Health Catalyst Reports 13% Revenue Decline and $40.5 Million Net Loss in Q2 2026

Health Catalyst, Inc. reported a decline in financial performance for the second quarter of 2026, with total revenue of $70.5 million, down 13% from $80.7 million in the same period last year. For the first half of 2026, revenue decreased by 12% to $141.2 million compared to $160.1 million in the first half of 2025. The decrease in revenue was attributed to the exit from lower-margin Tech-Enabled Managed Services (TEMS) arrangements and client churn related to the migration from the legacy DOS platform to the new Health Catalyst Ignite platform. The company incurred a net loss of $40.5 million for the second quarter, slightly lower than the $41.0 million loss reported in the prior year, but the loss for the first half of 2026 surged to $151.6 million, significantly higher than the $64.7 million loss in the same period of 2025, primarily due to a $122.5 million goodwill impairment charge.

In terms of operational metrics, Health Catalyst's technology revenue accounted for 69% of total revenue in the second quarter, while professional services revenue made up the remaining 31%. The company reported a total of 74.6 million shares outstanding as of June 30, 2026, an increase from 72.0 million shares at the end of 2025. The company also noted a significant goodwill impairment charge of $122.5 million, which was driven by declines in stock price and market capitalization, as well as the classification of the Vitalware business as held for sale.

Strategically, Health Catalyst completed the divestiture of its Vitalware business on July 31, 2026, for a base purchase price of $147 million. The proceeds from this transaction were used to fully repay all outstanding obligations under its Credit Agreement, which is expected to reduce future interest expenses significantly. The company anticipates recognizing a gain of approximately $66 million from the sale in the third quarter of 2026, although it also expects to incur a loss of about $10 million related to the extinguishment of debt.

Looking ahead, Health Catalyst is focused on managing its growth and client retention initiatives while navigating a challenging macroeconomic environment characterized by high inflation and interest rates. The company aims to enhance its technology offerings and improve operational efficiency through its Project Nexus initiative, which includes a workforce reduction aimed at streamlining operations. Despite the near-term challenges, Health Catalyst remains optimistic about its long-term growth potential, particularly as it continues to migrate clients to its Ignite platform and expand its service offerings.