertaken internal restructuring activities, and may do so again in the future.
If we need additional capital and cannot raise it on acceptable terms, or at all, we may not be able to, among other things: • develop new features, intelligence modules, updates, integrations, capabilities and enhancements; • continue to provide synthesis of real-time data; • hire, train and retain employees; • respond to competitive pressures or unanticipated working capital requirements; or • pursue acquisition opportunities.
Delaware law and our organizational documents, as well as our existing and future debt agreements, may impede or discourage a takeover, which could deprive our investors of the opportunity to receive a premium for their shares.
The interests of this group of stockholders may not coincide with the interests of other stockholders. Delaware law and our organizational documents, as well as our existing and future debt agreements, may impede or discourage a takeover, which could deprive our investors of the opportunity to receive a premium for their shares.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThese increases were partially offset by savings resulting from lower franchise taxes and relief from sales tax exposure, including penalties and interest, resulting from voluntary disclosure agreements, new insurance policies, and lower rent expense due to the exit of certain office facilities; • A decrease in depreciation and amortization expense of $1.1 million for the year ended December 31, 2023, primarily due to the full amortization of a significant database intangible asset during the comparable prior year period; and • An increase in transaction, integration and restructuring expenses of $3.6 million for the year ended December 31, 2023, due primarily to costs associated with restructuring plans announced in the first and third quarters of 2023 and the acquisition of Populi.
Biggest changeThe increase to operating expenses as compared to the prior-year period was primarily driven by higher goodwill impairment charges in the current period, partially offset by: • A decrease in sales and marketing expense of $10.7 million for the year ended December 31, 2024, primarily driven by lower personnel costs, including stock-based compensation expense, resulting from the 2024 Restructuring Plan; • A decrease in product development expense of $5.9 million for the year ended December 31, 2024, primarily driven by lower personnel costs, including stock-based compensation expense, resulting from the 2024 Restructuring Plan and the departure of certain executive-level employees; • A decrease in general and administrative expense of $9.6 million for the year ended December 31, 2024, primarily driven by lower professional service fees, expense relief from sales tax exposure during the year resulting from voluntary disclosure agreements and finalized favorable rulings on the taxability of our products in certain states, lower personnel costs, including stock-based compensation expense, resulting from the 2024 Restructuring Plan and the departure of certain executive-level employees, and lower franchise taxes; • A decrease in depreciation and amortization expense of $1.4 million for the year ended December 31, 2024, primarily driven by certain customer relationship intangible assets utilizing economic consumption amortization methods with lower amortization in the current period; and • An increase in transaction, integration and restructuring expenses of $0.7 million for the year ended December 31, 2024, primarily driven by higher restructuring costs incurred in the current period associated with the 2024 Restructuring Plan and impairment charges resulting from the consolidation of certain leased office facilities, partially offset by lower acquisition related costs in the current period.
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. We offer access to our platform on a subscription basis, and we generate substantially all of our revenue from subscription fees.
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.
Restructuring Charges 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.
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.
Goodwill impairment . Goodwill represents the excess of consideration transferred over the fair value of tangible and identifiable intangible net assets acquired and the liabilities assumed in a business combination. Substantially all of our goodwill was recognized in the purchase price allocations when our Company was acquired in 2019 by Advent, with smaller incremental amounts recognized in subsequent business combinations.
Goodwill represents the excess of consideration transferred over the fair value of tangible and identifiable intangible net assets acquired and the liabilities assumed in a business combination. Substantially all of our goodwill was recognized in the purchase price allocations when our Company was acquired in 2019 by Advent, with smaller incremental amounts recognized in subsequent business combinations.
Our board of directors may take into account general and economic conditions, our financial condition and operating results, our available cash and current and anticipated cash needs, capital requirements, contractual, legal, tax, and regulatory restrictions and implications on the payment of dividends by us to our stockholders or by our subsidiaries to us, and such other factors as our board of directors may deem relevant. 48 Stock Performance Graph The following shall not be deemed “soliciting material” or to be “filed” with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any of our other filings under the Securities Act or the Exchange Act.
Our board of directors may take into account general and economic conditions, our financial condition and operating results, our available cash and current and anticipated cash needs, capital requirements, contractual, legal, tax, and regulatory restrictions and implications on the payment of dividends by us to our stockholders or by our subsidiaries to us, and such other factors as our board of directors may deem relevant. 51 Stock Performance Graph The following shall not be deemed “soliciting material” or to be “filed” with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any of our other filings under the Securities Act or the Exchange Act.
While we have slowed hiring in response to macroeconomic conditions, and expect to maintain slower levels until macroeconomic conditions improve, we have continued to hire additional sales and marketing personnel, enhance our digital marketing infrastructure and invest in marketing programs targeting our major vertical markets. 55 Product development .
While we have slowed hiring in response to macroeconomic conditions, and expect to maintain slower levels until macroeconomic conditions improve, we have continued to hire additional sales and marketing personnel, enhance our digital marketing infrastructure and invest in marketing programs targeting our major vertical markets. Product development .
Accordingly, we cannot provide assurance that our business will generate sufficient cash flow from operations or that future borrowings will be available from additional indebtedness or otherwise to meet our liquidity needs.
Accordingly, we cannot provide assurance that our business will generate sufficient cash flow from operations or that future 67 borrowings will be available from additional indebtedness or otherwise to meet our liquidity needs.
We historically have not experienced any significant incidents that affected the defined levels of reliability and performance as required by the contracts. 65 Acquisitions We account for business combinations using the acquisition method in accordance with ASC 805—Business Combinations. Each acquired company’s results of operations are included in our consolidated financial statements starting on the date of acquisition.
We historically have not experienced any significant incidents that affected the defined levels of reliability and performance as required by the contracts. 72 Acquisitions We account for business combinations using the acquisition method in accordance with ASC 805—Business Combinations. Each acquired company’s results of operations are included in our consolidated financial statements starting on the date of acquisition.
Although the outcomes of these claims cannot be predicted with certainty, in the opinion of management, the ultimate resolution of these matters would not be expected to have a material adverse effect on our business, results of operations or financial condition. It em 4. Mine Safety Disclosures. Not applicable. 47 PA RT II It em 5.
Although the outcomes of these claims cannot be predicted with certainty, in the opinion of management, the ultimate resolution of these matters would not be expected to have a material adverse effect on our business, results of operations or financial condition. It em 4. Mine Safety Disclosures. Not applicable. 50 PA RT II It em 5.
We measure the credit risk of our derivative financial instruments that are subject to master netting agreements on a net basis by counterparty portfolio. 66 Goodwill and Intangible Assets Goodwill is calculated as the excess of the purchase consideration paid in the acquisition of a business over the fair value of the identifiable assets acquired and liabilities assumed.
We measure the credit risk of our derivative financial instruments that are subject to master netting agreements on a net basis by counterparty portfolio. 73 Goodwill and Intangible Assets Goodwill is calculated as the excess of the purchase consideration paid in the acquisition of a business over the fair value of the identifiable assets acquired and liabilities assumed.
Our principal uses of liquidity have been, and are expected to continue to be, primarily for investment in long-term growth of the business through capital expenditures and acquisitions, as well as debt services (see Note 10. Long-Term Debt in the accompanying consolidated financial statements for further details) and distributions to members of Definitive OpCo.
Our principal uses of liquidity have been, and are expected to continue to be, primarily for investment in long-term growth of the business through capital expenditures and acquisitions, as well as debt services (see Note 10. Long-Term Debt in the accompanying consolidated financial statements for further details), stock repurchases, and distributions to members of Definitive OpCo.
Other companies in similar businesses may use different estimation policies and methodologies, which may affect the comparability of our financial statements, financial condition, results of operations and cash flows to those of other companies. 64 Revenue Recognition We derive our revenue primarily from subscription license fees charged for access to our database platform, and professional services.
Other companies in similar businesses may use different estimation policies and methodologies, which may affect the comparability of our financial statements, financial condition, results of operations and cash flows to those of other companies. 71 Revenue Recognition We derive our revenue primarily from subscription license fees charged for access to our database platform, and professional services.
If estimated undiscounted future cash flows expected to result from its use and eventual disposition are not expected to be adequate to recover the asset’s carrying value, an impairment charge is recorded for the excess of the asset’s carrying value over its estimated fair value. 67 Accounting for Income Taxes Definitive OpCo is taxed as a partnership.
If estimated undiscounted future cash flows expected to result from its use and eventual disposition are not expected to be adequate to recover the asset’s carrying value, an impairment charge is recorded for the excess of the asset’s carrying value over its estimated fair value. 74 Accounting for Income Taxes Definitive OpCo is taxed as a partnership.
(calculated with certain assumptions) to the amount of such taxes that Definitive Healthcare Corp. would have been required to pay had there been no tax basis adjustments of the assets of Definitive Healthcare Corp. as a result of redemptions or exchanges and no utilization of certain tax attributes of the Blocker Companies, and had Definitive Healthcare Corp. not 63 entered into the TRA.
(calculated with certain assumptions) to the amount of such taxes that Definitive Healthcare Corp. would have been required to pay had there been no tax basis adjustments of the assets of Definitive Healthcare Corp. as a result of redemptions or exchanges and no utilization of certain tax attributes of the Blocker Companies, and had Definitive Healthcare Corp. not 70 entered into the TRA.
In February 2022, we completed our acquisition of Analytical Wizards Inc., a company that specializes in automating complex analytic models using tools that expedite efficient big data mining through A.I. and M.L. power to uncover deep insights. These acquisitions have strengthened our data platform and our business.
In February 2022, we completed our acquisition of Analytical Wizards Inc., a company that specializes in automating complex analytic models using tools that expedite efficient big data mining through A.I. power to uncover deep insights. These acquisitions have strengthened our data platform and our business.
The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position as well as consideration of the available facts and circumstances. For the tax years ended December 31, 2023, 2022, and 2021, we did not have any uncertain tax positions.
The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position as well as consideration of the available facts and circumstances. For the tax years ended December 31, 2024, 2023, and 2022, we did not have any uncertain tax positions.
While we are primarily focused on organic investments to drive innovation, we will also evaluate strategic acquisitions and investments that further expand our platform. 53 Key Metrics We monitor the following key metrics to help us evaluate our business performance, identify financial trends, formulate business plans, and make strategic operational decisions.
While we are primarily focused on organic investments to drive innovation, we will also evaluate strategic acquisitions and investments that further expand our platform. 58 Key Metrics We monitor the following key metrics to help us evaluate our business performance, identify financial trends, formulate business plans, and make strategic operational decisions.
(b) Equity-based compensation represents non-cash compensation expense recognized in association with equity awards made to employees and directors. (c) Transaction and integration expenses primarily represent legal, accounting, and consulting expenses and fair value adjustments for contingent consideration related to our acquisitions.
(b) Equity-based compensation represents non-cash compensation expense recognized in association with equity awards made to employees and directors. (c) Transaction and integration expenses primarily represent legal, accounting, and consulting expenses and fair value adjustments for contingent consideration related to our acquisitions and strategic partnerships.
Cybersecurity Risk Management and Strategy We have implemented and maintain various information security processes designed to identify, assess and manage material risks from cybersecurity threats to our critical computer networks, third party hosted services, communications systems, hardware and software, and our critical data, including intellectual property, confidential information that is proprietary, strategic or competitive in nature, and data of our customers and employees (“Information Systems and Data”).
Cybersecurity Risk Management and Strategy We have implemented and maintain various information security processes designed to identify, assess and manage material risks from cybersecurity threats to our critical computer networks, third party hosted services, communications systems, hardware and software, and our critical data, including intellectual property, confidential information that is proprietary, strategic or competitive in nature, and data of our customers and employees (“Infor mation Systems and Data”) .
A small portion of equity-based compensation is included in cost of revenue in accordance with U.S. GAAP, but is excluded from our Adjusted Gross Profit calculations due to its non-cash nature. Gross Margin is defined as Gross Profit as a percentage of revenue and Adjusted Gross Margin is defined as Adjusted Gross Profit as a percentage of revenue.
A small portion of equity-based compensation is included in cost of revenue in accordance with GAAP, but is excluded from our Adjusted Gross Profit calculations due to its non-cash nature. Gross Margin is defined as Gross Profit as a percentage of revenue and Adjusted Gross Margin is defined as Adjusted Gross Profit as a percentage of revenue.
The payments under the TRA are not conditioned upon continued ownership of us by the exchanging holders of LLC Units. See Note 19 in our consolidated financial statements included in Part II, Item 8 of this Form 10-K.
The payments under the TRA are not conditioned upon continued ownership of us by the exchanging holders of LLC Units. See Note 19. Income Taxes in our consolidated financial statements included in Part II, Item 8 of this Form 10-K.
Risk Factors in this Annual Report. 46 Governance Our audit committee of the board of directors addresses the Company’s cybersecurity risk management as part of its general oversight function. The audit committee is responsible for overseeing Company’s cybersecurity risk management processes, including oversight of risks from cybersecurity threats.
Risk Factors in this Annual Report. 49 Governance Our audit committee of the board of directors addresses the Company’s cybersecurity risk management as part of its general oversight function. The audit committee is responsible for overseeing Company’s cybersecurity risk management processes, including oversight of risks from cybersecurity threats.
We are continuing to evaluate these and other past and potential future direct and indirect impacts on our business and results of operations. 52 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 continue to organically grow the number of customers that use our platform by increasing demand for our platform and penetrating our addressable market.
We are continuing to evaluate these and other past and potential future direct and indirect impacts on our business and results of operations. 56 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.
There was no outstanding balance on the 2021 Revolving Line of Credit as of December 31, 2023 and 2022. During the quarter ended December 31, 2023, the lessor of the Company ’ s corporate headquarters transitioned from one entity to another.
There was no outstanding balance on the 2021 Revolving Line of Credit as of December 31, 2024 and 2023. During the quarter ended December 31, 2023, the lessor of the Company ’ s corporate headquarters transitioned from one entity to another.
Recently Issued Accounting Pronouncements For a summary of recent accounting pronouncements applicable to our consolidated financial statements, refer to Note 2. Summary of Significant Accounting Policies in the Notes to our consolidated financial statements included in Part II, Item 8 of this Form 10-K. 68
Recently Issued Accounting Pronouncements For a summary of recent accounting pronouncements applicable to our consolidated financial statements, refer to Note 2. Summary of Significant Accounting Policies in the Notes to our consolidated financial statements included in Part II, Item 8 of this Form 10-K. 75
The audit committee receives quarterly reports from the CTO concerning the Company’s significant cybersecurity threats and risk and the processes the Company has implemented to address them. The audit committee also receives various reports, summaries or presentations related to cybersecurity threats, risk and mitigation. It em 2. Properties.
The audit committee receives quarterly reports concerning the Company’s significant cybersecurity threats and risk and the processes the Company has implemented to address them. The audit committee also receives various reports, summaries or presentations related to cybersecurity threats, risk and mitigation. It em 2. Properties.
For a discussion of our 2022 cash flows compared to 2021 cash flows, see the discussion in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2022 Form 10-K/A, which is incorporated by reference herein.
For a discussion of our 2023 cash flows compared to 2022 cash flows, see the discussion in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2023 Form 10-K, which is incorporated by reference herein.
We calculate NDR as beginning ARR for a period, plus (i) expansion ARR (including, but not limited to, upsell and pricing increases), less (ii) churn (including, but not limited to, non-renewals and contractions), divided by (iii) beginning ARR for a period.
We calculate NDR as beginning ARR for a period, plus (i) expansion ARR (including, but not limited to, upsell and pricing increases), less (ii) churn (including, but not limited to, non-renewals and contractions), divided by (iii) beginning ARR for the same period.
For a discussion of the 2022 results compared to those in 2021, see the discussion in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2022 Form 10-K/A, which is incorporated by reference herein.
For a discussion of the 2023 results compared to those in 2022, see the discussion in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2023 Form 10-K, which is incorporated by reference herein.
Macroeconomic Conditions 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, the Russia-Ukraine war, the evolving conflict in Israel and surrounding areas, global geopolitical tension and more recently, inflation and high interest rates, volatility in the capital markets, liquidity concerns at, and failures of, banks and other financial institutions, and related market uncertainty.
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, the Russia-Ukraine war, the conflict in Israel and surrounding areas, global geopolitical and trade tensions and more recently, inflation and high interest rates, volatility in the capital markets, liquidity concerns at, and failures of, banks and other financial institutions, and related market uncertainty.
Acquisitions can result in transaction costs, amortization expense and other adjustments as purchase accounting requires that all assets acquired and liabilities assumed be recorded at fair value on the acquisition date.
Acquisitions can result in transaction costs, amortization expense and other adjustments as purchase accounting requires that all assets acquired and liabilities assumed be recorded at fair value on the acquisition date. See Note 3.
Credit Risk Our financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents, and trade and other receivables. We hold cash with reputable financial institutions that often exceed federally insured limits.
Credit Risk Our financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents, short-term investments, and trade and other receivables. We hold cash with reputable financial institutions that often exceed federally insured limits.
Stockholders As of February 23, 2024, there were 34 holders of record of our Class A Common Stock. The actual number of stockholders is greater than this number of record holders, and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers and other nominees.
Stockholders As of February 24, 2025, there were 34 holders of record of our Class A Common Stock. The actual number of stockholders is greater than this number of record holders, and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers and other nominees.
We were founded in 2011 by our Executive Chairman and current Interim Chief Executive Officer, 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.
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.
We do not have significant exposure to foreign exchange volatility and do not anticipate foreign currency transaction gains or losses to materially impact our results of operations. 56 Results of Operations The discussion of our consolidated results of operations includes year-over-year comparisons of 2023 results compared to those in 2022.
We do not have significant exposure to foreign exchange volatility and do not anticipate foreign currency transaction gains or losses to materially impact our results of operations. 62 Results of Operations The discussion of our consolidated results of operations includes year-over-year comparisons of 2024 results compared to those in 2023.
Expanding Relationships with Existing Customers We believe there is a significant opportunity to generate additional revenue from our existing customer base of approximately 2,900 as of December 31, 2023. Our customers have historically increased their spending by adding functionality and by expanding use-cases across departments.
Expanding Relationships with Existing Customers We believe there is a significant opportunity to generate additional revenue from our existing customer base of approximately 2,500 customers, as adjusted, as of December 31, 2024. Our customers have historically increased their spending by adding functionality and by expanding use-cases across departments.
Our subscription revenue is recognized ratably over the contract term. Our professional services revenue typically is derived from non-recurring consulting services which are generally capable of being distinct and can be accounted for as separate performance obligations.
Our subscription revenue is recognized ratably over the contract term. Our professional services revenue typically is derived from non-recurring consulting services or from other one-time deliveries which are generally capable of being distinct and can be accounted for as separate performance obligations.
We manage our credit risk by concentrating our cash deposits with high-quality financial institutions and periodically evaluating the credit quality of those institutions. The carrying value of cash approximates fair value. Cash Flows The discussion of our cash flows includes a year-over-year comparison of 2023 cash flows to those in 2022.
We manage our credit risk by concentrating our cash deposits and short-term investments with high-quality financial institutions and periodically evaluating the credit quality of those institutions. The carrying value of cash approximates fair value. Cash Flows The discussion of our cash flows includes a year-over-year comparison of 2024 cash flows to those in 2023.
A balloon payment of approximately $220.0 million will be due at the maturity of the 2021 Term Loan. There was $257.8 million outstanding on the 2021 Term Loan at December 31, 2023. The 2021 Revolving Line of Credit is committed for $75.0 million and has a maturity date of September 17, 2026.
A balloon payment of approximately $220.0 million will be due at the maturity of the 2021 Term Loan. There was $244.1 million outstanding on the 2021 Term Loan at December 31, 2024. The 2021 Revolving Line of Credit is committed for $75.0 million and has a maturity date of September 17, 2026.
Our corporate headquarters is located in Framingham, Massachusetts and consists of approximately 55,700 square feet of space under a lease that expire in January 2029, with extension options. As of December 31, 2023, we have other offices in Sweden and India. We lease all of our facilities and do not own any real property.
Our corporate headquarters is located in Framingham, Massachusetts and consists of approximately 40,500 square feet of space under a lease that expires in January 2029, with extension options. As of December 31, 2024, we have other offices in Sweden and India. We lease all of our facilities and do not own any real property.
We do not expect sales taxes and related interest and penalties to be an ongoing component of our general and administrative expense as we complete voluntary disclosure agreements, register with certain tax authorities, and commence collection of sales taxes from customers in these tax jurisdictions.
We do not expect sales taxes and related interest and penalties to be an ongoing component of our general and administrative expense as we have completed voluntary disclosure agreements, registered with certain tax authorities, and commenced collection of sales taxes from customers in these tax jurisdictions.
We plan to continue to invest significantly into our engineering and research and development efforts to enhance our capabilities and functionality and facilitate the expansion of our platform to new use cases and customers. In addition, we work to continuously release updates and new features.
We have continually created new products since our founding in 2011. We plan to continue to invest significantly into our engineering and research and development efforts to enhance our capabilities and functionality and facilitate the expansion of our platform to new use cases and customers. In addition, we work to continuously release updates and new features.
Refer to Debt Obligations for additional information related to our debt obligations. 62 Debt Obligations On September 17, 2021, DH Holdings entered into the 2021 Credit Agreement, providing for (i) a $275.0 million term loan A facility (the “2021 Term Loan”) and (ii) a $75.0 million revolving credit facility (the “2021 Revolving Line of Credit” and together with the 2021 Term Loan, collectively, the “2021 Credit Facilities”).
Debt Obligations 2021 Credit Facilities On September 17, 2021, DH Holdings entered into the 2021 Credit Agreement, providing for (i) a $275.0 million term loan A facility (the “2021 Term Loan”) and (ii) a $75.0 million revolving credit facility (the “2021 Revolving Line of Credit” and together with the 2021 Term Loan, collectively, the “2021 Credit Facilities”).
See Note 3 in our consolidated financial statements included in Part II, Item 8 of this Form 10-K. 54 Components of our Results of Operations Revenue For the year ended December 31, 2023, we derived approximately 97% of our revenue from subscription services and the remainder from professional services.
Acquisitions in our consolidated financial statements included in Part II, Item 8 of this Form 10-K. 59 Components of our Results of Operations Revenue For the year ended December 31, 2024, we derived approximately 97% of our revenue from subscription services and the remainder from professional services.
Other Income, Net Total other income, net was $21.6 million for the year ended December 31, 2023 compared to total other income, net of $2.2 million in the same period in the prior year.
Other Income, Net Total other income, net was $77.1 million for the year ended December 31, 2024 compared to total other income, net of $21.6 million in the same period in the prior year.
When a contract contains multiple performance obligations, the contract transaction price is allocated on a relative standalone selling price (“SSP”) basis to each performance obligation. We typically determine SSP based on observable selling prices of our products and services.
Revenue related to these professional services is recognized at the time the services are performed. When a contract contains multiple performance obligations, the contract transaction price is allocated on a relative standalone selling price (“SSP”) basis to each performance obligation. We typically determine SSP based on observable selling prices of our products and services.
As a result of our quantitative impairment test, we determined that the fair value of our single reporting unit was lower than its carrying value and, accordingly, recorded this impairment charge. (e) Other non-core items represent expenses driven by events that are typically by nature one-time, non-operational, and/or unrelated to our core operations.
As a result of the impairment tests conducted in each respective period, we determined that the fair value of our single reporting unit was lower than its carrying value and, accordingly, recorded these impairment charges. (e) Other non-core items represent expenses driven by events that are typically by nature one-time, non-operational, and/or unrelated to our core operations.
Goodwill and Intangible Assets in the accompanying consolidated financial statements for further details. Impairment of Long-Lived Assets We review the carrying value of long-lived assets, including definite-lived intangible assets and property and equipment, for impairment whenever events and circumstances indicate that the carrying value of an asset may not be recoverable.
Impairment of Long-Lived Assets We review the carrying value of long-lived assets, including definite-lived intangible assets and property and equipment, for impairment whenever events and circumstances indicate that the carrying value of an asset may not be recoverable.
However, inflation has not materially affected our business to date. Sales and marketing. Sales and marketing expenses primarily consist of personnel costs such as salaries, bonuses, sales commissions, stock-based compensation, and other employee-related benefits for our sales and marketing teams, as well as non-personnel costs including overhead costs, technology and advertising costs.
Sales and marketing expenses primarily consist of personnel costs such as salaries, bonuses, sales commissions, stock-based compensation, and other employee-related benefits for our sales and marketing teams, as well as non-personnel costs including overhead costs, technology and advertising costs.
Benefit From Income Taxes Benefit from income taxes for the year ended December 31, 2023 was $18.6 million compared to $17.7 million in the same period in the prior year.
Benefit From Income Taxes Benefit from income taxes for the year ended December 31, 2024 was $42.3 million compared to $18.6 million in the same period in the prior year.
Transaction, integration and restructuring expenses . Transaction, integration, and restructuring expenses are costs directly associated with various acquisition and integration activities we have undertaken, primarily accounting and legal due diligence, and consulting and advisory fees, as well as expenses related to our restructuring plans committed to in the first and third quarters of 2023 and our office relocations.
Transaction, integration, and restructuring expenses are costs directly associated with various acquisition, strategic partnership, and integration activities we have undertaken, primarily accounting, legal due diligence, consulting, and advisory fees, as well as expenses related to our restructuring plans committed to in 2024 and 2023 and our office relocations and consolidations. Goodwill impairment .
Goodwill and Intangible Assets in the accompanying consolidated financial statements for further details), increased $309.7 million, or 138%, for the year ended December 31, 2023 compared with the same period in the prior year.
Goodwill and Intangible Assets in the accompanying consolidated financial statements for further details), increased $374.6 million, or 70%, for the year ended December 31, 2024 compared with the same period in the prior year.
The following table summarizes our cash flows for the periods presented: Year Ended December 31, (in thousands) 2023 2022 2021 Cash provided by (used in): Operating activities $ 41,190 $ 35,579 $ 25,212 Investing activities (31,782 ) (248,903 ) (46,731 ) Financing activities (25,584 ) (26,696 ) 384,372 Change in cash and cash equivalents (excluding effect of exchange rate changes) $ (16,176 ) $ (240,020 ) $ 362,853 Cash Flows provided by Operating Activities Net cash provided by operating activities was $41.2 million during the year ended December 31, 2023, primarily as a result of a net loss of $289.6 million and a $30.4 million net decrease in our operating assets and liabilities, offset by non-cash charges of $361.2 million.
The following table summarizes our cash flows for the periods presented: Year Ended December 31, (in thousands) 2024 2023 2022 Cash provided by (used in): Operating activities $ 58,196 $ 41,190 $ 35,579 Investing activities (26,409 ) (31,782 ) (248,903 ) Financing activities (56,749 ) (25,584 ) (26,696 ) Change in cash and cash equivalents (excluding effect of exchange rate changes) $ (24,962 ) $ (16,176 ) $ (240,020 ) Cash Flows provided by Operating Activities Net cash provided by operating activities was $58.2 million during the year ended December 31, 2024, primarily as a result of non-cash charges of $675.6 million, partially offset by a net loss of $591.4 million and a $25.9 million net decrease in our operating assets and liabilities.
Our cybersecurity risk assessment and management processes are implemented and maintained by certain Company management, including our Senior Principal Security and Infrastructure Architect with over 20 years managing large scale enterprise security systems and programs.
Our cybersecurity risk assessment and management processes are implemented and maintained by certain Company management, including our Vice President of Information technology and Director of Information Security, each Senior Principal Security and Infrastructure Architect with over 20 years’ experience managing large scale enterprise information technology and security systems and programs.
Our customers include biopharmaceutical and medical device companies, healthcare information technology 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.
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.
Delivered through our software as a service (“SaaS”) platform, our intelligence has become important to the commercial success of our approximately 2,900 customers as of December 31, 2023. We generally define a customer as a company that maintains one or more active paid subscriptions to our platform.
Delivered through our software as a service (“SaaS”) platform, our intelligence has become important to the commercial success of our approximately 2,500 customers as of December 31, 2024. 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.
In addition to total contract volume, cRPO is influenced by several factors, including seasonality, disparate contract terms, and the timing of renewals, because renewals tend to be most frequent in the fourth quarter. The value of contracts that included cancellation terms increased significantly in the fourth quarter compared with prior periods.
In addition to total contract volume, cRPO is influenced by several factors, including seasonality, disparate contract terms, and the timing of renewals, because renewals tend to be most frequent in the fourth quarter.
The following table presents cRPO as of December 31, 2023 and 2022: (in thousands) December 31, 2023 December 31, 2022 Current $ 187,331 $ 183,527 Non-current 89,636 93,464 Total $ 276,967 $ 276,991 Impact of Acquisitions We seek to enhance our platform, data and business through internal development and through acquisitions of and investments in businesses that broaden and strengthen our platform.
The following table presents our current and total remaining performance obligations as of December 31, 2024 and 2023: (in thousands) December 31, 2024 December 31, 2023 Current $ 188,050 $ 187,331 Non-current 105,673 89,636 Total $ 293,723 $ 276,967 Impact of Acquisitions We seek to enhance our platform, data and business through internal development and through acquisitions of and investments in businesses that broaden and strengthen our platform.
The following table presents a reconciliation of gross profit and gross margin to adjusted gross profit and adjusted gross margin for the periods presented: Year Ended December 31, 2023 2022 2021 (in thousands) Amount % of Revenue Amount % of Revenue Amount % of Revenue Reported gross profit and margin $ 203,933 81 % $ 180,028 81 % $ 125,465 76 % Amortization of intangible assets resulting from acquisition-related purchase accounting adjustments (a) 9,044 4 % 15,715 7 % 20,220 12 % Equity-based compensation costs 1,097 0 % 942 0 % 277 0 % Adjusted gross profit and margin $ 214,074 85 % $ 196,685 88 % $ 145,962 88 % (a) Amortization of intangible assets resulting from purchase accounting adjustments represents non-cash amortization of acquired intangibles, primarily resulting from the Advent Acquisition.
The following table presents a reconciliation of gross profit and gross margin to adjusted gross profit and adjusted gross margin, respectively, for the periods presented: Year Ended December 31, 2024 2023 2022 (in thousands, except percentages) Amount % of Revenue Amount % of Revenue Amount % of Revenue Reported gross profit and margin $ 197,469 78 % $ 203,933 81 % $ 180,028 81 % Amortization of intangible assets resulting from acquisition-related purchase accounting adjustments (a) 9,866 4 % 9,044 4 % 15,715 7 % Equity-based compensation costs 839 0 % 1,097 0 % 942 0 % Adjusted gross profit and margin $ 208,174 83 % $ 214,074 85 % $ 196,685 88 % (a) Amortization of intangible assets resulting from purchase accounting adjustments represents non-cash amortization of acquired intangibles, primarily resulting from the Advent Acquisition. 65 Adjusted EBITDA and Adjusted EBITDA Margin We present “Adjusted EBITDA” as a measure of our operating performance.
Management further adjusts EBITDA in its presentation of Adjusted EBITDA to exclude (i) other (income) expense, (ii) equity-based compensation, (iii) acquisition, integration, and restructuring expenses, (iv) goodwill impairments, and (v) other non-core items.
EBITDA is defined as earnings before (i) debt-related costs, including interest expense, (ii) interest income, (iii) income taxes, and (iv) depreciation and amortization. Management further adjusts EBITDA in its presentation of Adjusted EBITDA to exclude (i) other income, (ii) equity-based compensation, (iii) transaction, integration, and restructuring expenses, (iv) goodwill impairments, and (v) other non-core items.
We are also experiencing heightened customer churn. These trends have been particularly pronounced for smaller customers and in the life science and provider markets. This churn impacted our revenue growth in 2023, and we expect this will continue to impact our growth in 2024 as we remediate the underlying issues.
We are also experiencing heightened customer churn. These trends have been particularly pronounced for smaller customers and in the Life Science market. This churn has impacted our revenue growth since 2023, and we expect this will continue to have an impact on our growth into fiscal year 2025.
Our NDR for all customers over $17,500 ARR was 92%. For the year ended December 31, 2022, our NDR for Enterprise Customers was 110% and our NDR for all customers over $17,500 ARR was 103%. For the year ended December 31, 2021, our NDR for Enterprise Customers was 120% and our NDR for all customers over $17,500 ARR was 111%.
Our NDR for all customers over $17,500 ARR was 85%. For the year ended December 31, 2023, our NDR for Enterprise Customers was 96% and our NDR for all customers over $17,500 ARR was 92%.
Year Ended December 31, (in thousands) 2023 2022 2021 Merger and acquisition due diligence and transaction costs $ 5,419 $ 1,580 $ 2,496 Integration costs 934 3,765 27 Fair value adjustment for contingent consideration 302 1,250 3,764 Restructuring charges for severance and other separation costs 4,679 — — Office closure and relocation restructuring charges and impairments 155 1,295 — Total transaction, integration and restructuring expense $ 11,489 $ 7,890 $ 6,287 (d) Goodwill impairment represents a non-cash, pretax, goodwill impairment charge of $287.4 million recorded during the quarter ended September 30, 2023.
Year Ended December 31, (in thousands) 2024 2023 2022 Merger and acquisition due diligence and transaction costs $ 3,329 $ 5,419 $ 1,580 Integration costs 1,115 934 3,765 Fair value adjustment for contingent consideration (1,780 ) 302 1,250 Restructuring charges for severance and other separation costs 8,097 4,679 — Office closure and relocation restructuring charges and impairments 1,464 155 1,295 Total transaction, integration and restructuring expense $ 12,225 $ 11,489 $ 7,890 (d) Goodwill impairment represents non-cash, pre-tax, goodwill impairment charges.
Refer to Note 14. Commitments and Contingencies within the accompanying consolidated financial statements for further information. Tax Receivable Agreement ( “ TRA ” ) In connection with the Reorganization Transactions and the IPO, the Company entered into the TRA with certain of our pre- IPO holders of LLC Units and the former shareholders of certain Blocker Companies.
Tax Receivable Agreement ( “ TRA ” ) In connection with the Reorganization Transactions and the IPO, the Company entered into the TRA with certain of our pre- IPO holders of LLC Units and the former shareholders of certain Blocker Companies.
The net decrease in operating assets and liabilities of $30.4 million for the year ended December 31, 2023 was primarily driven by an increase in deferred contract costs of $18.8 million, an increase in prepaid expenses and other assets of $7.2 million, and a decrease in deferred revenue of $6.6 million due to the timing of billings and cash received in advance of revenue recognition for subscription services.
The net decrease in operating assets and liabilities for the year was primarily driven by cash outflows resulting from an increase in deferred contract costs of $12.8 million, an increase in prepaid expenses and other assets of $7.8 million, lower accounts payable, accrued expenses, and other liabilities, collectively, of $5.5 million, and a decrease in deferred revenue of $5.0 million due to the timing of billings and cash received in advance of revenue recognition for subscription services.
As a result, our total NDR of 91% for the year ended December 31, 2023 has been reduced relative to our total NDR of 102% for the year ended December 31, 2022.
As a result, our total NDR of 85% for the year ended December 31, 2024 is lower relative to our total NDR of 91% for the year ended December 31, 2023.
Revenue related to these professional services is insignificant and is recognized at a point in time, when the performance obligations under the terms of the contract are satisfied and control has been transferred to the customer. Because of the macroeconomic challenges described above, we expect a reduction in our revenue growth rate for 2024 relative to 2023.
Revenue related to these professional services is recognized at a point in time, when the performance obligations under the terms of the contract are satisfied and control has been transferred to the customer.
Our current and prospective customers and their business spendings are impacted by difficult macroeconomic conditions to varying degrees and as a result, in some cases we are observing deal cycles lengthen for new and existing customers, in part as a result of more stringent approval processes, as well as a significant number of deferred purchasing decisions.
After a thorough search process, our board of directors appointed Casey Heller, our current Senior Vice President of Finance, to the role of Chief Financial Officer effective on June 2, 2025. 55 Macroeconomic Conditions Our current and prospective customers and their business spendings are impacted by difficult macroeconomic conditions to varying degrees and as a result, in some cases we are observing deal cycles lengthen for new and existing customers, in part as a result of more stringent approval processes, as well as a significant number of deferred purchasing decisions.
The following table sets forth a summary of our consolidated statements of operations for the periods presented: Year Ended December 31, (in thousands) 2023 2022 2021 Revenue $ 251,415 $ 222,653 $ 166,154 Cost of revenue: Cost of revenue 34,740 25,866 19,421 Amortization 12,742 16,759 21,268 Total cost of revenue 47,482 42,625 40,689 Gross profit 203,933 180,028 125,465 Operating expenses: Sales and marketing 94,534 89,585 56,387 Product development 42,441 34,890 18,565 General and administrative 58,861 51,561 32,864 Depreciation and amortization 39,008 40,145 38,679 Transaction, integration and restructuring expenses 11,489 7,890 6,287 Goodwill impairment 287,400 — — Total operating expenses 533,733 224,071 152,782 Loss from operations (329,800 ) (44,043 ) (27,317 ) Total other income (expense), net 21,620 2,166 (35,450 ) Loss before income taxes (308,180 ) (41,877 ) (62,767 ) Benefit from income taxes 18,553 17,698 443 Net loss (289,627 ) (24,179 ) (62,324 ) Less: Net loss attributable to Definitive OpCo prior to the Reorganization Transactions - - (34,068 ) Less: Net loss attributable to noncontrolling interests (87,239 ) (16,957 ) (10,416 ) Net loss attributable to Definitive Healthcare Corp. $ (202,388 ) $ (7,222 ) $ (17,840 ) Year Ended December 31, 2023 compared to Year Ended December 31, 2022 Revenue Revenue increased $28.8 million, or 13%, for the year ended December 31, 2023 compared with the same period in the prior year, resulting from higher subscription revenue of $26.0 million and higher professional service revenue of $2.7 million.
The following table sets forth a summary of our consolidated statements of operations for the periods presented: Year Ended December 31, (in thousands) 2024 2023 2022 Revenue $ 252,202 $ 251,415 $ 222,653 Cost of revenue: Cost of revenue 40,684 34,740 25,866 Amortization 14,049 12,742 16,759 Total cost of revenue 54,733 47,482 42,625 Gross profit 197,469 203,933 180,028 Operating expenses: Sales and marketing 83,807 94,534 89,585 Product development 36,518 42,441 34,890 General and administrative 49,267 58,861 51,561 Depreciation and amortization 37,618 39,008 40,145 Transaction, integration and restructuring expenses 12,225 11,489 7,890 Goodwill impairment 688,854 287,400 — Total operating expenses 908,289 533,733 224,071 Loss from operations (710,820 ) (329,800 ) (44,043 ) Total other income, net 77,075 21,620 2,166 Loss before income taxes (633,745 ) (308,180 ) (41,877 ) Benefit from income taxes 42,299 18,553 17,698 Net loss (591,446 ) (289,627 ) (24,179 ) Less: Net loss attributable to noncontrolling interests (178,322 ) (87,239 ) (16,957 ) Net loss attributable to Definitive Healthcare Corp. $ (413,124 ) $ (202,388 ) $ (7,222 ) Year Ended December 31, 2024 compared to Year Ended December 31, 2023 Revenue Revenue was largely flat, increasing $0.8 million, or 0%, for the year ended December 31, 2024 compared with the same period in the prior year, resulting from higher subscription revenue of $1.8 million, partially offset by lower professional service revenue of $1.0 million.
We believe these metrics provide useful measures to investors to assess our operating performance and in measuring the profitability of our operations on a consolidated level. 59 The following table presents a reconciliation of net loss and margin to adjusted EBITDA and adjusted EBITDA margin for the periods presented: Year Ended December 31, 2023 2022 2021 (in thousands) Amount % of Revenue Amount % of Revenue Amount % of Revenue Net loss and margin $ (289,627 ) (115 )% $ (24,179 ) (11 )% $ (62,324 ) (38 )% Interest expense, net 1,559 1 % 8,413 4 % 25,871 16 % Income tax benefit (18,553 ) (7 )% (17,698 ) (8 )% (443 ) (0 )% Loss from extinguishment of debt — 0 % — 0 % 9,873 6 % Depreciation & amortization 51,750 21 % 56,904 26 % 59,947 36 % EBITDA and margin (254,871 ) (101 )% 23,440 11 % 32,924 20 % Other income, net (a) (23,179 ) (9 )% (10,579 ) (5 )% (294 ) (0 )% Equity-based compensation (b) 48,739 19 % 36,434 16 % 9,957 6 % Transaction, integration and restructuring expenses (c ) 11,489 5 % 7,890 4 % 6,287 4 % Goodwill impairment (d) 287,400 114 % — 0 % — 0 % Other non-core items (e) 4,875 2 % 6,561 3 % 7,116 4 % Adjusted EBITDA and margin $ 74,453 30 % $ 63,746 29 % $ 55,990 34 % (a) Primarily represents foreign exchange and TRA liability remeasurement gains and losses.
The following table presents a reconciliation of net loss and margin to adjusted EBITDA and adjusted EBITDA margin, respectively, for the periods presented: Year Ended December 31, 2024 2023 2022 (in thousands, except percentages) Amount % of Revenue Amount % of Revenue Amount % of Revenue Net loss and margin $ (591,446 ) (235 )% $ (289,627 ) (115 )% $ (24,179 ) (11 )% Interest expense, net 245 0 % 1,559 1 % 8,413 4 % Income tax benefit (42,299 ) (17 )% (18,553 ) (7 )% (17,698 ) (8 )% Depreciation & amortization 51,667 20 % 51,750 21 % 56,904 26 % EBITDA and margin (581,833 ) (231 )% (254,871 ) (101 )% 23,440 11 % Other income, net (a) (77,320 ) (31 )% (23,179 ) (9 )% (10,579 ) (5 )% Equity-based compensation (b) 38,085 15 % 48,739 19 % 36,434 16 % Transaction, integration and restructuring expenses (c) 12,225 5 % 11,489 5 % 7,890 4 % Goodwill impairment (d) 688,854 273 % 287,400 114 % — 0 % Other non-core items (e) (936 ) (0 )% 4,875 2 % 6,561 3 % Adjusted EBITDA and margin $ 79,075 31 % $ 74,453 30 % $ 63,746 29 % (a) Primarily represents foreign exchange and Tax Receivable Agreement liability remeasurement gains and losses.
Depreciation and Amortization . Depreciation and amortization expenses consist primarily of amortization of intangible assets resulting from acquisitions and business combinations, as well as depreciation of property and equipment. We anticipate depreciation of property and equipment as a percentage of revenue to moderately decrease, although amortization will increase if we make additional acquisitions in the future.
We anticipate depreciation of property and equipment as a percentage of revenue to moderately decrease, although amortization will increase if we make additional acquisitions and data asset purchases in the future. Transaction, integration and restructuring expenses .
We also enter into a limited number of contracts that can include various combinations of professional services, which are generally capable of being distinct and can be accounted for as separate performance obligations. Revenue related to these professional services is recognized at the time the services are performed.
If we promise to update the initial data set at specified intervals, each update is a performance obligation, which we satisfy when the updated data is delivered. We also enter into a limited number of contracts that can include various combinations of professional services, which are generally capable of being distinct and can be accounted for as separate performance obligations.
Our progress in expanding usage of our platform with our existing customers is demonstrated by our NDR (see “Key Metrics”). For the year ended December 31, 2023, our NDR for customers generating more than $100,000 in ARR (“Enterprise Customers”) was 96%. As of December 31, 2023, we had 565 Enterprise Customers, which represented approximately 65% of our ARR.
Our progress in expanding usage of our platform with our existing customers is demonstrated by our Net Dollar Retention (“NDR”) (see “Key Metrics”). For the year ended December 31, 2024, our NDR for Enterprise Customers was 90%. As of December 31, 2024, we had 519 Enterprise Customers, which represented approximately 68% of our ARR.
Customers generating more than $100,000 in ARR, which we refer to as “Enterprise Customers”, represent the majority of our ARR and are a key focus of our go-to-market programs. As of December 31, 2023, we had 565 Enterprise Customers and approximately 2,900 customers overall, and as of December 31, 2022, we had 537 Enterprise Customers and approximately 3,000 customers overall.
Customers generating more than $100,000 in Annual Recurring Revenue (“ARR”), which we refer to as “Enterprise Customers”, represent the majority of our ARR and are a key focus of our go-to-market programs.
Other Income, Net Interest expense consists of interest expense on our debt obligations and the amortization of debt discounts and debt issuance costs. Interest income consists of earnings resulting from our short-term investments.
The goodwill impairment charges did not affect our liquidity or the financial covenants in our outstanding debt agreement. 61 Other Income, Net Interest expense consists of interest expense on our debt obligations and the amortization of debt discounts and debt issuance costs. Interest income consists of earnings resulting from our short-term investments.
These expenses are comprised of non-core legal and regulatory costs isolated to unique and extraordinary litigation, legal and regulatory matters that are not considered normal and recurring business activity including sales tax accrual charges inclusive of penalties and interest for sales taxes that we may have been required to collect from customers in 2023 and certain previous years, professional fees related to the filing delay and restatement of our previously issued financial statements filed concurrently with our Quarterly Report on Form 10-Q for the second quarter of 2023, and other non-recurring legal and regulatory matters.
These expenses are comprised of non-core legal and regulatory costs isolated to unique and extraordinary litigation, legal and regulatory matters that are not considered normal and recurring business activity, including sales tax accrual adjustments inclusive of penalties and interest for sales taxes that we may 66 have been required to collect from customers in 2024 and in certain previous years, and other non-recurring legal and regulatory matters.
Restructuring expenses relate to our restructuring plans committed to in the first and third quarters of 2023 and impairment and restructuring charges related to office closures and relocations.
Restructuring expenses relate to the 2024 Restructuring Plan and those we committed to during the first and third quarters of 2023, as well as impairment and restructuring charges related to office closures, relocations, and consolidations.
At the beginning of 2023, additional third-party data sources were rolled out to our customers, which resulted in, and is expected to continue to result in, an increase in cost of revenue. Gross Profit Gross profit is revenue less cost of revenue, and gross margin is gross profit as a percentage of revenue.
Additional third-party data sources, inclusive of sources obtained through the acquisition of Populi, were rolled out to our customers during 2023, which resulted in, and is expected to continue to result in, an increase in cost of revenue, including amortization.
Issuer Purchases of Equity Securities None. It em 6. Reserved It em 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 2023, 2022 and 2021.
The following discussion includes a comparison of our results of operations, financial condition, and liquidity and capital resources for fiscal years 2024, 2023 and 2022.
Cash Flows used in Investing Activities Cash used in investing activities during the year ended December 31, 2023 was $31.8 million, driven primarily by $259.2 million in purchases of short-term investments and $45.0 million in cash paid for the acquisition of Populi, net of cash acquired, partially offset by $275.4 million in maturities of short-term investments.
Cash Flows used in Investing Activities Cash used in investing activities during the year ended December 31, 2024 was $26.4 million, driven primarily by $304.3 million in purchases of short-term investments, $13.5 million in cash paid, net of cash acquired, for the acquisition of Carevoyance in the first quarter of 2024, and $12.3 million in purchases of property, equipment, and data assets, partially offset by $303.8 million in maturities of short-term investments.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

17 edited+5 added−9 removed15 unchanged
Biggest changeInherent Limitations on Effectiveness of Controls and Procedures Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls or our internal control over financial reporting will prevent or detect all errors and all fraud.
Biggest changeChanges in Internal Control Over Financial Reporting Other than the changes described above under “Remediation of Previously Disclosed Material Weakness”, there were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. 77 Inherent Limitations on Effectiveness of Controls and Procedures Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls or our internal control over financial reporting will prevent or detect all errors and all fraud.
Due to the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected. REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the shareholders and the Board of Directors of Definitive Healthcare Corp.
Due to the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected. 78 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the shareholders and the Board of Directors of Definitive Healthcare Corp.
Excluding the effect of the interest rate swap agreement, a hypothetical 1.0% increase or decrease in the interest rate associated with borrowings under the 2021 Credit Agreement would result in an approximately $2.6 million impact to interest expense on an annual basis. Foreign Currency Exchange Risk To date, the majority of our sales contracts have been denominated in U.S. dollars.
Excluding the effect of the interest rate swap agreement, a hypothetical 1.0% increase or decrease in the interest rate associated with borrowings under the 2021 Credit Agreement would result in an approximately $2.4 million impact to interest expense on an annual basis. Foreign Currency Exchange Risk To date, the majority of our sales contracts have been denominated in U.S. dollars.
As the impact of foreign currency exchange rates has not been material to our historical results of operations, we have not entered into derivative or hedging transactions, but we may do so in the future if our exposure to foreign currency becomes more significant. 69 Ite m 8. Financial Statements and Supplementary Data.
As the impact of foreign currency exchange rates has not been material to our historical results of operations, we have not entered into derivative or hedging transactions, but we may do so in the future if our exposure to foreign currency becomes more significant. 76 Ite m 8. Financial Statements and Supplementary Data.
Our consolidated financial statements, together with the reports of our independent registered public accounting firm, appear beginning on page F-1 of this Annual Report for the year ended December 31, 2023. It em 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. None. I tem 9A. Controls and Procedures.
Our consolidated financial statements, together with the reports of our independent registered public accounting firm, appear beginning on page F-1 of this Annual Report for the year ended December 31, 2024. It em 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. None. I tem 9A. Controls and Procedures.
Opinion on Internal Control over Financial Reporting We have audited the internal control over financial reporting of Definitive Healthcare Corp. and subsidiaries (the “Company”) as of December 31, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Opinion on Internal Control over Financial Reporting We have audited the internal control over financial reporting of Definitive Healthcare Corp. and subsidiaries (the “Company”) as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Evaluation of Disclosure Controls and Procedures As of December 31, 2023, our management carried out an evaluation, under the supervision and participation of our Chief Executive Officer (principal executive officer) and our Chief Financial Officer (principal financial officer), of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (“Exchange Act”)).
Evaluation of Disclosure Controls and Procedures As of December 31, 2024, our management carried out an evaluation, under the supervision and participation of our Chief Executive Officer (principal executive officer) and our Chief Financial Officer (principal financial officer), of the effectiveness of the design of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (“Exchange Act”)).
Management's Annual Report on Internal Controls Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting and for the assessment of the effectiveness of internal control over financial reporting as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act.
Management ’ s Annual Report on Internal Controls Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting and for the assessment of the effectiveness of internal control over financial reporting as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act.
Under the supervision and participation of our Chief Executive Officer and our Chief Financial Officer, our management conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2023, based on the criteria set forth in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework).
Under the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer and oversight of the board of directors, our management conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2024, based on the criteria set forth in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework).
In order to reduce the interest rate risk on our debt, we have entered into an interest rate swap agreement on a portion of our borrowings. As of December 31, 2023, the total principal balance outstanding was $257.8 million.
In order to reduce the interest rate risk on our debt, we have entered into an interest rate swap agreement on a portion of our borrowings. As of December 31, 2024, the total principal balance outstanding was $244.1 million.
Interest Rate Risk Our cash, cash equivalents and short-term investments primarily consist of cash on hand and highly liquid investments in money market funds, U.S. government securities and commercial paper. As of December 31, 2023 we had cash and cash equivalents of $131.0 million and short-term investments of $177.1 million.
Interest Rate Risk Our cash, cash equivalents and short-term investments primarily consist of cash on hand and highly liquid investments in money market funds, U.S. government securities and commercial paper. As of December 31, 2024 we had cash and cash equivalents of $105.4 million and short-term investments of $184.8 million.
We identified a material weakness in the design of our controls over the collection and remittance of sales taxes, as well as the accurate recording of our sales tax obligations in the financial statements. This material weakness remains unremediated as of December 31, 2023.
Remediation of Previously Disclosed Material Weakness During 2023, we identified a material weakness in the design of our controls over the collection and remittance of sales taxes, as well as the accurate recording of our sales tax obligations in the financial statements.
In our opinion, because of the effect of the material weakness identified below on the achievement of the objectives of the control criteria, the Company has not maintained effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.
In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB) the consolidated financial statements as of and for the year ended December 31, 2023, of the Company and our report dated February 28, 2024, expressed an unqualified opinion on those financial statements. 71 Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Controls Over Financial Reporting.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2024, of the Company and our report dated February 27, 2025, expressed an unqualified opinion on those financial statements.
Deloitte & Touche LLP, our independent registered public accounting firm, has audited our consolidated financial statements included in this Annual Report and issued its report, which is included herein, stating that the Company's internal controls over financial reporting were not effective as of December 31, 2023. 70 Changes in Internal Control Over Financial Reporting There was no change in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Deloitte & Touche LLP, our independent registered public accounting firm, has audited our consolidated financial statements included in this Annual Report and issued its report, which is included herein, stating that the Company’s internal controls over financial reporting were effective as of December 31, 2024.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/Deloitte & Touche LLP Boston, Massachusetts February 27, 2025 79 Item 9B. Other Information. Trading Arrangements No ne.
Our management identified control deficiencies, as previously disclosed, that, individually or in the aggregate, constitute a material weakness in our internal control over financial reporting and has concluded that our internal control over financial reporting was not effective as of December 31, 2023.
Based on this evaluation, management concluded that our internal control over financial reporting was effective as of December 31, 2024.
Removed
Based on our management’s evaluation, management concluded that our disclosure controls and procedures were not effective as of December 31, 2023 as a result of the material weakness discussed below.
Added
Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of December 31, 2024 to provide reasonable assurance that information to be disclosed by us in the reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the SEC, and (ii) accumulated and communicated to management, including our principal executive and principal financial officers or persons performing similar functions, as appropriate to allow timely decisions regarding disclosure.
Removed
Notwithstanding this material weakness, our management concluded that our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K fairly present, in all material respects, our financial condition, results of operations and cash flows as of and for the periods presented in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”).
Added
Remediation of this material weakness was completed during the three months ended December 31, 2024 and included establishing new controls and procedures over the collection, control, and subsequent monitoring of applicable documentation of exempt status from customers in affected jurisdictions.
Removed
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.
Added
As of December 31, 2024, these control activities have been appropriately designed and implemented, and have operated effectively for a sufficient period of time to conclude that the previously identified material weakness has been remediated.
Removed
Remediation Efforts to Address Material Weakness In response to the identified material weakness, management, with the oversight of the Audit Committee of the Board of Directors, has designed and implemented measures to improve our internal control over financial reporting and remediate the material weakness.
Added
Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Controls Over Financial Reporting.
Removed
Our efforts include a number of actions: • We immediately engaged additional third-party tax experts to assist in the review of the classification for sales tax purposes of our existing products and services; • We have designed and implemented additional sales tax nexus reviews, including controls over the monitoring of changes in our products and service offerings and identification of new and/or enhanced products and services, to put in place effective review controls over the classification of products and services for sales tax purposes; and • We have designed and implemented controls over the collection, control, and subsequent monitoring of applicable documentation of exempt status from customers in affected jurisdictions.
Added
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Removed
Our management believes that the measures described above will remediate the material weakness and strengthen our overall internal control over financial reporting. The material weakness will not be considered remediated until the applicable remediated controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.
Removed
Material Weakness A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis.
Removed
The following material weakness has been identified and included in management's assessment: The Company did not have appropriately designed controls over the collection, remittance and accurate recording of sales tax obligations in the financial statements.
Removed
This material weakness was considered in determining the nature, timing, and extent of audit tests applied in our audit of the consolidated financial statements as of and for the year ended December 31, 2023, of the Company, and this report does not affect our report on such financial statements. /s/Deloitte & Touche LLP Boston, Massachusetts February 28, 2024 Item 9B.

Other DH 10-K year-over-year comparisons