Health Catalyst, Inc.

Second-quarter 2026 total revenue was $70.5 million, above the guided range of $68 million to $70 million. Technology revenue was $48.8 million and professional services revenue was $21.7 million. Adjusted gross margin was 51% versus 50% in the prior-year period; adjusted technology gross margin was 63% versus 66%, and adjusted professional services gross margin was 22% versus 18%. Adjusted operating expenses were $25.9 million, or 37% of revenue, versus $30.6 million, or 38% of revenue, in the prior-year period. Adjusted EBITDA was $9.9 million, at the high end of guidance, and adjusted net income per share was $0.04. The company ended Q2 with approximately $103.4 million of cash, cash equivalents and short-term investments. Vitalware was sold for $147 million in total cash consideration, with net proceeds of $145.5 million after transaction costs, and the company fully retired approximately $160 million of credit facility debt plus accrued interest and prepayment premium. Management said this removes about $19 million of annual GAAP interest expense and about $16.5 million of annual cash interest payments. For full-year 2026, the company now expects revenue of $246 million to $249 million and adjusted EBITDA of $18 million to $18.5 million. For Q3, it expects revenue of $55 million to $56 million and adjusted EBITDA of breakeven to $500,000. It also expects full-year adjusted gross margin below 50%, adjusted technology gross margin in the low 60s, and adjusted professional services gross margin in the low to mid-teens.

Ben Albert framed the quarter as a step in a broader transformation, emphasizing simplification, balance-sheet repair and focus on the company’s core technology opportunities. He said the Vitalware divestiture, debt repayment and Project Nexus restructuring are intended to create a stronger foundation and give the company time to validate its highest-conviction bets. His tone was constructive but candid about the fact that Health Catalyst is still early in a multiyear transition and working through revenue headwinds from platform migrations and lower-margin services.

Jason Alger said Q2 results were at or above expectations, with $70.5 million of revenue and $9.9 million of adjusted EBITDA, and noted that Project Nexus is starting to take hold with partial savings reflected in the quarter. He highlighted the balance-sheet impact of the Vitalware sale: $147 million of cash consideration, $145.5 million of net proceeds, repayment of about $160 million of debt, and removal of about $19 million of annual GAAP interest expense. He also said the company ended the quarter with approximately $103.4 million of cash and, pro forma for the transaction, would have had about $82 million of cash and no debt. On margins and costs, he pointed to migration-related pressure, duplicate hosting, data-loading costs, deliberate investment in products and retention, and said adjusted gross margin should be below 50% for 2026.

The main analyst question was whether guidance would have been reiterated absent the Vitalware divestiture; management said the revenue and EBITDA changes were primarily driven by removing Vitalware, while also reflecting deliberate investments in team members and core products. A second question asked whether the company is reviewing the portfolio for additional divestitures; management said the current focus is on fundamentals, validating the best opportunities in market, and executing the transformation rather than actively discussing more divestitures. No new outlook details were added beyond those comments.