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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________________________________________
FORM 8-K
__________________________________________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 12, 2019
__________________________________________________________
HEALTH CATALYST, INC.
(Exact name of registrant as specified in its charter)
________________________________________________________________
Delaware
001-38993
45-3337483
(State or other jurisdiction of
incorporation)
(Commission File Number)
(IRS Employer
Identification No.)
3165 Millrock Drive #400
Salt Lake City, UT 84121
(Address of principal executive offices, including zip code)

(801) 708-6800
(Registrant’s telephone number, including area code)

Not Applicable
(Former name or former address, if changed since last report)
______________________________________________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: 
¨      Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) 
¨     Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) 
¨     Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) 
¨     Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
______________________________________________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
 
Trading Symbol(s)
 
Name of exchange on which registered
Common Stock, par value $0.001 per share
 
HCAT
 
The Nasdaq Global Select Market
________________________________________________________
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 ((§240.12b-2 of this chapter).
Emerging growth company ý

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ý



 






Item 2.02. Results of Operations and Financial Condition.

On November 12, 2019, Health Catalyst, Inc. (the Company) issued a press release relating to its financial results for the third quarter of 2019. A copy of the press release, which is incorporated by reference herein, is attached hereto as Exhibit 99.1.

The foregoing information (including the exhibit set forth in Item 9.01 hereto) is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such filing.


Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.
Exhibit No.
 
Description
 

* Furnished herewith.


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
HEALTH CATALYST, INC.
 
 
 
 
Date: November 12, 2019
By:
/s/ J. Patrick Nelli
 
 
J. Patrick Nelli
 
 
 
 
 
Chief Financial Officer



Exhibit


Exhibit 99.1
https://cdn.kscope.io/c479b5638a24f66cc75562f829af92bc-healthcatalystlogo.jpg

Health Catalyst Reports Third Quarter 2019 Results


SALT LAKE CITY, UT, November 12, 2019 — Health Catalyst, Inc. (Nasdaq: HCAT), a leading provider of data and analytics technology and services to healthcare organizations, today reported financial results for the third quarter ended September 30, 2019.
“In the third quarter of 2019, I am pleased that we achieved strong performance across all areas of our business and exceeded the guidance we provided for the quarter,” said Dan Burton, CEO of Health Catalyst. “In addition to this financial and operational execution, we held our sixth annual Healthcare Analytics Summit conference in September, where over 1,600 attendees joined us in Salt Lake City. This year’s Summit was an important opportunity for Health Catalyst to continue to provide thought leadership within the healthcare data and analytics industry, while carefully listening to our customers and the broader industry’s needs. Overall, a positive third quarter positions us well to deliver strong results for the full year 2019 and beyond.”

Financial Highlights for the Three Months Ended September 30, 2019

Key Financial Metrics
 
Three Months Ended
September 30,
 
Year over Year Change
 
2019
 
2018
 
GAAP Financial Data:
(in thousands, except percentages)
Technology revenue
$
21,160

 
$
18,283

 
16%
Professional services revenue
$
18,263

 
$
14,585

 
25%
Total revenue
$
39,423

 
$
32,868

 
20%
Loss from operations
$
(20,736
)
 
$
(16,495
)
 
26%
Net loss
$
(21,416
)
 
$
(16,876
)
 
27%
Other Non-GAAP Financial Data:(1)
 
 
 
 
 
Adjusted Technology Gross Profit
$
14,484

 
$
12,169

 
19%
Adjusted Technology Gross Margin
68
%
 
67
%
 

Adjusted Professional Services Gross Profit
$
6,677

 
$
4,172

 
60%
Adjusted Professional Services Gross Margin
37
%
 
29
%
 

Total Adjusted Gross Profit
$
21,161

 
$
16,341

 
29%
Total Adjusted Gross Margin
54
%
 
50
%
 

Adjusted EBITDA
$
(8,446
)
 
$
(11,333
)
 
25%
________________________
(1) These measures are not calculated in accordance with generally accepted accounting principles in the United States ("GAAP"). See the accompanying "Non-GAAP Financial Measures" section for more information about these financial measures, including the limitations of such measures, and for a reconciliation of each measure to the most directly comparable measure calculated in accordance with GAAP.

Financial Outlook

Health Catalyst provides forward-looking guidance on total revenue, a GAAP measure, and Adjusted EBITDA, a non-GAAP measure.

For the fourth-quarter of 2019, we expect:
•
Total revenue between $40.0 million and $43.0 million, and
•Adjusted EBITDA between $(9.2) million and $(7.2) million





For the full-year of 2019, we expect:
•
Total revenue between $151.4 million and $154.4 million, and
•
Adjusted EBITDA between $(30.1) million and $(28.1) million

We have not reconciled guidance for Adjusted EBITDA to net loss, the most directly comparable GAAP measure, and have not provided forward-looking guidance for net loss, because there are items that may impact net loss, including stock-based compensation, that are not within our control or cannot be reasonably predicted.

Quarterly Conference Call

The third quarter 2019 earnings conference call and webcast will be held Tuesday, November 12, 2019 at 5:00 p.m. EDT. The conference call can be accessed by dialing 1-877-295-1104 for U.S. participants, or 1-470-495-9486 for international participants, and referencing participant code 6569426. A live audio webcast will be available online at https://ir.healthcatalyst.com/. A replay of the call will be available via webcast for on-demand listening shortly after the completion of the call, at the same web link, and will remain available for approximately 90 days.

About Health Catalyst

Health Catalyst is a leading provider of data and analytics technology and services to healthcare organizations, committed to being the catalyst for massive, measurable, data-informed healthcare improvement. Its customers leverage the cloud-based data platform—powered by data from more than 100 million patient records and encompassing trillions of facts—as well as its analytics software and professional services expertise to make data-informed decisions and realize measurable clinical, financial, and operational improvements. Health Catalyst envisions a future in which all healthcare decisions are data-informed.
Available Information

Health Catalyst intends to use its Investor Relations website as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD.
Forward-Looking Statements

This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, as amended. These forward-looking statements include statements regarding our future growth and our financial outlook for Q4 and full year 2019. Forward-looking statements are subject to risks and uncertainties and are based on potentially inaccurate assumptions that could cause actual results to differ materially from those expected or implied by the forward-looking statements. Actual results may differ materially from the results predicted, and reported results should not be considered as an indication of future performance.

Important risks and uncertainties that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: (i) changes in laws and regulations applicable to our business model; (ii) changes in market or industry conditions, regulatory environment and receptivity to our technology and services; (iii) results of litigation or a security incident; (iv) the loss of one or more key customers or partners; and (v) changes to our abilities to recruit and retain qualified team members. For a detailed discussion of the risk factors that could affect our actual results, please refer to the risk factors identified in our SEC reports, including, but not limited to the Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2019 that was filed with the SEC on August 23, 2019.  All information provided in this release and in the attachments is as of the date hereof, and we undertake no duty to update or revise this information unless required by law.





Condensed Consolidated Balance Sheets
(in thousands, except share and per share data, unaudited)
 
As of
September 30,
 
As of
December 31,
 
2019
 
2018
Assets
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
52,059

 
$
28,431

Short-term investments
189,360

 
4,761

Accounts receivable, net
31,019

 
27,696

Deferred costs
978

 
649

Prepaid expenses and other assets
6,403

 
5,321

Total current assets
279,819

 
66,858

Property and equipment, net
4,228

 
4,676

Intangible assets, net
26,684

 
28,304

Operating lease right-of-use assets
4,494

 
6,344

Other assets
1,050

 
1,099

Goodwill
3,694

 
3,694

Total assets
$
319,969

 
$
110,975

Liabilities, redeemable convertible preferred stock, and stockholders’ equity (deficit)
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
5,179

 
$
1,812

Accrued liabilities
9,544

 
9,203

Acquisition-related consideration payable
3,403

 
2,172

Deferred revenue
32,131

 
24,755

Operating lease liabilities
2,790

 
2,577

Current portion of long-term debt
—

 
1,287

Total current liabilities
53,047

 
41,806

Long-term debt, net of current portion
47,916

 
18,814

Acquisition-related consideration payable, net of current portion
1,826

 
3,770

Deferred revenue, net of current portion
7,505

 
7,280

Operating lease liabilities, net of current portion
2,435

 
4,228

Other liabilities
687

 
—

Total liabilities
113,416

 
75,898

Commitments and contingencies
 
 
 
Redeemable convertible preferred stock, $0.001 par value; no shares and 22,713,694 shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively
—

 
409,845

Stockholders’ equity (deficit):
 
 
 
Common stock, $0.001 par value; 36,472,223 and 4,779,356 shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively
36

 
5

Additional paid-in capital
802,777

 
—

Accumulated deficit
(596,248
)
 
(374,772
)
Accumulated other comprehensive loss
(12
)
 
(1
)
Total stockholders’ equity (deficit)
206,553

 
(374,768
)
Total liabilities, redeemable convertible preferred stock, and stockholders’ equity (deficit)
$
319,969

 
$
110,975








Condensed Consolidated Statements of Operations
(in thousands, except per share data, unaudited)
 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
2019
 
2018
 
2019
 
2018
Revenue:
 
 
 
 
 
 
 
Technology
$
21,160

 
$
18,283

 
$
61,393

 
$
38,459

Professional services
18,263

 
14,585

 
50,047

 
38,031

Total revenue
39,423

 
32,868

 
111,440

 
76,490

Cost of revenue, excluding depreciation and amortization:
 
 
 
 
 
 
 
Technology(1)(2)
6,740

 
6,132

 
20,536

 
12,782

Professional services(1)(2)(3)
11,892

 
10,865

 
33,132

 
28,343

Total cost of revenue, excluding depreciation and amortization
18,632

 
16,997

 
53,668

 
41,125

Operating expenses:
 
 
 
 
 
 
 
Sales and marketing(1)(2)(3)
14,721

 
13,771

 
35,579

 
32,496

Research and development(1)(2)(3)
13,477

 
10,839

 
33,209

 
28,031

General and administrative(1)(2)(3)
11,013

 
5,605

 
23,333

 
16,748

Depreciation and amortization
2,316

 
2,151

 
6,844

 
5,252

Total operating expenses
41,527

 
32,366

 
98,965

 
82,527

Loss from operations
(20,736
)
 
(16,495
)
 
(41,193
)
 
(47,162
)
Loss on extinguishment of debt
—

 
—

 
(1,670
)
 
—

Interest and other expense, net
(659
)
 
(374
)
 
(2,924
)
 
(1,389
)
Loss before income taxes
(21,395
)
 
(16,869
)
 
(45,787
)
 
(48,551
)
Income tax provision (benefit)
21

 
7

 
43

 
(142
)
Net loss
$
(21,416
)
 
$
(16,876
)
 
$
(45,830
)
 
$
(48,409
)
Less: accretion (reversal of accretion) of redeemable convertible preferred stock
18,170

 
514

 
180,826

 
(12,045
)
Net loss attributable to common stockholders
$
(39,586
)
 
$
(17,390
)
 
$
(226,656
)
 
$
(36,364
)
Net loss per share attributable to common stockholders, basic and diluted
$
(1.40
)
 
$
(3.71
)
 
$
(17.78
)
 
$
(7.56
)
Weighted-average shares outstanding used in calculating net loss per share attributable to common stockholders, basic and diluted
28,223

 
4,686

 
12,750

 
4,813

 
 
 
 
 
 
 
 
Pro forma adjusted net loss per share, basic and diluted(4)
$
(0.27
)
 
 
 
$
(0.72
)
 
 
Pro forma as adjusted weighted-average number of shares outstanding used in calculating Adjusted Net Loss per share, basic and diluted(4)
36,373

 
 
 
36,183

 
 
_______________
(1)
Includes stock-based compensation expense as follows:
 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
2019
 
2018
 
2019
 
2018
Stock-Based Compensation Expense:
(in thousands)
Cost of revenue, excluding depreciation and amortization:
 
 
 
 
 
 
 
Technology
$
64

 
$
18

 
$
129

 
$
49

Professional services
306

 
120

 
593

 
325

Sales and marketing
1,358

 
298

 
2,639

 
1,023

Research and development
3,067

 
179

 
3,502

 
532

General and administrative
5,179

 
318

 
6,165

 
958

Total
$
9,974

 
$
933

 
$
13,028

 
$
2,887






(2)
Includes tender offer payments deemed compensation expense as follows:
 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
2019
 
2018
 
2019
 
2018
Tender Offer Payments Deemed Compensation Expense:
(in thousands)
Cost of revenue, excluding depreciation and amortization:
 
 
 
 
 
 
 
Technology
$
—

 
$
—

 
$
—

 
$
28

Professional services
—

 
—

 
—

 
284

Sales and marketing
—

 
—

 
—

 
3,967

Research and development
—

 
—

 
—

 
906

General and administrative
—

 
—

 
—

 
3,133

Total
$
—

 
$
—

 
$
—

 
$
8,318


(3)
Includes post-acquisition restructuring costs as follows:
 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
2019
 
2018
 
2019
 
2018
Post-Acquisition Restructuring Costs:
(in thousands)
Cost of revenue, excluding depreciation and amortization:
 
 
 
 
 
 
 
Technology
$
—

 
$
—

 
$
—

 
$
—

Professional services
—

 
332

 
108

 
332

Sales and marketing
—

 
749

 
306

 
749

Research and development
—

 
484

 
32

 
484

General and administrative
—

 
513

 
—

 
513

Total
$
—

 
$
2,078

 
$
446

 
$
2,078


(4)
Includes pro forma adjustments to net loss attributable to common stockholders and the weighted average number of common shares outstanding directly attributable to the closing of our initial public offering on July 29, 2019 as well as certain other non-GAAP adjustments. Refer to the "Non-GAAP Financial Measures—Pro Forma Adjusted Net Loss Per Share" section below for further details.





Condensed Consolidated Statements of Cash Flows
(in thousands, unaudited)
 
Nine Months Ended
September 30,
 
2019
 
2018
Cash flows from operating activities
 
 
 
Net loss
$
(45,830
)
 
$
(48,409
)
Adjustments to reconcile net loss to net cash used in operating activities:
 
 
 
Depreciation and amortization
6,844

 
5,252

Loss on extinguishment of debt
1,670

 
—

Amortization of debt discount and issuance costs
797

 
393

Investment discount and premium amortization
(443
)
 
(120
)
Change in fair value of warrant liability
—

 
(37
)
Gain on sale of property and equipment
(36
)
 
(21
)
Stock-based compensation expense
13,028

 
2,887

Change in operating assets and liabilities:
 
 
 
Accounts receivable, net
(3,323
)
 
(1,206
)
Deferred costs
(329
)
 
191

Prepaid expenses and other assets
(1,033
)
 
(650
)
Operating lease right-of-use assets
1,850

 
(3,957
)
Accounts payable, accrued liabilities, and other liabilities
1,661

 
7,518

Deferred revenue
7,601

 
7,415

Operating lease liabilities
(1,580
)
 
3,434

Net cash used in operating activities
(19,123
)
 
(27,310
)
 
 
 
 
Cash flows from investing activities
 
 
 
Purchases of property and equipment
(1,658
)
 
(760
)
Proceeds from the sale of property and equipment
40

 
21

Purchase of short-term investments
(221,444
)
 
(9,234
)
Proceeds from the sale and maturity of short-term investments
37,277

 
26,700

Purchase of intangible assets
(1,747
)
 
(18
)
Net cash (used in) provided by investing activities
(187,532
)
 
16,709

 
 
 
 
Cash flows from financing activities
 
 
 
Proceeds from initial public offering, net of underwriters' discounts and commissions
194,649

 
—

Proceeds from the issuance of redeemable convertible preferred stock, net of issuance costs
12,073

 
33,987

Proceeds from exercise of stock options
2,177

 
2,800

Proceeds from employee stock purchase plan
1,216

 
—

Repurchase of common stock
—

 
(8,712
)
Payment of SVB line of credit and mezzanine loan
(21,821
)
 
—

Proceeds from credit facilities, net of debt issuance costs
47,169

 
—

Payments of acquisition-related consideration
(773
)
 
(12,348
)
Payments of deferred offering costs
(4,407
)
 
—

Net cash provided by financing activities
230,283

 
15,727

Net increase in cash and cash equivalents
23,628

 
5,126

 
 
 
 
Cash and cash equivalents at beginning of period
28,431

 
22,978

Cash and cash equivalents at end of period
$
52,059

 
$
28,104





Non-GAAP Financial Measures

To supplement our financial information presented in accordance with generally accepted accounting principles in the United States, or GAAP, we believe certain non-GAAP measures, including Adjusted Gross Profit, Adjusted Gross Margin, Adjusted EBITDA, Adjusted Net Loss, and Adjusted Net Loss per share, basic and diluted, are useful in evaluating our operating performance. We use this non-GAAP financial information to evaluate our ongoing operations, as a component in determining employee bonus compensation, and for internal planning and forecasting purposes. We believe that non-GAAP financial information, when taken collectively, may be helpful to investors because it provides consistency and comparability with past financial performance. However, non-GAAP financial information is presented for supplemental informational 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. In addition, other companies, including companies in our industry, may calculate similarly-titled non-GAAP measures differently or may use other measures to evaluate their performance. A reconciliation is provided below for each non-GAAP financial measure to the most directly comparable financial measure stated in accordance with GAAP. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures, and not to rely on any single financial measure to evaluate our business.

Adjusted Gross Profit and Adjusted Gross Margin
Adjusted Gross Profit is a non-GAAP financial measure that we define as revenue less cost of revenue, excluding depreciation and amortization and excluding (i) stock-based compensation and (ii) post-acquisition restructuring costs. We define Adjusted Gross Margin as our Adjusted Gross Profit divided by our revenue. We believe Adjusted Gross Profit and Adjusted Gross Margin are useful to investors as they eliminate the impact of certain non-cash expenses and allow a direct comparison of these measures between periods without the impact of non-cash expenses and certain other non-recurring operating expenses. The following is a reconciliation of revenue, the most directly comparable GAAP financial measure, to Adjusted Gross Profit, for the three months ended September 30, 2019 and 2018:
 
Three Months Ended September 30, 2019
 
(in thousands, except percentages)
 
Technology
 
Professional Services
 
Total
Revenue
$
21,160

 
$
18,263

 
$
39,423

Cost of revenue, excluding depreciation and amortization
(6,740
)
 
(11,892
)
 
(18,632
)
Gross profit, excluding depreciation and amortization
14,420

 
6,371

 
20,791

Add:
 
 
 
 
 
Stock-based compensation
64

 
306

 
370

Adjusted Gross Profit
$
14,484

 
$
6,677

 
$
21,161

Gross margin, excluding depreciation and amortization
68
%
 
35
%
 
53
%
Adjusted Gross Margin
68
%
 
37
%
 
54
%
 
Three Months Ended September 30, 2018
 
(in thousands, except percentages)
 
Technology
 
Professional Services
 
Total
Revenue
$
18,283

 
$
14,585

 
$
32,868

Cost of revenue, excluding depreciation and amortization
(6,132
)
 
(10,865
)
 
(16,997
)
Gross profit, excluding depreciation and amortization
12,151

 
3,720

 
15,871

Add:
 
 
 
 
 
Stock-based compensation
18

 
120

 
138

Post-acquisition restructuring costs
—

 
332

 
332

Adjusted Gross Profit
$
12,169

 
$
4,172

 
$
16,341

Gross margin, excluding depreciation and amortization
66
%
 
26
%
 
48
%
Adjusted Gross Margin
67
%
 
29
%
 
50
%





Adjusted EBITDA
Adjusted EBITDA is a non-GAAP financial measure that we define as net loss adjusted for (i) interest and other expense, net, (ii) income tax provision, (iii) depreciation and amortization, (iv) stock-based compensation, and (v) post-acquisition restructuring costs. We believe Adjusted EBITDA provides investors with useful information on period-to-period performance as evaluated by management and comparison with our past financial performance and is useful in evaluating our operating performance compared to that of other companies in our industry, as this metric generally eliminates the effects of certain items that may vary from company to company for reasons unrelated to overall operating performance. The following is a reconciliation of our net loss, the most directly comparable GAAP financial measure, to Adjusted EBITDA, for the three months ended September 30, 2019 and 2018:
 
Three Months Ended September 30,
 
2019
 
2018
 
(in thousands)
Net loss
$
(21,416
)
 
$
(16,876
)
Add:
 
 
 
Interest and other expense, net
659

 
374

Income tax provision
21

 
7

Depreciation and amortization
2,316

 
2,151

Stock-based compensation
9,974

 
933

Post-acquisition restructuring costs
—

 
2,078

Adjusted EBITDA
$
(8,446
)
 
$
(11,333
)
Pro Forma Adjusted Net Loss Per Share

Adjusted Net Loss is a non-GAAP financial measure that we define as net loss attributable to common stockholders adjusted for (i) accretion of redeemable convertible preferred stock, (ii) stock-based compensation, (iii) post-acquisition restructuring costs, (iv) amortization of acquired intangibles, and (v) loss on debt extinguishment. We believe Adjusted Net Loss provides investors with useful information on period-to-period performance as evaluated by management and comparison with our past financial performance and is useful in evaluating our operating performance compared to that of other companies in our industry, as this metric generally eliminates the effects of certain items that may vary from company to company for reasons unrelated to overall operating performance.
On July 29, 2019, we closed our initial public offering (our IPO) in which we issued and sold 8,050,000 shares (inclusive of the underwriters’ option to purchase an additional 1,050,000 shares, which was exercised on July 25, 2019) of common stock at $26.00 per share. We received net proceeds of $194.6 million after deducting underwriting discounts and commissions and before deducting offering costs of $4.6 million. Upon the closing of our IPO, all shares of our outstanding redeemable convertible preferred stock converted into 23,151,481 shares of common stock on a one-for-one basis. As a result of our IPO closing during the three and nine months ended September 30, 2019, we have prepared the below adjusted condensed consolidated statement of operations data in order to present pro forma adjusted net loss per share amounts that will be comparable to future periods. The following calculation gives effect to the following pro forma adjustments:
I.
The automatic conversion of all outstanding shares of our redeemable convertible preferred stock (using the if-converted method) into common stock as though the conversion had occurred as of the beginning of each period.
II.
The issuance of 8,050,000 shares of common stock as part of the IPO, assuming the shares of common stock were issued and sold as of the beginning of each period.
The table below presents our calculation of pro forma adjusted net loss per share, basic and diluted, including a reconciliation of Adjusted Net Loss and the pro forma as adjusted weighted-average shares used in calculating pro forma adjusted net loss per share, basic and diluted, to the most directly comparable financial measures calculated in accordance with GAAP:




 
Three Months Ended September 30, 2019
 
Nine Months Ended September 30, 2019
Numerator:
(in thousands, except share and per share amounts)
Net loss attributable to common stockholders
$
(39,586
)
 
$
(226,656
)
Add:
 
 
 
Accretion of redeemable convertible preferred stock
18,170

 
180,826

Stock-based compensation
9,974

 
13,028

Post-acquisition restructuring costs
—

 
446

Amortization of acquired intangibles
1,625

 
4,672

Loss on extinguishment of debt
—

 
1,670

Adjusted Net Loss
$
(9,817
)
 
$
(26,014
)
Denominator:
 
 
 
Weighted-average number of shares used in calculating net loss per share attributable to common stockholders, basic and diluted
28,222,555

 
12,749,903

Pro forma adjustments:
 
 
 
Pro forma adjustment to reflect conversion of redeemable convertible preferred stock to common stock, assuming the conversion took place at the beginning of each period
6,039,517

 
17,384,812

Pro forma adjustment to reflect issuance of shares of common stock as part of IPO, assuming the issuance took place at the beginning of each period
2,111,413

 
6,048,718

Pro forma as adjusted weighted-average number of shares used in calculating Adjusted Net Loss per share, basic and diluted
36,373,485

 
36,183,433

Pro forma adjusted net loss per share, basic and diluted
$
(0.27
)
 
$
(0.72
)

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