Healthcare data analytics company Health Catalyst (NASDAQ: HCAT) reported Q2 CY2026 results topping the market’s revenue expectations, but sales fell by 12.7% year on year to $70.49 million. On the other hand, next quarter’s revenue guidance of $55.5 million was less impressive, coming in 10.7% below analysts’ estimates. Its non-GAAP profit of $0.04 per share was in line with analysts’ consensus estimates.
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Health Catalyst (HCAT) Q2 CY2026 Highlights:
- Revenue: $70.49 million vs analyst estimates of $69.05 million (12.7% year-on-year decline, 2.1% beat)
- Adjusted EPS: $0.04 vs analyst estimates of $0.03 (in line)
- Adjusted EBITDA: $9.92 million vs analyst estimates of $9.43 million (14.1% margin, 5.2% beat)
- The company dropped its revenue guidance for the full year to $247.5 million at the midpoint from $262.5 million, a 5.7% decrease
- EBITDA guidance for the full year is $18.25 million at the midpoint, below analyst estimates of $32.09 million
- Operating Margin: -51.8%, down from -46% in the same quarter last year
- Free Cash Flow was -$4.88 million, down from $13.57 million in the previous quarter
- Billings: $54.75 million at quarter end, down 28.1% year on year
- Market Capitalization: $176.6 million
“We delivered a very productive second quarter, exceeding the high end of our revenue guidance and the midpoint of our adjusted EBITDA guidance," said Ben Albert, Chief Executive Officer of Health Catalyst.
Company Overview
Built on its "Health Catalyst Flywheel" methodology that emphasizes measurable outcomes, Health Catalyst (NASDAQ: HCAT) provides data and analytics technology and services that help healthcare organizations manage their data and drive measurable clinical, financial, and operational improvements.
Revenue Growth
A company’s long-term performance is an indicator of its overall quality. Any business can have short-term success, but a top-tier one grows for years. Over the last five years, Health Catalyst grew its sales at a weak 6.2% compounded annual growth rate. This was below our standard for the software sector and is a tough starting point for our analysis.
We at StockStory place the most emphasis on long-term growth, but within software, a half-decade historical view may miss recent innovations or disruptive industry trends. Health Catalyst’s performance shows it grew in the past but relinquished its gains over the last two years, as its revenue fell by 1.2% annually. 
This quarter, Health Catalyst’s revenue fell by 12.7% year on year to $70.49 million but beat Wall Street’s estimates by 2.1%. Company management is currently guiding for a 27.3% year-on-year decline in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to decline by 16.9% over the next 12 months, a deceleration versus the last two years. This projection doesn’t excite us and implies its products and services will see some demand headwinds.
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Billings
Billings is a non-GAAP metric that is often called “cash revenue” because it shows how much money the company has collected from customers in a certain period. This is different from revenue, which must be recognized in pieces over the length of a contract.
Health Catalyst’s billings came in at $54.75 million in Q2, and it averaged 14.4% year-on-year declines over the last four quarters. This alternate topline metric underperformed its total sales, meaning the company recognizes revenue faster than it collects cash - a headwind for its liquidity that could also signal a slowdown in future revenue growth. 
Customer Acquisition Efficiency
The customer acquisition cost (CAC) payback period represents the months required to recover the cost of acquiring a new customer. Essentially, it’s the break-even point for sales and marketing investments. A shorter CAC payback period is ideal, as it implies better returns on investment and business scalability.
Health Catalyst’s recent customer acquisition efforts haven’t yielded returns as its CAC payback period was negative this quarter, meaning its incremental sales and marketing investments outpaced its revenue. The company’s inefficiency indicates it operates in a highly competitive environment where there is little differentiation between Health Catalyst’s products and its peers.
Key Takeaways from Health Catalyst’s Q2 Results
It was encouraging to see Health Catalyst beat analysts’ revenue expectations this quarter. On the other hand, its full-year revenue guidance missed and its full-year EBITDA guidance fell short of Wall Street’s estimates. Overall, this was a weaker quarter. The stock traded down 25.5% to $1.71 immediately following the results.
The latest quarter from Health Catalyst’s wasn’t that good. One earnings report doesn’t define a company’s quality, though, so let’s explore whether the stock is a buy at the current price. The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).
