Claritev Q2 2025 slides: Revenue growth resumes with 3.5% increase, margins expand

Claritev Corp (NYSE:CTEV) shares fell 2.83% in premarket trading to $38.40 despite reporting a return to growth in its Q2 2025 earnings presentation on August 6, 2025. The healthcare technology company posted a 3.5% year-over-year revenue increase, rebounding from the previous quarter’s decline, while expanding its adjusted EBITDA margin by 94 basis points.

Quarterly Performance Highlights

Claritev reported Q2 2025 revenue of $241.6 million, up 3.5% from $233.5 million in the same quarter last year and a 4.4% sequential increase from Q1 2025’s $231.3 million. Adjusted EBITDA reached $154.0 million with a 63.8% margin, improving from 62.8% in Q2 2024.

The company highlighted several key achievements during the quarter, including securing an enterprise subscription deal worth $80 million in total contract value (TCV), launching its International Business Unit with an agreement with Burjeel Holdings, and implementing a new ERP system to accelerate its transformation roadmap.

As shown in the following financial highlights chart:

"We’re pleased to report a return to topline and profitability growth this quarter," said Travis Dalton, CEO of Claritev, during the earnings call. "Our 103.5% total net revenue retention rate demonstrates the strength of our client relationships and the value we continue to deliver."

Detailed Financial Analysis

Claritev’s performance varied significantly across its three service lines. Network-Based services showed the strongest growth at 18.4% year-over-year, reaching $54.1 million. Payment & Revenue Integrity services grew 9.4% to $30.5 million. However, Analytics-Based services, which represent the company’s largest segment at $157.0 million, declined 1.8% compared to Q2 2024.

The quarterly results by service line demonstrate these divergent trends:

The company processed $43.8 billion in medical charges during the quarter, identifying $6.3 billion in potential savings, representing 14% of charges processed. This highlights Claritev’s continued focus on its mission to make healthcare more affordable and transparent.

Network-Based services showed particularly strong performance, driven by Complementary Network and Primary Fee For Service offerings. The company implemented a new network at a large TPA client and secured non-recurring revenue related to a new agreement in the property and casualty market.

Analytics-Based services, despite the overall year-over-year decline, showed signs of improvement with 2.3% sequential growth from Q1 2025. The company noted that excluding attrition at one large client, this segment would have grown 2.9% year-over-year.

Strategic Initiatives

Claritev continues to execute on its vision "To Make Healthcare More Affordable and Transparent for All" through a multi-faceted growth strategy across different market verticals. The company made progress in each of its target markets, including securing five new logos in the Payors/TPA segment, hosting its first Broker Summit, and expanding its government and provider relationships.

The launch of the International Business Unit represents a significant strategic move, with the first signed contract with Burjeel Holdings and active development of new product offerings for the Middle East and North Africa region.

The company’s vision connects various stakeholders in the healthcare ecosystem through solutions focused on affordability, transparency, and quality:

Forward-Looking Statements

Claritev updated its fiscal year 2025 guidance, projecting flat to 2% revenue growth compared to 2024, while maintaining its adjusted EBITDA margin guidance of 62.5% to 63.5%. The company increased its capital expenditure expectations to $170-180 million and provided free cash flow guidance of $(20) million to $20 million.

In terms of capital allocation, Claritev is prioritizing organic investments to fuel its Vision 2030 Plan, followed by debt paydown. The company currently maintains a high leverage ratio of 8.0x with $4.6 billion in first lien debt against TTM adjusted EBITDA of $579 million.

"Our capital allocation strategy reflects our commitment to long-term sustainable growth while strengthening our balance sheet," noted the company’s CFO during the earnings call. "We’re focused on organic investments that will drive future growth while gradually reducing our leverage."

This quarter’s results mark an important turnaround for Claritev after the company reported a 1.4% revenue decline in Q1 2025. The return to growth, particularly in the Network-Based and Payment & Revenue Integrity segments, suggests the company’s diversification strategy is yielding results. However, the stock’s negative premarket reaction indicates investors may remain cautious about the company’s high debt levels and the continued challenges in its largest segment, Analytics-Based services.

Full presentation:

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