Good morning, everyone. Welcome to the JPMorgan Healthcare Conference. My name is Anne Samuel, and I cover healthcare technology and distribution here at JPMorgan. We're thrilled to have Health Catalyst with us this morning. They've given us some good news this week with an interesting acquisition that we can't wait to hear about. Presenting this morning is going to be CEO Dan Burton, CFO Jason Alger, and Dan LeSueur. And we will have them do their presentation, and then after that, we can open it up to some Q&A. So with that, let me turn it over to Dan.
Wonderful. Thank you, Anne. Thank you to all of you. It's great to see each of you. I appreciate this opportunity to be back at J.P. Morgan. I think this is my 14th time, maybe the best weather that I've experienced, so grateful for that, and we're appreciative of an opportunity to share an overview and an update of what we've been focused on at Health Catalyst, so first, by way of overview, Health Catalyst is a leading provider of data and analytics technology and services to healthcare organizations. There are three components to our solution, and if you think about our revenue mix, it's about a third, a third, a third in each of these categories. The first two are technology categories. The last is services.
So we have always started, since our founding 16 and a half years ago, with organizing the data into a data platform so that our clients, who are primarily healthcare organizations, health systems, can integrate that data in a flexible, open, and scalable platform into a single source of truth, where we can then add the second component of our solution. At the apps layer, use case layer, we analyze the performance of each healthcare organization financially, clinically, and operationally. That gives us insights as to where there may be opportunities for improvement. And then the third component of our solution is our services expertise, where we literally bring over 1,000 domain experts that know how to actually improve in those areas that the technology highlights as areas for improvement. We've always been very mission-focused at Health Catalyst.
Since the company's founding, our focus has been to be the catalyst for massive, measurable, data-informed healthcare improvement. And we use a strategic framework of the flywheel to measure how we're doing with each client each year. We start in a client relationship at the top of the flywheel and recognize that clients take a leap of faith when they choose to work with Health Catalyst, that these three components of our solution, the data and analytics platform, the applications, and the right expertise, when combined with the client's best efforts will lead to measurable improvement. We focus obsessively on measurable improvement in every area that we're asked to work on, whether it's a clinical, financial, or operational area. When that measurable improvement occurs, the trust between us and our clients deepens, and they often choose to expand and work on more improvement areas.
We see that improvement flywheel spin faster in year two and year three, and ultimately for many, many years in our client relationship. They often refer us to others in the industry. And at the center of that improvement flywheel has always been team members and their engagement. We continue to focus on attracting and retaining extraordinary team members because they're the ones that build the technology. They're the ones that provide that expertise. And their high engagement then leads to high client engagement and client success, and that improvement flywheel spins faster and faster. As we put ourselves in your shoes as investors or potential investors in Health Catalyst, these are the five areas that we would highlight that we believe we have differentiated value that make Health Catalyst an attractive investment.
First, we are a recognized industry leader and have been for over a decade in an important area of healthcare: data and analytics. It's important because it's required if you want to solve the trillion-dollar problem of waste or 30 cents out of every dollar that's inefficient, that's not effective, but to know what to change and how to change it, you need a data and analytics infrastructure to do that, and we have been recognized many, many times over the years as an industry leader. Second, we have a comprehensive solution. It's not just the platform play. It's not just at the apps layer or use case layer, and it's not just services expertise. It's all three.
And we have real depth at the data platform layer with experience working with hundreds of different data sources and lots and lots of data, often up to 100 terabytes of data per client. We've built application capabilities that are in must-have areas. And I'll talk about the five areas of focus for Health Catalyst. And then we combine that with over 1,000 domain experts at Health Catalyst. All of that combines to lead to the real proof that our solutions provide value, which is the measurable improvements that our clients realize. We've documented with client approval billions of dollars of financial improvement, over 300 case studies that have been published, and thousands more that we track on a regular basis that have enabled our clients. And that improvement flywheel has spun faster and faster. And we measure over time how fast that flywheel is spinning.
We continue to see that the longer a client has a relationship with us, the more improvements, the more measurable improvements that they're realizing, and therefore the higher the ROI of their relationship with Health Catalyst. It's all enabled by excellence and team member engagement. We continue to use third parties to measure that. The most recent results from the Gallup organization are just a few weeks old, and we scored in the 94th percentile in terms of team member engagement. That was about the level at which we were at when I joined Health Catalyst 14 years ago, and there were five of us. Now there are 1,500 team members. We're really grateful to have scaled that excellence and team member engagement. All this leads to an attractive operating model.
We continue to be in business with over 90% of our revenue recurring in nature, so lots of visibility. We continue to have a loyal client base. And we have an expanding revenue and profit profile that will lead us to the published targets that we've shared in 2028 of $500 million of top-line revenue, $100 million of bottom-line EBITDA. We now work with over 1,000 clients across the healthcare delivery ecosystem. It is such an honor and a privilege to work with so many organizations. And 2024 was a year of investment in expanding the number of clients that we have some form of relationship. And I'll talk about our platform clients and our app clients in a few minutes. But that opportunity to have an open-door existing client relationship with over 1,000 clients is significant and a real growth driver for us.
We're grateful to have made investments to dramatically expand those client relationships. We believe that'll be a primary growth driver moving forward. As I mentioned a few minutes ago, we have five key areas of focus. At the bottom of this slide are two horizontal infrastructure levels of focus, areas of focus. First, the data and analytics platform, the Ignite Next Generation platform. In 2024, that was a big year for us in rolling out the Ignite platform. Starting last year, all new clients went directly onto the Ignite platform. We've done major work migrating our existing clients. We've now spoken to all of our existing platform clients. The excitement level around Ignite is really encouraging to us. It is a better, faster, and cheaper next-generation data platform. Dan L.
Will talk a little bit more about our progress with Ignite, why our clients and prospective clients find it compelling, and what it enables from an AI perspective. Second is measures and registries, another really important horizontal capability that relies on deep domain expertise with complexity from a data perspective, that we have differentiation in our technology and in our services expertise. And then at the use case or the apps layer, we continue to have three areas of focus: clinical improvement, revenue and cost improvement, and ambulatory operations. And as I mentioned a few minutes ago, we continue to be obsessed at Health Catalyst with measurable improvement. That has to be in place.
We have a whole system that we have built and scaled at Health Catalyst to enable all of our clients to set measurable improvement goals, to work on using the technology that we provide for them, to enable those measurable improvements. We then track those and publish those. These are just a few examples that we're really proud of our clients having achieved. As mentioned before, we're honored to have been recognized now 110 times as the best place to work by third-party organizations and continue to place in that 94th-99th percentile in Gallup's team member engagement levels. That team member engagement then leads to strong client engagement and leadership with clients and their decision to stay deeply engaged and loyal to Health Catalyst. We're grateful for lots of third-party recognition that highlights that client engagement.
Now, in 2024, I want to acknowledge we have made some meaningful investments, and there's always a cost associated with those investments that I believe will drive our long-term growth moving forward. There have been important investments we've made for multiple years, including 2024, at the platform level that I believe will yield a return over the next several years, but there has been a real meaningful cost there, and that's the first driver of durable long-term growth on this slide: expanding within our existing client, existing platform client base. We have 130 platform clients, and those clients are the group that are going through this migration from our old data platform, which was called DOS, to our new Ignite platform. I'm really excited about the value proposition of Ignite and so are our clients. It is better, faster, and cheaper.
As we go through that migration process, the value proposition of the client just gets stronger. It is a near-term financial headwind in the sense that clients have the option of supporting the same level of use cases at a lower cost because the new infrastructure is better, faster, and cheaper. We've done a good job, I think, of adding new capabilities to maintain the same level of spend through that migration process. That would otherwise have shown up as existing client expansion and shown up in our dollar-based retention. That's a near-term headwind. Now, as it relates to client value, we're really excited about how our clients feel about that. As we go through that migration, that headwind will be removed. I think we'll see even more expansion in our platform client dollar-based retention.
The second area of investment is the second primary growth driver for the company long-term, which is the ability to add more and more of these platform clients. And increasingly, the source of those adds is going to come from our app layer clients. And we've made investments, particularly through acquisitions. And the one that we announced this week, Upfront Healthcare, we're really excited about. And the CEO of Upfront, Ben Albert, is here. Ben, do you want to just raise your hand? So if you have questions, you can always talk to those of us that are right here, but you can also talk to Ben. But Upfront is a great example of an industry-leading application layer company that is growing rapidly and is taking market share in a must-have area. It's in one of those five areas of focus for us: clinical improvement.
Patient engagement, patient activation is so important there. But it does come at a cost. We've made investments there and in other acquisitions. And we've been more acquisitive over the last 12 months than I think we will be moving forward. But that has given us a massive expansion in what we can offer at the apps layer and also a massive expansion in the number of app clients that we have. And we're really excited to harvest that, to convert so many of those app layer clients into platform clients. And the step function that we usually see is an average app layer client spends a little less than $100K on average per year with Health Catalyst. When we add the Ignite platform, that adds approximately around $500K. And that addition is a huge step function forward.
It also opens up further possibilities for them to adopt more apps over time and more services over time. And we have now over 900 of those app layer clients. We've added nearly 400 in 2024. But that's required investment. And we're excited in 2025 to really focus on getting a great return on that investment. And that has informed our 2025 guidance of the number of new logos, new platform clients that we can add. We believe we can add in that 40 range that we shared earlier this week. That would represent only about 4% or 5% conversion of those app layer clients into platform clients. Two-thirds of our platform client adds in 2024 came from that app layer client base. So getting really good at cross-selling and converting those app clients to platform clients, I think, will be a durable long-term driver of growth.
Those will be the two primary drivers. We will continue over the next few years to be a consolidation platform. We'll be opportunistic there. And we've got a lot to harvest from the recent activity over the last 12 months. So that will be a primary focus in 2025. But we're really excited about that. And these last two drivers, we'll continue to opportunistically monitor whether it will make sense to add new applications and services or to grow through adjacencies. We have been pleased as a company to continue to grow. Before being a public company and since IPO, right before we went public in 2018, we had $113 million of revenue. And it was about a 50/50 mix between tech and services. Two things have happened since we've gone public. First, we've seen meaningful expansion and growth to about triple that size as of this year.
We're grateful this year to return to double-digit top-line growth. The second thing that's happened is the mix has shifted. We saw that mix shift in 2024. We believe it will further shift towards more technology. We're now more in the two-thirds, one-third category of technology and services. We believe that that pattern will continue over the years to come. We're grateful in this middle section to have had a long track record of clients who are loyal and stay with Health Catalyst. As I mentioned before, in 2024 and in 2025, we will still have that near-term headwind of the platform migration going from a more expensive to a less expensive, which is great with the Ignite platform from a client value perspective.
But expansions that otherwise would have showed up as an app layer expansion to a platform client are often helping us just maintain the same spend at a tech level. We're still encouraged by the fact that with our updated definition of tech plus TEMS, in 2024, we saw 102% dollar-based retention. We're confident in that ability to see something around 103% in 2025, even with that headwind, given all that we have to sell at the apps layer. And we believe that can further expand over time as we get through the migrations. Our plan is to be largely through the Ignite migrations by mid-2026. So that'll be an important milestone where we'll have that behind us. And we're excited and grateful that our clients are so interested in migrating to that new platform.
Last on this slide, we've been excited to see meaningful expansion in the number of platform clients. The year before we went public, we had 50. Today, we have 130, and we've also seen a massive expansion in the number of app clients, and therein really lies a significant opportunity for us over the next four or five years to really convert those app layer clients into platform clients. A few data points that we've observed in 2024. One is that when we have any form of existing client relationship within our sales organization with a client, even if it's a small one at an app layer, we're more than twice as likely to win that pipeline opportunity to convert that pipeline opportunity.
Taking advantage of that much higher conversion rate and focusing then on those app layer clients as the major source of new platform clients, like they were in 2024, informs that opportunity for us to see meaningful expansion in 2025 and beyond. We published this one slide summary. Jason's going to cover some of this detail in a few minutes as well. We want to acknowledge, again, there were investments that we needed to make in 2024. We're pleased with much of the progress. We believe there's meaningful progress in 2024, not a perfect year. One example in Q4 that we shared the last couple of quarters, we had some complex projects from a revenue perspective that we weren't exactly sure whether they would be completed by the end of the year. Many of them were.
A few of them have pushed into the early part of 2025. We'll still recognize all of that revenue. So our Q4 and full-year revenue are coming in the range, but a little bit below the midpoint. On the profitability side, we're proud of the progress. We've come in at the high end, above the midpoint of the range that we gave for Q4 and full year, and excited about the kind of progress that we believe we can continue to make in 2025. I've spoken to the growth metrics for 2024. Just to highlight from a 2025 perspective, we are excited to return to that double-digit top line of 10% growth overall as a company, with most of that growth coming from our technology, where we're projecting 13% year-over-year growth and about a 50% increase in our Adjusted EBITDA as a company.
We are excited this year, as the first year within our tech business, to see a tech business profile with 13% top-line growth, a 17% Adjusted EBITDA margin for our tech business unit for the first time to be a Rule of 30 profile, and we believe that will expand to a Rule of 40 profile in the next few years. As I mentioned before, we are excited to see another record year in terms of the number of new platform clients. We set a record in 2024, and we believe we can grow even further in 2025, primarily by converting app layer clients into the platform, and we would only need to convert between 4% and 5% of those to get to that 40 new platform client number, and excited to see dollar-based retention improve a little bit in 2025.
We believe there's more improvement as we get past that near-term migration headwind. A few other comments, and then I'll turn it to Dan and then Jason, and then we'll open it up for questions. We did make a strategic decision to end a pilot category, a pilot services category in our TEMS category around ambulatory operations. We had been working in these pilots for about 18 months. We found that there weren't the same efficiency levers in this new pilot area that we've seen for over a decade in the two primary areas of TEMS, in chart abstraction and in analytics. We made that decision to transition out of those pilots, which has about a $9 million annualized impact. We should be transitioned out of those by mid-year. That is incorporated into that 10% revenue growth for 2025.
We also announced earlier this week, as I mentioned before, an exciting acquisition of Upfront Healthcare. There is a meaningful cost to that, and we understand that that cost is an area of concern for investors. That includes a dilutive impact, but we are confident that this capability, which is industry-leading and very fast-growing, will provide a great return over time, and we're focused on enabling that great return and excited to work with Ben and his really talented team in a must-have area of patient activation, patient engagement that yields a real ROI for our clients and see that continued growth occur. I'm grateful to add Ben to a fantastic leadership team. Engagement helps at every level at Health Catalyst, including at the leadership level, and now you'll have the opportunity to hear from two other of these leaders.
First, Dan LeSueur to give an operational update, and then Jason to give a financial update, and then we'll open it up for questions. Dan?
Thank you, Dan, so Dan mentioned our data and analytics platform, which we call Ignite. This is our 4th-generation upgrade to our data and analytics platform over the last 15 years. We're really excited. 15 years ago, many of the capabilities that exist today with Databricks and Snowflake and Microsoft didn't exist, and so we're very grateful to partner up with the likes of those cross-industry experts to provide world-class technology and an infrastructure that powers our data and analytics platform. That technology is so helpful. It's necessary, but it's insufficient to light up many of the use cases in healthcare.
And so Health Catalyst is really focused on this next layer of content that's specific to healthcare, data models, terminology, normalization of that data, providing a unified data model that's ready, prepared for downstream use cases specifically tailored to healthcare use cases. And I want to talk about a few of those today, a subset of those use cases that pertain to AI, which we're also very excited about and seeing so much uptake and adoption of this emerging technology, some very exciting use cases. So I'll talk about just a few of those right now. The first one is a Generative AI technology that's focused on the data and analytics engineer experience, those that are required to mine the data, write code, extraction code, modeling code. Maybe it's SQL or some other programmatic code base.
What this does is it automates much of that code writing so that it requires less and less of their time for hunting and gathering and identifying the right data and cleansing that data and moving them upstream to be more focused on analyzing that data and deriving insights from it. A lot of automation capabilities exist within that AI use case. The next one on the screen here is focused on patient communication. Upfront Healthcare is in this space of patient engagement. We also have Twistle and Lumeon and other capabilities that we've acquired over the years focused on that patient engagement and patient experience element of healthcare. The ability to derive or build, construct predictive models to predict how best to reach out and engage with patients. Should that be through text? Should that be through email? Should it be via phone or some other mechanism?
Based on sociodemographic data and other factors that influence somebody's propensity to respond to or take action on a communication is what this is all about: predictive models that help us to be more targeted in our outreach and achieve better success in getting patients to the right modality of care at the right time for the right use case. So we're excited about that use case and seeing great results there. The next one, AI-driven visualization insights.
And then the very last one, AI expert services kind of go together, b ut this is really the ability to take data and, depending on the analysis that is needed, whether you're trying to detect change in a process using process control charts or other statistical analyses, this automates that process for a knowledge worker to evaluate a data set, to interrogate that data set, asking questions about, "Is this process out of control?" or, "Is there something going on that would indicate that something out of the norm is going on and we should take action on that?" It's really focused on that. and we get over 8,000 queries per day using this technology and tool across our client base. Think of that. That's 8,000 visualizations that are created by a knowledge worker. Maybe it's a clinician or an operational expert who's interrogating data, asking a question.
It's presenting a visualization that not only displays the data in a way that somebody can consume, but then provides insights and conclusions based on that data and based on the statistical models that the AI modeling is providing for them. The next one is a chart abstraction use case. These are clinicians, nurses that are doing chart review across thousands of patient charts and extracting bits of information and submitting that data to a regulatory agency like CMS or maybe a professional society because they're participating in a registry. That's a very manual effort. We've been able to use AI to automate the finding of that data and the populating of those databases to submit to those bodies. We found a 94% accuracy rate with our models in extracting that data.
And so the abstractors are only required to sort of check the box that, "Yes, that looks accurate," and they can move on to the next chart. So we're super excited about that use case. The last one I'll mention that's not on the screen pertains to a recent acquisition of Intraprise , which is a cybersecurity technology that we acquired late last year. And if you think about our client base, typically they manage hundreds, maybe sometimes upwards near 1,000 client healthcare IT vendors. And each one of those vendors needs to be certified for cybersecurity risk. So every year they go through an audit process to test new cybersecurity risks related to each of those vendors. And so Intraprise has an AI capability that automates much of that auditing process and evaluation of those cybersecurity risks.
And that's meaningfully reduced the number of man-hours required to conduct those audits, HITRUST and HIPAA-related audits. So I'll stop there and turn the time over to Jason.
Thank you, Dan, and thank you for the time. Dan B did touch on our 2024 preliminary results. I'll keep this fairly high level and highlight one area where we did make a lot of progress in 2024, and that is with our net new platform clients, where we did have 21 net new wins. This was a record year for Health Catalyst and does factor into our total clients, which you'll see represented there on the bottom left of the slide, where we do have over 1,000 total clients between platform and app clients, which does form a very solid base for our cross-sell efforts moving into 2025 and beyond. In looking out to 2025, we did set an expectation of $335 million of overall revenue. This would represent 10% growth year- over- year.
It does include a level of contribution related to the Upfront acquisition, which we expect to close in Q1 of 2025 and is also offset by the exit of the ambulatory operations TEMS that Dan B highlighted in his remarks. From a technology standpoint, we'd expect technology revenue of $220 million. That represents 13% growth year- over- year, so great progress year- over- year. Adjusted EBITDA, we are expecting adjusted EBITDA in 2025 of $39 million. As you'll see in our 2024 results, we made great progress in 2024 and expect that progress to continue in 2025, where that $39 million is a 49% improvement over prior year.
Our technology business unit, we expect to represent the majority of that Adjusted EBITDA, where we would expect it to make up $38 million of that $39 million, which represents a 17% Adjusted EBITDA margin for that business unit, where we do expect our technology business unit to be a Rule of 30 business profile in 2025, and looking out to 2028, from a revenue standpoint, we are targeting revenue of $500 million based on we want to stay data-informed, and based on the trend that we're seeing in our performance in 2024 and expected performance in 2025, we do expect the revenue split on that $500 million to be two-thirds technology revenue.
And are expecting Adjusted EBITDA of $100 million for 2028, with an overall Adjusted EBITDA margin of 20% across the total company and 30% across our technology BU, where our overall company would have a Rule of 30 profile. And our technology business unit, we would expect to have a Rule of 40 profile in 2028. If we look at the trends over time, you will see, given the difficult demand environment from a revenue trend, that our revenue was challenged in 2023. And in 2024, our revenue growth did dip. We're excited to return to double-digit revenue growth in 2025.
As we look at adjusted operating expenses, you will see the trends there, where we have continued to perform at a higher level each year, where you'll see the declining trend, where those expenses are declining as a percentage of revenue each year, which does factor into our Adjusted EBITDA, where we did flip positive from an Adjusted EBITDA standpoint in 2023, continued to make progress in 2024, and expect that progress to continue in 2025 and on to 2028. And with that, Anne, I'll turn it back to you for questions.
Terrific. Thank you guys so much. Dan, maybe we can start with just how your customer base is feeling. I mean, it feels like you've been a lot more optimistic lately. I think recently you cited pre-pandemic levels of normalcy. You added 21 new clients this year. So are they looking to spend yet? Or is the reason you're adding so many new clients because they want to spend specifically on Health Catalyst?
Yeah, I think it's a little bit of both. I think the demand environment, from our perspective, and the overall end market macro factors of inflation coming down is helping across the board. And you can see that industry-wide in Kaufman Hall reports that show solid operating margins. In the not-for-profit health system space, you're never lighting the world on fire. A 3% operating margin is pretty solid. That's kind of a pre-pandemic level. And we see that. You see that in the Kaufman Hall data. We're kind of in that 3%-4% level. So I do think that there is some uncertainty related to the new administration, but not much of a focus on that uncertainty in our areas of focus. And so within our pipeline at Health Catalyst, we continue to see healthy pipeline conversion, healthy movement in the pipeline.
As is always the case, do I wish we would have converted a couple of Q4 deals that slipped into Q1? Yes, but that kind of happens every year, and so we do feel good about the pipeline. We feel good about the sales environment and that shift in focus where in 2022 and 2023, there was just no room, no appetite for incremental technology investments, and that's where we really had to focus on TEMS and lowering the cost structure in the near term. The full portfolio is open, and we continue to see that be the case, and that's one of the reasons why I think we saw some overperformance in tech and a little bit more growth in tech in 2024, and we expect that to continue.
That's great. It feels good to see things opening up a little bit again. Can we talk about your acquisition of Upfront? What incremental capabilities does that give you? And I think when you announced it and recently we kind of heard other companies talking just a little bit more this year about the consumerization of healthcare, we haven't heard that term in so long. People haven't been focused on the front end. It feels like there's been too many other things that they've been dealing with. So how do you view the importance of kind of being present at that kind of part of the healthcare continuum? And how do you? And also, was this customer-driven? Were your customers saying, "We need a solution for that"?
Yeah, it's a fascinating evolution. If you think about the patient being at the center of everything we do in healthcare, of course, the patient relationship, patient engagement should be really important. As you said, we've gone through some waves. Like three years ago, it was really hot and everyone was talking about it. And there were actually a lot of areas of focus that didn't have kind of a direct ROI associated with it, a direct financial impact associated with it. It was more like, "Well, we'll just generate some cool insights about your patient population." And when inflation hit and operating margins were tight, that's when everyone was like, "Insights, that's not enough, right?
If this doesn't drive hard dollar ROI, we can't go there." I think the reemergence of this focus on the patient has the additive, and I think it's better focus to say, "Yes, we want the insights, but let's make sure we can take action." And we know how that action will translate into financial results. And I think that's one of the greatest strengths of Upfront, that they're very, very focused on not just generating the insight, but helping in the ambulatory setting, in the acute care setting, the client know what action to take. And that that action will lead to specific financial outcomes that are incrementally positive. Such a good fit with our focus on measurable improvement. And it's one of the reasons why we're excited to invest there. We certainly made a large investment to add Upfront to the portfolio. It is a fast-growing asset.
I think a lot of the reason for that is because there is a direct ROI for the client associated with focusing on not just the insight, but the actions that need to be taken. Coupling Upfront with our existing capabilities, as Dan L. was talking about, gives us differentiation in that space. It's a must-have area. There's a financial ROI associated with it. It's one of our five areas of focus. So when the opportunity presented itself, even though it was a little more acquisitive than we would kind of normally be, we felt like it was the right long-term decision. We're really excited about it.
That's very helpful, caller. Thank you. Maybe just one more, because I know we're kind of getting towards the end of time here. But the push-pull between dollar-based retention and new customers, right? Because when you were smaller, those new customers were very incremental. Now, dollar-based retention, as you have scale, is really an important driver because just even if it was kind of your historical, like $1 million on kind of the base, it doesn't move the needle as much. So how are you thinking about those as kind of growth levers going forward?
Yeah, it's a great question. It's an interesting next chapter for Health Catalyst. We've been around 16 and a half years, and man, in those early years, it's easy to get really big top-line growth numbers. And to your point, every client that you add, there's this massive expansion opportunity. And when you get larger and you scale more, that changes a little bit. And I think for us, when we think about the growth levers the next few years, they're actually both the new client and the existing client are primarily existing client expansion levers. It's just app layer clients converting versus platform clients continuing to expand. And I think you will see over the next four or five years the majority of our organic growth coming from those app layer clients, where we have an existing relationship, but we're dramatically expanding it from under $100K to $600K.
And then our goal is certainly after that. And as we add more of those app layer clients, there's more growth opportunity. Today, our existing platform clients already spend an average of $1 million of tech per year and $500,000 of TEMS per year. So they're pretty mature. As we add more app conversions, that not only is a great growth driver on its own, but then it gives more growth opportunity within that platform client base. And that's one of the reasons why I think, especially after we get through the platform migration, we do believe that dollar-based retention number will keep going up. But I still believe over the next four or five years, the primary growth driver will be just converting that massive number of 900-plus app layer clients into platform clients. And we're getting better and better at that.
That's great. Well, in our last minute, you've got a new acquisition. You've got these kind of really great progress on your profitability here and kind of getting to really meaningful EBITDA margins. What are you most excited about for 2025?
I am really excited about harvesting the investments, right? The last couple of years, we've made really meaningful investments. At the platform layer, it was with Ignite. And now it's migrating Ignite clients. And that strengthens the client value proposition. It's a little bit of a near-term headwind in terms of the platform client expansion. But it's the right infrastructure. And our clients are making a five-plus-year bet that they want to continue with Health Catalyst. So seeing the opportunity as we get through that expansion with our platform clients is super exciting. And I think leveraging the investments we've made to strengthen the apps layer is really exciting. We've been acquisitive. We have a lot to offer. Each of the recent four acquisitions that we've done over the last 12 months are industry-leading capabilities. They're best in class. And our clients are excited about that.
And we're excited to go harvest those investments. And I think we'll see that in 2025. We'll see that even more in and beyond 2025. And I'm excited about that.
Terrific. Well, thank you so much for sharing your time with us today.
Thank you, Anne.