Health Catalyst Reports Q3 2025 Revenue of $76.3 Million, Net Loss of $22.2 Million

Health Catalyst, Inc. reported its financial results for the third quarter of 2025, revealing total revenue of $76.3 million, a slight decrease from $76.4 million in the same period last year. For the nine months ending September 30, 2025, revenue increased to $236.5 million from $227.0 million in 2024, primarily driven by new client acquisitions and revenue expansion from existing clients. However, the company incurred a net loss of $22.2 million for the quarter, compared to a loss of $14.7 million in the prior year, and a year-to-date loss of $86.9 million, up from $48.8 million in 2024. The increase in losses was largely attributed to a $28.8 million goodwill impairment charge recognized in the second quarter of 2025.

In terms of operational metrics, Health Catalyst's technology revenue accounted for 68% of total revenue in the third quarter, reflecting a 7% increase year-over-year, while professional services revenue decreased by 12% to $24.3 million. The decline in professional services revenue was attributed to reduced utilization rates and the exit from certain service arrangements. The company also reported a significant increase in operating expenses, which rose to $55.3 million from $47.7 million, driven by higher costs in sales and marketing, research and development, and general administrative expenses.

Health Catalyst has been actively pursuing growth through acquisitions, including the recent purchase of Upfront Healthcare Services for $80 million, which is expected to enhance its patient engagement capabilities. The company also acquired Intraprise Health, Lumeon, and Carevive Systems in 2024, further expanding its service offerings. As of September 30, 2025, Health Catalyst had 70.6 million shares outstanding, an increase from 64.0 million shares at the end of 2024, reflecting ongoing equity issuance related to acquisitions and employee stock plans.

The company is navigating a challenging macroeconomic environment characterized by high inflation and interest rates, which have impacted client budgets and decision-making processes. Health Catalyst anticipates that a higher proportion of its future bookings will come from existing clients, as many have already realized a strong return on investment from its solutions. The firm is also focused on migrating clients from its legacy DOS platform to the new Health Catalyst Ignite platform, a transition that is expected to incur additional costs in the near term but ultimately aims to enhance operational efficiency and client satisfaction.

Looking ahead, Health Catalyst remains committed to refining its strategic operating plan to align with client needs for cost management and operational improvement. The company expects to continue investing in research and development to enhance its technology offerings while managing costs effectively. Despite the current challenges, Health Catalyst aims to leverage its strong recurring revenue model, with over 90% of its revenue being recurring, to drive long-term growth and stability.