Health Catalyst Q1 Net Loss Widens to $111M on $95.5M Goodwill Impairment; Warns of Future Revenue Churn
Summary
Health Catalyst reported a Q1 net loss of $111 million, including a $95.5 million goodwill impairment, and an 11% revenue decline. Despite exceeding Adjusted EBITDA expectations, the company projects significant future revenue churn related to its 'DOS to Ignite' migration.
Key Events
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Q1 Net Loss and Goodwill Impairment
Health Catalyst reported a net loss of $111 million for Q1 2026, a significant widening from $23.7 million in Q1 2025. This loss includes a substantial $95.5 million goodwill impairment, indicating ongoing issues with asset valuation.
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Revenue Decline and Non-GAAP Beat
Total revenue for Q1 2026 decreased by 11% year-over-year to $70.7 million. However, the company's Adjusted EBITDA was $9.1 million, exceeding expectations and up 46% from $6.2 million in Q1 2025.
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Future Revenue Churn Anticipated
The company anticipates approximately $19 million in churn or down-sell from its 'DOS to Ignite' migration over 2026 and 2027, out of an estimated $52 million in at-risk annual recurring revenue (ARR).
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Financial Outlook Provided
For Q2 2026, Health Catalyst expects total revenue between $68 million and $70 million, and Adjusted EBITDA of $9 million to $10 million. Full-year 2026 guidance projects total revenue of $260 million to $265 million and Adjusted EBITDA of $30 million to $33 million.
Analysis
Health Catalyst reported a substantial net loss of $111 million for Q1 2026, primarily driven by a $95.5 million goodwill impairment. This marks another significant impairment following previous disclosures, indicating ongoing challenges with asset valuation and business performance. While the company exceeded expectations for Adjusted EBITDA, the GAAP results and a year-over-year revenue decline of 11% paint a challenging financial picture. Furthermore, the company anticipates approximately $19 million in churn or down-sell from its 'DOS to Ignite' migration over 2026 and 2027, representing a material future revenue headwind. This filing underscores the severe financial pressures and strategic reset efforts, including recent leadership changes and workforce reductions, as the company navigates a difficult transition.
At the time of this filing, HCAT was trading at $1.40 on NASDAQ in the Technology sector, with a market capitalization of approximately $101.5M. The 52-week trading range was $0.96 to $4.74. This filing was assessed with negative market sentiment and an importance score of 9 out of 10.