Health Catalyst, Inc.HCAT
Health Catalyst, Inc. Segments Disclosure
Segments
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We operate our business in two operating segments that also represent our reportable segments. Our business is organized based on our technology offerings and professional services. Accordingly, our segments are:
•Technology - Our technology segment (Technology) includes our data platform, analytics applications and support services and generates revenues primarily from contracts that are cloud-based subscription arrangements, time-based license arrangements, and maintenance and support fees; and
•Professional Services - Our professional services segment (Professional Services) is generally the combination of analytics, implementation, strategic advisory, outsource, and improvement services to deliver expertise to our clients to more fully configure and utilize the benefits of our Technology offerings.
Revenues and cost of revenues generally are directly attributed to our segments. All segment revenues are from our external clients. Asset and other balance sheet information at the segment level is not reported to our CODM. The CODM is regularly provided with and reviews revenue and Adjusted Gross Profit by operating segment. The CODM uses Adjusted Gross Profit as the primary measure of our profit used to assess performance and allocate resources between the two operating segments. Adjusted Cost of Revenue is a significant segment expense that is easily computable by subtracting segment Adjusted Gross Profit from segment revenue. Adjusted Gross Profit and Adjusted Cost of Revenue are non-GAAP financial measures, have limitations as analytical tools, and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP.
The reconciliation between consolidated loss before income tax to reportable segment Adjusted Gross Profit is as follows (in thousands):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
Adjusted Gross Profit: | |||||||||||||||||
Technology | $ | 140,315 | $ | 129,139 | $ | 127,339 | |||||||||||
Professional Services | 18,792 | 20,394 | 15,099 | ||||||||||||||
Total reportable segments Adjusted Gross Profit | 159,107 | 149,533 | 142,438 | ||||||||||||||
Less Adjusted Gross Profit reconciling items: | |||||||||||||||||
Stock-based compensation | (4,475) | (7,741) | (9,235) | ||||||||||||||
Acquisition-related costs, net(3) | (328) | (753) | (664) | ||||||||||||||
| Restructuring costs | (2,629) | (260) | (706) | ||||||||||||||
Less other reconciling items: | |||||||||||||||||
Sales and marketing | (52,477) | (54,387) | (67,321) | ||||||||||||||
Research and development | (49,770) | (57,950) | (72,627) | ||||||||||||||
| General and administrative | (49,559) | (56,817) | (76,559) | ||||||||||||||
Depreciation and amortization | (50,500) | (41,431) | (42,223) | ||||||||||||||
Impairment of goodwill and intangible assets | (110,223) | — | — | ||||||||||||||
| Interest and other income (expense), net | (16,404) | 637 | 9,106 | ||||||||||||||
| Loss before income taxes | $ | (177,258) | $ | (69,169) | $ | (117,791) | |||||||||||
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(3) Acquisition-related costs, net include deferred retention expenses following the Lumeon, Carevive, ARMUS, and KPI Ninja acquisitions.
Revenue, Adjusted Cost of Revenue, and Adjusted Gross Profit by operating segment were as follows (in thousands):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
Technology: | |||||||||||||||||
Revenue | $ | 208,277 | $ | 194,852 | $ | 187,583 | |||||||||||
Adjusted Cost of Revenue(1) | 67,962 | 65,713 | 60,244 | ||||||||||||||
Adjusted Gross Profit | $ | 140,315 | $ | 129,139 | $ | 127,339 | |||||||||||
Professional Services: | |||||||||||||||||
Revenue | $ | 102,859 | $ | 111,732 | $ | 108,355 | |||||||||||
Adjusted Cost of Revenue(2) | 84,067 | 91,338 | 93,256 | ||||||||||||||
Adjusted Gross Profit | $ | 18,792 | $ | 20,394 | $ | 15,099 | |||||||||||
(1)Technology Adjusted Cost of Revenue primarily consists of costs associated with hosting and supporting our technology, including third-party cloud computing and hosting costs, license and revenue share fees, contractor costs, and salary and related personnel costs for our cloud services and support teams. Technology Adjusted Cost of Revenue excludes depreciation, amortization, stock-based compensation, acquisition-related costs, net, and restructuring costs.
(2)Professional Services Adjusted Cost of Revenue primarily consists of costs related to delivering our team’s expertise in analytics, strategic advisory, improvement, and implementation services. These costs primarily include salary and related personnel costs, travel-related costs, and outside contractor costs. Professional Services Adjusted Cost of Revenue excludes stock-based compensation, acquisition-related costs, net, and restructuring costs.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 12, 2026 | Showing above |
| 2024 | Feb 26, 2025 | |
| 2023 | Feb 22, 2024 | |
| 2022 | Feb 28, 2023 | |
| 2021 | Mar 1, 2022 | |
| 2020 | Feb 25, 2021 | |
| 2019 | Feb 28, 2020 | |
About Segments Disclosures
Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.
Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.