Healwell AI Stock

Thank you for joining Healwell AI's 2026 Second Quarter Financial Results Conference Call. This call is being recorded. [Operator Instructions]

I'll now turn the call over to Mr. Hefton Seni, Investor Relations at Healwell.

Hello, and thank you, operator. Joining me on the call today are James Lee, CEO of Healwell; Dr. Alexander Dobranowski, President of Healwell; and Anthony Lam, Healwell's CFO. I trust that everyone has received a copy of our financial results press release that was issued yesterday. Listeners are also encouraged to download a copy of our quarterly financial statements and management discussion and analysis that was filed on SEDAR+.

Please note portions of today's call, other than historical performance, include statements of forward-looking information within the meaning of applicable securities laws. These statements are made under the safe harbor provisions of those laws. Please refer to yesterday's press release and to our management discussion analysis for more details on the company's risks and forward-looking statements. We provide forward-looking statements solely for the purpose of providing information about management's current expectations and plans relating to the future. We do not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in our expectations or any change in events, conditions, assumptions or circumstances on which any such statement is based, except if required by law.

We use terms such as gross margin and adjusted EBITDA on this conference call, which are non-IFRS and non-GAAP measures. For more information on how we define these terms, please refer to the definition set out in our management discussion and analysis. There will be a question-and-answer session at the end of the call, which will be limited to analysts only. [Operator Instructions]

And with that, let me turn the call over to Healwell's CEO, James Lee.

Thank you, Hefton, and thank you, everyone, for joining us today. Before Anthony takes you through the numbers, I want to spend a few minutes talking about something equally fundamental. A year ago, we announced our first quarter post the pivotal Orion acquisition and embarked on a 2-year transition to integrate our businesses, embed our AI capability and shift our sales mix to more enterprise healthcare sales from episodic life science sales.

We knew we had a great opportunity in front of us, and we're excited about the possibilities. But as I sit here today, we are feeling even more confident both of the opportunity, but more importantly about the progress we are making. We are through the difficult part of integration and transition, and we are now seeing the benefit of the enterprise healthcare focus. We have successfully demonstrated an upsell of customers with our AI capability. We've integrated our business lines, and we have improved our balance sheet.

We expanded our AI footprint, and now we are moving to the exciting phase of delivering on those sales. At the same time, we've expanded our growth channels so that today, we have the strongest pipeline of our potential deals we have seen. Importantly, we have, at the same time, expanded our scientific validation mode, begun investing in infrastructure to improve margin and maintained a positive adjusted EBITDA throughout.

The market we are building into is changing faster than any other point in the history of our company. And what we have built is we are building a business position to meet that need. I'm excited to share this progress today, but more importantly, excited to talk about what we will be demonstrating in the coming phase. Our mission is to be the primary enabler of preventative care. But what does that mean? So we're going to talk about it in 3 simple sentences.

Firstly, we connect. We take complex fragmented healthcare data and turn it into longitudinal patient records that can be used to share across the system. We surface. 80% of clinical data is unstructured, sitting in notes and reports that were never designed to be read at population scale. We abstract the clinically relevant information from that data with 95% accuracy and 95% of disease states, and we enable. We give the healthcare system the ability to implement preventative care cost effectively, not as a pilot, but as an operating model.

Now the facts are really well known, so I won't go into them, but I'll give you more about the shape of the number themselves. So 3 of the world's largest healthcare systems all face 3 very different pressures, but they've all faced with the same outcome, which is the money is effectively gone. Whether it's the debt servicing overtaking healthcare spend or the working age population being too small to carry the load, every one of the major healthcare systems around the world are running out of room within this decade.

Underneath that sits a disease burden that no one's counting because most of the people who have these diseases don't know they have it. And here is the point that matters commercially. Each one of these diseases is detectable many years early before the costs are rising. The signal exists that is simply not being read. 4 forces are converging, and converging is an important word. Any of these on their own would just be a trend, but all 4 occurring is a structural shift.

The economics are broken. We've talked about that, and that's a well-known fact. So systems are having to intervene even earlier to ensure that they can spend less. The regulation is starting to catch up. Prevention is now mandated, not just aspirational with data access and interoperability rules that are a direct run rate for our platform, and the market is aligned. The payers, providers and pharma are all reaching the same conclusion.

The opportunity is that these diseases are detectable early, prevention costs a fraction of the treatment and our platform today connects the data to science into delivery. You will hear us talk a lot today about the transition from episodic to enterprise because that is the part that we've been focusing on the part that matters. Whereas last year, we were negotiating 6-figure individual engagements. Today, we're discussing annualized licenses that exceed that. The old model was project by project services and patient reviews.

Revenue grew in a linear fashion, one clinic, one study at a time. Delivery was high touch and manual. Revenue was lumpy, nonrecurring and hard to forecast. Our current model we're moving towards is different in every single way. We've go to enterprise licenses, data access and a productized SMARTSuite. We deploy it once and expand it across our network. We're selling to global pharma centers of excellences. Delivery is now product-led, revenue is larger, stickier and multiyear recurring and the defensibility of our data activation plus the DARWEN platform is a real moat.

And importantly, we're now through the trough of that transition. Now that transition has produced 4 key growth engines, all from the same platform across 2 key client segments. Firstly, engine 1, our HIE and clinical data unlock. Unlocking de-identified data across our partner networks creates value for every stakeholder right across the ecosystem. We are seeing active interest from all markets in this capability. Engine 2 is our SMARTSuite for its Search, Summary, or ID. It's packaged, it's repeatable and it's embedded into our platform.

It's a single sale process and it's been successfully deployed in North America, sold in the Middle East, and we look forward to giving further progresses in the second half. Engine 3 is our global life science enterprise business. We're moving to centralized agreements with pharma AI centers of excellence, which is a cost saving for them against repeating patient ID and real-world evidence studies region by region. And Engine 4 is our consented data in Canada.

We've talked a lot about WELLTRUST, but activating this key partner network for life sciences, CROs and public health has created a growing consented database with strong demand behind it, which has become a virtuous cycle. The more consents we get, the faster our customers can innovate. So a year into this transition, the execution signals are good. They're shown across all of our geographies, products and partners.

In '25, we were predominantly a life science business with episodic revenue. Today, we have activity in all of our key markets with healthcare systems, and this will grow into a meaningful part of our revenue. Excitingly, the integrated offering of DARWEN and Amadeus is commercially compelling, is resonating with all of our customers. WELLTRUST is opening genuine new commercial use cases and moving us towards meaningful enterprise discussions across new revenue streams.

SMARTSuite now means we sell as a single customer and a single company through one sales process. With an AI landing expands the customer base these conversations have transitioned from project work to enterprise deals and the platforms and businesses are working well behind that. Finally, data activation. This brings us closer to the customer and reduce duplication because we are helping our customers activate data they already hold. There's no new data assets to build, which shortens the pathway to evidence.

Internally, AI data output overtook human output for the first time in May. From a base of 0 a year ago. So we're seeing significant AI use case internally. Commercially, we've had wins across the Middle East, Canada and the U.S., and we're seeing demand from all of our key geographies. These sales that we're winning are durable. They take a long time, more than a single quarter, but we're moving to an enterprise license with SaaS fees, and this is a shift that matters.

I want to touch briefly on why the validation compounds across segments. So I think that's underappreciated across the market. Obviously, we're focused on science first with 57 peer-reviewed publication and pre-clinical recognition. But what this means is the healthcare systems can adapt preventative healthcare using validated evidence rather than assertion. And every adoption generates more data, which feeds into Amadeus and adds to 150 million lives. That scales what comes next is that allows something that underwriters can price because we can price that and we can move forward to the underwriter population. This is why we see insurance as the next and largest step in our opportunity, and we'll be talking to that in the year to come.

Finally, I want to talk about our 4 key strategic goals for the quarter. As you know, our indirect stake in SpaceX is now estimated at approximately CAD 23 million as at the 30th of June 2026, up from a carrying value of approximately $4.6 million as at March 31, 2026. Our holding remains subject to the customer pre-IPO lockup period. We continue to commercialize our AI product suite across our care network. Our AI solutions include SMART Search and SMART Summary and they've been cross-sold into the Orion network now.

We completed a real-world evidence study demonstrating the effectiveness of WELL AI Decision Support, identifying patients who may have been undiagnosed or unmanaged diabetes. WAIDS analyzed patient records and recommended clinical reviews and point-of-care assessments for high-risk patients. We completed a multi-province pilot evaluating our DARWEN SMART Summary and Search solutions across the healthcare systems across British Columbia, Ontario and New Brunswick across both OSCAR Pro and Intrahealth Profile EMR. The results of that pilot were accepted for presentation at the American Medical Informatics Association, which will be taking place in November 2026 in Dallas, Texas.

I'd like to hand over the call now to Anthony Lam to walk through our Q2 numbers.

Thank you, James. Before I begin, I would like to remind everyone that all of the figures I will be discussing on our call today are expressed in Canadian dollars, and our financial statements are presented in accordance with IFRS International Financial Reporting Standards. Our second quarter 2026 results as compared to Q2 of 2025 are as follows: Healwell achieved quarterly revenue from continuing operations of $33 million in '26 -- in Q2 2026, in line with the $33.2 million generated in Q2 of last year.

The comparison reflects an unusually strong Q2 '25, which benefited from elevated project-based professional services activity, while our recurring subscription support and maintenance revenue continued to grow year-over-year, reflecting our continued transition from episodic project-based engagements to higher-margin recurring enterprise sales. Healwell reported positive adjusted EBITDA of $1.1 million in Q2 2026 compared to adjusted EBITDA of $2.3 million in Q2 2025.

Our prior year performance includes Mutuo, which was disposed of in Q4 of 2025, together with a stronger number of life sciences studies in Q2 2025 accounted -- this accounted for the change in year-over-year EBITDA. Healwell achieved gross profit of $17.9 million during Q2 2026 compared to $18.7 million in Q2 2025. The decrease is due to a lower margin mix of studies within the Data Science and AI segment in the current year period. Healwell achieved a gross margin of 54% during Q2 2026 compared to 56% in Q2 2025.

Looking at our first half of 2026, Healwell achieved revenue from continuing operations of $66.2 million for the 6 months ended June 30, 2026, an increase of 60% compared to $41.2 million generated in the 6 months ended in June 30, 2025. The increase was driven primarily by the Orion Health acquisition, which closed on April 1, 2025, and contributed a full 6 months of revenue in the current period versus a partial period in the prior year. Healwell reported positive adjusted EBITDA of $1.9 million for the 6 months ended June 30, 2026, compared to $0.1 million in the prior year period, an increase of approximately 2,574%.

The increase was primarily attributed to the Orion Health acquisition and improved performance across our operating segments. Healwell reported positive EBITDA of $1.9 million -- sorry, Healwell achieved gross profit of $37.4 million during the 6 months ended June 30, 2026, an increase of 62% compared to $23.2 million in the prior year period due to higher revenues driven primarily by the Orion Health acquisition. Healwell achieved a gross margin of 57% for the 6 months ended June 30, 2026, compared to 56% in the prior year period.

A key highlight this quarter is the continued positive trajectory of our operating cash flow. We generated $4.5 million of positive operating cash flow for the first half of 2026, a $14.4 million improvement, approximately 145% compared to cash used in the prior year period, reflecting an underlying strength in increasing efficiency in our combined operations following the Orion Health acquisition.

This shift to sustained positive cash generation strengthens our balance sheet and liquidity position, and we remain in compliance with all of our covenants under our credit facilities as at June 30, 2026. We continue to prioritize disciplined capital allocation as we build on this cash flow momentum and work towards sustained profitability.

With that, I'd like to now turn the call over to our President, Dr. Alexander Dobranowski.

Thank you, Anthony. Thank you, James. I'd like to take a moment to walk through the scale of impact of Healwell's platforms as we deliver globally. This is really the proof point behind everything James and Anthony have just walked you through, and it's one thing to talk about an integrated platform and another to show you the reach it's actually achieving across patients, clinicians and the broader healthcare system.

Let's start with data. Across our global business units spanning 13 distinct clinical data domains, Healwell now maintains more than 150 million patient records. That breadth of longitudinal data is really the foundation of everything we do. It's what allows our AI models to identify at-risk patients earlier and more accurately than a single source system ever could. On the clinical side, more than 770,000 clinicians and physicians are now engaged across our platforms globally. That's a meaningful and growing share of the frontline healthcare workforce actively using Healwell software and technology in their day-to-day practice. And that engagement is translating directly into outcomes.

In the second quarter alone, our AI copilots powered by our DARWEN AI engine identified over 62,000 high-risk patients. Patients who, in many cases, have not otherwise been flagged for early intervention. On the clinical technology side, our DARWEN AI engine now supports and is able to screen for 123 rare complex, and chronic diseases, reflecting the continued expansion of our clinical validation work and the depth of our disease detection capabilities.

From a network perspective, we serve more than 22,000 healthcare service providers across our combined network of platforms and business units, underscoring just how embedded our technology has become across the broader healthcare ecosystem. And finally, on adoption, as of the second quarter, 1,291 physicians have been onboarded to our AI copilots, giving us a strong and growing base of active physician users to build on as we scale.

Together, these figures reflect the scale and reach of the platform we've built and more importantly, the depth of real-world impact we're delivering for patients and providers around the world. This is the kind of scale that we believe differentiates Healwell, and it's a big part of why we remain so confident in the growth opportunity ahead.

From an outlook perspective, we remain focused on several key drivers of growth as we continue to build on the momentum we've established this quarter. First, on profitability. Management and the team, we continue to target an approximately 10% adjusted EBITDA margin by the end of the year, reflecting continued operating leverage across the platform as we scale our revenue base and drive further efficiencies across our combined operations.

Second, on revenue quality. We expect, as James reflected, a growing mix of enterprise recurring revenue led by subscription, support and maintenance growth, which continues to make our overall revenue base more durable and more predictable quarter-to-quarter. Third, on deal economics, we now anticipate larger AI deal sizes as SMART Search and SMART Summary scale across our customer base, reflecting both deeper adoption within existing accounts and the growing maturity of our AI product suite.

Fourth, on geographic expansion, we continue to see organic growth in new customer wins across our key geographies, and we expect that footprint to keep expanding as our enterprise pipeline matures. Fifth and finally, on the public sector, we're seeing extremely strong tailwinds supporting continued adoption of our platform as governments and health systems increasingly prioritize preventative data-driven care. Beyond these 5 priorities, we also continue to see meaningful key value and growth alongside WELL Health, our strategic partner across 3 specific areas of that relationship that James highlighted earlier.

First is WELL ID, our secure digital identity and single sign-on platform across the WELL Health network, which continues to streamline clinician access while strengthening the security and interoperability of our broader platform. The second is WAIDS, WELL AI Decision Support, our AI-powered clinician decision support platform for early disease detection, which continues to generate strong clinical validation and commercial momentum. And third is WELLTRUST, our patient consent and data governance infrastructure that underpins secure data access across our platform.

Across all 3 of these areas, we're looking to expand these capabilities into additional geographies in the periods ahead, and we see meaningful runway to deepen this partnership even further. So taken together, the profitability discipline, the shift towards recurring enterprise revenue, the scaling of our AI products, our geographic expansion and public sector tailwinds and the depth of our partnership with WELL Health, these priorities reflect our continued discipline in scaling a connected AI-enabled platform. It's a platform that we believe is built to deliver durable long-term value for our shareholders, for the patients we serve and for our healthcare partners around the world. In short, 2026 has been a year of focus on margin expansion and improvement with 2027 being a year where we will focus again firmly on growth.

And with that, I'll now hand it back to the operator and move to the Q&A portion. Thank you.

[Operator Instructions] Your first question comes from Kevin Krishnaratne from Scotiabank.

Congrats on the continued success. I wanted to talk about your mention there of moving from episodic to enterprise. Maybe it's in public health, actually. Wondering if you talk about the current pipeline of opportunities, what's that looking like on potential HIE RFPs? Maybe you can talk about opportunities by geo. And just curious how the discussions with customers are progressing? Is there any change in the macro or healthcare budgetary front that we need to be aware of as we think about the timing of potential RFPs and how that would translate to revenue?

Kevin, look, great question. You probably asked enough in that question. I could probably spend the next 30 minutes covering off. So let me try to bring that back and then just maybe ask a follow-up and push me if I could get some of it wrong. But like starting your first point, it's not just the software, it's just not in healthcare. We've actually shifted all of our sales to -- sorry, all of our focus to enterprise sales. So we're seeing potential deals not with our life science partners, we have data unlock partners across HIEs and across our SMARTSuite Suite with enterprise sales.

The pipeline now would be that we're seeing opportunities in all 4 areas. But importantly, we're seeing it across all geographies. And so it's very hard to sort of isolate it down. What we've actually seen in the last 6 months is a shift in approach from the market, partly because there's been so much -- so many people trying to do small pilots that what they're really looking for is much more enterprise platform outcomes, so not a single point solution. So what we're actually seeing is that the conversations are morphing much more quickly from a little pilot to show us what a proper RFP would look like at scale.

To give you some context of size, a pilot, we've talked about previously might have been $200,000 or $300,000. What we're seeing now is that an enterprise agreement might be anywhere between $1 million and $3 million, depending on the size of the customer. And as I said, it's across all parts of our business. Geography-wise, we've seen a lot of activity in the Middle East, a lot of activity in the U.S. Canada is busy and Europe, we've got some RFPs coming out towards the end of the year. And importantly, for home markets, both Australia and New Zealand are busy at the moment as well. So it's quite broad-brushed. What we've seen is -- it's across all of our product suites and across all of our geographies currently, which is why probably some of the optimism we're seeing currently in our language.

Did I leave any out there, Kevin?

Yes. No, I think you captured it well. And maybe to get Anthony on board here, just as we think about the model, thanks again, good to see the confidence in the 10% EBITDA margin trajectory. How do we think about your thoughts or any guidance you want to give us on revenue growth by segment on the Data Science and AI and then the healthcare software for 2026? And maybe it's a bit early, but if you can just talk about the trajectory into 2027 on your growth expectations?

Yes, Kevin, great question. As we look out here and as we talked about, the shift to our -- to more enterprise sales is going to create an elongation of sales cycle for us. And so while we started the year with a very exuberant sense that we view that 30% to 50% in terms of growth, we're likely to be more on the lower end of that growth range in terms of 2026, but really see 2027 on the heels of the health system side of the AI and DS part of the business to be a big contributor of our growth in 2027.

So Kevin, to your question on AI and DS, I think we can see that growth on that profile has probably shifted to the right for us from our perspective, given our real focus on enterprise. And then as we look at healthcare software, I think growth rates that we've been talking about to now, I think you can expect to see continue in that high single digits kind of range is really as we look at that business as a steady state kind of really stable core revenue stream.

Your next question comes from Gianluca Tucci from Haywood Securities.

I guess, firstly, at a high level, can you speak to cross-sell attach rates so far for selling into the Orion legacy customer base? How is that tracking?

Yes. So our goal was to get 10% done this year. I think as we sit there now, we have line of sight as halfway through the year for that. So feeling really comfortable with our current target that we'll achieve our cross-sell. We've got another big push coming second half to a bit wider. But realistically, we're probably towards capacity of what we want to get done in the first year to make sure we do it well. Obviously, the enterprise sales cycle is probably more like 6 to 9 months, not 1 to 3. So we're seeing that way towards the second half.

Great. And then just perhaps a follow-up on the adjusted EBITDA margin target of 10%. That would imply a strong second half. Can you bridge that for us what kind of cost actions or like revenue combination helps to get you there by the end of the year?

Yes, there's 3 things you see there. Obviously, one is the enterprise sales starting to kick in, in healthcare and AI and DS. So we'll start seeing that occur in Q3 and Q4, given that they were small numbers in the first half that will shift that division materially in terms of margin profile. And cost actions we've seen taken in the first half flowing through in second half in the software business. And then finally, some continued growth in our software business items. There's obviously some timing issues between first half and second half within costs. So first half costs might have been slightly higher than second half. But effectively, those 3 things bridge that gap.

Next question comes from Michael Freeman from Raymond James.

Congrats on the quarter and the progress. I wonder if we could double-click on your pursuit of the insurance opportunity. I wonder if you could frame that again and sort of update your view on it from when you introduced it, the pursuit of that last quarter?

Yes, sure. I guess when you look at the framing of it, the best way to think about insurance is around -- in the U.S., obviously, insurance replaces where the role of public health does in commonwealth countries, i.e., the fundamental payer. One of the things we're finding in the U.S. is that the insurance market has a secondary use of risk, i.e., so looking for where there are gaps in care where they might get sued. And so what we've seen in the U.S. is there's 2 different lenses. It's not only cost savings from an insurance point of view, but it's also risk mitigation.

And so it's got a really different driver in that market. And what we're also seeing in the U.S. in particular, with the insurance side is that they are tied to the provider network. So we're also seeing that where we're talking to providers in the U.S., they've actually got connectivity to the payer markets. And so we see those sales as much more intertwined. What I would say is they are larger but slower burn sales. So we won't be expecting to make any of those in 2026. But the sheer size of that market is what we're excited about, Michael.

Okay. All right. Great. I appreciate you framing that. Now I wonder if you could touch on the balance sheet and how you're feeling about its profile and how you can anticipate it evolving in the second half of the year?

Yes. I'll open that then maybe Anthony, you can close it out. But I think the best way we think about our balance sheet, Michael, is that in terms of our short-term liabilities post the disposal of SpaceX, we'll see net liabilities in the short term of circa 1x adjusted EBITDA. Our long-term debt, $30-odd million, is a convertible instrument, as you know, with 4 more years to go. So we look at the balance sheet now as being a really stable part of the business to serve the needs we have today. But Anthony, is there anything you want to add to that?

Yes. Look, great question on that because I think the big thing that James highlighted on the call was that we -- with the -- our investment in SpaceX, I think, again, the intention is clearly to liquidate that position. We will actually have a good source of capital there for our immediate needs. And so the balance sheet actually for us is we feel very good about because while we approached cash flow neutrality and generation towards the end of the year, we're now in a very solid position from a liquidity standpoint with that asset being one that we will be liquidating to. We feel very comfortable that we have all the resources we need to meet the expectations that we've been setting for ourselves, not only for this year but also for next year.

Your next question comes from Brian Kinstlinger from Alliance Global Partners.

I appreciate your changing approach to get away from episodic demand and the opportunity as it relates to preventative care is clearly large. The subscriptions for AI technology are almost half what they were 2 quarters ago. And this is the part I'm focused on, not the services piece. So first, what's driving this reduction? Next, what's the biggest impediment you're seeing right now to growth? And lastly, what gives you the confidence the ramp is imminent as we've been talking about it for a bit?

Anthony, do you want to start on the first one? Because obviously, when I look at -- when I look at our services subscription revenue and AI and DS, I'm not seeing it down. So do you want to maybe comment what number you're talking about?

Sure. We did $531,000 in the June quarter for subscriptions. And just 2 quarters ago, you were at about $1 million, and it's come down each of the last 2 quarters.

Anthony, again, I'm looking at a very different number. I see our number is $479 in the MD&A. So...

Brian, if I could just point out, you're looking year-over-year. In our prior period numbers, if you're looking at the prior period numbers up until the beginning of the first quarter last year, we had a business called Mutuo that was -- we have divested. Those numbers stay in our comparatives because we were sold. But they were 100% subscription, and that's probably what's throwing off some of your numbers there. I would say, otherwise, our subscription numbers have been pretty steady for every other part of our business. And so I think that might be the skew for you in terms of what you're seeing in terms of the subscription piece.

Okay. Let me ask differently. Last quarter, when that business was not in the numbers, you did about $828,000. So we're down 36% sequentially. So it speaks to the same trend. Again, I'm curious, what's the biggest impediment growth? What's leading to the churn? And what gives you confidence that imminently we'll be growing this?

So Brian, I don't -- look, I'm happy to take this up with you. We didn't have any churn in the quarter. So the changes that we've had in our -- in any of our business is really around our episodic revenue or maybe a little bit on our professional services, but our subscription business remains pretty robust.

We can take that piece back up online. But in terms of what's giving us confidence in the second half is revenue recognition is effectively the key issue there. And so when you're delivering on enterprise licenses, the revenue recognition is very different from the sales that we've made. So we've announced sales in the Middle East, in Canada and the U.S., and we're in the process of delivering those. So we'll be able to recognize revenue against those as those delivery milestones are made in the third and fourth quarter. Does that...

Sure, I mean, hopefully, you can take it offline. That's good, but the numbers are down. But the -- in a previous question Anthony responded to, he said you'll probably be at the low end of the 30% to 50% growth for the AI segment. First of all, what number does that suggest for 2025 AI Data Science because what was reported was $10 million. And I'm sure that doesn't include the divested piece. So I'm just kind of curious what that suggests for the second half of the year?

Yes, Brian, we did start with -- so the comparable for 2025 is that $10 million mark. And as I mentioned, we're going to be on the lower end of the growth scale on that in terms of year-over-year growth for '26. And so that would suggest that we are in closer to that $13 million for the full year.

So that would suggest almost $9 million of second half revenue for AI and Data Science? From $4 million change in the first half of the year?

Sorry...

From a sales cycle, I just -- I mean, I guess maybe you can talk about some bookings that get you there already.

So Brian, in our first half...

You did $4.6 million.

That's correct. So we anticipate that we have a healthy pipeline that has us on track to hit that -- the 30% growth rate year-over-year.

Right. So just to be clear, that's about $8.5 million, $9 million almost just doing simple math of 30% or $10 million, right?

Your math is right. Revenue recognition is a key component of that. So obviously, there's a bunch of work that's been done in the first half. We haven't been able to recognize revenue until the projects milestones in Q3 and Q4. So you shouldn't think that in a straight line. And where we land as a percentage will really determine on revenue recognition.

So the sales pipeline for our healthcare software AI business is on track. The revenue recognition in the first half was behind because it was enterprise nature. And then we've got plenty of activity in the Life Sciences business, which, again, we hope to recognize in the second half.

Your next question comes from Firuz Yakhyayev from TD Cowen.

My first question is on the multi-province pilot that you recently completed for SMART Summary and SMART Search. Now we know you have the presentation coming up in November. But in addition to that, do you see any sales traction with the listed provinces as a result of those trials?

Yes. Excellent question. So the reality is those pilots now lead to what we would call the second stage. So we've now done a pilot in those regions and now we're now looking to deploy it further to go back and get further funding on those -- on all 3 regions. We expect to go live this quarter in another region. And to be honest, I think we're going to see quite good activity from that product late '26 and 2027.

Great color. And a follow-up to the previous balance sheet question. So SpaceX lockups are starting to expire, do you have an expected time line for monetizing your investment? And how soon after are you planning to deploy it on debt extinguishment?

We'll get notification shortly on our lockup expiry because we obviously hold our stock indirectly in a fund. So we should be able to update you in the next month or so on that. Our anticipation is that we are not a VC investor, and we will be looking to liquidate as practical and sensibly as we can.

Great. And on debt extinguishments, if you were planning to improve your balance sheet as well?

If you look at our debt, our debt is a working capital facility sitting within Orion Healthcare. So if you think about that can -- it's an accordion can go up and down. So it may be used to pay down debt, but it will be a working capital debt facility, not we won't be paying the debt facility off.

Your next question comes from Daniel Rosenberg from Paradigm Capital.

First one comes just on the enterprise licenses and potentials for 6-figure type revenues. I was just wondering if you could speak to kind of how it ramps. I know you touched on a bit of the accounting and timing treatment, but really to understand perhaps an example of you engage with the client, what that looks like to stand up the solution and how it flows through to revenue?

Yes. Excellent question, maybe it will take longer than we go through. But what I would say is every region is different. So the first thing when we ramp up into a customer, there will be an implementation fee. That implementation fee requires us to set the environment, whether that's going to be Azure, Google, or AWS. And what I would say is every region has a different component there. What we're finding is that from signing to launch and bound to book implementation fees is probably taking longer than we expected.

So while we may have got started in February to March, we may not be able to recognize revenue until Q3. Based on the setup function in each region is new. So that once we get through doing it once in each region will be much faster. And then the reality is within 3 to 4 months of implementation, we're moving into SaaS fees. And so those SaaS fees will be somewhere between 3 to 4x the implementation fee. So it's a different healthcare systems where this implementation fee because it's so much more complex might be one for one. What we find is implementation fees here are smaller and SaaS fees materially larger.

That's a lot of color and understanding. I guess in going to market and pursuing these opportunities, I was wondering if you could update us on kind of how you're working with partner channels, if you're going direct? Just what does the sales process look like, understanding there's a lot of geographies and customers here. But if you could give us some color there would be helpful?

Yes, that might be the most complex question. So there are 4 different channels and 11 different geographies. But broadly, you should think that we partner in Life Sciences with one of the major 5 for a data unlock. So we would work alongside a Life Sciences customer and an HIE as a partner network for distribution. So you can name a top 10 pharma, pick a geography and then we will be trying to -- we partner with Life Sciences per region and obviously with one healthcare system.

Within the SMARTSuite product that we're currently focused on our own direct channel, so using our own capacity, open to going further, but we don't have capacity within our deployment to go much more than what we can do already ourselves. In Canada, we obviously partner really well with WELL as a one WELL team to take all of the products and WELL's offerings in a complete united front for our customer base. So we work very, very closely with the WELL and WELLSTAR within Canada itself.

And then we work with SI partners for large projects, you could name a few like Deloitte, EY, Accenture for large-scale deployments. And we haven't really talked about that today because we've been focusing a lot on the AI business, which I understand as we think about the overall mix, have been a few million dollars slower, as Anthony talked about. But obviously, we've seen on the flip side, the software division being stronger than that than we expected the year.

And we've seen a lot of opportunity in the Middle East within HIEs, obviously, within U.K. coming back to market. U.S. is very busy in the HIE space. So what I would say is that the partner network in those markets is far more important. They're much bigger dollar value sales, and we're no longer talking 1 or 2 a year RFPs coming up. We're probably talking 1 or 2 per region every 6 months are coming up now. So it's a very active market.

These processes are long dated, so I don't expect 15 to land by the end of the year. But what I would say is that there's a very deep pipe now of HIE business. And the HIE business is great because the first sale is obviously a software sale and the second sale is, therefore, the AI sale. And the AI conversations with our existing customers are going very well. Does that cover your question?

Yes. That's fantastic color. Lastly for me, you mentioned a number of kind of engines that are driving demand, clinical data unlock, SMART Search, partner ID, consent. I was curious how you would kind of rank or I guess, rank with your customers, what gets people most excited? Or is it always kind of this bundled solution that you're talking about in conversations with end customers? And then I'll pass the line.

Yes. So if you think about our customer segment being broken into healthcare systems and Life Sciences. So Life Sciences is the data unlock. It's the ability to partner with the region to effectively help that region utilize their data. And you've seen obviously very, very large contracts around the world with people like Tempus and AstraZeneca and different regions doing those data unlocks. So that would be what gets our Life Sciences customers most excited.

Within our Canadian Life Sciences business, though, well trust, the ability to get -- to find patients to get on to clinical trials at the speed at which we can do that from consent to data. That is a unique database. And so that has a lot of interest in it currently. The SMARTSuite, SMART Summary, that has the most impact with big healthcare systems with our providers because obviously, the key thing they're looking for is efficiency with their networks. So what I would say is that everyone's got different components.

Interestingly, though, while we're all talking about the interesting AI exciting stuff, interoperability and that is such a phenomenal problem in the U.S. just like the single most basic thing is sharing data along with record. One of the quotes we had from a customer was even in a closed-loop customer base where they own -- the customer is theirs, they still only get between 20% or 30% of a patient's data from their own network. So HIEs are high value to actually enable AI in the U.S. So I wouldn't underestimate the value that we're finding just from that as they would describe it diamond in the rough, what is an infrastructure type asset is a core component to enable any sort of real AI.

I may just squeeze one more in, given the answer. It sounds like a ton of opportunity across the board. I'm just curious if you had the resources or additional resources, whether it be capital or people or just reach in general, where would you put that towards? What would you do if you -- everything you have the control to implement whatever you wanted in terms of pursuing these opportunities?

Yes. It's a great question, right? That -- you sit there in a war room sometimes how do we scale up when we need to scale up. As we sit there today, we are very mindful of both margin and growth and getting the right balance because it's very easy to chase 100 different deals and not deliver on any. But what I would say is that the data unlock activation is probably where we'd probably put time and energy right now. And why that is, though, to be really clear, is because it will take longer than the other stuff, but it's really, really scalable, where the HIE businesses that's RFP, they'll land, we'll deploy them. We'll scale the team to deploy more of those, then we can embed AI solutions like the SMARTSuite.

But the data unlock, that is not a linear sale. They're effectively unlocking some regions with multi, multi, multimillion dollar contracts. So what we'd like to do and what we'll do in time is once we show we can do is we'll try all of our regions together rather than pick them off one by one.

The next question comes from Justin Keywood from Stifel.

Maybe just a follow-up on the capital allocation. Is a share buyback or NCIB part of the strategy?

Good. I saw that Vital did one today. Look, realistic, we haven't discussed that at the Board now. I think we'd always be looking at use of capital in the environment. What I would say is that the liquidity in our stock is not great. So announcing a share buyback, probably the stock price movement wouldn't even get me back. But it's a good thought process and probably something we'll discuss late second half, early first half next year.

Okay. And then I'm not sure if I missed it, the timing of the SpaceX disposition, when is that anticipated?

We'll get notified by our fund in the next month as to the timing of our componentry. But effectively, the lockup was a year from investment. So there should be 3 tranches between now and February next year.

And then just the mechanics of it, it would be a share transfer and then the shares are freely trading to dispose?

That is the current expectation, but I'm saying the current expectation will be notified shortly. But theoretically, the stock would be transferred into our brokerage account and then we would manage the sale ourselves.

[Operator Instructions] Your next question comes from Christopher Pu from Canaccord.

I'm on the line here for Tanya. I just have a question regarding the Orion Health, kind of a high-level question. I'm wondering if you can let us know how much integration work is left? And if you can quantify perhaps how much of this remaining integration work is more of a top line thing versus like a cost reduction?

We're talking specifically Orion Healthcare, yes?

Yes. For Orion Health.

Yes. No, that's fine. Sorry, to make sure I got the answer on the question. So realistically, revenue synergies, we are connecting as they are as much as we can today. I don't think there's much more in terms of revenue synergies that we would get by integrating further. What we might find though is we get more efficient on those revenue synergies. They go faster by moving the teams closer together. But the reality is, I would say we've achieved 90% of what we'll achieve in terms of putting from a revenue synergy point of view.

From a cost synergy point of view, though, there's still plenty of room across the organization over the next year and a bit, both from gross margins and both from net margins. I think realistically, we're only probably 1/3 of the way through that component. What we're talking about in terms of R&D, retiring tech debt, corporate functions, but we've still got a lot of room to go there as some of the stuff just takes time. I think we've talked previously about removing some of our tech debt to broaden out gross margins for both within Intrahealth and Orion. Those processes take largely 1.5 years to complete, but they're meaningful increases to our gross margin profile.

Well, that's great to see some numbers around that. My last question is regarding the customer acquisition costs, because you have a lot of new jurisdictions that are outside of Canada. I'm wondering how does the CAC compare with your expectations so far?

I can't actually answer that today because we haven't won a new customer that hasn't been in an existing region. So all of our expansion has been in the regions we're currently already in. But when we move into a new region, we'll be able to quantify that. But currently, we've only really expanded our existing footprint.

There are no further questions. I'll turn the call back over to speakers.

Well, thanks for joining us today. Look, it's a really good session, lots of really good questions. We're excited on the second half of the year. There's plenty of work still to be done. We feel like we're on the other side of that trough through the transition. And so -- and there's still plenty of opportunity both to grow revenue and as we have the last question, margin. So enjoy, anyone having the summer holidays. Thank you for joining us today, and good luck to the rest of your day.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.

Good afternoon, and welcome to the Annual Meeting of Shareholders of Healwell AI Inc. Please note that today's meeting is being recorded. [Operator Instructions] I would now like to turn the meeting over to Mr. Hamed Shahbazi, the Chairman of Healwell. Mr. Shahbazi, the floor is yours.

Good morning, ladies and gentlemen, and welcome to the 2026 Annual General and Special Meeting of Healwell AI Inc. My name is Hamed Shahbazi, and I am the Chairman of the company. On behalf of Healwell and its Board and management team, I would like to thank you for joining us today. Your engagement and participation is critical to our success, and we appreciate your time and attention this morning.

Before we get to the formal portion of the meeting, I would like to introduce the other directors and members of Healwell's management team who've joined us virtually. James Lee, our CEO; Alexander Dobranowski, our President; and Anthony Lam, our CFO.

Also joining us this morning are James Szumsky, the company's legal counsel; and Dale Loyol from our transfer agent, Computershare, who will be scrutineering the meeting.

With introductions out of the way, we will now begin the formal portion of the meeting. And I ask that the meeting come to order. With the approval of the Board, I will be presiding as the Chair of this meeting. I hereby appoint James Szumsky, Legal Counsel of the company, to act as the Secretary for the meeting. I appoint Dale Loyol of Computershare Investor Services, the register and transfer agent of the company, to act as scrutineer for this meeting. I would now ask Mr. James Szumsky to take us through the formalities of the meeting. James?

Thank you, Mr. Shahbazi. Please note that the meeting today is taking place as a virtual meeting only. Only registered shareholders and their duly appointed proxy holders who have logged in using a control number provided by Computershare will be able to vote, ask questions or table motions at the meeting today.

If you are a registered shareholder or a proxy holder, you will see a voting button on the platform that will allow you to vote on each item of business before the meeting. Please note that if you've already submitted a proxy to Computershare in advance of the meeting, indicating your vote on each item, you do not need to vote again.

If you do choose to vote again, your vote today will override any previously submitted proxy. If you have a question about any of the matters tabled today, you can submit your questions or comments by clicking on the message tab, and we will address your questions in the next available break in the agenda before voting on the matter in question. As always, questions should relate to the business or affairs of the company and should not be of a personal nature. Questions which do not pertain directly to the formal business of the meeting may not be considered or may be deferred to the informal Q&A session at the end of the meeting.

Please note that if you're logged in today as a guest, you'll be able to listen in on the meeting in any discussion, but you will not be able to vote, ask questions or table motions.

A quorum of shareholders for this meeting consists of one person present and entitled to vote at the meeting that holds or represents by proxy not less than 10% of the votes attached to the outstanding shares of the company.

I've been advised by the scrutineer that there is a quorum of shareholders present. I've received the scrutineer's report in that regard, and I will file a copy of the report with the minutes of today's meeting. I've been advised that the notice calling this meeting and related management information circular and forms of proxy were mailed on or before June 4 to the directors, auditor and shareholders of record as of May 15, 2026. The affidavit of mailing will be available for inspection by any shareholder. I will file a copy of the affidavit with the minutes of today's meeting.

As the notice of meeting has been duly mailed to all parties entitled to receive it, the reading of the notice will be dispensed with. Based on all the foregoing, I declare that this meeting has been regularly called and properly constituted for the transaction of business.

Just to go over this one more time, registered shareholders and duly appointed proxy holders will see that the polls for all items of business are already open for voting. You're free to enter your vote on each item at any time. Polls will be closed after we address the final item of business on the agenda.

The scrutineer has advised me that the proxies deposited with this meeting are sufficient to carry all matters proposed for the meeting and a copy of the proxy tabulation report will be made available for inspection after the meeting.

All resolutions passed at the meeting today will be in the forms included in the management information circular for the meeting, unless amendments are specifically requested on motion by a shareholder and adopted by formal resolution. You've all received a copy of the circular. And so in the interest of time, unless specifically requested, we will dispense with the reading of the specific language of each resolution.

We'll now proceed with the first item of business for the meeting, the presentation of the audited financial statements of the company for the year ended December 31, 2025, together with the report of the auditors thereon. These financial statements were previously mailed to shareholders and are available under the company's profile on SEDAR+. Are there any questions on the financial statements or the auditor's report?

Not seeing any, I declare that the audited financial statements of the company for the year ended December 31, 2025, together with the report of the auditors have been received.

The next item of business is the election of directors. As a preliminary matter, it is proposed that the number of directors to be elected should be fixed at 7. Can I please get a motion to fix the number of directors to be elected at the meeting at 7.

I move.

And can I please get a seconder?

I second the motion.

Thank you. We will now address any questions or comments from shareholders or proxy holders that are related to fixing the number of directors.

Not seeing any, I will now call for a vote on the motion. If you've not already done so, please vote on this item now.

Based on the proxies submitted in advance of the meeting, the motion will carry.

We will now move to the election of directors of the company. Information about each of management's nominees is included in the management information circular. The company did not receive notice of any other director nominations in accordance with its advanced notice policy. Accordingly, the only persons eligible to be nominated for election to the Board of Directors today are the management nominees.

Can I please get a motion to nominate Alexander Dobranowski, Tina Raja, Sam Englebardt, Hamed Shahbazi, Erik Danudjaja, Ian Kidson and Bradley Porter.

I move.

And can I please get a seconder?

I second the nominations.

Thank you. We'll now address any questions or comments from shareholders or proxy holders that are related to the nominees. If you have any questions, please get them in.

Not seeing any questions, I'll now call for a vote on the nominees. You can vote in favor of a nominee or withhold your vote. If you've not already done so, please vote on each nominee now.

[Voting]

Based on the proxies submitted in advance of the meeting, each nominee will be elected as a director of the company to hold office until the next Annual General Meeting or until his or her successor is duly elected or appointed.

The next item of business is the reappointment of Deloitte as the auditors of the company and authorizing the Board to fix their remuneration. Can I please get a motion to reappoint Deloitte as auditors of the company and that the Board be authorized to fix their remuneration?

I move.

Thank you. And can I please get a seconder?

I second the nominations.

There are any questions or comments from shareholders or proxy holders related to the appointment of the auditor, if you could please get those in now.

And not seeing any, I'll now call for a vote on the motion. If you've not already done so, please vote on this item now.

[Voting]

Based on the votes and proxies submitted in advance of the meeting, the motion will carry.

The final item of business is the reapproval of the company's equity incentive plan dated December 22, 2020, including the rolling 10% limit on the number of Class A subordinate voting shares that can be issued under the plan and all unallocated options, rights and entitlements under the plan.

This is the ordinary course approval that must be obtained under the TSX rules every 3 years. I can confirm that there have been no material amendments to the equity incentive plan since the last approval in 2023. If the approval motion carries, the company will have the ability to continue granting incentives under the plan until June 25, 2029.

Can I please get a motion to approve the equity incentive plan?

I move.

And can I please get a seconder?

I second the nominations.

If there are any questions or comments from shareholders or proxy holders related to the equity incentive plan approval, please get those in now.

Not seeing any, I will now call for a vote on the motion. If you've not already done so, please vote on this item. And please note that as this is the last item on the agenda, the polls will be closed after this vote. So if you haven't voted on any of the items, now is the time to get in your vote.

[Voting]

Thank you. Based on the votes and proxies submitted in advance of the meeting, the motion will carry. That was the last item of business on the agenda. I will now ask the moderators and scrutineer to close all of the voting polls for each item of business, and I declare that the formal portion of the meeting is now closed.

I'll now turn the floor back over to Mr. Shahbazi for the Q&A session.

We will now take any general questions that the group may have.

If you have a question for the management team or the Board, you can submit your questions or comments by clicking on the Message tab. Please enter your questions now.

Doesn't sound like there are any questions. James, do you see any in the platform?

No questions, Mr. Shahbazi.

Great. Well, I would then like to thank everyone for attending the meeting. Have a wonderful day, and I would ask the operator to please close the line. We look forward to engaging with you on our next filing date.

This concludes the meeting. You may now disconnect.

Thank you for standing by. My name is Carly and I will be your conference operator today. At this time, I would like to welcome everyone to the Healwell AI Q1 2026 Financial Results Conference Call. [Operator Instructions] I would now like to turn the call over to Hefton Seni, Head of Investor Relations. Please go ahead.

Hello, and thank you, operator. Joining me on the call today are James Lee, CEO, of Healwell. Dr. Alexander Dobranowski President of Healwell and Anthony Lam, Healwell CFO. I trust that everyone received a copy of our financial results press release that was issued yesterday. Listeners are also encouraged to download a copy of our quarterly financial statements and management discussion analysis that was filed on SEDAR+.

Please note, a portion of today's call other than historical performance include statements of forward-looking information within the meaning of applicable securities laws. These statements are made in the safe harbor provisions of those laws. Please refer to yesterday's press release and to our management discussion and analysis for more details on the company's risks and forward-looking statements. We provide forward-looking statements only for the purpose of providing information about management's current expectations and plans going into the future. We do not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in our expectations or any change in events, conditions, assumptions or circumstances on which any such statement is based, except if required by law.

We use terms such as gross margin and adjusted EBITDA on this conference call, which are non-IFRS and non-GAAP measures. For more information on how we define these terms, please refer to the definition set out in our management discussion analysis. [Operator Instructions]

And with that, let me turn the call over to Healwell's CEO, James Lee.

Thank you, Hefton, and thank you, everyone, for joining us today. Let me start by grounding this why Healwell exists. Healwell is focused on becoming the primary enabler of preventative care by making health care data usable, actionable and scalable. We now have access to over 150 million patient lives across our network, and we're putting that scale to work. The challenge we're addressing is not a new one, but rather a structural one. Health care systems today are largely designed to treat illness and not prevent it. As a result, a disproportionate amount of spending is concentrated on patients with advanced disease where interventions are more complex, more expensive and often less effective. At the same time, many of these conditions delivered drive this burden of preventable and manageable if identified earlier. So the issue is not whether prevention works is that prevention has not been made and implemented at scale within real-world health care systems. And that's the core problem we're methodically approaching and solving.

Now the scale of this problem is significant and the data makes it stark. 80% of health care data is unstructured and untapped embedded in the clinical notes, reports and disparate systems, and they were never designed to be analyzed at population scale. This is not a marginal inefficiency. It means the vast majority of available clinical intelligence invisible to the people and the systems that could act on it. And now at the same time, 74% of global deaths are caused by conditions that are preventable or reversible if detected early enough. Healwell addresses these key issues by connecting disparate and complex health care information, serving meaningful clinical insights and implement those insights in real-world environments. We do this now in some of the biggest partners across the world in both clinical, health care systems and with life science partners. So it's a really exciting time for us as the science exists, the tools exist and the data exists, and we have the ability to bring this all together.

Now solving this requires more than a single capability. It requires solving 4 interconnected problems. The first is infrastructure. Health care systems cannot act on data they cannot see. The foundational requirement is the ability to connect disparate data sources and surface them in a way that is meaningful at population scale. The second is clinical grade tools. Data alone is insufficient. Clinicians need tools that can interact directly in their workflows, surface the right patients at the right time without adding friction to an already stretched system. Third is scientific evidence. Prevention must be grounded in validated science, not simply assumed. That means peer-reviewed research, real-world validation, partnerships with life science organizations that set the standard for both clinical treatments and clinical evidence.

And the final one is economic incentives. Even when the science is clear, health care systems will not change behavior without aligned incentives. Health care moves when incentives align. The financial case of prevention needs to be quantified and made compelling, equipping insurers and reinsurers to price the value of early intervention and build models that reward prevention, not treatment. Now these 4 problems exist independently across the health care system. What has been missing is the ability to integrate those problems. Now each of those problems maps directly on to what Healwell has built and is building, and we are making tangible progress across all 4. On the infrastructure side, the Orion acquisition has been the defining move that gave us global distribution scale.

Now a year on, the integration is behind us and the results are starting to come through. Our Amadeus platform now connects over 150 million patient lives, unlocking longitudinal multisource data at the foundation of every preventative model we build. And critically, it gives us the distribution layer so we can scale our entire offering globally. On clinical tools, our strategic alliance with WELL Health allowed us to prove that AI can be embedded into real-world clinical environments at scale. DARWEN and WELL Decision Support are now live, embedding our algorithms and IP directly into clinical workflows, servicing high-risk patients and shifting care from reactive to proactive. This is no longer a theoretical capability that is working today across our network.

On scientific evidence, we have a foundation that is genuinely difficult to replicate with 47 peer-reviewed publications and partnerships with leading life science organizations. That trust takes years to build and increasingly recognized across the industry as being a meaningful competitive moat. And the final one, economic incentives, translating population level insight and sustainable financial performance is the final step. The insurance industry represents our next significant opportunity, and we're actively building towards it. Now each step has been deliberate. The pillars are in place and the strategy is now fully in motion.

Now let me speak to what we've delivered in Q1 '26 and what you should expect from us for the balance of the year. Q1 was another strong revenue quarter, and we maintained positive adjusted EBITDA, demonstrating we are growing with discipline commercially and operationally. It was also a quarter of meaningful progress with new contract wins and platform milestones I'll walk through shortly. Q1 gives us confidence what lies ahead. The pipeline is building, the platform is scaling and the commercial momentum is real. While health care systems are considered with long sales cycles, the foundational growth signs are exciting. We're seeing strong growth in physicians using our products, increased patients being identified, new life science partners and the U.S. market is the most active it's been for a long time.

As we look across second half, we will be accelerating enterprise pipeline development across the U.S., Australia and the Middle East. We continue to deepen our life science partnerships, leveraging our validated AI models and regulatory-grade real-world data for clinical trial matching and drug discovery, and we'll continue to expand DARWEN across additional EHRs and population platforms. By year-end, our targets are clear: activate our global network across life sciences, increase enterprise AI sales and achieve approximately a 10% exit run rate for adjusted EBITDA margin. The foundation is built, the strategy is clear and Q1 demonstrates we're executing against it.

Turning to some of our key strategic and operational highlights for the quarter. First, we successfully unified Khure and Pentavere into a single DARWEN powered AI engine. Now this is an important milestone in our platform strategy as it enhances integration of our ecosystem, enables more effective cross-sell and upsell opportunities, particularly across the Orion Health and VeroSource customer bases. Second, we launched WELLTRUST in partnership with WELL Health. This is a consent first AI-powered data governance and patient identification platform that enables privacy, compliant, clinical mobilization at scale. Importantly, it also improves patient recruitment for clinical research, which remains a critical bottleneck in the life sciences industry. This has already demonstrated significant value to our life science partners.

Third, we can continue to build commercial momentum across all parts of the business, including AI contracts and opportunities outside of Canada, increased momentum in ANZ and our first RFP response to the genomic partner. This reflects the growing global demand for our AI solution and reinforces our expanding international footprint. Overall, these milestones highlight the continued execution of our strategy to combine AI data and clinical validation to drive meaningful impact across health care systems and life science organizations.

I'd now like to turn the call over to our CFO, Anthony Lam, to walk through Q1 financial results.

Thank you, James. Before I begin, I'd like to remind everyone that all of the figures I will be discussing today are in Canadian dollars, and our financial statements are presented in accordance with IFRS, International Financial Reporting Standards. Our first quarter 2026 results are as follows: Healwell achieved quarterly revenues of $33.2 million during Q1 2026 compared to $8 million generated in Q1 2025, an increase of 316%. Revenue growth in the quarter was largely driven by the Orion Health acquisition and organic growth of the company's AI division.

During Q1 2026, Healwell reported positive adjusted EBITDA of $0.7 million compared to an adjusted EBITDA loss of $2.3 million in Q1 2025, representing a year-over-year improvement of 132%. The improvement in adjusted EBITDA is attributable to the Orion Health acquisition and improved performance across Healwell operating segments. Healwell achieved gross profit of $19.5 million during Q1 2026, an increase of 340% compared to $4.4 million in Q1 2025. The increase is due to higher revenue performance across the business in the quarter. Healwell achieved gross margin percentage of 59% during Q1 2026 compared to 56% in Q1 of the prior year. Healwell reported IFRS net loss from continuing operations of $6.8 million in Q1 2026, and this compares to a net loss of $14 million in Q1 2025.

Healwell ended the quarter on March 31, 2026, with $21.9 million in cash, an increase when you compare this to year-end -- our year-end balance of $18.6 million. I'd also note that the company holds a strategic investment position in xAI, now part of the broader SpaceX ecosystem, which represents additional balance sheet value beyond our reported cash. As we evaluate the appropriate timing to monetize this position, it provides meaningful optionality to further strengthen our capital base and support the company's growth initiatives.

Now looking at our revenue segments. As of November 1, 2025, following the divestiture of the company's clinical research and Patient Services division, Healwell now generates revenue across 2 core segments: one, AI and data science; two, health care software. Our AI and Data Science segment achieved revenue of $2.6 million in Q1 of 2026, marking a 13% year-over-year growth compared to the $2.3 million in Q1 2025. The increase was driven by contributions from the VeroSource Data-as-a-Service offering and Orion Health systems component with the AI segment. This growth is partially offset by the divestiture of Mutuo, which was completed on November 1, 2025, and contributed to revenues in the prior year comparative. Excluding the impact of this divestiture, the company continues to advance its AI and data science capabilities through a combination of strategic and organic initiatives.

The second revenue stream is health care software, which generated $30.6 million in revenue in Q1 2026 an increase of 439% from $5.7 million in Q1 2025. This increase was primarily driven by significant growth in the health care Software segment, reflecting the continued contribution of Orion Health, that acquisition happening and organic growth expansion initiatives. With the recent divestiture of noncore assets, Healwell is now fully focused on driving growth, innovation and profitability across its 2 high-margin scalable segments, AI and data science and health care software. This strategic focus positions the company to continue delivering strong financial performance with rapidly growing revenue streams, expanding customer adoption and meaningful contributions to overall profitability.

With that, I'd now like to turn the call over to our President, Dr. Alexander Dobranowski, who will discuss our Canadian and global public sector opportunity, Healwell's competitive moat and key investment highlights underpinning our strategy.

Thank you, Anthony, and thank you, James. I want to start today by discussing an important opportunity that is presented before us. Over the last year or so, we have seen a dramatic and positive shift in global public sector posture towards addressing key pain points in health care, inclusive of data interoperability challenges. Never before have we seen such exciting public sector tailwinds with major funding commitments being announced and being made in key jurisdictions where we operate. We have seen this shift happen not just in Canada, but also in other important jurisdictions. For instance, in the U.S.A., with the introduction of the OBBBA, this has led to the addition of USD 50 billion to the Rural Health Transformation program, a program that is directly targeting to address health care data access and compatibility issues. In the U.K., we have seen revitalized commitment to health care investment as echoed in their well-publicized 10-year plan to transform the NHS.

And finally, in Canada, I've broken down this opportunity into 2 parts. Part one, at the federal level, Bill S-5, the Connected Care for Canadians Act, currently under review in the Canadian Senate represents a meaningful shift in Canada's health care policy landscape. It mandates interoperability across health IT systems and explicitly prohibits data blocking practices. From an investor standpoint, this effectively establishes a new national baseline for how health care technology must operate in Canada. The implications are significant. First, federal funding and procurement are expected to increasingly favor platforms that are compliant with these interoperability requirements.

Second, scale becomes a key advantage, particularly for platforms capable of integrating clinics, EMRs and AI into a single unified workflow. And third, it creates additional pressure on legacy vendors operating closed ecosystems or point solutions, which may face challenges adapting to these new standards. At the same time, provincial procurement trends are also evolving with a clear preference emerging for Canadian-owned sovereign technology platforms. Taken together, these dynamics create a really strong structural tailwind towards vertically integrated Canadian-based health care technology companies. Healwell is fundamentally built around AI and data interoperability and has already demonstrated its ability to deploy large-scale public sector health information systems, including the Health Information Exchange in Saudi Arabia, which is the world's largest implementation of its kind.

Together with WELL Health and WELLSTAR, Healwell is uniquely positioned to meet the requirements of the Connected Care framework. Collectively, this forms a vertically integrated end-to-end Canadian sovereign stack spanning care delivery, data infrastructure and clinical intelligence, fully aligned with both interoperability mandates and sovereignty-driven procurement priorities.

Now on to the second or part 2 of the public sector opportunity in Canada. On March 19, 2026, the Ontario Minister of Health announced the provinces plan to launch a province-wide primary care medical record initiative aimed at advancing an integrated interoperable electronic medical record system for primary care. This initiative forms part of the Ontario Primary Care action plan supported by more than $3.4 billion in funding with the objective of connecting approximately 2 million additional residents to primary care by 2029. The province has indicated it will run an open competitive procurement process and is evaluating a multi-vendor approach. Our Chairman, Hamed Shahbazi, noted in yesterday's earnings call that WELL Health strongly supports this initiative and intends to actively participate in the forthcoming procurement process led by Supply Ontario.

Healwell already plays an active role in supporting the province through its 811 service, which provides clinical guidance to over 15 million users as well as through the Ontario patient viewer, a digital care record that consolidates patient data across care settings. In addition, Healwell's award-winning and clinically validated DARWEN AI platform delivers intelligent search and summarization plus clinical decision support capabilities that directly align with Ontario's requirements. The provinces initiative closely aligns with Healwell's core strengths. Healwell intends to support WELL Health and WELLSTAR on their bid for this opportunity, and we are well positioned to help deliver this vision for the province of Ontario.

Now I'd like to turn our attention back to Healwell. As the health care AI landscape continues to evolve, we are seeing a clear transition from very early-stage experimentation towards real-world deployment of AI solutions that are delivering measurable clinical and economic outcomes at scale. From a strategic standpoint, we believe the companies that are best positioned to lead in this environment will be those that combine advanced AI capabilities with strong distribution, access to high-quality clinical data and solutions that are embedded directly into care delivery. At Healwell, our first key competitive moat is our clinical validation and scientific credibility. You heard about -- a little bit about this from James. Our DARWEN AI platform has now been supported by 47 peer-reviewed publications and was recognized with the 2024 Prix Galien USA Award, one of the most respected honors in the life sciences industry. Importantly, our AI platform can generate regulatory-grade real-world evidence, which we believe is a highly differentiated capability on a global scale. We continue to collaborate with leading hospital systems, cancer centers and pharmaceutical companies. And today, we have active commercial relationships with 8 of the top 10 largest global pharma companies. The second core advantage is our global distribution infrastructure through Orion Health. This provides us with enterprise access that is both broad and difficult to replicate. Through Orion, we maintain relationships with more than 70 large health care customers across 11 countries. This is a very unique and special customer base. We also recently secured our first major public sector AI deployment in the Middle East, marking an important step in expanding our AI products beyond Western markets.

Looking forward, we see a strong and growing pipeline across Canada, the United States, the United Kingdom, Australia, New Zealand and the Middle East, which positions us well to scale our solutions globally. Our third competitive advantage, we believe are -- we believe we benefit from meaningful embedded switching costs and a continuously expanding clinical data network. Our solutions are integrated directly into electronic health record systems and clinical workflows, which supports strong customer retention and long-term partnerships. On top of this, we currently have approximately 35 master service agreements with pharmaceutical companies, including, as mentioned, many of the largest global players. Each additional deployment enhances our proprietary data sets and contributes to ongoing improvements in model performance.

And finally, our proprietary DARWEN AI platform serves as the technological foundation of our business. Over the past year, we've successfully unified the capabilities of Khure Health and Pentavere into a single integrated platform powered by DARWEN. This includes now our product set of SMART Identify, SMART Search and SMART Summary artificial intelligence solutions, which are designed to automate complex clinical data analysis and patient identification across large-scale data sets. Taken together, we believe these factors of scientific validation, global distribution, a unified AI platform and deep workflow integration form a strong competitive moat and position Healwell to capture significant opportunities as health care AI adoption continues to accelerate.

Now turning some attention to our investment highlights. At a high level, Healwell is a health care AI company that is mission-driven to move the needle in preventative care. How we do this is through our focus on early disease detection. Now to add a little bit of color to this, over the last 6 months, our team and incredible technology has helped identify over 160,000 patients that are at high risk for rare, ultra-rare, chronic and complex conditions. And we believe we are uniquely positioned at this intersection of clinical data and AI to deliver outsized results and value for our shareholders.

Now starting in the top left of this slide, as mentioned, we are already generating revenue from 8 of the top 10 largest global pharma companies. This is a real strong validation of both our technology and our commercial model and reflects the trust that large pharma organizations are placing in our platform. Next, we are operating in what we believe is a multibillion-dollar market opportunity. As health care systems increasingly adopt AI to improve outcomes and reduce costs, we see significant long-term demand for solutions like ours that can operate at scale. In fact, we believe that those companies that are best positioned to unlock true value in preventative care have a shot at being one of the first trillion dollar businesses in health care. The addressable market opportunity is that immense.

Importantly, through our platform and partnerships, we now have access to over 150 million patient lives. This scale of data access is a key competitive advantage, enabling us to deliver more accurate insights and continuously improve our AI models. From a growth perspective, to date, we have completed 6 material acquisitions, and we continue to see a strong pipeline of opportunities, and we believe we are well positioned to deploy capital strategically to drive further expansion. We are also supported by an experienced Board and a talented management team with deep expertise across health care, technology and capital markets.

And finally, our relationship with WELL Health remains a key strategic advantage. It continues to accelerate our growth, expand our multinational footprint and provide us with direct access to clinical environments where our AI solutions are being deployed and scaled. Taken together, these elements reinforce our position as a differentiated health care AI platform with strong momentum and a clear path for continued growth and profitability. And with that, I'd like to thank everyone for attending this call. I'd like to thank our Board of Directors, our management team, all our hard-working staff. And with that, I will hand it back to the operator and move to the Q&A portion. Thank you.

Your first question comes from Kevin Krishnaratne with Scotiabank.

James, you mentioned that the U.S. market is the most active it's been in a while. So I'm just wondering if there's any way you can size that, quantify that and whether that's maybe pipeline growth, number of conversations. Just curious to hear what you're seeing there in the U.S.

Yes. Firstly, Kevin, thanks for the question. As it happens, Alex and I are both in the U.S. currently. We've been here for the week seeing clients and customers. So giving you a bit of flavor is that last year, we saw some new activity. We won a new contract in the U.S., which we announced first quarter. But what we're seeing here is that the new activity driven by OBBBA, but more particularly the rural health funding bill has meant that what I would say, RFPs in the market are at least 2 to 3x more active than they were this time last year. And those are a wide range of new HIEs in this market.

But interestingly, what we're also seeing is that, that funding for rural health is now pushing into and being extracted out to AI opportunities as well. So we're probably having more AI conversations now in the U.S. than we were having certainly even 3 months ago. Now that's driven by that first round of funding is now being dished out and people wondering how they spend it. But it is a significant portion of money going to this part of the world.

Great to hear. Maybe one for Anthony. The health care software line this quarter looked good. I know there is a mix of software but also deployments in pro service work. So I'm wondering if you could dig in a little bit deeper into that number. Was there any sort of things that you call it as onetime-ish? And then how do we think about the segment as we move into Q2?

That's a great question. We did see in Q1, I would say, a bit of a catch-up in some of our pro services side of the equation. So I would say that, yes, some of it is maybe a little bit of a catch-up on some opportunities that we've been working on at the end of last year that have now caught up this year with some really good revenue recognition with the completion of some key milestones. And so what we saw here is that benefit our margins a little bit as we got into Q1 here because we had obviously some costs related to that, that were incurred in prior periods with the revenue now being recognized. So I would say that there was -- I would say, just a marginal amount of that happening in this quarter that created a little bit of that lift.

Your next question comes from Gianluca Luca Tucci with Haywood Securities.

I think last quarter -- I think it was last quarter that you called out over 50% organic growth for AI for this year. I'm just wondering at this point of the year, how you're thinking about organic growth for both AI and software?

Why don't I cover that? Obviously, it's early in the year. What I would say is the pipeline still gives us confidence in our previous comments about AI growth. Revenue recognition is always tricky to get that kind of precision this early in the year. So we're not going to -- we're not at the stage where we can update that. But what I can say is that the pipeline continues to build nicely. Software development, we'll probably give you an update in the second half. What we are seeing is that there is, as I said, significant uplift in RFP activity turning up in Q2, Q3 this year. But we feel comfortable with the numbers we've given previously.

Okay. And then just following up to the prior question on software and how that impacted gross margin in the quarter. It was up nicely Q-on-Q gross margins. Anthony, like is this kind of a new baseline or because of the one-timers in pro services, we should see kind of a step half down for Q2 in gross margin?

Yes. Gianluca, thanks for that. Yes, definitely had a great quarter from that perspective, a little bit of a catch-up taking place. We can expect to see that our margins will be in that mid-50% range that we've seen historically. I think we had a nice little benefit in this quarter, but I think we'll be in that mid-50s range for the year as we get -- as we look ahead.

Your next question comes from Derek Greenberg with Maxim Group.

I wanted to just ask, I think on the previous call, you had also mentioned you had expected 10% year-over-year growth in the subscription support and maintenance segment for health care software. I was wondering if there was just any updates on that as well.

Anthony, do you want to cover that?

Yes, absolutely. We see continued -- on that line, we see the continued similar performance. I think we will -- that's a really steady part of our business. We -- I would say it continues to progress at the same level that we've seen historically.

Okay. Got it. And then I was wondering if you could maybe just give some color in terms of -- in the Middle East when you're engaging with government sovereign health entities. Just what that process looks like in terms of how the sales cycle progresses? And then once live, how long it takes to go from signing a contract to scaling revenue?

That it's a really good question. I don't think there's a clean answer. I think what we can say is that every part of the region is different. So what we're seeing there -- there are some parts where activity can get in quite quickly, where if it's an established market there's no need for an RFP. We're already embedded and it goes -- we can go from an initial discussion to what I would say, revenue within 6 months. Now obviously, what we're seeing with the -- trying to think, I'd say the global conflict in the region, we are seeing some slowdown in sort of initial conversations progressing into secondary conversations. That conflict has gone longer than we had expected. But equally, we had nothing baked in this year, just to be clear with our numbers and thought processes for the Middle East for new contracts in the numbers we've given previously.

Now there are -- as we extend slightly beyond the regions that we're currently active in, we are still seeing activity and RFPs come to market. They're probably more, I would say, a 9-month process from beginning to revenue recognition and with a ramp-up. And you've got to remember, the implementation phase for us from winning an RFP begins with contracting, which can take anywhere between 3 to 6 months from the time we would announce a contract win. And then -- because obviously, we have to contract with a bunch of secondary parties, including the likes of AWS. And then the recurring revenue might be a year after that because new regions can take up to a year of implementation. Does that answer your question?

Yes, definitely. That's very helpful.

Your next question is from Brian Kinstlinger with Alliance Global Partners.

In the first quarter, subscription revenue for AI and data sciences declined sequentially. It was the first time that's ever happened. Was there a churn or lower usage? Or maybe what explains the dip, particularly in that subscription piece sequentially?

Anthony, do you want to cover that? Or do it myself?

No, I got it. No, it's a great question. We did see a bit of a change there. I would say that as we recalibrate all of our AI business here, we did see that a small move in it, but I would say it's -- it continues to be an area where we're focusing our efforts to grow. As you know, the subscription portion of our AI business is a very small portion. It's less than 10%. The larger component continues to be the elements that we have more episodic revenue. As we build out capabilities and we start seeing the cross-sell opportunities through our carriage network with Orion, we can expect to see that subscription element become a much more important portion.

But health care systems are relatively slower moving in decision-making. And I would say that at this early stage, we're very pleased with the performance, and we continue to see incredible interest as James and Alex have highlighted earlier in the call. They're in the U.S. now, having very, very fruitful conversations with a lot of the opportunities there, all of which have an element of the AI component in it.

Okay. Great. And then my second question relates to the major -- your statement on a contract with a major government health system in the Middle East and continued expanding enterprise deployments across North America. What's the potential size of some of these opportunities on a run rate basis? What would be considered small when you move to production? What might be considered a large contract? Help us understand so we can see how this might scale.

Just some clarity on that, are you talking about when we're fully in production or what a first stage would look like?

Well, maybe the life cycle. Maybe talk about what the Middle East might look like and then how we get to production and how long that might take?

Yes. I think that's a nice way to frame it. So what I would say is that within -- it's not linear. So I'll just give you a range. So for a small health care system, a first stage implementation might be, call it, USD 250,000 of revenue for implementation and something similar for ongoing. And then at scale and fully implemented, it might be $0.5 million a year ongoing. For a large system, it's probably 4 times that. What we're seeing is that the potential for these to come in as platforms into health care systems, they're probably more like an HIE sort of contract, USD 1 million to USD 2 million type contracts depending on the scale and size of the opportunity.

Again, as the product matures and the number of use cases becomes more apparent, I think the way we're considering the platform in the later years is a deeper embedded platform. And you could see an area here, and we're already having conversations of having embedded resource, which would probably lift that number again. So if I'm thinking about that in the most broad sense, the reality is that the AI deployments are not going to be $100,000 a PoP type deployments. I think what we are seeing is that the interest is not point solution, but fully embedded platforms. Now they will take more time, but the margins are materially higher and far more exciting. And so you'll see our language shift and talk about that in terms of this coming -- I think Anthony made the comment of going from being episodic to being embedded. And those embedded platform conversations are really what's leading through here.

What's very clear in this market is that the time and energy to deploy a point solution or a proof of concept is pretty much the same as going fully for an enterprise grade. And so what we've seen there has been a real change in the U.S. market from very nascent, almost immature approach to governance to now very strict thought processes on procurement, government, connectivity being embedded, scientific validation, all of which plays very, very clearly into our hands. And if we have a little bit of bounce in our voices, it's because we're here at the moment hearing it firsthand from every single party of the realistic answer where our platform sits in the universe.

Great. I'm going to slip one more in. There was a significant step-up in R&D. Can you highlight what these R&D investments are, where they're focused on and directionally, how we should think about R&D expenses for the next few quarters?

Yes. Look, R&D, there's 2 key areas, right? We're obviously spending on integrating the platforms and bringing it to new markets, bringing -- integrating the new VeroSource Orion platform into the U.S. is a first-time process. So there will be R&D spend on that. We're also at the final stages of delivering our digital front door in Ontario. Again, that means it's heavy in the R&D cycle and a lot of new product development within the AI division. What I would suggest is that we're at the tail end of that growth with the platform coming live here in the U.S. in the last quarter, we're at the end of that, I would say, the initial deployment phase and moving now into the more steady state. And there's obviously a bit of what I would say, the integration spend on getting these businesses aligned.

The final thing there is that there is a period of what I would say is removing significant tech debt across the organization. And so we have approved a few projects, which will be multiyear projects, so call it a couple of years, but very, very significant ROI projects in terms of reducing costs. So while there is some upfront in the current year, and we saw a bit of that in last year, that will start to tail off. I think what we're seeing and thinking is that we're seeing significant improvement from deploying AI internally within R&D. So once we've completed the tech debt and completed some of the current projects, we would expect our R&D as a percentage of revenue to decline. And to be fair, probably R&D to flat line decline in an absolute sense as well.

Your next question comes from Max Czmielewski with Stifel.

Just a few questions. Maybe, Anthony, you could help me out on this first. This is Max, by the way, on for Justin Keywood at Stifel. Maybe besides some of the margin improvement lift in Q1, could you help us understand the cadence of invoicing and revenue recognition in Q1? And should we expect that there is sort of this bolus of collections in this quarter on a seasonal basis from contract work through the year?

Max, thanks for the question. The cadence of invoicing hasn't really changed. I will say, though, that one of the dynamics that we see with -- now with the -- we're seeing a full cycle with Orion and the mix is that they do have a customer base -- we have a customer base that -- where we do have a handful that we will build annual revenues upfront. And again, close to 2/3 of our revenue is recurring. And so we do have -- we will see some benefit from a balance sheet perspective, where we have some cash 12 months build upfront as we get into -- right now into Q2, we'll start seeing a bit of a bulge in our cash collections on those annual build relationships and then it will be drawn down partially throughout the rest of the year.

But I would say it's a smaller portion of our recurring revenue, but definitely a nice little benefit for us from a balance sheet perspective. Other than that, the rest of our business is billing on a regular basis, contracts, milestones, they build and recorded similar to how we've seen in the last few quarters. So not a lot of movement there in that. We just had a -- just a small benefit this quarter that was a bit of a catch-up. That's all.

Perfect. Great. And maybe more of a broader question, if you could help us understand maybe which types of customers are most amenable to these cross-sell, upsell opportunities? Is there a bigger opportunity with, say, HIE or maybe in other enterprise context? And if there's a meaningful difference between geographies on bringing additional products into a project given the sophistication or how well those systems are resourced or funded?

I'll take that. Short answer is there is no meaningful difference by geography. I think there's a meaningful difference in timing. And so our customer bases, whether HIEs or digital front doors, realistically, they're still government platforms. And so while we are always part of the solution, we're never ever going to be 100% of the technical stack they have. So the conversations we're having doesn't really matter which part of the stack we're in. We're still having those conversations. It's their readiness that is the driving force. And generally, it's the funding cycle. So we're having conversations in all of our major regions. So active conversations in the U.K., active conversations in ANZ, U.S., Canada, Middle East. So we're trying to be really methodical about where we apply our time.

What I would say is there's probably more conversations demand than we are capable of delivering right now. So we wouldn't -- we need to scale with that. But as we said, these are long-dated cycles, and they're not things that will switch on tomorrow. These are conversations that can take 3 to 6 months, and then they can take 6 months to implement. But what we're seeing from -- and I think Alex mentioned in his presentation, we're seeing governmental support now coming through in Canada, the U.S., the U.K., ANZ actually behind supporting AI being deployed. And there's really common language, which is the exciting piece of -- the U.K. talks about getting people out of hospitals into the community, although it requires a shared care record. That requires an HIE.

And there's conversations about treating people -- treating wellness, not sickness. And again, that's the same language they have within the CMS. In fact, the CMS has extended the period of what they want to see people looking after their customers, so in terms of accountable care. So -- the language, the financing is actually quite global right now, which is exciting, and it matches our footprint nicely. I think what will be an interesting component in 2027 will be as we broaden from regions we're not in because our capabilities work in any health care system. And what we're seeing within preventative health care is that as we begin to show use cases and proof points in what I would say, tangential or adjacent revenue streams, there is -- what we find is there's no real -- I'll say a way, there's no real opportunity that we can't participate in. I think I mentioned before, we put in our first RFP with a genomics partner, which was an exciting change of just a range of the things we can apply our AI and platforms to.

Your next question comes from David Kwan with TD Cowen.

I was wondering, could you talk about some of the conversations that you guys are having with life sciences companies as I guess you're in a much stronger position now to help them with their clinical trials given your AI capabilities and the integration there. And then you've got WELLTRUST and now, I guess, WELL Health is talking about WELL Research on their call yesterday. So just curious to see, are you having more inbound interest? And also how you're planning to work with WELL in terms of going after these opportunities?

David, thanks very much for your question. Look, I think our credibility and our relationships with life sciences companies, which includes, of course, big pharma, med device and biotech, I think it's all been really maturing in an exciting direction. And just to give you a quick snapshot, David, of what we're able to do, right? We started really with this capability of being able to risk stratify patients, right, identify at-risk patients of all sorts of different conditions, including rare, ultra-rare chronic and complex conditions. And on top of that, we've been able to offer our life sciences partners a capability of being able to generate regulatory-grade real-world evidence, which could then inform and help generate clinical studies. And that's really key.

And then a third kind of value proposition is being able to not just screen and identify at-risk patients, but identify patients that are also of strong eligibility for clinical trials. And this work is really meaningful. And I think that's what you're touching on with partnership and strategic alliance with WELL Health and their initiative around WELLTRUST and WELL Research, right? We're able to identify patients years in advance that then get access to, in some ways, is life-saving clinical trials. So that's a really exciting partnership opportunity, and we encourage you guys to watch that closely. And I'm sure Hamed will share more news on that front in coming quarters.

The only thing I'd add the only thing I'd add there is that, that's already in market. It's not an idea. We're already seeing use cases and RFPs coming in. I think the scale of WELLTRUST at the speed at which is growing surprised us. We're seeing really good consent from people going through the clinics. And so it's an area that we're actually looking at accelerating our spend and growth to accelerate the size of the scale of consented patients we have access to.

No, that's great. Do you guys actually have an updated number in terms of how many of WELL's patients have given their consent through WELLTRUST?

I don't have it in front of me. It's changing rapidly week by week. So we're in the early phases of deploying it across all the WELL ecosystem. And so it will be a more meaningful number for me to give you next quarter. But what I can say so far is that the -- it's a week-by-week growth that has surprised us from -- but let's be clear, from a small start early, but now we're to the point where it's enough to be meaningful, like we're now using what we have to identify patients for clinical trials and commercial growth. So not just not theoretical, we're actually doing it.

[Operator Instructions] At this time, there are no further questions. I'll turn the call back over to Mr. James Lee for any closing remarks.

Actually, I'll take it. So in closing, I want to thank everyone once again for joining our call today. Thank you to the analysts for their questions. Everyone, please stay safe and healthy, and we look forward to providing more updates in the future. Thank you.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.

Hello, and welcome to the Healwell AI Fourth Quarter 2025 Financial Results Call. [Operator Instructions] I will now turn the conference over to Hefton Seni, Investor Relations at Healwell. Please go ahead.

Hello, and thank you, operator. Joining me on the call today are James Lee, CEO of Healwell; Dr. Alexander Dobranowski, President of Healwell; and Anthony Lam, Healwell's CFO. I trust that everyone has received a copy of our financial results press release that was issued yesterday. Listeners are also encouraged to download a copy of our quarterly financial statements and management discussion and analysis that was filed on SEDAR+.

Please note, a portion of today's call other than historical performance include statements of forward-looking information within the meaning of applicable securities laws. These statements are made in the safe harbor provisions of those laws. Please refer to yesterday's press release and to our management discussion and analysis for more details on the company's risks and forward-looking statements. We provide forward-looking statements only for the purpose of providing information about management's current expectations and plans going into the future. We do not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in our expectations or any change in events, conditions, assumptions or circumstances on which any such statement is based, except if required by law.

We use terms such as gross margin and adjusted EBITDA on this conference call, which are non-IFRS and non-GAAP measures. For more information on how we define these terms, please refer to the definition set out in our management discussion analysis. [Operator Instructions]

And with that, let me turn the call over to Healwell's CEO, James Lee.

Good morning, everyone. Thank you for joining us today. Before I walk through results, I want to step back and frame exactly where we believe Healwell sits in the broader health care AI landscape. We're in the early innings of what most analysts expect to be one of the largest technology adoption cycles in health care's history. The question for investors is no longer whether AI will transform clinical care and switch companies with the distribution, the science of credibility and secure compliant and ethical data infrastructure to capture that adoption at scale. We've heard directly from leading health care systems, global life science companies and clinical leaders. And Healwell is one of the very few companies globally that has assembled all three. Our Orion Health platform gives us global enterprise customers across 11 countries where we manage health information exchanges, the foundation for building and bringing clinical data together at scale. Our DARWEN AI engine is backed by 47 peer-reviewed publications, more clinical validation than any comparable platform we're aware of. And our consent first by design data network through WELLTRUST creates a true learning health system feedback loop that makes our AI better with every deployment, and that's the thesis.

Now bringing that back to how 2025's results confirm that. 2025 was a transformational year for Healwell as we significantly expand the scale of the company and advanced our strategy of building a global AI platform for health care. Revenue increased 427% to $103.8 million, largely driven by the acquisition of Orion Health completed in April 2025. This expanded our global footprint and strengthened our recurring revenue from our health care data infrastructure. We also achieved our first year of positive adjusted EBITDA, reaching $2.3 million, reflecting early operating leverage in the model. During the year, we sharpened our focus, including the divestiture of noncore assets in October, positioning Healwell as a pure-play AI and software company.

We launched Amadeus AI in September, embedding DARWEN directly into Orion Healthcare's platform, and we expanded our AI deployment footprint, including our first AI deployment in the Middle East, which we announced in February of this year. As we move into '26, we are beginning to demonstrate both financial performance and accelerating AI-driven growth supported by expanding distribution network, positioning us to drive continued top line growth and long-term impact across health care systems. The next step is how we scale that platform, and we'll talk about the 4 pillars driving that strategy.

As I said, we're building Healwell as a scalable AI platform for health care. We are still in the early stage of AI adoption in health care, but advances in AI and digitalization of data is now enabling large-scale deployment. We believe this will become one of the most important use cases of AI over time. From our perspective, the companies that will win will be defined by 4 things: a scaled distribution network, trusted and validated AI, deep integration with clinical workflows, all underpinned by high-quality data and a strong platform economics. Importantly, this combination of own distribution, consent-based data and embedded AI is difficult to replicate but our business is built around these three core principles.

Firstly, our distribution network gives us access to global -- to a large global health care footprint and allows us to scale AI deployments across health care systems and other markets. Secondly, trusted AI. We continue to invest in clinical validation and privacy-first consent-to-run data frameworks to ensure our technology is trusted across health care ecosystems. Through WELLTRUST, we've levered a consent-based clinical data network to identify and match patients with clinical trials using DARWEN, creating a differentiated data moat, which is highly valuable to our life science partners. Third, AI adoption expansion. Our AI is embedded directly into clinical workflows, enabling faster patient identification insights, improves on through time through real-world data and usage. And finally, financial performance. As adoption grows, each deployment expands our data network, increases AI usage and improves the overall economics of the business.

To execute the strategy, we've laid out clear milestones to reflect how we're scaling the platform. In the second half of 2025, we made strong progress across all 4 pillars. We expanded our distribution network. We integrated DARWEN directly into Healwell, delivering a unified AI platform, and we simplified the business into a focused AI and software company, all while achieving positive EBITDA across Q2, Q3 and Q4. As we head into Q1 of 2026, our focus is on continuing this momentum by expanding enterprise deployments, strengthening our AI leadership through continued validation and driving further AI adoption expansion across our network while maintaining a positive adjusted EBITDA. Looking wider across '26, the priority is scaling globally, expanding our distribution network, increasing adoption and strengthening our financial position. As the platform scales, we expect to drive strong growth in AI revenue and continued operating leverage, targeting approximately 50% AI revenue growth and an exit run rate adjusted EBITDA margin around 10%.

On behalf of the team, we'd like to thank you for your continued support and look forward to sharing progress over the coming quarters. I'd now like to hand the call over to our CFO, Anthony Lam, to walk you through Q4 and the year-end financials in more detail.

Thank you, James. Before I begin, I'd like to remind everyone that all of the figures I will be discussing today are in Canadian dollars, and our financial statements are presented in accordance with IFRS International Financial Reporting Standards.

Our fourth quarter 2025 results are as follows: Healwell achieved quarterly revenues of $32.2 million during Q4 2025 compared to $6.8 million in Q4 2024, an increase of 374%. Revenue growth in the quarter was primarily driven by the acquisition and integration of Orion Health.

During Q4 2025, Healwell reported positive adjusted EBITDA of $1.4 million compared to an adjusted EBITDA loss of $5 million in Q4 of 2024. This marks the company's third consecutive quarter of positive adjusted EBITDA, highlighting continued growth execution improvements and stronger financial performance, representing a year-over-year increase of approximately 123% in adjusted EBITDA.

Healwell achieved gross profit of $17.6 million during Q4 2025, an increase of 376% compared to $3.7 million in Q4 2024. The increase is due to higher revenues in the quarter. Healwell achieved gross margin percentage of 55% during Q4 '25, and this is in line with 55% in Q4 2024. Healwell reported an IFRS net loss from continuing operations of $7 million for Q4 2025 compared to a net loss of $11.4 million in Q4 2024.

Healwell ended the quarter on December 31, 2025, with $18.6 million in cash and nearly doubling from its $9.4 million at the end of Q4 2024. I'd also note that the company holds a strategic investment position in xAI, now part of the broader SpaceX ecosystem, which represents additional balance sheet value beyond the reported cash. As we evaluate the appropriate timing to monetize this position, it provides meaningful optionality to further strengthen our capital base and support the company's growing initiatives.

Our year-end 2025 results are as follows: Healwell achieved annual revenues of $103.8 million during 2025 compared to $19.7 million generated during 2024, an increase of 427%. Revenue growth in the quarter was primarily driven by the acquisition and integration of Orion Health. During 2025, Healwell reported positive adjusted EBITDA of $2.3 million compared to an adjusted EBITDA loss of $14.2 million in 2024. This marks the company's first year of positive adjusted EBITDA, highlighting continued execution improvements and stronger financial performance, representing a year-over-year increase of approximately 116% in adjusted EBITDA.

Healwell achieved gross profit of $57.3 million during 2025, an increase of 429% compared to $10.8 million in 2024. The increase is due to the higher revenues in the quarter. Healwell achieved gross margin percentage of 55% during 2025, and this is in line with last year's 55% in 2024. Healwell reported an IFRS net loss from continuing operations of $39.1 million in 2025 compared to a net loss of $27.5 million in 2024.

Now looking at our revenue segments. As of November 1, 2025, following the divestiture of the company's clinical research and Patient Services division, Healwell now generates revenue across 2 core segments: first, AI and data science; second, health care software. Our AI and Data Science segment achieved revenue of $10.2 million in 2025, marking a 120% year-over-year growth compared to $4.6 million in 2024. The commercial adoption of Khure and Pentavere technology drove strong organic growth in the quarter, reflecting increasing demand for Healwell's AI-powered disease identification and clinical insight tools.

Growth in the AI segment was supported by both expansion within the existing customer base and new client wins with approximately 20% of the revenue growth driven by existing customers and 69% from new customers. The AI segment also saw a meaningful expansion in its customer base with the number of revenue-generating customers increasing from 262 in 2025 from 36 in 2024, underscoring the accelerating commercialization of our AI solutions. Our second revenue stream is health care software, which generated $93.7 million in revenue in 2025, an increase of 520% from $15.1 million in 2024. The acquisitions of Orion and Verosource have been the primary drivers of growth in this segment.

With the recent divestiture of noncore assets, Healwell is now fully focused on driving growth, innovation and profitability across its 2 high-margin scalable segments, AI data science and health care software. This strategic focus positions the company to continue delivering strong financial performance with rapidly growing revenue streams, expanding customer adoption and meaningful contributions to overall profitability.

With that, I'd now like to turn the call over to our President, Dr. Alexander Dobranowski, who will discuss how we're positioning Healwell within the broader health care AI landscape and the key pillars supporting that strategy.

Thank you, Anthony, and thank you, James. And look, as the health care AI market continues to mature, we're seeing a clear shift across the industry from early experimentation toward deploying AI solutions that deliver measurable outcomes and integrate directly into real-world clinical workflows at scale. If we step back and think about how we're positioning Healwell competitively in the broader health care AI landscape, we believe the long-term winners in this space will be companies that combine deep AI capabilities with strong distribution, access to high-quality data and solutions that are embedded directly into clinical workflows. Importantly, our first competitive advantage is our clinical validation and scientific credibility, which we believe represents a key moat that is very difficult to replicate quickly.

Our DARWEN AI platform, which is trademarked and has patent IP, has now been validated across 47 peer-reviewed publications, and our work was recognized with the 2024 Prix Galien USA Award. This award, with no exaggeration, is held to a similar esteem as a Nobel Prize. Importantly, our platform can produce regulatory-grade real-world data, which provides a globally unique capability for generating real-world clinical evidence. We also continue to collaborate with leading institutions and pharmaceutical companies, inclusive of some of the top-ranked hospital networks and cancer centers and many of the world's largest pharmaceutical companies.

In fact, we currently work commercially with 8 of the top 10 largest pharma companies globally. Our second competitive advantage is our Orion Health distribution network, which gives us global enterprise access that many AI companies simply do not have. This is also something that is not easy to replicate. Through Orion Health, we have relationships with more than 70 large enterprise health care customers across 11 countries. This is a very special and unique customer base. Earlier this year, we also signed an AI deployment in the Middle East, representing our first major AI public sector contract outside Western markets.

When we look ahead, we see a growing pipeline across Canada, the U.S., Australia, New Zealand, the United Kingdom and the Middle East. This distribution infrastructure allows us to scale Healwell's AI capabilities across global health care systems. This is truly an exciting and distinctive opportunity. Our third competitive advantage is the DARWEN AI platform itself, which is our proprietary AI engine. And over the past year, we've merged the capabilities of our subsidiaries, Khure Health and Pentavere into a unified DARWEN-powered platform. The platform includes our SMART Identify, our SMART Search and SMART summary products, which are designed to automate clinical data analysis and patient ID across massive health care data sets. In published studies, DARWEN has demonstrated up to a 100-fold efficiency improvement compared to manual chart review.

Finally, we believe we benefit from embedded switching costs and a growing clinical data network. Our AI solutions are embedded directly into existing EHR and clinical workflows, which creates high retention and long-term relationships with customers. Today, we have approximately 30 master service agreements in place with pharmaceutical companies, including, as mentioned, 8 of the world's top 10 largest pharma companies. Each new deployment deepens our proprietary clinical data network and further improves the performance of our AI models over time. One other point to mention with regards to our resilience is that our software falls into a category that is also known as system of record software. And this category of software is typically very difficult to displace. Taken all together, we believe these elements, scientific validation, global distribution, a unified AI platform and deep workflow integration position Healwell at a significant competitive advantage as health care AI adoption continues to scale.

Now before we conclude, I want to leave you with a few key takeaways about where Healwell stands today and where we're headed. First, our strategy of combining AI with a scalable health care software platform is working. We've successfully transitioned toward a model where proprietary AI technologies are paired with large-scale health care data interoperability software to create meaningful clinical and commercial value. Second, Orion's deep relationships within health systems and governments creates a powerful opportunity to deploy AI tools directly into the clinical care setting at scale. These enterprise relationships provide a strong distribution channel for our AI solutions and positions us well as demand for clinical AI continues to explosively grow.

Third, we continue to build one of the most scientifically validated AI platforms in health care. As mentioned, our DARWEN AI engine is now supported by 47 peer-reviewed publications, demonstrating its ability to identify patients with rare, complex and chronic diseases across a wide range of real-world clinical data sets. Fourth, the Orion Health acquisition significantly expands our global scale. Orion brings a health care data platform supporting over 150 million patient records and deep relationships within major enterprise health systems around the world, creating a powerful distribution channel for Healwell's AI solutions.

And fifth, we are seeing strong financial momentum. This year, we delivered record revenue growth and our first year of positive adjusted EBITDA, demonstrating that our platform strategy is translating into real financial performance. And finally, when you combine these validated AI models, a global health care software platform and growing enterprise relationships, we believe Healwell is uniquely positioned to scale AI-powered health care solutions globally and drive long-term growth. We're still in the early stages of what we believe is an extremely large opportunity in health care, and we're excited about the growth ahead.

And with that, I'd like to thank everyone for attending this call. I'll hand it back to the operator and move to the Q&A portion. Thank you.

[Operator Instructions] Your first question comes from the line of Allen Klee of Maxim Group. Allen, perhaps your line is mute.

Your next question comes from the line of Kevin Krishnaratne of Scotiabank.

I want to talk about the nice press release you had a few weeks ago on the U.S. state win on HIE. I'm wondering if you can talk about what drove that win. It was competitive, I'm sure. Just talk about the drivers that led to that win. Was it a brand-new state for you? And how do we think about maybe the size of that contract in the context of your revenue base?

Kevin, lots of good questions there. So let me where to start. So yes, new state for us. In terms of the why, I think the exciting thing for us, it was the first place -- the first win we've had where we had a combined offering of all of our capabilities from Orion, Verosource and our SMART Identify, SMART functions within the DARWEN platform into a single entity. So what we found was we won because of what the product set could do and where we looked at addressing the partner. We also think it was the first state that was funded by this new Big Beautiful Bill for rural funding, which really does think -- show us that, that market is beginning to open up and really gave us confidence that the U.S. is a place in the next 2 or 3 years that can have significant growth in the business. I think what we've seen over there is that the market is at a really early adoption phase of AI. So coming in with our capabilities as an easy add-on feature and a nice pathway is a really compelling argument for them. And we went very quickly from a long list to a short list. And to be honest, it became very apparent that we had a unique proposition in that market.

In terms of scale, it's a large state. It's a multiyear contract. It's obviously within our existing numbers for the year. But it would put it there as one of the larger contracts we have in the U.S., which we're excited about. And also, I think as we look at the opportunity set in front of us, we're probably getting more excited of just trying to temper about what we could see coming to that market.

Awesome. Good stuff. Maybe just for my follow-up, maybe turning to M&A. I'm wondering if you could give us broad thoughts on how you're approaching M&A this year. I know you're still digesting and integrating Orion, but just talk about that. And I want to also raise that one of the competitors out there in the U.S. market, a large HIE looks like it's under a strategic review. I'm just wondering if you've got any thoughts on that as well and potential for picking up some similar assets there in other states.

Yes, really good questions. M&A is always a focus for this business as any business. As we look to scale, we look at lots of assets. I think you've seen that over the last 9 months, we've been really disciplined since Orion to focus on integrating that and integrate our DARWEN engine into the asset. Partly, that's because there's a lot of work to be done in integration, a lot of benefit to come through in margin. We want to demonstrate that to the market and to our investors that we are getting operational leverage, not just adding on new assets like others.

As we look across the market, yes, we will be looking to expand our footprint. We have a long list of states and areas where we think there is natural growth parts and natural synergies. You're unlikely to see something in the first 6 months. I think in the next 6 months, we're very focused on hitting our targets and demonstrating our business organically. That said, look, we look at every process. We can see many synergies on like-minded platforms, but the platforms themselves really matter. Just buying a platform won't work for us. We need to buy a platform where the platform integration process is relatively simple. Buying an old legacy platform that we would find hard to integrate doesn't really work for us. We need to find a way for assets where AI can be deployed into them. Does that answer your question?

Your next question comes from the line of Justin Keywood of Stifel.

Maybe a question for Alex. On the WELLTRUST platform launched in February for ethical patient identification and recruitment. I realize it's early, but how is that platform being received by the top 8 of 10 global pharmaceutical customers as mentioned? WELL disclosed yesterday that they had 4.3 million patient visits in 2025. So that suggests a substantial data pool to potentially access. And just wondering if that's leading to any traction with your customers.

Justin, really appreciate the question and of course, appreciate the support. Look, the structure that we label WELLTRUST is really important and has been developed over quite a significant period of time with a lot of care. And where this is orienting, just to add some context, is a globally unique function of being able to compliantly with a consent-driven framework, recruit patients at scale. I can't actually point to another health system or ecosystem that has been able to do this at this level of quality and scale anywhere else globally. And look, this is in its early phases. But of course, like the whole concept here is remember, Healwell's mission is early disease detection. Well, and remember, we're doing this at scale. We're finding tens of thousands of patients now per quarter, which is incredible, right? This is extraordinary capability that's in production at scale. Well, what's the next step? Well, when we're able to identify these at-risk patients, well, the next step is make sure that they have access to quality care and are on the right guideline-directed care. And on top of that, have access to life-saving clinical trials, and that's why WELLTRUST has been developed. Now it just so happens that a huge pain point for the life sciences sector is being able to recruit patients in a cost-effective and time-effective way. And that's what this is eventually going to also solve and is currently starting to solve today. So to answer your question, is there interest from our life sciences partners? Yes, absolutely. And we'll be talking to the development of this whole clinical trial recruitment paradigm a little bit more pointedly in coming quarters.

Absolutely. Maybe just a follow-up question. What should we expect for organic growth in 2026 for the Data and Healthcare Sciences segment?

Yes. Justin, this is a segment of ours that is really exciting, okay? And we went from under $5 million in 2024 to $10 million in 2025, right? And we're looking to maintain a significant level of growth. North of 50% is what I'll share today, and we'll come back as our pipeline continues to develop. But we're looking to continue a really exciting velocity of growth of that business segment.

Your next question comes from the line of Rob Goff of Ventum.

I really appreciate you looking at the, or mentioning the 10% EBITDA margin as a target exiting the year. Could you perhaps frame that in terms of the balance between scaling or efficiencies that would drive such a target?

Yes. Look, I guess as you look at target and look at margin, it comes down to 3 key elements. Obviously, one comes through some efficiencies in integrating platforms. Last year, we began integrating our AI platforms and started integrating our software platforms. A second part of that is just scaling over corporate costs. Obviously, the corporate operating the Healwell operation and as the business grows, there is efficiencies there. And the final thing is as software revenue continues to grow as a proportion of the business, our gross margins expand because obviously, professional services is a lower margin business than in our software business lines. So as we're seeing accelerated growth in AI and our software wins, those margins are higher margins than our traditional professional services we've seen as a mix within the Orion platform. So the way we think about it is it's still early days in terms of margin expansion, and we don't think of the exit run rate of 10% as being a final target at all.

Okay. And could you perhaps provide additional perspectives on the status of POVs and RFPs outstanding?

Yes. So in terms of the POVs, they range in value, but the value is probably increasing as we go through. So we're seeing now that we're in multiple, what we call Phase 1 deployments of, on average, $500,000. And we're seeing new deployments coming in a Phase 1 range anywhere from $150,000 to $500,000. What I would say is that as they move into Phase 2, we're getting more and more confident that those second phase, so wider deployments within organizations are multimillion dollar contracts. And that's right across the SMART summary, SMART Search and SMART Identify range.

That's great. And perhaps anything with respect to large RFPs outstanding?

Look, the RFP network is -- it's a really hard way to answer. We have RFP -- public RFPs in the -- where the revenue opportunity is in multiple, multiple millions of dollars. If I think about a TCV, they range from $30 million to $100 million in terms of range of size that are out there currently. What I would say, though, is they take a long time. Health care is lumpy and the procurement cycle goes anywhere between 6 months and 6 years. So I want to set the expectation that the RFP responses are lumpy contracts. The AI deployments are in more easier stages to mitigate with shorter deployment cycles, but they come in 2 phases.

Your next question comes from the line of Kyle Bauser of ROTH Capital Partners.

Congrats on all the progress. Let's see, so you finished the quarter with nearly $19 million of cash, and you're looking to potentially monetize that investment in xAI. What sort of dollar value is associated with that investment? And what's the expected timing around that?

Anthony, do you want to pick that one up?

Kyle, thanks for the question there. The investment there is in a private interest right now. And so the timing of that exit will be a little bit dependent on when we find the right opportunity to kind of monetize. It may need to wait until it becomes more readily liquid. So there's no timing from our perspective. But we certainly, at this stage are at a point where we're at a very comfortable cash level where we're able to manage our business and execute on all of our objectives this year without having to undertake that transaction to make it happen, right? So we'll be happy to update as things progress in that arena. But yes, we don't have a specific timing on that right now.

So I was going to say, the only thing I'd add is that we're waiting, and I think with an expectation that the SpaceX IPO will be announced in the next -- in the next quarter or so, which would give us more -- a different view about how liquid -- how quickly we might want to liquidate that.

Okay. And I imagine you'll be able to pinpoint kind of the dollar value at that point as well?

There's a wide range there. Like you would know as well as I do that, there are press releases of $1.25 trillion, and there are many rumors of numbers higher than that. So it would be irresponsible for us to guess what that might end up looking like. I know that in the secondary market, currently, it's trading about 10% higher than where the merger occurred at.

Okay. Appreciate that. And then nearly half of the full year adjusted EBITDA in 2025 came in the fourth quarter and had a quarterly margin of about 4%. To get to that exit run rate of 10%, should we anticipate kind of a step function increase each quarter? Or how should we expect some seasonality? Just trying to understand kind of the cadence going throughout the year.

Yes, Kyle, it's Anthony here. We certainly made some great progress in 2025. We will be making continued progress in 2026. So yes, a step function is how we see our business progressing in the year. So we would be obviously more modest in the current Q1 quarter as we are in it now, and it will grow through Q2, Q3 right into Q4. So I think you can expect to see that kind of progression take place as the year unfolds.

Your next question comes from the line of Gianluca Tucci of Haywood Securities.

Congrats on all the progress. I just wanted to ask on the launch of Amadeus here in the U.S. in the first half. How should we be thinking about the pipeline as it pertains to activations in the U.S. this year and early next?

Yes. Look, there's 2 parts to that. I think the first thing, the activation of the AI network, we're already actively discussing with our existing customer base, the SMART product suite, and we should expect to see -- and we do expect to see in the first half some conversion of our existing customers in that product mix. I think the other thing with Amadeus is that we're starting to get more, what I call, RFIs. So early stage that people are looking at health information exchanges in the U.S. or looking at new partners. So we would expect to see some momentum to grow both within the AI deployments in the U.S., but actually with more state-based HIEs as a broader software deployment through late half '26 and '27.

So we're really excited about what we see in the U.S. in terms of the market, which the last 5 years, to give context has been pretty quiet. The funding that led to a lot of the HIE deployments in the U.S. was around Obamacare. And as that ended in 2024 and the COVID overhang of digital health care spend started to end, the U.S. market was a bit tepid. What we're seeing now is that this Big Beautiful Bill of rural funding has reopened that market. And it looks to be a magnitude larger than what we saw through Obamacare. So we're really excited what the next 3 or 4 years look like in the U.S.

That's great, James. And so now just on that point, from a boots on the ground perspective, how are you positioned right now in the U.S.? Is there some more scaling to go in order to capture the opportunity ahead of you guys? How should we be thinking about your sales headcount or integration headcount in the U.S.?

Good question. Look, I think what you see with what we -- our investment in sales is both direct sales, partnerships and external consultants. The U.S. market is not a, "Hey, there's going to something turn up tomorrow." It's very much RFI and RFP driven. So it's about being around the hoop. And so it doesn't require a large-scale investment, but we are making targeted investments in both our AI sales capability, and we're looking deeply at our partner network of how we build widely because putting 50 people on the ground in every state isn't a viable option and it's not needed. These are long-dated sales cycles. So I think the way that we think about it is we should get more scale out of the existing sales network, and then we will look to partner with other people to bring in deep relationships as opposed to a big investment in sales going forward.

Congrats again.

Your next question comes from the line of Michael Freeman of Raymond James.

Congratulations on the results. I wanted to sort of take a step back and understand how do you speak more about your strategy to monetize your internal AI capabilities? And what you've been learning as you've been going out and selling the initial AI products you have and how you might translate those learnings into further product launches and monetizing your AI in earnest.

That's a really, really good question. So as you imagine, there's been a ton of learning. So what we've seen in the -- particularly in the U.S. is that the demand for point solutions isn't very high. People don't want a single solution to do one thing. What they're looking for is a platform that enables lots of things. So as we've gone around the U.S. understanding requirements, what we've seen is that actually building upon SMART Search, SMART Summary as core functionality would then Identify as a, let's just say, an add-on is a far more attractive proposition than going and trying to sell a single entity. So we've actually found the bigger deployments of Search and Summary are actually faster and more, let's say, a stronger pipeline of business, largely because the amount of work to deploy at their end is the same. And so the benefit to those platforms is actually in getting infrastructure over their entire platform and then how do we get wider insights.

What we've also seen is that the type of customer that is looking for that is really broad. We've got a deployment now in a large pharmacy chain business. We've got a deployment across government entities, regulators, large medical device companies, all sort of as a data as an insight platform. So what we're finding is the platform has got many more use cases than just one, the SMART Search, SMART Summary and go into Identification.

And the people with the best funding right now are actually the large health care systems, but actually what I would say, health care adjacent businesses as well. So our learnings currently are that the cycle of adoption is still really early and going with a single deployment is actually the wrong approach. The approach is going with the strategy and so this is what you should do over the next 2 to 3 years. And these are all the things you can add on from our portfolio, which will then let you enable both preventative health care and patient identification. So we've been pivoting our sales pitch accordingly, particularly in the U.S.

Amazing. And I remember that there is some price discovery that you guys were undergoing, especially when it comes to pharmaceutical customers. How -- what have you learned -- as you've been out there in the world when it comes to appropriately pricing your offerings across the portfolio?

Look, what we've actually found in Life Sciences is that we're adding more value than we're charging for. So prices are beginning to increases we go into wider deployments with more and broad bigger data sets. Alex, do you want to give a couple of examples of what we've seen for over -- without naming customers of what we're seeing for this kind of customers for 10 or 11 deployments?

Yes, sure. And Michael, great question. And I think this allows me just to add quickly just some perspective, right? Because in this area of health care AI, there aren't that many companies we can point to that are starting to get material revenue traction. You can kind of count them on one hand, and we're one of them, right? And getting to that $10 million mark in terms of our 2025 AI revenue is really exciting. And I think it's really set the stage and foundation for this next level of growth. And what I mean by that is our engagements with our life sciences companies.

And by the way, we have a phenomenal team. Don Watts is now -- he leads our global life sciences sales, supported by Aaron Leibtag, who is the CEO of Pentavere, right, who leads now our work with some of the most discerning and leading organizations in Canada, including health systems, right? As James mentioned, we work with the governments. We work with med tech at a global level. And -- but what I -- so why I'm mentioning is that we went from these very small initial type of pilot prototype engagements with life sciences companies to now 7-figure multi-jurisdictional collaborations. And this is part of our competitive advantage because it takes years to build that type of credibility, those proof points, this validation. So we're getting to that point of real product market fit, and you're going to see these engagements continue to evolve. And some of them now are in a subscription format, and that's super exciting and super unique.

Amazing. Okay. And then maybe, forgive me if you did touch on it in your prepared remarks, but in the growth considering the health care software business alone, how should we think about growth on that revenue line considering, I guess, fourth quarter as a base?

Was the question towards software? Or is it overall business within Q4 as a base?

Yes, the software line.

Yes, look, the software line will be lumpy. And what I mean by that is that there are 2 components. There's a PSG number and a recurring number within our software business. What I think you'll see is the recurring number will grow, let's call it, 10% across the board. And then the PSG will be really lumpy. And so there'll be -- that comes down to delivery cycles. And so some quarters, it will grow more and some quarters are less depending when customer dependencies are -- the way the revenue recognition is the milestones. So whether something lands in Q1, Q2 or Q3, there are some of those things are out of our control. So as we think about that, we think that is an annual number. What I would say, though, is that going out beyond 2026, we are seeing a probably more exciting pipeline of where we think we'll get recurring sales beyond that.

Your next question comes from the line of Daniel Rosenberg of Paradigm Capital.

My first one comes around the partnership strategy. I'd just love to better understand who -- or if you could characterize what your ideal partners look like? How broad would you go with that? And then maybe understanding the scope of work that you would do with a partner where that line stops where the partner may add complementary work versus you yourselves picking up that work. Where is that line drawn?

Excellent question. Look, the reality is that we look at partners across every part of the market, right? Like the health care system is a $4.5 trillion market. So as a scale point, we're going to need to have good partners in each component. They range from sales partnership relationships like we saw in the Middle East with Lean, we announced in last year. And then we look at clinical partnerships that we have within Canada within WELL. But to give an example, we won't do clinical work. So when it has to move into the clinical side of things, that is when we use partners in terms of sales channels. So many of our HIE customers have both embedded clinical lines as well as software.

And so we'll partner with people where that's required. We'll partner with people that have, let's say, revenue cycle management assets where we can go as part of that portfolio, where in the U.S., we can be part of the revenue cycle component of generating revenue in areas where we don't play. And we'll look at partners for when we don't have an existing platform. So -- and that can be by geography or by state or by type of revenue. But the market is so big that it's really hard to sit there and pinpoint to one thing. But I would say is that the ideal partners that we're looking to and talking to generally complementary rather than competitive.

That's fair. Appreciate the color. And then maybe just as it relates to the RFPs you mentioned, there's some massive TCVs you put out there. And so when you're approaching these, are these for the most part -- I would imagine these are partner attached type initiatives. Just trying to understand the type of contracts that you guys are looking at.

That's right. Like there will be large software implementation partners will need in some of those things where the deployment and the implementation of that software is at such a scale that we wouldn't want to scale up for it. We'd be reluctant to scale our Professional Services division to service a $100 million contract, for instance, because we find it hard to scale up and scale down efficiently. We find we'd probably scale up too late and have too many people in. So finding a partner to that in regions really matters.

But also in terms of capabilities, too, like we're working with genomics partners on where they are bringing a capability we don't have. And we're finding lots of those opportunities where the partner network of 2 or 3 of us combined is a very, very compelling offering. And so I think as we across those markets, the numbers will often quote and obviously, the hundreds, we're quoting the entire conglomerate. But the numbers will try and quote on a go-forward basis, the TCVs that apply to us. So if there's a $50 million TCV, of which $25 million is for the software, we'll quote $25 million, not $50 million, just to be sure that we're not -- we've been very clear with what we talking applies to Healwell.

Okay. I appreciate that transparency. And then lastly for me, just as you're building up partnerships and have a history of partnerships, where do you stand today? I mean, how much I guess, do you have the right number of partners today in the areas that you currently operate? Obviously, you're expanding, but where you are operating today, do you feel like you have the right partnerships in place? Or is that an ongoing process to build to execute on the opportunity you see?

Yes. Let's frame that in 2 different ways. For our existing business lines, we -- obviously, we've been in these markets for 20, 30 years. So we have a very deep partnership pool for our software implementations. AI is still new. And so we are having to build partnerships and learn and pivot as the market grows. It's still very, very early in the AI adoption cycle. And so as we look at partnerships within the AI side of things, the market is still learning. We've got lots of partners we work with currently, but that's where we're focusing our energy on new partners to say, well there are other sales channels that will accelerate what actually is going to work in this market because we bring something unique with clinical validation and capability within AI.

And for this business to have outsized growth, it will need an outsized sales partner because as we look across the potential for this business, this business' potential isn't to grow at 5%, 10%, 25%, 30%, 40%, 50% the market is such a big market for us in front of us. We're trying to build a platform with partners, with deployments, with the right capabilities and access to data that's a multi, multi-decade growth profile where we want to be a leading player in that game. We don't want to be part of the equation. We want to lead the equation because we think we have something pretty unique here. And we do accept that AI is very much in its infancy.

And even as people get up to speed, they're only just supporting AI offices and AI governance to deploy these things. And so as we go in, we're finding that actually our capability is pretty unique in terms of meeting the requirements for validated AI. So I know that's a waffle answer, and I apologize for that. But as we look across the broader market going forward. We really want to build the capability that as we roll into the later years of this decade that we're not talking about 40%, 50% growth that we've got a capability delivering higher than that.

With no further questions, that concludes our Q&A session. I will now turn the call over to James for closing remarks.

Firstly, team, thanks for dialing in. Look, we really appreciate the support. We get a lot of value for the interactions with the industry. It helps shapes our thinking. So look, I know you always have lots to do. So I appreciate your time, and I look forward to keeping in touch in the coming quarter. Thanks, guys.

This concludes today's conference call. You may now disconnect.

Good day, and welcome, everyone, to the HEALWELL AI Third Quarter 2025 Financial Results Conference Call. Today's conference is being recorded. [Operator Instructions] At this time, I would like to turn the conference over to [ Hefton Seni ], Investor Relations.

Thank you, operator. Joining me on the call today are James Lee, CEO of HEALWELL; Dr. Alexander Dobranowski, President of HEALWELL; and Anthony Lam, HEALWELL's CFO. I trust that everyone has received a copy of our financial results press release that was issued yesterday. Listeners are also encouraged to download a copy of our quarterly financial statements and management discussion analysis that was filed on SEDAR+.

Please note portions of today's call, other than historical performance, include statements of forward-looking information within the meaning of applicable securities laws. These statements are made under the safe harbor provisions of those laws. Please refer to yesterday's press release and to our management discussion and analysis for more details on the company's risks and forward-looking statements. We provide forward-looking statements solely for the purpose of providing information about management's current expectations and plans relating to the future. We do not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in our expectations or any change in events, conditions, assumptions or circumstances on which any such statement is based, except if it's required by law.

We use terms such as gross margin and adjusted EBITDA on this conference call, which are non-IFRS and non-GAAP measures. For more information on how we define these terms, please refer to the definitions set out in our management discussion and analysis. There will be a question-and-answer session at the end of the call, which will be limited to analysts only. To ask a question, analysts are required to call in to the conference using the dial-in number provided in our press release.

And with that, let me turn the call over to James Lee, CEO.

Thank you, Hefton. Thank you, everyone, for joining us today. Look, Q3 for was HEALWELL was a very busy period, both in terms of productivity and change. So we're excited to share our progress. Obviously, as you know, in Q2, we completed the acquisition of Orion, and we had a major milestone becoming adjusted EBITDA positive. And as we enter Q3, we set ourselves 2 really simple but clear goals. We want to simplify the business and focus the business to maintain growth and a balance of adjusted EBITDA positivity.

We announced in Q3 and we've completed this week the simplification of HEALWELL, forming a major milestone where we've gone from a conglomerate to a pure-play software service and AI business. And we've seen the strength of the diverse geographic and product mix, allowing us to maintain a positive adjusted EBITDA during the traditional slower Northern Hemisphere summer quarter, which we'll talk about later. These milestones are a critical event for us. They shape our future as a focused and simplified business. We have the resources now to succeed on our journey of creating a globally relevant and leading preventative care AI business.

Now I'd remiss if we didn't thank everyone, like this wouldn't have been possible without the support of our key partner, WELL Health and the hard work both from our Board and our broader team members. So I want to thank everyone for a really busy and productive Q3.

Now Post Q3, the business now is a simplified software and AI business. But looking at our Q3 results, Q3 has been another positive step for us in our journey. Our continued operations achieved revenue of $30.4 million versus $6.7 million in 2024 and adjusted EBITDA of $0.7 million. While we saw a quieter start to the quarter due to the summer period, we ended the quarter strong in our AI and data division, and we see good momentum for the rest of the year and into 2026.

Now in Q3, we announced that we are integrating our AI platform, DARWEN, into our software platform, Amadeus. And this combination with -- in conjunction with our expansion here in the U.S. has begun to show really promising signs, which we'll talk about shortly. We're very early in the adoption cycle of AI tools and health care systems. So having the appropriate resources and becoming increasingly efficient with these resources is really important. So our goal is to maintain that balanced investment and maintaining adjusted EBITDA positivity.

You heard us and you will continue to hear us talk about the word simplify and focus a lot today. As we talk about and shift the strategic focus over the last 6 months in the quarter. But I'd be remiss if we didn't talk about why we've done it. Now AI is a powerful tool. It's in the infancy of its understanding and adoption, but we believe that in health care, it's the most valuable use case that AI is currently able to do. At its heart, it's capable of consuming significant amounts of data looking to signal. But the impact we're seeing in the health care system for what we can do today is undeniable. Our AI engine, DARWEN, can identify hard to find patients using existing clinical data. Now unlike precision medicine when you need new data, we can find signal from existing data. As we've begun to expand DARWEN across the global footprint, we've seen the sheer size of the opportunity to expand materially.

So to achieve our stated goals, which I mentioned before, of investing while maintaining and improving operating margin required us to have a really disciplined and focused business. Now, that let us taking the hard decision to simplify our business and product offering, which you've seen us execute this quarter. We've integrated our AI business. We acquired the balance of Pentavere. We've begun aligning our software businesses. We've expanded in the U.S. and we simplified our business lines and added some resources.

So going into the final quarter and the first quarter of 2026, we have 2 primary areas of focus. In Q4, our goal is to complete the integration plans to maximize position and flexibility, allowing us to maintain improved operating margins year-on-year while investing. And in Q1 next year, our goal is to demonstrate commercial validation of AI platform and health care systems outside of life sciences. Maintaining and keeping focus on a well-defined set of goals in the immediate future allows us to remain disciplined so we can demonstrate both value to our customers and to our shareholders.

Finally, I'd like to give a little bit of context about the opportunity in front of us in AI. Now I think it's [ one-off effect ] that the earlier you identify treatment path ensure the great path is identified, the better both the patient outcome and the cost of the system will be. Our AI platform, DARWEN is uniquely placed to help extract meaningful insight from existing unstructured clinical data, allowing us scalable improvements to both.

We've already begun a number of proof points and what we call proof of values to multiple health care systems right across North America with the ability of identifying at-risk patients. Our priority is, obviously, as we mentioned, is to take advantage of the leadership of our field, demonstrate commercial value to the health care systems and to our shareholders.

During Q&A, we'll talk a little bit about the opportunity and where we're looking to deploy and how many of our algorithms. But for now, on behalf of the team, I want to thank you all for your continued support. We look forward to sharing progress over the coming quarters.

Anthony, I'll hand it over to you for the financial results in more detail.

Thank you, James. Before I begin, I'd like to remind everyone that all of the figures I will be discussing today are in Canadian dollars, and our financial statements are presented in accordance with IFRS International Financial Reporting Standards.

Our third quarter 2025 results are as follows: HEALWELL achieved quarterly revenues of $30.4 million during Q3 2025. This compares to $6.7 million generated during Q3 2024, an increase of 354% Revenue growth in the quarter was primarily driven by the acquisition and integration of Orion Health, along with both organic and inorganic initiatives.

HEALWELL achieved gross profit of $16.5 million during Q3 2025, an increase of 330% compared to $3.8 million in Q3 of 2024. This increase was tied directly to higher revenues in the quarter. HEALWELL achieved gross margin percentage of 54% during Q3 2025. This compares to 57% in Q3 2024.

During Q3 2025, HEALWELL reported positive adjusted EBITDA of $0.7 million compared to an adjusted EBITDA loss of $2.8 million in Q3 of 2024. This marks the company's second consecutive quarter of positive adjusted EBITDA, highlighting continued execution improvements and stronger financial performance.

HEALWELL reported an IFRS net loss from continuing operations of $16 million for Q3 of 2025. This compares to a net loss of $8.7 million in Q3 of 2024. HEALWELL ended the quarter on September 30 with $15.6 million in cash, an increase when compared to $9.4 million at the end of Q4 2024.

Looking at our revenue segments. As of November 1, 2025, following the divestiture of the company's Clinical Research and Patient Services division, HEALWELL now generates revenue across 2 core segments: first, AI and data science; second, health care software. Our AI and data science segment achieved revenue of $2 million in Q3 2025, marking a 79% year-over-year growth compared to Q3 of 2024. The commercial adoption across all of our offerings, including Khure and Pentavere technology, drove strong organic growth in the quarter, reflecting increasing demand for HEALWELL's AI-powered disease identification and clinical insight tools.

The second revenue stream is health care software, which generated $28.4 million in revenue in Q3 2025, an increase of 408% from $5.6 million in the same quarter last year. The acquisitions of Orion Health and VeroSource have been the primary drivers of growth in this segment. With the recent divestiture of noncore assets, HEALWELL is now fully focused on driving growth, innovation and profitability across its 2 high-margin scalable segments, AI data science and health care software.

With that, I'll turn the call over to our President, Alexander Dobranowski, for an update on progress that we made with regards to our AI division.

Thank you, Anthony, and thank you, James. I'd like to take a few minutes to highlight some of our progress we have made in Q3 with regards to our AI division. Most notably, in Q3, we achieved full ownership of Pentavere, enabling deeper integration of DARWEN AI with Khure Health for early disease detection and clinical insight generation. In addition, we launched Amadeus AI, integrating DARWEN into Orion Health's Amadeus platform, extending HEALWELL's AI capabilities across global health care systems.

From a peer-reviewed validation perspective, our teams under the leadership of our Chief Medical Officer, Dr. Chris Pettengell and the Co-Founders of Pentavere, Aaron Leibtag and Steve Aviv have now published over 40 peer-reviewed scientific publications, underscoring HEALWELL's leadership in validated and clinically proven AI solutions.

Subsequent to the quarter, as James and Anthony mentioned, we recently announced a 50-50 joint venture with WELL Health to build an AI-driven clinical research platform. By actioning this, we have transitioned HEALWELL into a pure-play AI and SaaS health care company focused on preventative care and early disease detection. Our AI platform powers this JV, automating patient recruitment, trial execution and real-time data insights. Ultimately, now, our strengthened balance sheet and focused operations enable global expansion of HEALWELL's AI commercialization strategy.

From an outlook perspective, we are currently demonstrating continued expansion of proof-of-value AI projects with health care systems across North America. Our ongoing and progressing discussions with global pharmaceutical and research organizations to extend AI-driven real-world evidence and clinical data programs continues to progress, and we are now commercially active with 8 of the top 10 world's largest pharmaceutical companies, and this roster continues to grow.

We also recently announced one of the world's first examples of using AI to generate regulatory-grade real-world data for supporting patient access and advancing the pharmaceutical industry. These types of capabilities are key differentiators of HEALWELL and our artificial intelligence engine, highlighting us as leaders in this section. A key focus for us in 2026 is scaling DARWEN AI commercialization and demonstrating measurable clinical and economic outcomes.

And with that, I'd like to thank everybody today for attending this call, and I'll now hand it back to the operator and move to the Q&A portion. Thank you.

[Operator Instructions] We'll take our first question from Allen Klee at Maxim Group.

Nice to hear from you guys. Just on what you're doing with Orion and cross-selling opportunities with the rest of your business and how you're thinking about how that can all expand your total addressable market and opportunities?

Look, and if I've understood the question correctly, what you've asked is how we look and expand the overall market as we integrate through the Orion network. I think what you've seen there is that it's not just the existing customers, the Orion network that we're spanning over. What we've actually found is the broader footprint Orion has and reputation has significantly enhanced the size of that market. So while we thought the original proposition was we would cater to existing customers, actually, the brand recognition in different regions has been really, really favorable.

But if you think about the market opportunity, what it's led us to do is go from just being at the governmental and integration layer levels right down now to the hospital level. We are seeing that the market size from where we can add value is like I'll make up a number, but 10x to 15x larger.

And then just last question on -- with your AI business, what are the main areas that you're kind of -- you're working on proof of concept, but just in general, in terms of commercializing the business more. Can you talk about kind of what the main initiatives are?

Sure. And just for the vernacular, we use proof of value because I think the concept and an important distinction is the concept is clearly been proven. What we're demonstrating now is that our deployments are providing value to a health care system. So look, as we look across the opportunity set, the best way to think about it is that if we just take a small subset to get the numbers relevant, if you took the top 100 health care systems in the U.S. and what you have there is a patient identification of where just 100 disease states would mean up to 2 million patients are being either misdiagnosed or underdiagnosed.

And so for us, the opportunity set there is to take just a small subset. So to prove that value that we could take 10 most relevant, whether that's from [ heart valves ] or through oncology, what we're trying to do is take a very small subject to prove value before we take the wider array of products out. But in general, we can find 105 different disease states, and we think just the top 10 would cover about 1/3 of the opportunity. So we're trying to remain disciplined and focused with a smaller subset so we can prove scale first in the North America.

We'll move next to Michael Freeman at Raymond James.

Congratulations on the quarter and all the action. I wonder if -- first, congratulations on the launch of Amadeus AI. I'm glad to see this being deployed through the Orion network. I wonder if you could describe some of the traction you're seeing, some of the reasons why your customers might be adopting this. And then I wonder if you could describe, I guess, preview for us, a product road map of where you're going to further leverage your internal AI capabilities through the organization.

Yes, great question. I guess let's start with the reasons. So we'll just use one example. And so the example we like to use as we go through it. So if we've got 105 disease states, what does that actually mean? The one that we try and use is the cardiovascular. So Alex, do you want to give a rundown, obviously, we presented that recently of the one project we're running through in the U.S. right now.

Yes, sure. We would love to. And Michael, thanks very much for the question. So I think one capability that, of course, we kind of anchor around the mission of the company, right, is early disease detection, okay? So -- and what does that mean now practically deployed, right, within a health system or a public sector partner?

Well, one example is our capability to be able to screen patient populations and find these at-risk patients and effectively produce a list that then physicians can go and take action on. And one particular example we're working on is there's a number of patients that have worsening heart disease, and they're great candidates for having a heart valve to be replaced. So we're able to identify these patients that are fully reimbursable that should be on track to have this intervention. They're effectively patients that have fallen to the wayside. And we're able to identify them, get those lists to the physician, the physicians can then take action. And then it leads to a number of interesting outcomes.

Number one, of course, the patient is on the right and appropriate care pathway. But number two, this is also a revenue-generating initiative for the hospital system. So that's kind of one clear example of us working very focused in one area, which is in cardiology. And then there's, of course, a host of other areas and domains where we have expertise to be able to execute against this.

Thanks, Alex. Well, I think it's that definition in the U.S. that the American market sees it as a revenue opportunity as opposed to a outcome you see in Commonwealth countries, which has been both not surprising, but really encouraging about the adoption rate in the U.S.

Okay. And I wonder, in that cardiology example, it appears that the health care system is your customer, where there might be -- there also may be an opportunity with the specific heart valve companies like working with in Edwards, and which resembles the approach perhaps that you're taking with the life sciences companies linking up with Cure Health. Can you describe the reason -- I guess, the rationale for pursuing health care systems versus working directly with life sciences companies in this way?

Yes. Look, I guess there's a bunch of stuff in that. I'd start from the basis they're not mutually exclusive. So we can do both. It's the same data with the same signal. The second thing I'd say is that it depends where the data sources, right? And so if you're using a hospital's data rather than our data, the hospital is using the componentry of what they already have for their own benefit, and we're enabling that and giving them insight. They may not wish other people to have that access to that data. But more importantly, we think about it as 2 flywheels. And so what I mean by that is that the flywheel we have in Canada of identifying patients and working with life sciences creates more opportunities and more disease states and knowledge to then go to a health care system and say, there are other ways we can use this data. And what we're finding is you can do both.

So yes, we can maintain our work with our life science customers. But in different regions, the health care system, what you got to remember is the core component of what we put together, why Orion and HEALWELL made so much sense because their business is health care systems as opposed to life sciences businesses. But the adoption of AI within health care systems will be at a different rate than it will be in life sciences. So we see them as not mutually exclusive, but we actually see them as complementary, Michael.

Okay. All right. And last very quickly. We just -- from last quarter to this quarter, we saw health care software revenue step down marginally. Can you explain this step down and perhaps let us -- get us your thinking on when we expect that segment revenue to turn around and begin growth?

Yes. Good question. I think, look, professional services, there are 2 things going there. Obviously, it's not a straight line. It's a lumpy business. So you'll have one quarter will be up, one quarter will be down depending on deliverables. What I would say is that the growth comes in is not a linear line. It will come in like every time a new customer comes is significant, but it's not a week. And so professional services quarter-by-quarter will be lumpy. This quarter, we were working through obviously Northern American summer. So customers being ready to take product as a core component of professional service revenue and hitting key milestones. So look, I don't want to give the impression that it's a straight line professional services. There will be some quarters. Obviously, Q2 was a positive quarter. It was above expectations.

In terms of growth, you should expect that some years, that business will grow at 5% and the other years it will grow much higher rate than that depending on whether -- when new customers land because when you win a new customer, professional services revenue comes in before recurring. And that can be a 1-year lag before we implement into the recurring from professional service revenue. So our focus in '26 is clearly driving our AI and data science revenue, which is probably more linear.

We'll go next to [indiscernible] at Canaccord Genuity.

Congratulations on the quarter and recently announced divestments. So my first question is on the Middle East partnership that you recently announced through an MOU with Lean Business Services. Would you be able to tell us more about your plans in this region and what this opportunity entails?

Yes. Look, Lean has been a wonderful partner for the business as it is before. Look, I think what we see with Lean is that they've built real capability in the region and over the top of our existing products. So the opportunity set for us is taking what they've already built across our platform globally, and then within the region for them to be a reseller of what we've built in their environment. That will open up materially new markets that we don't have access to in sales capacity within the Gulf. And our global footprint of taking some of their products is material as well. So we see it as one of the few win-wins you can have in health care where it's noncompetitive. We look at the region the relationships, the expertise they have to expand, and we obviously have the global reach within our network.

That sounds pretty exciting. And then maybe a follow-up on HEALWELL's appetite for additional M&A. So following your recent meetings with several potential targets from the U.K., as you mentioned, and what does your pipeline look like? And given the recent divestments, do you think you're in a better position to resume M&A activity?

Look, M&A activity has been a core component, being good allocators of capital for HEALWELL. We're maintaining a deep pipe of various stages across all parts of the market. The reality is that we're looking currently at tuck-ins, as we said, the key focus for us in the next 6 months is remain disciplined and focused, but not give up the pipeline. So what I mean by that is the deals that we're looking at will take longer than 3 months to consummate, but we don't want to distract the team from what the opportunity set is improving value.

I'm sure everyone on this call is looking forward to when we can show the clinical validation and commercial validation across the Orion network. And we're very, very focused on demonstrating that. So what I think you can expect is that M&As will be a core component of the business. But for the next quarter or 2, we need to demonstrate the organic and commercial validation of what we're doing, not just the clinical validation.

Sounds great. Certainly, I'm looking forward to hear more good news from you guys.

We'll take our next question from Rob Goff at Ventum.

Congrats on all the efforts and successes within the quarter.

Thanks, Rob. It's been a busy quarter, but the teams did really well. So it's exciting to be here.

Very good. And looking forward, can you discuss the current POVs outstanding? And how would you measure the success or performance of expanding that pipeline of POVs in the first quarter?

Well, I think Alex did a great job of explaining one of those POVs. What we're doing is -- but I'll talk about sort of how it works. We take a small portion of their data to prove the value that we're talking about. So rather than give them a list on all of their patients, we give them a list of what they can deal with in the next quarter. And so it's -- what we're building in the -- particularly in the U.S. is a rinse and repeat model, so we can go and take the same algorithm to a different non-competitive health care system. And so given the sheer size of the U.S., what we're trying to do is focus on a small set of subsets of our capability, demonstrate it at scale and then land and expand.

Now what we're seeing is that there are multiple different uses. So we're not looking at just like hospital systems. We're looking across med tech businesses, government entities, regulators, pharmacies. So what we're trying to do is demonstrate the breadth of different health care systems that we can integrate with not just -- and I use health care systems as vernacular to anything outside life sciences. The core components, the insight that we can get from that clinical data, whether that's used by health care systems, life sciences, hospitals, insurers is the same insight. It's just got multiple use cases.

Okay. And perhaps it's simplistic, but in terms of tracking it, is something where you could say you currently have 5 proof of values and you're looking to add another 5 in the first quarter or anything to track the momentum there?

Yes. No, in first quarter, we'll come through how we think about those numbers. But I think the numbers you had there, we're doing more than those. What we're trying to do is be very disciplined this quarter to ensure they're successful. And then we'll start tracking out both the scale of where we're going in the different markets. But our initial approach is to try and have one in each region and one in each product. And so there's well north of 5. But you'll see us talk about those numbers in early 2026.

Very good. And one last question, if I may. Could you discuss your RFP pipeline? Is it an active market at this time?

Look, yes, the RFP pipeline is actually quite active. What we're finding is that there's multiple RFPs for all of our products in most regions. AI-enabled platforms are now becoming part of the RFP process. We're starting to see in Europe, in particular, the RFPs, including other common use cases, including how you integrate with life sciences. I think health care systems are becoming a lot more open to what they do with their own data. And so our experience of working in life sciences in North America is a real value outside the rest of the world. Yes, 2025, we saw an election cycle, both in Canada and the U.K., which slowed down adoption. But what we're seeing now is that the RFPs are back on right across the business. In fact, every part of our business has got a significant pipeline of RFPs. Obviously, what I would say in health care systems, they are long-dated, big processes, big dollar values.

Our next question comes from Brian Kinstlinger at Alliance Global Partners.

So as adoption of your AI increases, and I know you're targeting 50% plus annual growth or more, how should we think about the mix of professional services versus subscriptions in that one segment?

Look, that's a really good interesting question, something you'll see us define more clearly in forward quarters. I think professional services in our AI business probably looks more reoccurring. And so it's not as professional services like it is in software. And so often we find in life sciences that it is a multiyear relationship, not a one-off PSG. So I think we're going to -- we've obviously taken the feedback on that from the investor and analyst community that we need to do a better job of describing that what is PSG and software is not PSG and AI and data science.

But the sequential reduction in professional services, that was a one-off project, yes, excluding the divestiture.

Now are we talking now in AI and data science?

We are, yes.

Yes. No. So Northern Hemisphere quarter, the summer is you're going to see seasonality. We definitely see in life sciences, holidays being taken. And that's why we saw the ramp-up in September, significant ramp-up in September versus July and August.

That's helpful. My last question is, as we look at the subscriptions revenue piece of AI, I know pharma and life sciences makes up the majority of that. Are there any hospital systems or clinics or anyone else taking outside of life sciences that are paying for subscriptions yet?

We do work with all of them. I think the reality is that they're de minimis in the scheme of things currently, the life science is the bulk of them, that you'll start to see that revenue be recognized and grow materially as we go into 2026.

We'll go next to Daniel Rosenberg Paradigm.

My first one just comes around the proof of value that you spoke of. I was just curious how easy or hard is it to go to market with these proof-of-value concepts? Do you find it's early adopters? Or is it more broadly than that? People are curious to explore the capabilities of the AI.

Look, I would say the adoption cycle in North America is faster. It's not just early adopters. I think the reality is that it's a new segment in the U.S., helping burdened and profit struggling entities find patients where they can generate revenue and give better patient outcomes is something that hasn't really existed over there. So I think what we're actually seeing is that it's not just the early adopters, but actually people with large bases. It means the conversations are swiftly with CFOs, not just with medical offices.

So what I would suggest is that what we're seeing in the U.S. because of the profit-centric nature of that health care system is that the adoption cycle to get to procurement is faster. Procurement and legal is still a slow process. It's weeks and months, not days, but I would say that we are at the very front line of what AI experimentation has been happening in the U.S. I mean a lot of what is workflow tools and our tools are very different to that.

And then you mentioned some -- the time it takes to go through procurement and legal. So how do you think about the sales cycle? And then perhaps as you think about competitors trying to go to the market, is there an advantage you have there just based on Orion's history, the Pentavere research you have out there? How helpful is that getting you through the door?

Look, immensely helpful. I mean, at the end of the day, what you need in any market is cut through. So we have an established brand that's been there 20, 30 years. We're not a start-up. We have clinically validation -- clinical validation on multiple disease states. We're not picking on one thing with one department. We can talk across most components of health care. And so we are peer-reviewed published, and I think the number grows every day, but from my understand, it's well over 50x now, I think 45x, 3 months ago. So we're publishing on a regular basis, new disease states.

And I think even our validation we've got with life sciences, we work with the largest life sciences companies in the world. So I think that validation component and reputation is vastly important because privacy and security is a core competency in the U.S. you're using health care data. So as we walk along in a, what I would say, sea of AI, I think we really stand out. It's very hard to find anything that's been clinically validated and peer reviewed published as often as we have. And certainly, it's very hard finding with the long-term reputation that Orion has had. So going back to the industrial logic of the 2 acquisitions, Pentavere and Orion, we are seeing market fit and why that works in the U.S. right now. But I use U.S. loosely, like I think North America is probably is a better phrase than just the U.S.

Good to hear. Last one for me, if I may. It sounds like early disease detection, we're obviously in the very early days of AI, very early days of proof of concepts and showing -- commercializing it. But it sounds like it can expand dramatically. I'm just wondering how do you think about that balance of taking one concept, growing it, scaling it versus expanding into other verticals and the cost and resources to do that.

Yes. Look, we've taken the approach of "crawl, walk, run" as Sacha, our COO, will talk about. So what we've gone into is make sure that the foundations of how we get the data out and how we put into our algorithms is scalable and repeatable. And so a lot of the work at the moment from the team and make sure the technology is deployed on the ground. So our core part of this is going to the U.S. is the data can't leave the U.S. So we have to deploy a team there. But once we've got the infrastructure right and we know what disease states, it's actually a relatively fast follow-on of the next step. Once the pipes are in, if you think about it, of how we get the data out, we know what to look for and set DARWEN over. We just need to tune it.

So it's the same clinical data we're pulling out and it's just different insights we're drawing from it. So when you think about the model, the model was new health care systems, there is a deployment of getting the data into DARWEN. But once you're in there, then expanding it over 1 disease state to 10 to eventually 105, that stage is a much faster and easier deployment cycle than a new customer. And so our focus today is to go wide and then go deeper.

We'll move next to Justin Keywood at Stifel.

Nice to see the results. On the MOU with Lean Business Services in Saudi Arabia announced last week, are we able to quantify that opportunity? I know historically, Orion has been very active in the Middle East. And how should we monitor that opportunity going forward? And any indication of the potential TAM or size?

Yes. Look, obviously, it's early days in any MOU. But what I would suggest is, yes, there has been success in the Middle East, but I think the Middle East is a much bigger market. And as health care systems grow, the wonderful thing that the Middle East has and why Lean is such a great partner is there are regions where we don't have people on the ground. And so working with them to deploy some of our platforms in either the Middle East or even if they take it to Africa, the regions that we're not focused on currently.

And so the reality is what is a wonderful partnership because what it brings to us is that we focus on our core markets where we've got expertise, people on the ground, talking Europe, North America, Asia. But in the areas where we don't have capacity, we don't have to give up on those. And so Lean is a wonderful partner in that thing that it's a conjunct, if you like to think about it, and bring parts of the market that we're not currently servicing.

Interesting. Absolutely. And then just on the growth in the quarter, obviously, a big step-up. Is there any indication of the organic expansion?

Yes. Look, the short answer is that, obviously, AI is predominantly organic expansion and growth. And I appreciate your comment that much of our software growth has been the Orion and VeroSource acquisitions. The reality is in the sector is that between Q2 and Q3, the professional services number was flat to down. And so the organic growth was, therefore, very low between the quarters. I think you will continue to see that PSG being volatile, as I said before, and that will come in a lumpy stage. The nature of the contracts is they are very large, but long dated. And so it won't be a straight-line quarter-by-quarter growth.

Next, we'll move to Gianluca Tucci at Haywood Securities.

Just one question here. Could you perhaps update us on how you're seeing cost synergies play out across the entities post Orion acquisition?

And, [ Lam ], why don't I leave that to you.

Yes, absolutely. Great question, Gianluca. Since the acquisition, we've been really ramping up our work with the team at Orion. And we've got, as you can appreciate, a mature experienced team there and looking at the best of all our business units, and we're finding that there's some really good synergies that we will realize. It will take a little more time for us to see that. We'll see that benefit as we get into the 2026 fiscal year, but we're certainly seeing a lot of benefit to having the large team there that has the experience we need across the organization. And so those synergies will be realized. It just -- it will be something that we'll see in 2026.

Okay. And if I could just ask follow-up question on the sales cycle process. As you work through these POCs or POVs, James, are you seeing more eagerness from clients who have a better understanding of the technology just given the state of AI globally today?

I'll sort of paraphrase that a little bit. But the -- particularly in the U.S., the understanding and willingness to deploy AI is very high. Some of our health care systems have got 50-plus projects that have been [ tried them ] in any quarter. So there's definitely an understanding that to improve profitability, they need to use AI a lot. And there are a lot of different products. What I would suggest is that most of the workflow products that they've seen currently to reduce that burden. You've probably all seen charts that the administrative burden of health care is way outstrip the cost of health care from a clinical point of view, particularly in the U.S. So they're trying to solve that burden. And where we're coming in a different space because of the willingness to look at AI is that we're in a very narrow field of -- by the way, we can find revenue. You can focus on your cost through the other providers, but we are a different type of AI solution for you. And that has a real cut through.

And that concludes our Q&A session. I will now turn the conference back over to James Lee for closing remarks.

Look, I just want to thank everyone. I really appreciate the engagement. Look, Q3 was a big quarter for us. I think I read a research report saying it was surgical amputation, which I thought was a lovely way to phrase it that we've gone through the business. We've looked at what we need to sharpen our business. And going into the end of the year and next year, we're really excited about what we're seeing. I think we're looking forward to talking to you early next year about these proof of values and showing commercial validation. But thank you for everyone's support to the team. Thank you for your hard work and throughout to the Board and to our shareholders, we appreciate all the support. All the best.

And this concludes today's conference call. Thank you for your participation. You may now disconnect.