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Date

Monday, May 11, 2026 at 5 p.m. ET

Call participants

  • Chief Executive Officer — Ben Albert
  • Chief Financial Officer — Jason Alger
  • Finance and Investor Relations Senior Vice President — Stephanie St. Clair

Takeaways

  • Total revenue -- $70.8 million, exceeding the high end of guidance ($68 million-$70 million), with technology revenue at $49.5 million and professional services revenue at $21.3 million.
  • Adjusted gross margin -- 51.5% in the quarter, up from 49.2% in the prior-year period.
  • Adjusted technology gross margin -- 65.3%, impacted by duplicate hosting costs from migrations and heavy data loading for HIE client deployments.
  • Adjusted professional services gross margin -- 19.4% for the quarter; management expects this to decline with continued migrations.
  • Adjusted operating expenses -- $27.3 million, representing 39% of revenue, versus $32.8 million (41% of revenue) in the prior-year quarter.
  • Adjusted EBITDA -- $9.1 million, above the guided range of $7 million-$8 million, and up from $6.3 million in the prior-year quarter.
  • Adjusted net income per share -- $0.02 on a weighted average share count of 72.6 million shares.
  • Cash, cash equivalents, and short-term investments -- $108.8 million at quarter-end, up $13.1 million compared to December 31, 2025.
  • Total bookings -- Introduced as a new operating metric; Q1 bookings described as "strong," with anticipated $22 million-$26 million in new bookings for the full year.
  • Guidance — full-year 2026 -- Total revenue forecast of $260 million-$265 million, adjusted EBITDA expected in the range of $30 million-$33 million.
  • Guidance — Q2 2026 -- Total revenue expected between $68 million-$70 million, adjusted EBITDA projected at $9 million-$10 million.
  • Project Nexus restructuring -- Targets annualized run-rate cost savings of approximately $30 million, with $22 million from a 9% headcount reduction and non-headcount spend, and $8 million from closing open positions and canceling other planned expenses.
  • Anticipated restructuring charges -- Estimated $4 million in Q2, with the majority of the program complete by year-end.
  • DOS-to-Ignite migration churn -- Of $52 million in previously identified at-risk ARR, at least $22 million is now expected to be retained; $30 million remains at risk, with a projected revenue impact of $20 million in 2026 and $10 million in 2027.
  • Professional services segment outlook -- Expected to produce $55 million-$65 million in annual revenue exiting 2026.
  • Adjusted cost structure expectations -- Quarterly adjusted operating expenses expected to decrease by $3 million-$4 million, with adjusted cost of revenue decreasing by $1 million-$2 million, as changes take effect throughout the year.
  • Engineering efficiency -- Initial pilots using new development "pods" and proprietary AI agents resulted in up to 100% more story points delivered per developer.
  • Strategic focus -- "Project Nexus" aims to create “one company, one commercial approach, one client-facing team, and one set of standards.”
  • AI strategy -- "AgenTeq" models are under development, targeting cost management, clinical quality, consumer experience, and ambulatory growth, leveraging 18 years of proprietary healthcare improvement data.

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Risks

  • Management identified "revenue pressure" as a direct result of the previous rigid DOS-to-Ignite migration timeline, with the majority of this impact expected to be absorbed in 2026.
  • CEO Albert stated, "While this accumulated complexity will take time to unwind and will create short-term revenue pressure, we are focused and confident in our plan of action."
  • Adjusted professional services gross margin is expected to decline to the mid to low teens for the full year due to ongoing migrations and revenue mix shift.
  • CFO Alger noted, "we do not anticipate this level of cash generation every quarter," qualifying the $13.1 million cash increase as atypical.

Summary

Health Catalyst (HCAT 9.21%) reported quarterly revenue and adjusted EBITDA above management's guidance, driven partially by milestone-based and new client technology revenue, despite visible revenue pressure from legacy migration dynamics. Leadership announced the launch of Project Nexus, a restructuring targeting $30 million in annualized cost savings via workforce and spending reductions, infrastructure consolidation, and go-to-market streamlining. The company detailed churn impacts tied to the DOS-to-Ignite migration, clarifying its revised retention outlook and new client-by-client transition strategy, and introduced total bookings as a primary metric for evaluating commercial success. Full-year guidance targets $260 million-$265 million in revenue and $30 million-$33 million in adjusted EBITDA, with lower guidance reflecting ongoing headwinds from revenue mix shifts and expected at-risk ARR loss. Management highlighted operational progress in engineering productivity using proprietary AI agents and reinforced a strategic pivot toward proprietary intelligence and AI-enabled solutions embedded in its core healthcare data platform.

  • Board composition shifted, with four of seven current directors, including new Chair Steve Nelson, joining within the last year to provide added healthcare and public company expertise.
  • The company plans a mix shift to higher-margin technology revenue, supporting margin improvement objectives and a declining professional services mix.
  • CEO Albert said the company is "extending the availability of DOS" and pursuing tailored migration plans, moving away from a one-size-fits-all transition.
  • Bookings are expected to convert to revenue in three to six months depending on the project, with full-year bookings guidance detailed for the first time.
  • Management confirmed continued investment in AI and the "intelligence layer," positioning Health Catalyst as a differentiated partner for cost, clinical, and consumer improvement initiatives.

Industry glossary

  • DOS: Data Operating System, Health Catalyst’s legacy data and analytics platform for healthcare providers.
  • Ignite: The next-generation cloud-based data infrastructure platform released by Health Catalyst, designed to host advanced analytics and AI models.
  • ARR: Annual recurring revenue, representing the yearly value of contracted recurring revenue streams.
  • HIE: Health information exchange, a system that enables electronic sharing of health-related information among organizations.
  • AgenTeq: Suite of proprietary AI models under development at Health Catalyst, targeting multiple healthcare improvement domains.
  • Project Nexus: Health Catalyst’s operational and business restructuring initiative aimed at simplifying its structure and streamlining costs.

Full Conference Call Transcript

Stephanie St. Clair: Good afternoon, and welcome to the Health Catalyst, Inc. earnings call for the first quarter of 2026, which ended on 03/31/2026. My name is Stephanie St. Clair, Finance and Investor Relations Senior Vice President. With me on the call today are Ben Albert, our Chief Executive Officer, and Jason Alger, Chief Financial Officer. A complete disclosure of our results can be found in our press release issued today, as well as in our related Form 8-Ks furnished to the SEC, both of which are available on the Investor Relations section of our website at ir.healthcatalyst.com. As a reminder, today’s call is being recorded and a replay will be available following the conclusion of the call.

During today’s call, we will make forward-looking statements pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995 regarding our future growth, financial outlook for the second quarter and full year 2026, market conditions, AI initiatives, bookings, retention, operational priorities, strategic and restructuring initiatives, client migrations, and the general anticipated performance of our business. These forward-looking statements are based on management’s current views and expectations as of today and should not be relied upon as representing our views of any subsequent date. We disclaim any obligation to update any forward-looking statements or outlook. Actual results may materially differ.

Please refer to the risk factors in our most recent Form 10-K for the full year 2025 filed with the SEC on 03/12/2026, and our Form 10-Q for 2026 filed today. We will also refer to certain non-GAAP financial measures to provide additional information to investors. Non-GAAP financial information is presented for supplemental purposes only, has limitations as an analytical tool, and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP. A reconciliation of our non-GAAP financial measures to their most comparable GAAP measures is provided in our press release.

We will provide forward-looking guidance for certain non-GAAP financial measures in this earnings call and are not providing forward-looking guidance for the most directly comparable GAAP measures and therefore have not provided reconciliations because there are items that may impact the comparable GAAP measures that are not within our control or cannot be reasonably forecasted. With that, I will turn the call over to Ben.

Ben Albert: Thank you, Stephanie. And thank you to everyone for joining us today. We are pleased to report a strong first quarter with solid bookings and results that exceeded expectations on both revenue and adjusted EBITDA. We ended the quarter in a strong cash position, and combined with the cost savings from streamlining our operations, we are making progress as we position the company for durable and efficient growth. We are also introducing a new performance metric that we believe provides a clear benchmark of success and issuing full-year guidance as promised. Jason will detail our performance and outlook in his remarks.

But first, I would like to spend a few minutes sharing learnings from our initial assessment and the actions we have taken and will continue to take with urgency to transform the company’s operating model, simplify our organizational structure, and align resources around our highest conviction technology opportunities. Over the last few months, we have begun examining every area of the business from our cost structure and our product portfolio to our go-to-market approach, organizational design, leadership, technology infrastructure, and how we deliver value to clients. This review has reinforced both the strength of our foundation and the need to operate differently.

One of the most significant findings from that review was the direct connection between our previous migration strategy and the revenue pressure we are managing this year. Setting a rigid timeline for DOS-to-Ignite migration efforts over the last two years has created a churn dynamic that is heavily impacting 2026. It is the area we have addressed most aggressively, prioritizing client success and retention to build a more durable revenue base. As we shared in our March earnings call, we stopped managing the migrations as a one-size-fits-all program and conducted a line-by-line review of every remaining client.

We developed a tailored plan for each client’s specific situation and have strengthened the teams dedicated to taking clients through this process, including options where clients stay on DOS for an extended period of time. The initial review is now complete and gives us a new level of visibility into a path forward. As we look at our business holistically, we believe that Health Catalyst, Inc. has exceptional core assets, including 18 years of proprietary healthcare improvement data, deep client relationships, proven outcomes, and a team that genuinely cares about improving healthcare. However, these assets were hampered by a fragmented and cumbersome business structure that created friction and lacked focus for clients and teammates.

While this accumulated complexity will take time to unwind and will create short-term revenue pressure, we are focused and confident in our plan of action. Ultimately, we believe this short-term impact is necessary to achieve more profitable growth long term. Importantly, we are building a leadership team that is equipped and eager to execute this plan. We have added significant experience across nearly every function, bringing in operators with vision, executional discipline, and a track record of results.

We also recently promoted our new Chief Marketing Officer, who is already transforming our messaging, product positioning, and how we take our solutions to market, and our new Chief Growth Officer, who is bringing her excitement and data-driven leadership to our growth function. At the board level, we have also made significant changes. We recently welcomed Steve Nelson, who currently serves as the President of Aetna and brings deep healthcare expertise and public company leadership experience. Steve previously served as Chief Executive Officer of UnitedHealthcare, ChenMed, and Duly Health and Care, building and scaling delivery models where health outcomes, provider experience, cost discipline, clinical performance, and consumer engagement operated as a single integrated strategy.

Out of our seven current board members, he is one of four board members who have joined in the last year, including a new chair. The board refresh brings fresh perspective, outside expertise, and strategic insight. Moving forward, our focus is building a technology business with urgency and discipline and investing in our AI intelligence that differentiates our solutions. Two weeks ago, we announced a comprehensive operational and business restructuring we are calling Project Nexus. It is a strategic initiative designed to fundamentally transform our operating model, improve our cost structure, and advance each of these priorities.

This initiative is expected to generate annual run-rate cost savings of approximately $30 million and accelerate the progress we have already made to integrate our core functions and consolidate our operations under one company with one commercial approach, one client-facing team, and one set of standards. On the engineering side, we piloted a new development model utilizing highly efficient pods and proprietary AI development agents. In initial pilots, development teams increased story points delivered by as much as 100% per developer, allowing us to simultaneously reshape our cost structure and accelerate product innovation. Finally, we are introducing total bookings as a simplified operating metric.

We consider investor feedback carefully and believe it is one of the most direct indicators of whether our commercial engine is working. Combined with our guidance and continued focus on technology gross margin and cash generation, we believe our metrics will give you a clear and consistent framework to track the success of this transformation. Now let me tell you how the work we are doing positions us for the opportunity ahead, and why I took this job. Healthcare is at an inflection point. The financial pressure on health systems—compressing margins, shifting payer mix, rising labor costs—is structural, not cyclical. In this environment, organizations are looking for more than incrementally better tools.

They are looking for a partner who can help them reduce costs, improve clinical quality, and grow consumer relationships, delivering meaningful outcomes. That is the market we are built for, and AI strengthens our ability to serve it. Healthcare data infrastructure has increasingly commoditized. Durable advantage lives in the intelligence built on top of it, and our advantage rests on something no one else has: our wealth of improvement data—the link between an intervention, its cost, and its measured outcome. Eighteen years and thousands of improvement engagements later, our proprietary dataset compounds, building our competitive advantage. A new entrant cannot manufacture this dataset retrospectively.

These engagements include an evidence base that tells us what reduces costs, improves clinical quality, and grows consumer engagement, and then can be calibrated to each system’s case mix, cost structure, workforce, and starting point. The result is a prescriptive roadmap that identifies opportunities sized in dollars and interventions ranked by impact, sequenced so the foundations are in place before the harder work begins. That is the foundation of our AI strategy. We are building a growing suite of AgenTeq AI models across cost management, clinical quality, consumer experience, and ambulatory growth, embedded in our domain-specific applications.

These improvement agents will combine multiple layers of machine learning models and LLMs to surface the right opportunity for each health system, quantify the impact, and guide execution. We are building a moat by combining our depth of improvement data with purpose-built AI agents at scale. Work that once required months of consulting services and manual effort is being embedded in our technology solutions and recalculates daily as conditions change, improving with every outcome delivered. I want to add something more personal. I believe that a thriving health system is foundational—essential as education, as central to the fabric of community as any institution we have.

For the communities they serve, health systems provide care, they provide employment, and they provide resilience. When they struggle, communities feel it in ways that go far beyond healthcare. That reality is under threat today, and many communities do not yet see it coming. Health Catalyst, Inc. exists to help health systems sustain and strengthen that role. Our improvement data is the foundation, and AI will allow us to make that expertise efficient, scalable, and accessible to every system that needs it. That is the company we are building. In conclusion, we asked for time and we used it to conduct a thorough assessment of the business. We are acting on what we found.

We are transforming the company’s operating model by simplifying our organizational structure and aligning resources around our highest conviction technology opportunities. We have increased visibility into the DOS-to-Ignite migration impact, and we expect that the majority of that revenue pressure will be absorbed in 2026. These changes to our operating model position us to enter 2027 with a more efficient organization and a commercial engine that will be aligned to where we believe we will win. With that, I will turn it over to Jason.

Jason Alger: Thanks, Ben. I want to start by putting the Q1 results in context. Ben described the transformation we are undertaking and the framework we are using to measure it. The financials this quarter reflect the very early stages of that work. We exceeded our guidance on both revenue and adjusted EBITDA. We are reporting strong Q1 bookings, which gives us confidence our commercial simplification work is gaining traction. Our cost discipline continues to show up in the numbers. Let me walk through the details. For the first quarter of 2026, total revenue was $70.8 million, exceeding the high end of our guided range of $68 million to $70 million.

Technology revenue was $49.5 million and Professional Services revenue was $21.3 million. On the top line, I would point to a few things. Our revenue trajectory is beginning to show some of the revenue pressure that Ben discussed, but it was partially offset by milestone delivery-based revenue and new client revenue. Professional Services revenue continues to decline as expected as we shift toward a more technology-led model, which is by design. Adjusted gross margin for the first quarter was 51.5%, compared to 49.2% in the prior-year period. Adjusted Technology gross margin was 65.3% and adjusted Professional Services gross margin was 19.4%.

Adjusted Technology gross margin reflects duplicate hosting costs as we migrate clients to Ignite, and heavy data loading costs associated with HIE client deployments. We are laser focused on margin expansion as part of the transformation to streamline delivery and optimize our cost structure. We expect that the operational changes that Ben described—which include certain headcount and non-headcount changes that impact cost of revenue—will begin to show up in Q2 results and will become more evident in 2026. Adjusted operating expenses in Q1 were $27.3 million, representing 39% of revenue, compared to $32.8 million, or 41% of revenue, in Q1 2025. We have been disciplined about cost management while protecting investments in areas that directly support the transformation.

Adjusted EBITDA for the first quarter was $9.1 million, exceeding the high end of our guided range of $7 million to $8 million, compared to $6.3 million in Q1 2025. Adjusted net income per share was $0.02 with a weighted average share count of 72.6 million. Turning to the balance sheet, we ended the quarter with approximately $108.8 million of cash, cash equivalents, and short-term investments. As Ben noted, cash generation is a central focus. This Q1 cash, cash equivalents, and short-term investments value reflects a $13.1 million increase compared to 12/31/2025.

Although we do not anticipate this level of cash generation every quarter, we are managing liquidity carefully, and we expect the restructuring actions we are taking will meaningfully improve our ability to generate cash. Let me walk through the math of Project Nexus because I think it is important for investors to see how these actions connect to the financial trajectory we are targeting. We expect total second quarter restructuring charges of approximately $4 million. This program spans workforce actions, infrastructure consolidation, and go-to-market realignment. We expect the majority of these charges to be incurred in Q2, with the restructuring substantially complete by year end.

Project Nexus is expected to generate annualized run-rate savings of approximately $30 million, inclusive of direct savings of approximately $22 million from the 9% reduction in headcount and reductions in non-headcount spend such as infrastructure, subscriptions, and contractors, and indirect savings of approximately $8 million from the closing of open headcount and cancellation of other previously planned expenses. It is important to note that these savings are annualized, so not all of the benefit will be seen in 2026. As we think about 2026, we expect our quarterly adjusted operating expenses to decrease by $3 million to $4 million compared to Q1. We also expect our quarterly adjusted cost of revenue to decrease by $1 million to $2 million.

These quarterly impacts will start to take effect in Q2 and will ramp throughout the year. We are making meaningful structural changes to how this company operates and what it costs to run. Today, we are providing full-year 2026 guidance, and I want to walk through not just the numbers but how we expect the year to unfold, because of the shape of 2026. We currently expect total revenue of $260 million to $265 million and adjusted EBITDA of $30 million to $33 million. For Q2 2026, we currently expect total revenue of $68 million to $70 million and adjusted EBITDA of $9 million to $10 million.

Our full-year revenue guidance reflects the weight of short-term revenue pressure related to the previous migration strategy, as well as the TAMs and Professional Services-related revenue reductions and the assessment that Ben described. The churn that we are working through today is largely the result of prior decisions that forced clients into an accelerated decision point on the migration before we had the right retention program and client-facing structure in place. On our previous earnings call, we shared certain data points related to the DOS-to-Ignite migration, including the $12.5 million of ARR notified down-sell and churn and approximately $52 million of potentially at-risk ARR.

Following the client-by-client review, we anticipate retaining at least $22 million of the previously identified $52 million of at-risk ARR. This leaves approximately $30 million of at-risk ARR, which we are focused on retaining through dedicated account plans tailored to each client’s needs. The current expected impact will be approximately $20 million in 2026 and $10 million in 2027. For simplicity, we have provided this detail in a chart in our earnings release. We would note that a number of clients will continue to use our application solutions going forward, even after transitioning to their own infrastructure. As we previously noted, the migration impact is temporary, and we expect to be generally through the strains of the migration by 2027.

This does not mean every migration is complete, as we are extending the availability of DOS, but it means we will transition each client when the time is right and on what products make sense. Additionally, the changes we have put in place are helping us to build a more durable revenue base exiting 2027. As we prioritize a mix shift to higher-margin technology revenue, we continue to work with clients on the right services approach. In certain cases, it makes sense for clients to in-source team members, which aligns with our technology-led strategy and improves our margin profile.

Our best estimate today is that exiting 2026 our services segment will be between $55 million and $65 million in revenue annually. Our Q1 bookings were strong and our pipeline supports moderate bookings in Q2 and positive bookings momentum. Over the course of 2026, we expect $22 million to $26 million in new bookings, which includes all ARR and nonrecurring revenue. We use new bookings as an operating metric and define it further in our Form 10-Q filed today. We will report results for this new metric on an annual basis. We aim to turn bookings into revenue promptly for the advantage of our clients and our business.

From an adjusted gross margin standpoint, we expect adjusted Technology gross margin to fluctuate modestly quarter to quarter and to finish the year in the mid-60s. Technology margin expansion is a key focus area of our business moving forward, but it will take time to realize improvement in our financials given duplicate costs from the Ignite migrations and heavy data loading costs associated with HIE client deployments. We anticipate that our adjusted Professional Services gross margin will decline over the course of the year as we continue to work through the migrations, with a full-year margin expectation in the mid to low teens. We are targeting adjusted EBITDA that reflects changes to the operating model taking hold.

This is the financial case for why the short-term migration-related revenue pain is worth it. We believe our new structure will allow us to lean into high-priority opportunities and realize improving leverage when growth returns. We are managing this business for durable value creation, and believe the actions we are taking in 2026 are laying the foundation for that. With that, I will turn the call back to Ben.

Ben Albert: Thanks, Jason. In closing, I want to thank our clients for their continued partnership and our team members for their commitment during this period of progress and transition. We are energized by the transformation underway, and our Board and management team are fully aligned on driving shareholder value. We have a clear plan and are executing with urgency and discipline. We remain confident in the direction of the business and in our ability to create long-term value for our clients and shareholders. Operator, we are now ready to take questions. The floor is now open for questions.

Again, we kindly ask that you limit yourself to one question and that you pick up your handset when posing your questions to provide optimal sound quality. Thank you.

Operator: Our first question is coming from Stan Berenshteyn with Wells Fargo. Please go ahead. Your line is open.

Stan Berenshteyn: Hi, thanks for taking my questions. On the prepared remarks, you mentioned a bigger focus on the technology business. Are there any value-added services that are still part of this vision, or is the expectation here that services are going to shrink as a mix of total revenue? Thank you.

Ben Albert: Thank you for the question. Yes, the expectation is that services will shrink as we go forward in terms of percentage of revenue as we invest in technology-driven opportunities for the company overall. But we certainly see, and will continue to see, areas of opportunity for our services. In the chart abstraction scenario, for example, while we might infuse more AI into the process of our chart abstraction work, we will still have wraparound services to support that because our intention is to meet our clients where they are, and sometimes that will require utilizing some service in the business.

We will see a mix shift as we go forward, especially with the AI strategy we are unfolding and how we are really taking advantage of the highest technology opportunities the business has.

Operator: We will now move on to Canaccord Genuity. Please go ahead. Your line is open.

Analyst: Hi, John Penney on for Close. Thanks for the questions. I wanted to get greater detail on the shift from DOS to Ignite being a sticking point—trying to force that shift on people. What is the hesitation of people shifting? Is it just the flux that it would create during that shift? Is there something about DOS that they want to stick with that Ignite does not have?

Ben Albert: Thanks for the question. There are a couple of things. DOS provides a lot of value to our clients, and our clients have invested a lot in DOS over time. Taking on that transition to a new platform, whether it be Ignite or other, is a lot of work and requires a tremendous amount of effort, and they get tremendous value from DOS today. For many clients, they are excited to stay on DOS and, over time, they may move over to Ignite. We want to meet them where they are and support them through that transition as we go forward. As it relates to the second part of your question, the data platform layer has been commoditized a bit.

The value really is in the intelligence that sits on top of the data platform. We have 18 years of proprietary improvement data that sits on top of the data platform—and on top of Ignite—that we are enabling AI capabilities from across three critical areas: helping our clients manage cost, improve consumer engagement and ambulatory growth, and drive clinical quality. As we invest in AI and use that improvement layer that sits on top of the data platform, we will see more and more clients take advantage of what Ignite has to offer.

Operator: Thank you. We will move on now to Jeff Garro with Stephens. Your line is open.

Jeff Garro: Yes, good afternoon. Thanks for taking the question. I want to ask about feedback so far on Ignite Intelligence. What are you hearing from customers in terms of overall budgeting for AI, and feedback on your offering versus efforts to build themselves or buy from someone else?

Ben Albert: Thanks, Jeff. The feedback has been really positive as it relates to the initial rollout of our AI capabilities, in particular on the cost management side. We are in very early innings there, and the feedback has been excellent. We continue to invest to unearth capabilities we can provide. Our differentiation—and how we drive measurable improvement—is all about that 18 years of proprietary improvement intelligence. Thousands of projects have helped clients better manage costs, labor, and clinical quality. We have that data, and we can enable our clients to utilize it with our AI agents that will make our solutions more robust and help them manage changes going forward.

There is a lot of excitement, and we believe this will be a significant component of our future growth.

Operator: We will now move on to Jessica Tassan with Piper Sandler. Your line is open. Please go ahead.

Jessica Tassan: Hi, thanks for taking the question and appreciate you reinstating the guide. A multipart question: Are you able to disclose how many DOS and Ignite customers you have today? What is the average ARR for DOS customers in 2026 versus Ignite customers in 2026? And when you say data infrastructure is commoditized, when did that occur, who are the competitors on the data infrastructure side, and how much of the DOS or Ignite ARR would you ascribe to data infrastructure versus the intelligence layer?

Ben Albert: Hey, Jessica, really appreciate the question. What we have provided in the prepared remarks as well as in the earnings release is detail around what we expect from a down-sell and churn perspective. We do not have a logo count that we will be disclosing at this point in time, but we will keep everyone apprised of how we are projecting there. It continues to be less common for an enterprise client to exit entirely. What we are seeing is that clients generally continue with us even if we see down-sell or churn on the data infrastructure side—they are continuing to maintain those application relationships with us.

I would also add to your question on when the data platform became commoditized: we have talked on prior calls about vendors like Databricks and Snowflake—cross-industry tech vendors enabling that data platform layer—but they lack the intelligence that sits on top. They are building the infrastructure layer, and that is happening at times. We can still do the whole thing for clients who need that. Ultimately, we have the intelligence layer that can sit on top of that data platform so that Ignite Intelligence can enable our clients with a much greater improvement opportunity through the intelligence we provide.

Operator: We will now move on to Stifel. Your line is open.

Analyst: Hi all, thanks for taking my question. A two-parter. First, in the $30 million of anticipated churn and down-sell, is that entirely the data infrastructure layer? And secondly, thanks for providing the bookings metrics—how quickly are you expecting those to convert to revenue?

Jason Alger: Hey, thanks for the question. On the $30 million in anticipated churn or down-sell, it is heavily on the data infrastructure side. It is not 100% data infrastructure—we are seeing some of that churn come out of the applications—but it is primarily focused on data infrastructure. On bookings conversion to revenue, we would expect bookings to convert into revenue typically in about three to six months. It depends on the project or on the technology we are deploying, but three to six months would be most common.

Operator: We will move on to Daniel Grosslight with Citi. Your line is open. Please go ahead.

Daniel Grosslight: Hey, thanks for taking the question. This is Luis on for Daniel. You mentioned earlier that your pipeline supports moderate bookings in Q2 and positive momentum. Does this positive momentum represent a change in behavior among potential clients relative to your initial expectations, or would you characterize behavior as overall steady with some hesitancy in the market?

Ben Albert: I think it can be attributed to our approach. We recently added a new head of marketing, we have a new Chief Growth Officer, and we are focused on how we take our platform and capabilities to market and how we message our solutions so people understand exactly what we do. Health systems are still making purchases today, but the bar is definitely higher. The ROI threshold is higher. They do not want just one solution—they want a partner who can provide solutions across cost intelligence, labor intelligence, clinical intelligence, and consumer intelligence.

When you can come to them with a message of how well we understand them—18 years in healthcare with tremendous improvement data—and the ability to convert that data into meaningful outcomes and measurable improvement across multiple areas of their business, that capability is unique and differentiated in the market. We anticipate that driving momentum in the back half of the year.

Operator: We will move next to William Blair. Your line is open.

Analyst: Yes, thanks for taking the question and all the color thus far. Ben, I want to dig into the DOS-related ARR churn and potential buy-down. Can you talk a bit more about the $52 million and what delineates the $22 million you anticipate retaining versus the $30 million at risk? What are the characteristics defining your ability to retain some of that ARR versus the potential risk, and what are you doing to mitigate that risk going forward?

Ben Albert: Thanks for the question. We are working hard to retain as much of that as we can. Over the last few months we went line by line against every DOS-to-Ignite migration account and put a plan together to support them. We are not going to lose them all—some will down-sell as opposed to fully churn. We have a tailored approach, and we are hopeful to make inroads there. We want to make sure we are communicating clearly, building credibility, and setting the right expectations in the market while we work to retain as much of that revenue as we can through those account-by-account approaches.

Operator: There are no further questions at this time. I am happy to turn the floor back over to Ben Albert for additional or closing remarks.

Ben Albert: I would like to thank everybody for joining us today. We are excited about what Health Catalyst, Inc. can become as we go forward. We are very focused right now on the fundamentals—the launch of Project Nexus to transform our operating model and drive our company forward, investing in the areas that we believe will drive growth for our organization. We are trying to provide as much transparency as we can so you can understand where our business is and where it is going. We recognize that our performance has not been where we want it, and that we will be judged by the performance that we create, and we are very focused on executing against that.

Thank you all very much for joining us today.

Stephanie St. Clair: Appreciate it.

Operator: Thank you. This concludes today’s Health Catalyst, Inc. first quarter 2026 earnings conference call. Please disconnect your line at this time and have a wonderful day.