Definitive Healthcare Corp.

Previous wording

Definitive Healthcare is a leading provider of healthcare commercial intelligence. Our solutions are designed to provide accurate and comprehensive information on healthcare providers and their activities to help our customers optimize everything from product development to go-to-market planning and sales and marketing execution. Delivered through our software as a service (“SaaS”) platform, our intelligence has become important to the commercial success of our approximately 2,475 customers as of March 31, 2025. We generally define a customer as a company that maintains one or more active paid subscriptions to our platform.

Current wording

Definitive Healthcare is a leading provider of healthcare commercial intelligence. Our solutions are designed to provide accurate and comprehensive information on healthcare providers and their activities to help our customers optimize everything from product development to go-to-market planning and sales and marketing execution. Delivered through our software as a service (“SaaS”) platform, our intelligence has become important to the commercial success of our approximately 2,400 customers as of June 30, 2025. We generally define a customer as a company that maintains one or more active paid subscriptions to our platform.

Previous wording

On January 16, 2024, we completed the purchase of assets comprising the Carevoyance business line of H1 Insights, Inc., a product that helps medical technology (“MedTech”) customers improve segmentation, targeting, and prospect engagement for $13.7 million, subject to closing adjustments. Refer to Note 2. Acquisitions in the accompanying unaudited condensed consolidated financial statements for further information.

Current wording

On January 16, 2024, we completed the purchase of assets comprising the Carevoyance business line of H1 Insights, Inc., a product that helps medical technology (“MedTech”) customers improve segmentation, targeting, and prospect engagement for $13.7 million, subject to closing adjustments. Refer to Note 2. Acquisitions to our accompanying unaudited condensed consolidated financial statements for further information.

Previous wording

During the first quarter of 2025, we experienced declines in our market capitalization as a result of sustained decreases in our stock price, which represented a triggering event requiring our management to perform a quantitative goodwill impairment test as of the end of the reporting period. As a result of the impairment test, we determined that the fair value of our single reporting unit was lower than its carrying value and, accordingly, recorded a non-cash, pre-tax, goodwill impairment charge of $176.5 million during the three months ended March 31, 2025. The goodwill impairment charge did not affect our liquidity or the financial covenants in our outstanding debt agreement.

Current wording

During the first quarter of 2025, we experienced declines in our market capitalization as a result of sustained decreases in our stock price, which represented a triggering event requiring our management to perform a quantitative goodwill impairment test as of the end of the first quarter of 2025. As a result of the impairment test, we determined that the fair value of our single reporting unit was lower than its carrying value and, accordingly, recorded a non-cash, pre-tax, goodwill impairment charge of $176.5 million during the first quarter of 2025. The goodwill impairment charge did not affect our liquidity or the financial covenants in our outstanding debt agreement. There were no triggering events identified during the second quarter of 2025 that would have required our management to perform a goodwill impairment test.

Previous wording

We will continue to monitor for potential impairment indicators and potential impairments. See Note 7. Goodwill and Intangible Assetsto the accompanying unaudited condensed consolidated financial statements. Our reporting unit is at risk for future goodwill impairments if we experience a continued decline in our market capitalization or worsening macroeconomic conditions.

Current wording

We will continue to monitor for potential impairment indicators and potential impairments. See Note 8. Goodwill and Intangible Assetsto our accompanying unaudited condensed consolidated financial statements. Our reporting unit is at risk for future goodwill impairments if we experience a continued decline in our market capitalization or worsening macroeconomic conditions.

Previous wording

During the first quarter of 2024, we committed to a restructuring plan intended to reduce operating costs, improve operating margins, and continue advancing our ongoing commitment to profitable growth (the “2024 Restructuring Plan”). The 2024 Restructuring Plan provided for a reduction of the Company’s current workforce by approximately 150 people. During the three months ended March 31, 2024, we incurred restructuring and related charges of $7.2 million, consisting primarily of severance payments, employee benefits, and related cash expenses. These charges were recognized within transaction, integration, and restructuring expenses in our unaudited condensed consolidated statements of operations. As of March 31, 2025, $0.1 million of severance and separation benefits is included in accrued expenses and other liabilities in the unaudited condensed consolidated balance sheets, and we expect these payments will be made over the next seven months.

Current wording

During the first quarter of 2024, we committed to a restructuring plan intended to reduce operating costs, improve operating margins, and continue advancing our ongoing commitment to profitable growth (the “2024 Restructuring Plan”). The 2024 Restructuring Plan provided for a reduction of the Company’s current workforce by approximately 150 people. During the three and six months ended June 30, 2024, we incurred restructuring and related charges of $0.6 million and $7.8 million, respectively, consisting primarily of severance payments, employee benefits, and related cash expenses. These charges were recognized within transaction, integration, and restructuring expenses in our unaudited condensed consolidated statements of operations. We do not expect to incur any additional material charges associated with the 2024 Restructuring Plan.

Previous wording

In 2024, we recorded impairment charges of $1.2 million related to the consolidation of certain leased office space at our corporate headquarters. These charges comprised $0.9 million relating to the operating lease right-of-use assets and $0.3 million relating to the leasehold improvements. During the three months ended March 31, 2025, we incurred an additional $0.2 million in impairment charges related to the operating lease right-of-use assets. These charges were recognized within transaction, integration, and restructuring expenses in our unaudited condensed consolidated statements of operations for each respective period.

Current wording

In fiscal year 2024, we recorded impairment charges of $1.2 million related to the consolidation of certain leased office space at our corporate headquarters. These charges comprised $0.9 million relating to the operating lease right-of-use assets and $0.3 million relating to the leasehold improvements. During the first quarter of 2025, we incurred an additional $0.2 million in impairment charges related to the operating lease right-of-use assets. These charges were recognized within transaction, integration, and restructuring expenses in our unaudited condensed consolidated statements of operations for each respective period. No such charges were incurred during the second quarter of 2025.

Previous wording

As part of the 2024 Restructuring Plan, we made significant changes to our go-to-market team that reduced overlay expenses, created a separate group and sales motion for our small and medium sized customers, and allocated more resources to our Enterprise Customers. These changes created disruptions to our sales efforts in 2024, impacting both new customer acquisition and upsell to existing customers. These factors, in addition to the lower than historical renewal rates we observed through the second half of 2024 and the first quarter of 2025, have impacted, and we expect will continue to impact, our results in 2025.

Current wording

As part of the 2024 Restructuring Plan, we made significant changes to our go-to-market team that reduced overlay expenses, created a separate group and sales motion for our small and medium sized customers, and allocated more resources to our Enterprise Customers (as the term is defined below). These changes created disruptions to our sales efforts in 2024, impacting both new customer acquisition and upsell to existing customers. These factors, in addition to the lower than historical renewal rates we observed through the second half of 2024 and the first half of 2025, have impacted, and we expect will continue to impact, our results in 2025.

Previous wording

We experienced significant executive transitions in 2024. In November 2024, the Company announced that, following discussions regarding the scope of the role of Chief Financial Officer, Richard Booth, the Company’s Chief Financial Officer, and the Company agreed that Mr. Booth will be leaving the Company effective June 1, 2025. After a thorough search process, our board of directors appointed Casey Heller, our current Senior Vice President of Finance, to the role of Chief Financial Officer effective June 2, 2025.

Current wording

On November 7, 2024, we announced that our former Chief Financial Officer, Richard Booth, would be leaving the Company effective June 1, 2025. After a thorough search process, our board of directors (the “Board”) appointed Casey Heller, our former Senior Vice President of Finance, to the role of Chief Financial Officer effective June 2, 2025.

Previous wording

In the second quarter of 2024, we completed a project to refresh our customer hierarchy methodology to reflect industry consolidation and to better reflect our go-to-market strategy as we increased resources and focus on Enterprise Customers. In some cases, this consolidated certain existing customer legal entities under larger parent accounts, and therefore reduced total customer count. As a result, our customer counts are not directly comparable to previously reported values and prior year customer counts have been revised to also reflect the updated customer hierarchy methodology. We believe this view of customer count better reflects our updated selling and go-to-market strategy. Using the updated methodology, our total customer count, which includes smaller customers, was approximately 2,475 as of March 31, 2025 compared with approximately 2,700 customers as of March 31, 2024. Our smaller customers have churned at disproportionately higher rates, primarily due to current macroeconomic conditions.

Current wording

Our total customer count, which includes smaller customers, was approximately 2,400 as of June 30, 2025, compared with approximately 2,600 customers as of June 30, 2024. Our Enterprise Customer accounts have decreased by 27 to 510 customers as of June 30, 2025 compared with 537 customers as of June 30, 2024. Our smaller customers have churned at disproportionately higher rates, primarily due to current macroeconomic conditions.

Previous wording

We believe there is a significant opportunity to generate additional revenue from our existing customer base of approximately 2,475 customers as of March 31, 2025.

Current wording

We believe there is a significant opportunity to generate additional revenue from our existing customer base of approximately 2,400 customers as of June 30, 2025.

Previous wording

We monitor current remaining performance obligations as a metric to help us evaluate the health of our business and identify trends affecting our growth. cRPO represents the amount of contracted future revenue that has not yet been recognized, including both deferred revenue and non-cancelable contracted amounts that will be invoiced and recognized as revenue within the next twelve months. cRPO is not necessarily indicative of future revenue growth. In addition to total contract volume, cRPO is influenced by several factors, including seasonality, disparate contract terms, and the timing of renewals, because renewals tend to be most frequent in the fourth quarter. The value of contracts that included cancellation terms began to increase significantly during the third quarter of 2023 compared with prior periods as most of these contracts were inherited from the Populi acquisition. This precludes several millions of dollars of business from being included in the cRPO metric and puts further downward pressure on the cRPO growth rate. Due to these factors, it is important to review cRPO in conjunction with revenue and other financial metrics.

Current wording

We monitor current remaining performance obligations as a metric to help us evaluate the health of our business and identify trends affecting our growth. cRPO represents the amount of contracted future revenue that has not yet been recognized, including both deferred revenue and non-cancelable contracted amounts that will be invoiced and recognized as revenue within the next twelve months. cRPO is not necessarily indicative of future revenue growth. In addition to total contract volume, cRPO is influenced by several factors, including seasonality, disparate contract terms, and the timing of renewals, because renewals tend to be most frequent in the fourth quarter. Due to these factors, it is important to review cRPO in conjunction with revenue and other financial metrics.

Previous wording

We seek to enhance our platform, data and business through internal development and through acquisitions of and investments in businesses that broaden and strengthen our platform. During 2024, we completed the purchase of assets comprising the Carevoyance business line of H1 Insights, Inc., a product that helps MedTech customers to improve segmentation, targeting, and prospect engagement. Acquisitions can result in transaction costs, amortization expenses and other adjustments as purchase accounting requires that all assets acquired and liabilities assumed be recorded at fair value on the acquisition date. Refer to Note 2. Acquisitions in the notes to our unaudited condensed consolidated financial statements included elsewhere in this Form 10-Q for further details.

Current wording

We seek to enhance our platform, data and business through internal development and through acquisitions of and investments in businesses that broaden and strengthen our platform. During fiscal year 2024, we completed the purchase of assets comprising the Carevoyance business line of H1 Insights, Inc., a product that helps MedTech customers to improve segmentation, targeting, and prospect engagement. Acquisitions can result in transaction costs, amortization expenses and other adjustments as purchase accounting requires that all assets acquired and liabilities assumed be recorded at fair value on the acquisition date. Refer to Note 2. Acquisitions to our accompanying unaudited condensed consolidated financial statements for further details.

Previous wording

For the three months ended March 31, 2025, we derived approximately 97% of our revenue from subscription services and the remainder from professional services. Our subscription services consist primarily of subscription fees for access to our platform and stand-ready support. Our subscription contracts typically have a term ranging from 1 to 3 years and are non-cancellable. We typically bill for services in advance annually, and we typically require payment at the beginning of each annual period. Our subscription revenue is recognized ratably over the contract term. Our professional services revenue typically is derived from non-recurring consulting services or from other one-time deliveries, which are generally capable of being distinct and can be accounted for as separate performance obligations. Revenue related to these professional services is recognized at a point in time when the performance obligations under the terms of the contract are satisfied and control has been transferred to the customer.

Current wording

For the six months ended June 30, 2025, we derived approximately 96% of our revenue from subscription services and the remainder from professional services. Our subscription services consist primarily of subscription fees for access to our platform and stand-ready support. Our subscription contracts typically have a term ranging from 1 to 3 years and are non-cancellable. We typically bill for services in advance annually, and we typically require payment at the beginning of each annual period. Our subscription revenue is recognized ratably over the contract term. Our professional services revenue typically is derived from non-recurring consulting services or from other one-time deliveries, which are generally capable of being distinct and can be accounted for as separate performance obligations. Revenue related to these professional services is recognized at a point in time when the performance obligations under the terms of the contract are satisfied and control has been transferred to the customer.

Previous wording

As part of the 2024 Restructuring Plan, we made significant changes to our go-to-market team that reduced overlay expenses, created a separate group and sales motion for our small and medium sized customers, and allocated more resources to our Enterprise Customers. These changes disrupted our sales efforts in 2024, coupled with continued macroeconomic headwinds and sales execution challenges throughout 2024. As we moved through 2024 and the first quarter of 2025, we did not see subscription renewals return to historical levels. Based on these impacts, we expect our revenue to decline in 2025 compared with 2024.

Current wording

As part of the 2024 Restructuring Plan, we made significant changes to our go-to-market team that reduced overlay expenses, created a separate group and sales motion for our small and medium sized customers, and allocated more resources to our Enterprise Customers. These changes disrupted our sales efforts in 2024, coupled with continued macroeconomic headwinds and sales execution challenges throughout 2024. As we moved through 2024 and the first half of 2025, we did not see subscription renewals return to historical levels. Based on these impacts, we expect our revenue to decline in 2025 compared with 2024.

Previous wording

Product development. Product development expenses primarily consist of personnel costs such as salaries, bonuses, stock-based compensation, and other employee-related benefits for our engineering, data science and product teams, as well as non-personnel costs including overhead costs. We believe that our core technologies and ongoing innovation represent a significant competitive advantage for us, and we continue to invest in systems optimization and product improvements for our customers, enhance our software development team and invest in automation and artificial intelligence (“A.I.”) to drive higher quality data and deeper insights.

Current wording

Product development. Product development expenses primarily consist of personnel costs such as salaries, bonuses, stock-based compensation, and other employee-related benefits for our engineering, data science and product teams, as well as non-personnel costs including overhead costs. We believe that our core technologies and ongoing innovation represent a significant competitive advantage for us, and we continue to invest in systems optimization and product improvements for our customers, enhance our software development team and invest in automation and artificial intelligence to drive higher quality data and deeper insights.

Previous wording

General and administrative. General and administrative expenses primarily consist of personnel costs such as salaries, bonuses, stock-based compensation, and other employee-related benefits for our executive, finance, legal, human resources, IT and operations, and administrative teams, as well as non-personnel costs including overhead costs, professional fees and other corporate expenses. General and administration expenses also include sales tax amounts payable to taxation authorities, inclusive of interest and penalties, for customers that we did not collect sales taxes from, due to misclassifications of products and services for sales tax purposes. We do not expect sales taxes and related interest and penalties to be an ongoing component of our general and administrative expense as we have completed voluntary disclosure agreements, registered with certain tax authorities, and commenced collection of sales taxes from customers in these tax jurisdictions. We have slowed hiring in response to macroeconomic conditions and do not expect to increase it until macroeconomic conditions improve.

Current wording

General and administrative. General and administrative expenses primarily consist of personnel costs such as salaries, bonuses, stock-based compensation, and other employee-related benefits for our executive, finance, legal, human resources, IT and operations, and administrative teams, as well as non-personnel costs including overhead costs, professional fees and other corporate expenses. General and administration expenses also include sales tax amounts payable to taxation authorities, inclusive of interest and penalties, for customers that we did not collect sales taxes from, due to misclassifications of products and services for sales tax purposes. We do not expect sales taxes and related interest and penalties to be an ongoing component of our general and administrative expense as we have completed voluntary disclosure agreements, registered with certain tax authorities, and commenced collection of sales taxes from customers in these tax jurisdictions.

Previous wording

Goodwill impairment. Goodwill represents the excess of consideration transferred over the fair value of tangible and identifiable intangible net assets acquired and the liabilities assumed in a business combination. Substantially all of our goodwill was recognized in the purchase price allocations when our Company was acquired in 2019 by Advent (the “Advent Acquisition”), with smaller incremental amounts recognized in subsequent business combinations. Goodwill is not amortized, but is tested for impairment at the reporting unit level annually and more frequently if indicators of potential impairment arise. In conducting the impairment test, we first review qualitative factors to determine whether it is more likely than not that the fair value of our single reporting unit is less than its carrying amount.

Current wording

Goodwill impairment. Goodwill represents the excess of consideration transferred over the fair value of tangible and identifiable intangible net assets acquired and the liabilities assumed in a business combination. Substantially all of our goodwill was recognized in the purchase price allocations when we were acquired in 2019 by Advent (the “Advent Acquisition”), with smaller incremental amounts recognized in subsequent business combinations. Goodwill is not amortized, but is tested for impairment at the reporting unit level annually and more frequently if indicators of potential impairment arise. In conducting the impairment test, we first review qualitative factors to determine whether it is more likely than not that the fair value of our single reporting unit is less than its carrying amount.

Previous wording

When testing goodwill for impairment, we have the option of first performing a qualitative assessment to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount. If we elect to bypass the qualitative assessment, or if a qualitative assessment indicates it is more likely than not that carrying value exceeds its fair value, we perform a quantitative goodwill impairment test. Under the quantitative goodwill impairment test, if our reporting unit’s carrying amount exceeds its fair value, we will record an impairment charge based on that difference. Recently, we have experienced declines in our market capitalization as a result of sustained decreases in our stock price, which represented a triggering event requiring our management to perform a quantitative goodwill impairment test. As a result of the impairment test, we determined that the fair value of our single reporting unit was lower than its carrying value and, accordingly, recorded a non-cash, pre-tax, goodwill impairment charge of $176.5 million during the three months ended March 31, 2025. The goodwill impairment charges did not affect our liquidity or the financial covenants in our outstanding debt agreement.

Current wording

When testing goodwill for impairment, we have the option of first performing a qualitative assessment to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount. If we elect to bypass the qualitative assessment, or if a qualitative assessment indicates it is more likely than not that carrying value exceeds its fair value, we perform a quantitative goodwill impairment test. Under the quantitative goodwill impairment test, if our reporting unit’s carrying amount exceeds its fair value, we will record an impairment charge based on that difference. During the first quarter of 2025, we experienced declines in our market capitalization as a result of sustained decreases in our stock price, which represented a triggering event requiring our management to perform a quantitative goodwill impairment test as of the end of the first quarter of 2025. As a result of the impairment test, we determined that the fair value of our single reporting unit was lower than its carrying value and, accordingly, recorded a non-cash, pre-tax, goodwill impairment charge of $176.5 million during the first quarter of 2025. The goodwill impairment charges did not affect our liquidity or the financial covenants in our outstanding debt agreement.

Previous wording

Other income (expense), net consists primarily of the revaluation of Tax Receivable Agreement liabilities and realized and unrealized gains and losses related to the impact of transactions denominated in a foreign currency. Significant changes in the projected liability resulting from the Tax Receivable Agreement may occur based on changes in anticipated future taxable income, changes in applicable tax rates, or other changes in tax attributes that may occur and could affect the expected future tax benefits to be received by us. We do not have significant exposure to foreign exchange volatility and do not anticipate foreign currency transaction gains or losses to materially impact our results of operations.

Current wording

Other income (expense), net consists primarily of the revaluation of Tax Receivable Agreement liabilities, realized and unrealized gains and losses related to the impact of transactions denominated in a foreign currency, and a loss on the partial extinguishment of debt. Significant changes in the projected liability resulting from the Tax Receivable Agreement may occur based on changes in anticipated future taxable income, changes in applicable tax rates, or other changes in tax attributes that may occur and could affect the expected future tax benefits to be received by us. We do not have significant exposure to foreign exchange volatility and do not anticipate foreign currency transaction gains or losses to materially impact our results of operations.

Previous wording

Revenue decreased $4.3 million, or 7%, in the three months ended March 31, 2025 compared with the same period in the prior year due to lower subscription revenue of $4.5 million, partially offset by higher professional services revenue of $0.2 million. Revenue attributable to customers that existed prior to the start of 2025 decreased $6.9 million, which was partially offset by a $2.6 million increase in revenue from new customers in 2025.

Current wording

Revenue decreased $3.0 million, or 5%, in the three months ended June 30, 2025 compared with the same period in the prior year due to lower subscription revenue of $3.8 million, partially offset by higher professional services revenue of $0.8 million. Revenue attributable to customers that existed prior to the start of 2025 decreased $7.9 million, which was partially offset by a $4.9 million increase in revenue from new customers in 2025, inclusive of revenue from a data partnership that was launched earlier this year.

Previous wording

Cost of revenue increased $2.3 million, or 18%, in the three months ended March 31, 2025 compared with the same period in the prior year. This increase was driven primarily by a $1.9 million increase in amortization expense resulting from new data asset purchases and a $0.8 million increase in hosting fees and data subscription and collection costs as a result of expanded customer usage of our platform. These increases were partially offset by a $0.4 million decrease in personnel costs, primarily due to costs incurred associated with the 2024 Restructuring Plan that did not repeat in 2025.

Current wording

Cost of revenue increased $0.9 million, or 6%, in the three months ended June 30, 2025 compared with the same period in the prior year. The increase was driven primarily by a $2.0 million increase in amortization expense resulting from new data asset purchases and higher rates of amortization on certain technology assets amortized under economic consumption methods, partially offset by a $0.6 million decrease in hosting fees and data subscription and collection costs. Though we continue to experience increased data and hosting costs as a result of expanded customer usage of our platform, the year-over-year decrease in these costs was due to one-time credits totaling approximately $1.9 million we observed during the quarter ended June 30, 2025, primarily as a result of a renegotiation on an existing data contract. We also experienced a $0.4 million decrease in personnel costs, including stock-based compensation, which was primarily driven by costs incurred associated with the 2024 Restructuring Plan that did not repeat in 2025.

Previous wording

A decrease in sales and marketing expense of $1.1 million for the three months ended March 31, 2025, primarily driven by lower stock-based compensation expense in the current period. Higher stock-based compensation costs in the first quarter of 2024 associated with equity grant modifications were primarily driven by the 2024 Restructuring Plan and the departure of certain executive-level employees, which did not repeat at the same level during the first quarter of 2025;

Current wording

A decrease in sales and marketing expense of $1.1 million for the three months ended June 30, 2025, primarily due to lower personnel costs in the current period, including stock-based compensation expense, resulting from the 2024 Restructuring Plan and the departure of certain executive-level employees in the prior year, which did not repeat at the same level during the second quarter of 2025;

Previous wording

A decrease in depreciation and amortization expense of $0.8 million for the three months ended March 31, 2025, primarily driven by the full amortization of a database intangible asset during the third quarter of 2024 and certain customer relationship intangible assets utilizing economic consumption amortization methods with lower amortization in the current period; and

Current wording

A decrease in depreciation and amortization expense of $0.4 million for the three months ended June 30, 2025, primarily as a result of certain customer relationship intangible assets utilizing economic consumption amortization methods with lower amortization in the current period; and

Previous wording

A decrease in transaction, integration, and restructuring expenses of $7.3 million for the three months ended March 31, 2025, primarily driven by higher costs in the prior year period associated with the 2024 Restructuring Plan, partially offset by increased costs associated with the integration of certain prior acquisitions and the partial impairment of assets resulting from the consolidation of certain leased office facilities.

Current wording

A decrease in transaction, integration, and restructuring expenses of $2.2 million for the three months ended June 30, 2025, primarily driven by higher costs incurred in the prior year period associated with the consolidation of certain leased office facilities and the 2024 Restructuring Plan.

Previous wording

Total other income, net was $18.8 million for the three months ended March 31, 2025 compared to $2.8 million in the same period in the prior year. The increase was primarily driven by an increase in the TRA liability remeasurement gain of $18.4 million during the three months ended March 31, 2025 compared with the same period in the prior year. The TRA liability remeasurement gain was higher in the current period primarily as a result of a $176.5 million goodwill impairment charge incurred during the three months ended March 31, 2025. This increase was partially offset by a foreign currency transaction loss of $1.0 million in the current year period, compared with a gain of $0.4 million in the prior year period, as well as a $0.5 million loss on the partial extinguishment of debt incurred during the three months ended March 31, 2025.

Current wording

Total other expense, net was $4.6 million for the three months ended June 30, 2025 compared to total other income, net, of $41.6 million in the same period in the prior year. The change was primarily driven by a TRA liability remeasurement loss of $2.9 million during the three months ended June 30, 2025 compared with a $41.7 million gain during the same period in the prior year. The TRA liability remeasurement gain in the prior year was primarily driven by a $363.6 million goodwill impairment charge incurred during the three months ended June 30, 2024. Also contributing to the change was a foreign currency transaction loss of $0.5 million in the current year period, compared with a loss of $0.1 million in the prior year period, as well as interest expense, net, of $1.2 million in the current period, compared with interest expense, net, of less than $0.1 million in the prior year period.

Previous wording

Operating expenses, which included a goodwill impairment charge of $176.5 million incurred during the three months ended March 31, 2025 (refer to Note 7. Goodwill and Intangible Assetsto the accompanying unaudited condensed consolidated financial statements for further details), increased $161.9 million, or 243%, during the three months ended March 31, 2025 compared with the same period in the prior year. The increase to operating expense as compared to the prior-year period was primarily due to the goodwill impairment charge in the current period, partially offset by:

Current wording

Operating expenses, which included goodwill impairment charges of $176.5 million and $363.6 million incurred during the six months ended June 30, 2025 and 2024, respectively (refer to Note 8. Goodwill and Intangible Assetsto our accompanying unaudited condensed consolidated financial statements for further details), decreased $207.4 million, or 43%, during the six months ended June 30, 2025 compared with the same period in the prior year. The decrease to operating expense as compared to the prior-year period was primarily due to a lower goodwill impairment charge in the current period and:

Previous wording

A decrease in product development expense of $0.8 million for the three months ended March 31, 2025, primarily driven by lower personnel costs in the current period, including stock-based compensation expense. Higher stock-based compensation costs in the first quarter of 2024 associated with equity grant modifications were primarily driven by the 2024 Restructuring Plan, which did not repeat at the same level during the first quarter of 2025. These decreases were partially offset by increased costs associated with new software application investments in the current period;

Current wording

A decrease in product development expense of $3.0 million for the six months ended June 30, 2025, primarily driven by lower personnel costs in the current period, including stock-based compensation expense. Higher stock-based compensation costs in the first quarter of 2024 associated with equity grant modifications were primarily driven by the 2024 Restructuring Plan, which did not repeat at the same level during the current period. These decreases were partially offset by increased costs associated with new software application investments in the current period;

Previous wording

Benefit from income taxes was $10.9 million for the three months ended March 31, 2025 compared to $0.8 million in the comparable prior year period. The overall increase was primarily attributed to the $176.5 million impairment of goodwill during the current period, resulting in a reduction of indefinite-lived deferred tax liabilities.

Current wording

Benefit from income taxes was $10.4 million for the six months ended June 30, 2025 compared to $22.7 million in the comparable prior year period. The decrease was primarily attributed to a $187.1 million decrease in goodwill impairment charges during the current period, resulting in reduced income tax benefits from the reduction of indefinite-lived deferred tax liabilities.

Previous wording

We view Adjusted Gross Profit, Adjusted Gross Margin, Adjusted EBITDA, and Adjusted EBITDA Margin as operating performance measures. As such, we believe the most directly comparable GAAP financial measures to Adjusted Gross Profit and Adjusted Gross Margin are GAAP Gross Profit and GAAP Gross Margin, respectively, and the most directly comparable GAAP financial measure to Adjusted EBITDA and Adjusted EBITDA Margin is GAAP net loss and GAAP net loss margin, respectively.

Current wording

We view Adjusted Gross Profit, Adjusted Gross Margin, Adjusted EBITDA, and Adjusted EBITDA Margin as operating performance measures. As such, we believe the most directly comparable GAAP financial measures to Adjusted Gross Profit and Adjusted Gross Margin are GAAP Gross Profit and GAAP Gross Margin, respectively, and the most directly comparable GAAP financial measures to Adjusted EBITDA and Adjusted EBITDA Margin are GAAP net loss and GAAP net loss margin, respectively.

Previous wording

We define Adjusted Gross Profit as Gross Profit, excluding acquisition-related depreciation and amortization, and equity-based compensation costs. We exclude acquisition-related depreciation and amortization expenses as they have no direct correlation to the cost of operating our business on an ongoing basis. A small portion of equity-based compensation is included in cost of revenue in accordance with GAAP, but is excluded from our Adjusted Gross Profit calculations due to its non-cash nature. Gross Margin is defined as Gross Profit as a percentage of revenue and Adjusted Gross Margin is defined as Adjusted Gross Profit as a percentage of revenue. These are key metrics used by management and our board of directors to assess our operations.

Current wording

We define Adjusted Gross Profit as Gross Profit, excluding acquisition-related depreciation and amortization, and equity-based compensation costs. We exclude acquisition-related depreciation and amortization expenses as they have no direct correlation to the cost of operating our business on an ongoing basis. A small portion of equity-based compensation is included in cost of revenue in accordance with GAAP, but is excluded from our Adjusted Gross Profit calculations due to its non-cash nature. Gross Margin is defined as Gross Profit as a percentage of revenue and Adjusted Gross Margin is defined as Adjusted Gross Profit as a percentage of revenue. These are key metrics used by management and our Board to assess our operations.

Previous wording

We present “Adjusted EBITDA” as a measure of our operating performance. EBITDA is defined as earnings before (i) debt-related costs, including interest expense and loss from partial extinguishment of debt, (ii) interest expense (income), net, (iii) income taxes, and (iv) depreciation and amortization. Management further adjusts EBITDA in its presentation of Adjusted EBITDA to exclude (i) other income, net, (ii) equity-based compensation, (iii) transaction, integration, and restructuring expenses, (iv) goodwill impairment, and (v) other non-core items. We exclude these items because they are by nature non-cash, non-recurring, and/or unrelated to our core operations, and therefore we do not believe them to be representative of ongoing operational performance. Adjusted EBITDA Margin is defined as Adjusted EBITDA as a percentage of revenue. Adjusted EBITDA and Adjusted EBITDA Margin are key metrics used by management and our board of directors to assess the profitability of our operations. We believe these metrics provide useful measures to investors to assess our operating performance and in measuring the profitability of our operations on a consolidated level.

Current wording

We present “Adjusted EBITDA” as a measure of our operating performance. EBITDA is defined as earnings before (i) debt-related costs, including interest expense and loss on partial extinguishment of debt, (ii) interest expense (income), net, (iii) provision for (benefit from) income taxes, and (iv) depreciation and amortization. Management further adjusts EBITDA in its presentation of Adjusted EBITDA to exclude (i) other expense (income), net, (ii) equity-based compensation, (iii) transaction, integration, and restructuring expenses, (iv) goodwill impairment, and (v) other non-core items. We exclude these items because they are by nature non-cash, non-recurring, and/or unrelated to our core operations, and therefore we do not believe them to be representative of ongoing operational performance. Adjusted EBITDA Margin is defined as Adjusted EBITDA as a percentage of revenue. Adjusted EBITDA and Adjusted EBITDA Margin are key metrics used by management and our Board to assess the profitability of our operations. We believe these metrics provide useful measures to investors to assess our operating performance and in measuring the profitability of our operations on a consolidated level.

Previous wording

As of March 31, 2025, we had $106.1 million of cash and cash equivalents, $94.6 million of short-term investments, and $49.7 million available under our revolving credit facility. Our principal sources of liquidity are cash and cash equivalents and short-term investments on hand, as well as the cash flows we generate from operations. Our principal uses of liquidity have been, and are expected to continue to be, primarily for investment in long-term growth of the business through capital expenditures, acquisitions, as well as for debt services (see Note 9. Long-Term Debt to the accompanying unaudited condensed consolidated financial statements for further details), repurchases of our Class A Common Stock, and distributions to members of Definitive OpCo, and payments under our tax receivable agreement.

Current wording

As of June 30, 2025, we had $81.0 million of cash and cash equivalents, $103.2 million of short-term investments, and $49.7 million available under our Revolving Credit Facility (as the term is defined below). Our principal sources of liquidity are cash and cash equivalents and short-term investments on hand, as well as the cash flows we generate from operations. Our principal uses of liquidity have been, and are expected to continue to be, primarily for investment in long-term growth of the business through capital expenditures, acquisitions, as well as for debt services (see Note 10. Long-Term Debt to our accompanying unaudited condensed consolidated financial statements for further details), repurchases of our Class A Common Stock, and distributions to members of Definitive OpCo, and payments under our tax receivable agreement.

Previous wording

Net cash provided by operating activities was $26.1 million during the three months ended March 31, 2025, primarily as a result of a net loss of $155.1 million, offset by non-cash charges of $169.9 million. The non-cash charges were primarily comprised of $176.5 million in goodwill impairment charges recorded during the three months ended March 31, 2025, a gain on remeasurement of the TRA of $20.7 million, amortization of intangible assets of $13.2 million, a decrease in deferred taxes of $11.0 million, equity compensation costs of $7.3 million, amortization of deferred contract costs of $3.9 million, and a $0.5 million loss on the extinguishment of debt. The net increase in operating assets and liabilities of $11.2 million for the three months ended March 31, 2025 was primarily driven by cash inflows resulting from an increase in deferred revenue of $19.1 million due to the timing of billings and cash received in advance of revenue recognition for subscription services and a decrease in accounts receivable of $10.4 million. These factors were partially offset by cash outflows resulting from lower accounts payable, accrued expenses, and other liabilities, collectively, of $8.7 million, an increase in prepaid expenses and other assets of $5.7 million, and an increase in deferred contract costs of $3.8 million.

Current wording

Net cash provided by operating activities was $35.4 million during the six months ended June 30, 2025, primarily as a result of a net loss of $164.4 million, offset by non-cash charges of $198.5 million. The non-cash charges were primarily comprised of $176.5 million in goodwill impairment charges recorded during the six months ended June 30, 2025, a gain on remeasurement of the TRA of $17.8 million, amortization of intangible assets of $26.7 million, a decrease in deferred taxes of $10.6 million, equity compensation costs of $14.3 million, amortization of deferred contract costs of $7.9 million, and a $0.5 million loss on the extinguishment of debt. The net increase in operating assets and liabilities of $1.2 million for the six months ended June 30, 2025 was primarily driven by cash inflows resulting from a decrease in accounts receivable of $15.9 million, and an increase in deferred revenue of $8.0 million due to the timing of billings and cash received in advance of revenue recognition for subscription services. These factors were partially offset by cash outflows resulting from lower accounts payable, accrued expenses, and other liabilities, collectively, of $12.1 million, an increase in deferred contract costs of $6.3 million, and an increase in prepaid expenses and other assets of $4.2 million.

Previous wording

Cash provided by investing activities during the three months ended March 31, 2025 was $83.5 million, driven primarily by $103.3 million in maturities of short-term investments, partially offset by $12.0 million in purchases of short-term investments and $7.7 million in purchases of property (including software), equipment, and data assets.

Current wording

Cash provided by investing activities during the six months ended June 30, 2025 was $73.4 million, driven primarily by $147.4 million in maturities of short-term investments, partially offset by $64.1 million in purchases of short-term investments, and $10.0 million in purchases of property (including software), equipment, and data assets.

Previous wording

Cash used in financing activities during the three months ended March 31, 2025 was $109.7 million, driven by net repayments of the 2021 Term Loan (as defined below) of $71.3 million, payments of $21.2 million for repurchases of our Class A Common Stock, including commissions, payments of $13.8 million under the TRA, taxes paid related to the net share settlement of equity awards of $1.9 million, and payments of debt issuance costs of $1.7 million.

Current wording

Cash used in financing activities during the six months ended June 30, 2025 was $134.4 million, driven by net repayments of the 2021 Term Loan (as defined below) of $73.4 million, payments of $40.2 million for repurchases of our Class A Common Stock, including commissions, payments of $13.8 million under the TRA, taxes paid related to the net share settlement of equity awards of $2.5 million, distributions to members of $2.8 million, and payments of debt issuance costs of $1.7 million.

Previous wording

The loans under the Term Facility and the Revolving Credit Facility mature on January 16, 2030. The Facilities are guaranteed, subject to customary exceptions, by all of DH Holdings’ wholly-owned domestic restricted subsidiaries and AIDH Buyer, LLC, a Delaware limited liability company and the direct parent company of DH Holdings (“Holdings”), and are secured by associated collateral agreements that pledge a lien on substantially all of DH Holdings’ assets, including fixed assets and intangibles, and the assets of the guarantors, in each case, subject to customary exceptions (the “Pledged Assets”). As of March 31, 2025, the Pledged Assets of these subsidiaries approximated $710.0 million, and the net assets of these subsidiaries approximated $383.1 million.

Current wording

The loans under the Term Facility and the Revolving Credit Facility mature on January 16, 2030. The Facilities are guaranteed, subject to customary exceptions, by all of DH Holdings’ wholly-owned domestic restricted subsidiaries and AIDH Buyer, LLC, a Delaware limited liability company and the direct parent company of DH Holdings (“Holdings”), and are secured by associated collateral agreements that pledge a lien on substantially all of DH Holdings’ assets, including fixed assets and intangibles, and the assets of the guarantors, in each case, subject to customary exceptions (the “Pledged Assets”). As of June 30, 2025, the Pledged Assets of these subsidiaries approximated $664.2 million, and the net assets of these subsidiaries approximated $351.7 million.

Previous wording

The 2021 Credit Agreement, as amended, includes certain financial covenants for which we were compliant as of March 31, 2025 and December 31, 2024. Refer to Note 9. Long-Term Debt to our unaudited condensed consolidated financial statements for further information.

Current wording

The 2021 Credit Agreement, as amended, includes certain financial covenants for which we were compliant as of June 30, 2025 and December 31, 2024. Refer to Note 10. Long-Term Debt to our accompanying unaudited condensed consolidated financial statements for further information.

Previous wording

In connection with the DH Holdings Credit Agreement Amendment, we repaid $69.1 million of outstanding principal amount of the Term Facility and reduced our borrowing capacity under the Revolver Credit Facility by $25.0 million. As a result, we incurred a loss on partial extinguishment of debt of $0.5 million during the quarter ended March 31, 2025 attributed to the derecognition of a proportionate amount of the unamortized debt discount, a result of repaying the $69.1 million of outstanding principal on the Term Facility and reducing our Revolving Credit Facility. In addition, we capitalized financing costs totaling $1.7 million, of which $1.2 million related to the Term Facility and $0.5 million related to the Revolving Line of Credit. The financing costs associated with the Term Facility are recorded as a contra-debt balance in term loan, net of current portion in the consolidated balance sheets and are amortized over the remaining life of the loan using the effective interest method. The financing costs associated with the Revolving Line of Credit are recorded in other assets in the unaudited condensed consolidated balance sheets are amortized over the life of the arrangement. At March 31, 2025 and December 31, 2024, the unamortized financing costs were $0.6 million and $0.3 million, respectively.

Current wording

In connection with the DH Holdings Credit Agreement Amendment, we repaid $69.1 million of outstanding principal amount of the Term Facility and reduced our borrowing capacity under the Revolving Credit Facility by $25.0 million. As a result, we incurred a loss on partial extinguishment of debt of $0.5 million during the first quarter of 2025 attributed to the derecognition of a proportionate amount of the unamortized debt discount, a result of repaying the $69.1 million of outstanding principal on the Term Facility and reducing our Revolving Credit Facility. In addition, we capitalized financing costs totaling $1.7 million, of which $1.2 million related to the Term Facility and $0.5 million related to the Revolving Line of Credit. The financing costs associated with the Term Facility are recorded as a contra-debt balance in term loan, net of current portion in the consolidated balance sheets and are amortized over the remaining life of the loan using the effective interest method. The financing costs associated with the Revolving Line of Credit are recorded in other assets in the unaudited condensed consolidated balance sheets are amortized over the life of the arrangement. At June 30, 2025 and December 31, 2024, the unamortized financing costs were $0.5 million and $0.3 million, respectively.

Previous wording

Financing obligations generally include repayment of principal amounts of the 2021 Term Loan, lease payments, and purchase obligations. With the exception of the DH Holdings Credit Agreement Amendment as described under Debt Obligations, there have been no material changes to our financing obligations during the three months ended March 31, 2025. Refer to Note 5. Leases and Note 14. Commitments and Contingencies in our Annual Report on Form 10-K filed with the SEC on February 27, 2025 for further information.

Current wording

Financing obligations generally include repayment of principal amounts of the 2021 Term Loan, lease payments, and purchase obligations. With the exception of the DH Holdings Credit Agreement Amendment as described under Debt Obligations, there have been no material changes to our financing obligations during the six months ended June 30, 2025. Refer to Note 5. Leases and Note 14. Commitments and Contingencies to our consolidated financial statements included in our 2024 Form 10-K for further information.

Previous wording

In May 2024, our board of directors authorized a stock repurchase program of up to $20.0 million of our Class A Common Stock, which expired on December 31, 2024 (the “2024 Repurchase Program”). On November 1, 2024, our board of directors announced a new stock repurchase program (the “2025 Repurchase Program” and, together with the 2024 Repurchase Program, the “Repurchase Programs”) of our Class A Common Stock authorizing up to $100.0 million in share repurchases. The 2025 Repurchase Program expires on December 31, 2025 and became effective upon the expiration or completion of the 2024 Repurchase Program. Repurchases may be effected, from time to time, either on the open market (including pre-set trading plans), in privately negotiated transactions, and other transactions in accordance with applicable securities laws.

Current wording

In May 2024, our Board authorized a stock repurchase program of up to $20.0 million of our Class A Common Stock, which expired on December 31, 2024 (the “2024 Repurchase Program”). On November 1, 2024, our Board announced a new stock repurchase program (the “2025 Repurchase Program” and, together with the 2024 Repurchase Program, the “Repurchase Programs”) of our Class A Common Stock authorizing up to $100.0 million in share repurchases. The 2025 Repurchase Program expires on December 31, 2025 and became effective upon the expiration or completion of the 2024 Repurchase Program. Repurchases may be effected, from time to time, either on the open market (including pre-set trading plans), in privately negotiated transactions, and other transactions in accordance with applicable securities laws.