Healthcare data analytics company Health Catalyst (NASDAQ: HCAT) reported Q1 CY2026 results topping the market’s revenue expectations, but sales fell by 10.9% year on year to $70.76 million. On the other hand, next quarter’s revenue guidance of $69 million was less impressive, coming in 2.1% below analysts’ estimates. Its non-GAAP profit of $0.02 per share was in line with analysts’ consensus estimates.
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Health Catalyst (HCAT) Q1 CY2026 Highlights:
- Revenue: $70.76 million vs analyst estimates of $69.19 million (10.9% year-on-year decline, 2.3% beat)
- Adjusted EPS: $0.02 vs analyst estimates of $0.01 (in line)
- Adjusted Operating Income: -$102.7 million vs analyst estimates of -$10.81 million (-145% margin, significant miss)
- Revenue Guidance for the full year is $262.5 million at the midpoint, below analyst estimates of $278.9 million
- EBITDA guidance for the full year is $31.5 million at the midpoint, below analyst estimates of $34.2 million
- Operating Margin: -150%, down from -25.4% in the same quarter last year
- Free Cash Flow Margin: 18.9%, up from 6% in the previous quarter
- Billings: $84.21 million at quarter end, down 11.7% year on year
- Market Capitalization: $111.9 million
“We delivered solid first quarter results, with revenue and adjusted EBITDA exceeding expectations,” 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 sales performance can indicate its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Unfortunately, Health Catalyst’s 8.7% annualized revenue growth over the last five years was sluggish. This was below our standard for the software sector and is a poor baseline for our analysis.
Long-term growth is the most important, but within software, a half-decade historical view may miss new innovations or demand cycles. Health Catalyst’s recent performance shows its demand has slowed as its revenue was flat over the last two years. 
This quarter, Health Catalyst’s revenue fell by 10.9% year on year to $70.76 million but beat Wall Street’s estimates by 2.3%. Company management is currently guiding for a 14.5% year-on-year decline in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to decline by 8.2% over the next 12 months, a deceleration versus the last two years. This projection doesn't excite us and suggests its products and services will face some demand challenges.
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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.
Over the last year, Health Catalyst failed to grow its billings, which came in at $84.21 million in the latest quarter. However, this alternate topline metric outperformed its total sales, meaning the company collects cash upfront and then recognizes the revenue over the length of its contracts - a boost for its liquidity and future revenue prospects. 
Customer Acquisition Efficiency
The customer acquisition cost (CAC) payback period measures the months a company needs to recoup the money spent on acquiring a new customer. This metric helps assess how quickly a business can break even on its sales and marketing investments.
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 Q1 Results
We were impressed by Health Catalyst’s optimistic EBITDA guidance for next quarter, which blew past analysts’ expectations. We were also excited its EBITDA outperformed Wall Street’s estimates by a wide margin. 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 up 11.1% to $1.53 immediately after reporting.
Big picture, is Health Catalyst a buy here and now? 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).
