Earnings call transcript: Claritev Corp Q2 2025 sees revenue rise, stock dips

Claritev Corp reported a modest increase in revenue for Q2 2025, with a year-over-year growth of 3.5%, reaching $241.6 million. Despite the positive financial performance, the company’s stock experienced a premarket decline of 1.85%, trading at $38.79. According to InvestingPro data, the stock has shown remarkable strength with a 167% year-to-date return, though current analysis suggests the stock may be overvalued based on its Fair Value assessment. The company has also revised its full-year revenue guidance, forecasting a flat to a 2% increase. The earnings call highlighted new product launches and operational adjustments, including a focus on AI initiatives and cost reductions.

Key Takeaways

• Revenue for Q2 2025 increased by 3.5% to $241.6 million.
• Adjusted EBITDA grew by 50.9% in Q2.
• Stock price fell by 1.85% in premarket trading.
• Full-year revenue guidance was adjusted to flat to up 2%.
• New AI initiatives and product launches were announced.

Company Performance

Claritev Corp demonstrated a solid financial performance in Q2, with total revenue reaching $241.6 million, marking a 3.5% increase year-over-year. Year-to-date revenue also showed a healthy growth of 5.4%, totaling $472.9 million. InvestingPro analysis reveals the company maintains a healthy gross profit margin of 74.15%, though it operates with significant debt and faces profitability challenges. For deeper insights into Claritev’s financial health and growth potential, investors can access comprehensive Pro Research Reports covering 1,400+ top stocks on InvestingPro. The company benefited from strategic initiatives, including the launch of the CompleteView platform for healthcare providers and a focus on AI-driven solutions. Despite these advancements, the company faced challenges in maintaining its stock price, which dipped in premarket trading.

Financial Highlights

• Revenue: $241.6 million, up 3.5% year-over-year.
• Adjusted EBITDA: $154 million, reflecting a 50.9% increase.
• EBITDA Margins: 63.8%, aligning with the full-year midpoint target of 63%.

Outlook & Guidance

Claritev Corp has adjusted its full-year revenue guidance, expecting it to remain flat or increase by up to 2%. The company anticipates high single-digit revenue growth potential in the coming years, with most new pipeline opportunities converting to revenue by 2026. The strategic focus on AI and cloud infrastructure, as well as cost reduction measures, are expected to support these growth targets.

Executive Commentary

CEO Travis Dalton stated, "We are delivering on the turn in ’25, with strong financial performance and discipline." CFO Doug Barrett added, "The financial foundation we’ve rebuilt this year is strong." These statements reflect the company’s confidence in its strategic direction and financial health.

Risks and Challenges

• Market volatility could impact stock performance.
• The transition to AI and cloud-based solutions may face technical challenges.
• Cost reduction efforts, including facility closures and headcount reductions, could affect employee morale.
• Increasing competition in the healthcare technology sector may pressure market share.
• Economic uncertainties could impact future revenue growth.

Q&A

During the earnings call, analysts inquired about the increasing friction between payers and providers and explored potential revenue growth scenarios for 2026. The company detailed its performance in the IDR process and emphasized its strong market positioning, with a 22% win rate.

Full transcript - Claritev Corp (CTEV) Q2 2025:

Sami, Call Coordinator: Hello, everyone, and thank you for joining the Claritev Corporation Second Quarter twenty twenty five Earnings Call. My name is Sami, and I’ll be coordinating your call today. In the interest of time, we ask that participants limit themselves to one primary question and one follow-up question each. I’ll now hand over to your host, Shauna Gassic, AVP of Investor Relations to begin. Thank you, Shauna.

Please go ahead.

Shauna Gassic, AVP of Investor Relations, Claritiv Corporation: Thank you, Sami. Good morning, and welcome to Claritib’s second quarter twenty twenty five earnings call. Joining me today are Travis Dalton, President and Chief Executive Officer and Doug Barrett, Executive Vice President and Chief Financial Officer. This call is being webcast and can be accessed through the Investor Relations section of our website at claritiv.com. During our call, we will refer to the supplemental slide deck that is available in the Investors portion of the website along with the second quarter twenty twenty five earnings press release issued earlier this morning.

Before we begin, a couple of reminders. Our remarks and responses to questions today may include forward looking statements. These forward looking statements represent management’s beliefs and expectations only as of the date of this call. Actual results may differ materially from these forward looking statements due to a number of risks. A summary of these risks can be found on the second page of the supplemental slide deck and a more complete description on our annual report on Form 10 ks and other documents we file with the SEC.

We will also be referring to several non GAAP measures, which we believe provide investors with a more complete understanding of Claritin’s underlying operating results. An explanation of these non GAAP measures and reconciliations to their comparable GAAP measure can be found in the earnings press release and in the supplemental slide deck. With that, I would now like to turn the call over to Travis. Travis?

Travis Dalton, President and Chief Executive Officer, Claritiv Corporation: Good morning, everyone. Thank you for joining us today for our second quarter twenty twenty five earnings call. I’ve been eagerly awaiting this call to share my excitement around our achievements during the second quarter and, more importantly, the forward momentum we’re building for the remainder of the year and beyond. We’re halfway through 2025, and Claritiv is truly delivering in the year of the turn, as you can see from our earnings release this morning, with year on year revenue growth in 2025 supporting our full year guidance raise. I want to start off the call reiterating our guiding principles: clarity of purpose, alignment of talent and focus on results and how they shape the value we deliver to our clients as a fit for growth organization and allow us to think big when it comes to the health care ecosystem.

These are driving the results you are seeing in supporting our full year expectations and the way up heading into next year. I will then walk through our market verticals and share key highlights for each. Finally, before turning the call over to Doug for a CFO update, I will provide some updates on our digital transformation, which is driving accelerated product development. We’re pleased with our improved results and are building on the foundation of clarity alignment and focus heading into the second half of twenty twenty five and 2026. We’re clear on our purpose to make health care more affordable and transparent for all and thrilled with our new brand launch and progress.

We have aligned the organization for growth around six market segments, five of which are new focus areas and continue to attract world class technology, AI and sales talent. Finally, we are focused on our improved operating model and metrics, some of which you are starting to see in our reporting externally. We will continue to build on this foundation as

Sami, Call Coordinator: we move

Travis Dalton, President and Chief Executive Officer, Claritiv Corporation: forward. As I noted, we recently aligned the six focused market verticals, each with a clearly accountable leader and sales incentives to serve existing clients and new opportunity. This has significantly enhanced our ability to capture white space within existing clients, develop new logo relationships, and expand our total addressable market. You’re seeing that show up in results this quarter as we signed nine new logos and closed on 135 opportunities and $16,000,000 in annual contract value, achieving our quarterly targets. We are improving our operating model to take in new ideas, evaluate those, prioritizing its product roadmaps and launch.

Urgency is distilling the critical few from the many inputs and focusing on completion with organization and energy. In just three short months, we’ve been able to go from concept to contract with our partners at Burjeel in The Middle East. They see clear value with our advanced code editing products to produce efficiency, and this is a great example of a horizontal product serving a new vertical market. We’re happy to be returning to top line and bottom line growth this quarter. We’re also seeing the growth in our pipeline development.

During the 2025, we created over $130,000,000 in new pipeline. And as of the end of Q2, our pipeline increased 77% compared to the start of the year. The mix within the pipeline is consistent with our prior quarter, with roughly half from existing client white space and the rest from net new opportunity. We are confident in our foundation, principles and our fitness for growth. All the transformational changes we are making are organized, structured and producing results.

The collective mindset of our entire associate base is zoned in on our five key pillars as we communicate the value of our broad base of products through each of our market verticals. We have moved to a merit based performance management approach, and every level of the organization is aligned and measured against the key objectives of the company centered around world class delivery, new market expansion, and technology and data advancement. These, aligned with our market verticals, are creating real value. Now let’s take a look at Q2 in each of our six market verticals. I have told the team repeatedly to keep the main thing the main thing, and that is an intense focus on our existing core client base and product sets.

Not only do they provide the majority of our revenue today, but we believe have material growth potential as we continue to innovate in other products and market verticals. So let me start by talking about our core and historical client set. At the core of Claritiv are our payer and TPA client relationships. Our teams remain steadfast in providing world class service and solutions to not only maintain the current level of offerings, but introduce new ones into the client white space. And our clients are seeing the value.

We’re excited to share that we recently renewed a top five client for a five year period ahead of schedule. That is on top of the top 20 client that we renewed for five years earlier in Q2, which we announced on our last earnings call. We also had a nice organic sale with our ProPricer solution to an existing client for an incremental $6,000,000 in annual contract value and a white space win with Data EyeSight. Our core is secure, and we aren’t just holding on, but we are proactively seeking growth in this area. In our TPA segment, we’re pleased to share that we signed a significant agreement with an existing client that meaningfully expands its adoption of our network and analytics solutions.

Most notably, this agreement includes the enterprise wide deployment of BetInsights, replacing a key competitor’s platform. This is a ten year subscription based contract with minimum total contract value of $81,000,000 and carries additional upside potential of $20,000,000 or more over the term. Importantly, this marks the largest win to date for Ben Insights in our data and decision science suite, underscoring the growing demand and competitive strength of our solutions in the marketplace. This is how I see the market starting to evolve, with subscription based pricing, bundling licensed software solutions with licensed software support like BEN Insights. This allows us to continue to build a predictable recurring revenue base while also aligning with our clients and partners on upside potential and value sharing.

I’m also very excited to note we are attracting new clients as well with five new payer and TPA logos in Q2, including a new blue client logo win. The broker and employer market continues to seek innovation innovative solutions to manage health care costs while improving employee satisfaction and outcomes. Key milestones in Q2 in this market include hosting our first regional Claritve Broker Summit. 11 organizations attended the conference, which yielded over $1,000,000 in new pipeline and closed opportunity. We are here and more aggressively pushing the competition.

We also launched a premier broker incentive program targeting top national brokers to drive a greater reach for our products, including VDHP. We also won a new logo and closed our second direct to employer win, which will serve as our pilot client to build and test new integrated functions for our VEN Insights product with Oracle Human Capital Management. This is an exciting early development for us. When I joined the company over a year ago, it was immediately apparent to me the value our talent and solutions could bring to the provider market, particularly in rural America, where health care providers seek transparency and analytics solutions to optimize their operations and financial performance. Since we launched into the provider market, we formed an alliance with the National Rural Health Association, tested our thesis with several pilot programs, and eventually developed our CompleteView platform, which provides comprehensive transparency analytics that help providers understand their position in the market and optimize their cost structure.

I’m excited to announce that in Q2, we signed three new provider logos, selling not only CompleteView but network access and other data analytics products. Our pipeline is continuing to grow as we aggressively go to market and bring value to providers across the country. Next, international expansion represents a significant growth opportunity, the overseas health care challenges being similar to those in The U. S. It represents another market vertical where our products and solutions can provide immediate value.

Clarative solutions in The Middle EastNorth Africa region provide improvement in claims and payment accuracy, reduction in burdensome appeals, reduction in administrative resources, transparency to all parties, and standard and custom population health insights. As announced back in May, we’ve established an operational agreement with Pergeo Holdings and closed on our first contract with its subsidiary, ClaimsCare RCM, making our entry into key Gulf Cooperative Council countries within MENA. The breadth of our service offerings is allowing its relationship to bear even more fruit as the two sides continue to explore other solutions and efficiencies that can be developed in the region. We also plan to use this model to expand our proven solutions to more new geographies and possibly develop new offerings that would be applicable back in The U. S.

Market. U. S. And state government health care programs also represent significant opportunities for our transparency and cost management solutions. Our vision is very much aligned with government initiatives on price transparency services and reducing fraud, waste and abuse.

We stand ready to participate in meaningful discussions on thought leadership on these topics and execute on any such optimization projects and solutions. Finally, strategic partnerships are a key growth channel to create scale for our solutions and products. We continue to advance our partnership with Echo on payment offerings and signed three new clients in Q2. We are pursuing payments in a much more strategic and targeted way. The three wins this quarter were all competitive, and our value proposition and delivery capability stood out.

The pipeline for this service is strong, and we are starting to see inbound requests for this service from our existing clients. In addition to the Lantern partnership we announced on the last earnings call, we recently announced the integration of CompleteView into the athena marketplace. Now athena Health’s network of health care providers is empowered with CompleteView’s insightful analytics of publicly available pricing records. The latter relationship also highlights another strength of some of our partnerships, namely the ability to drive high inbound demand for our products versus active outbound prospecting. This is also true for the accessibility of BEN Insights within the Oracle HCM Marketplace platform, where we have seven active joint client efforts.

These partnerships can provide highly aligned value for us and our partners. Success in all of our markets relies on scalable and reliable technology platform and continuous pipeline of innovative products and enhancements. That is why the transformational shifting of our technology infrastructure, Oracle Cloud infrastructure, is so critical to our long term growth. OCI has already shown 13% to 17% improvement in our client response time and upload and download speed as compared to prior on premise processes. This creates a more stable environment for our solutions as we scale across multiple market verticals and geographies and allows us to innovate faster while delivering enhanced value to clients.

We are on schedule for the completion of the migration project before the end of the year. Both our partnership with Oracle and the recent hiring of a new Chief AI Officer, Fernando Schwartz, will accelerate our AI strategy and enable us to deliver new products to market faster, at scale, and for less cost. AI is undeniably a transformational force that will change how we work across all industries. We already have a dozen active predictive AI initiatives with wide ranging potential impact on operational productivity, revenue generating models and risk modeling, to name a few. And our team will use it responsibly.

We have a governance policy and process as well as having announced our membership in the Coalition for Health AI, which advances responsible development, deployment and oversight of AI in health care. All of this progress and being fit for growth allows us to think big. The impact of enhanced intelligence on the health care industry is closer than we think. Soon, we can expect to see AI deliver autonomous coding, automated prior authorization, and document processing tools that will reduce claim denials and accelerate reimbursements. These efficiencies create a trusted foundation that will soon support more patient facing advances, like AI that streamlines clinical documentation and decision support.

Imagine a world where the currently misaligned incentives start to come into balance with better data, clearer pricing, faster paths to free cash flow and less administrative burden. That world is possible, and we will be tracking alongside its development with solutions that harness and enhance these efficiencies. With that, let me just say I’m having the most fun and am as motivated as I’ve ever been in my professional life. We have great clients, great people and great purpose. We are now starting to see great results.

Put that together and our future is very bright. I will turn the call over to Doug to walk through our Q2 financial performance, impact from the recently passed One Big Beautiful Bill Act and as well as our updated full year guidance. We’ll then jump to Q and A before coming back to me for some closing remarks. Thank you.

Doug Barrett, Executive Vice President and Chief Financial Officer, Claritiv Corporation: Thank you, Travis, and good morning, everyone. As I reflect on my first year at Claritive, I can confidently say that we are stronger, more focused, and more energized than we were at this time last year. The clarity of our execution, the alignment across our teams, and the focus embedded in our operating model are starting to deliver tangible results. Q two is a key reason to believe that 2025 is really the turn, and I’m thrilled that we returned to a growth trajectory this quarter. I plan to cover selected q two and January financial highlights, and I will also give more color by service line as reflected in our supplemental earnings deck issued this AM, which continues to become more robust.

I will also highlight the profound and positive impact from the passage of H. R. One, the One Big Beautiful Bill Act. And finally, I’ll share an updated full year 2025 financial guidance before opening the call up for Q and A. Let’s get right into the numbers.

Total revenue in Q2 was $241,600,000 up 3.5% year over year and up 4.4% quarter over quarter. Year to date revenue came in at $472,900,000 which was above internal planning, represented a 5.4% increase year over year excluding the one client with no nutrition. It is an early signal that our go to market momentum is building. Adjusted EBITDA was $154,000,000 for the quarter and $296,100,000 year to date, reflecting 50.9% growth, respectively. Corresponding EBITDA margins were 63.8% in Q2 and sixty two point six percent year to date, healthy, stable and nicely tracking to the midpoint of 63% on a full year basis.

The strength of our core offerings allows us to confidently invest and nurture our expanding portfolio of products, solutions and markets. During Q2, core revenue grew year over year and sequentially, led by the network based service line and the nonrecurring revenue associated with a new commercial agreement in the Property and Casualty, or P and C, business. The analytics based service line revenue grew 2.3% sequentially, and excluding the impact of one large client, grew 2.9% year over year with solid performance in both our core and our key growth areas of VDHP and D and DS. Further, we expect our largest product, Data EyeSight, to deliver mid single digit year over year growth on a full year basis in 2025. The Payment and Revenue Integrity service line delivered another great quarter driven by volume growth and higher savings yield on process claims.

Our AI based advanced code editing product, ACE, posted strong double digit growth and is the solution we are broadly looking to enhance and deploy in international markets. Finally, a new commercial arrangement in the P and C business resulted in approximately 5,000,000 of nonrecurring revenue benefit this quarter. We expect a total of about $15,000,000 in nonrecurring in year revenue for 2025, with similar quarterly benefits to Q3 and Q4. In our growth products, we are gaining momentum. Travis gave a brief overview, but it’s worth reiterating our top line and funnel metrics.

Our funnel grew at a mid double digit pace sequentially. We generated over $130,000,000 in new pipeline during the 2025, with a June 30 pipeline balance representing a 77% increase since January. We are now actively pursuing a multi $100,000,000 opportunity set. Importantly, our growth areas, VDHP and DNDS, represented $90,000,000 or about 40% of the total sales pipeline. In total, we expect to book mid single digit percentage net incremental ACV this year, which will largely convert to revenue in 2026.

Finally, we closed our largest ever Ben Insights deal as part of a larger and unique enterprise agreement that will begin contributing meaningful recurring software subscription revenue in 2026. We remain disciplined with our operating cost. Adjusted expenses grew just 8% in Q2 0.8% in Q2. Personnel costs were higher due to talent and transformation related investments, partially offset by lower expenses in facility, legal and professional fees. Importantly, we delivered revenue growth in Q2 with 3% fewer headcount year over year.

Our multiyear transformation road map is pacing on schedule, and we’re continuing to enhance our processes with the implementation of a business case office to prudently assess new investments. So far during 2025, we shut down four facilities, streamlined product development through our chief medical officer, doctor Jigar Patel, who is now our chief product officer, and we are still very much on pace to meet our multiyear 10% to 15% net cost reduction and free cash flow improvement goals that we previously stated. In the near term, as we execute upon our transformation program, we may elect to increase investment in certain areas to help fuel growth, to develop new products and to accelerate entry into new markets. I wanted to take a moment to explain the profound and positive impact of H. R.

One, the One Beautiful Bill Act, to our business. Its reinstatement of IRC 174, the immediate expensing of capitalized software development, will reduce our 2025 cash tax burden substantially. We believe the catch up in current year impacts could result in 60,000,000 to $90,000,000 in free cash flow benefit this year and roughly $30,000,000 benefit per year going forward. This alone approves our Vision 2030 free cash flow outlook by greater than $200,000,000 over the next five years and provides us ample dry powder to execute against our Vision 2030 strategy. We will continue to assess the other business impacts from HR1, including the indirect effects of the changes to Medicaid eligibility and funding.

Although Medicaid related revenues currently account for approximately 05% of our total revenue, we are closely analyzing the implementation of HR1’s Medicaid provisions to proactively minimize any potential negative impact. A key focus area is the impact on rural health providers in the bill’s Rural Health Transformation, or RHT, provision. We will continue to work collaboratively to leverage data driven insights to optimize their financial position considering anticipated Medicaid shortfalls. On to guidance. Based on first half performance, we are raising full year revenue guidance to flat to up 2% versus prior year and maintaining our adjusted EBITDA margin guidance range of 62.5% to 63.5%.

Given the revenue raise in HR1, we are also raising the midpoint of our free cash flow guidance range from a use of $70,000,000 to flat for the year. By year end, we are targeting a full repayment of our revolver borrowing used to fund, our well timed debt refinancing completed at the January. We expect to end the year with net debt leverage under eight times. We are continuing to earn back trust, we are hitting our financial stride, and we’re making key investments now to fund growth in coming years. I want to end my comments by sharing that we have seen meaningful share price and debt fair value recovery in the 2025.

We ended the first half as one of the top 15 performing small cap stocks in The U. S. Public equity markets. We are also delighted to be re indexed and re entered the Russell two thousand and several other related indices at the June. Finally, the weighted average pricing of our long term debt portfolio, primarily publicly traded debt instruments, improved nearly 1,000 basis points between year end 2024 and June 2025.

I’ll end by saying that the financial foundation we’ve rebuilt this year is strong, and I’m pleased with the print this quarter. With that, Sami, will you kindly open up the call for questions?

Sami, Call Coordinator: Thank you very much.

Doug Barrett, Executive Vice President and Chief Financial Officer, Claritiv Corporation: Much.

Sami, Call Coordinator: Our first question comes from Joshua Raskin from Nephron Research. Your line is open, Joshua. Please go ahead.

Marco, Analyst, Nephron Research: Hey, good morning guys. This is actually Marco on for Josh. I appreciate you taking the question. Just wanted to see if you could further parse out some of the drivers of the revenue and EBITDA outperformance this quarter. Maybe parse it out by newly signed versus ongoing businesses and then the one timers as well.

It sounded like there were some one timers in the network services segment. And then it would also be helpful if you could parse that out for know, what are the drivers of the guidance increase today as well? Thank you.

Doug Barrett, Executive Vice President and Chief Financial Officer, Claritiv Corporation: Yeah. Sure. Maybe I’ll start with the the the easiest question, which is the driver of the increase, and it’s simply the the performance of the underlying business. And so we’re halfway through the year. We feel really good about the core and the foundation.

I think in some of the new supplemental materials, we’ve provided a little bit more color to help underscore the fact that our core business has stabilized. With respect to revenue and EBITDA in the quarter, we’ve seen meaningful pickup in our savings and revenue per claim. And we actually have done some pretty meaningful internal optimization work within our analytics and payment revenue integrity space to extract more value per per claim. So on the revenue front, most of the outperformance that we’ve experienced through the first half of the year is largely due to, I I think, things we’ve communicated over the last few quarters, which is our core business, has actually stabilized and performing quite well. And then when we think about, EBITDA, part of the pickup is the improved revenue, of course.

And then we did have a onetime, we had a onetime nonrecurring revenue pickup from a commercial agreement we signed in PNC. But then also, we’re doing a really good job managing our controllable cost. I mentioned we’ve shut, several facilities. We’re operating with less headcount than we did year over year. We’re actually purposely investing in, you know, new leadership and new talent to get fit for growth.

And then I think you’ll continue to see the reason why we still have a wide, kind of guide range. As the business recovers and we and we move forward, that gives us the flexibility to continue to invest to accelerate growth. But on the expense side, it’s it’s managing managing our business in real time and having strong accountability between our leadership team.

Marco, Analyst, Nephron Research: Great. Thanks. And then I guess just to pivot a little bit. We’ve been hearing a lot about increasing friction between payers and providers, especially in terms of provider up coding or payer denials or downgrades. So I was just wondering if you could speak a little bit to your view of the current environment, whether there’s been any changes that you’ve seen that are noticeable, and whether you see any incremental opportunities across your lines of business as a result of that increasing tension.

Thank you.

Travis Dalton, President and Chief Executive Officer, Claritiv Corporation: Yeah. This is Travis. I don’t think it’s any surprise to anybody that’s on the call that health care has some misaligned incentives, and that continues to be true. I think there’s always been some level of friction there that’s existed. Our our view hasn’t hasn’t changed.

I mean, we still view a lot of opportunity for transparent products. We think that it’s important to matters. We still think that there’s a mutual interest that exists. I actually see cooperation on things like prior prior authorization in some other areas that would be more efficient and create more efficiency. So although it’s been, you know, some natural, I would say, trying to parse out what’s going on with some of the recent legislation, I think many of the challenges still exist around affordability, transparency, and quality.

And I think that, the problem set and the opportunities are very much right in front of us. We’ve also Doug didn’t note, but I think we had strong growth in our Payment and Revenue Integrity business, and we see that as a continued trend, I think, over time, really combating fraud, waste, and abuse as we go forward and are very aligned with that. We think our products are a good fit for that. So we’re going continue to serve, and we think we have a role to play across the ecosystem.

Marco, Analyst, Nephron Research: Great. Thanks for all the color.

Sami, Call Coordinator: Our next question comes from Daniel Grosslight from Citigroup. Your line is open, Daniel. Please go ahead.

Doug Barrett, Executive Vice President and Chief Financial Officer, Claritiv Corporation: Hi, guys. Thanks for taking the question and congrats on the great results here. It’s nice to hear all the momentum in your pipeline, but it sounds like most of the pipeline, at least the new ones in the pipeline, really going to convert to revenue in 2026. Know you’re not guiding to 2026 quite yet, but I was hoping you could maybe put a framework together for us on how we should be thinking about growth in 2026 if core ex the attrition is growing kind of mid single digits and you have all these big wins converting into revenue in 2026, should we expect revenue growth to be closer to kind of the high single digits next year? Thanks.

Hey. Thanks, Daniel, and thanks for the for the dittos. So when we had our our recent investor summit in March, we had kind of put two flavors of what we think the business looks like in the short term and the long term. I would say, make no mistake, our long term plan is to grow this business substantially and, ratably. And a a big piece of that is having strong, stable foundation in our core, which is still over 90% of our business.

You know, I think why we’re we’re taking a little bit cautious of approach is because we wanna see a couple more quarters of progression in our core business. Part of the reason why we provided some supplemental materials in our earnings call is to demonstrate the business has stabilized. And we have talked through the the one known customer attrition issue, which I think we’ve played through incredibly well. To your point, we, we’re planning on booking mid single digit ACV this year, which will largely convert to revenue next year. We’ve also secured, you know, a good part of our contract base for a multiyear period.

And so we’re getting all the the ingredients ready to enter into a larger growth mode. We we do wanna see maybe one or two quarters more play out with a foundation and revenue retention in our core business. I think, really importantly, when you look at our funnel, about half of our funnel is existing white space. So we have over 300 opportunities on our multi $100,000,000 funnel, and half of them are within our, call it, top 20 to 50 customers, which represents much more selling opportunities, which kind of reaffirms our our planning algorithm that we re underwrote our debt through our refinancing, and we communicated in the spring. All that said, I think it’s fair to assume that most of the mid single digit growth converts to revenue next year.

But I think we would be in a much better position in a quarter or two. And, certainly, we can we can follow-up with some details after this call to walk you through how you might wanna think about ’26 from a modeling perspective. Yeah. Yeah. That makes sense.

And and perhaps it’s a similar answer to to my next question, but it it does seem like, the guidance for the remainder of the year is quite conservative, effectively a bit of a sequential decline from the ’25 to the ’25 on revenue. It doesn’t sound like there’s much renewals coming up or attrition like that in the second half, and it does sound like the onetime revenue that occurred this quarter is going to repeat ratably over the next couple of quarters. So I’m just curious, you know, why shouldn’t we see more revenue growth in the second half of the year? Yeah. So, thanks for that.

So I would say two comments. First, I think this might be the first beat and raise that we’ve done. So we wanna we want to, achieve a 100% of our say do ratio. I would tell you internally, we’re planning near the top end of the guide range. Got it.

All right. Thank you.

Sami, Call Coordinator: Our next question comes from Derek Grosse from Piper Sandler. Your line is open, Derek. Please go ahead.

Derek Grosse, Analyst, Piper Sandler: Hi, guys. Thanks for the question and congrats on the quarter. My question is on the IDR process. What’s your market share there? What role do play?

And could you just elaborate on what the revenue model is? Thank you.

Doug Barrett, Executive Vice President and Chief Financial Officer, Claritiv Corporation: Yes. So in the IDR space, I I’m not quite sure. It’s probably hard to get to a market share, and we can probably follow-up on that. But we do IDR incredibly well. Some of our largest customers use our our IDR process, and we actually have been working on some I had mentioned some automation and tooling.

Our surprise bill, our post payment negotiation IDR performance is actually up substantially. So when we look at the performance of our business, you know, even since the first half of the year, our gross receipts are actually up 25%, and we’ve improved outcomes by 30%. I think we can share some follow-up kind of independent research that shows our comparative performance versus our peers. But, I think CMS data as of June ranks Clairtive as a top performer performer with greater than a 22% win rate, which is substantially better than, I would say, our next one or two compares. And then very importantly, one of the things that we’ll tee up here, maybe even on our next earning is earnings call is our our approach and our thought process to AI.

So when you look at AI and use cases and, agents, there is a ton of automation that Fernando and team will be doing, internally to help us automate processes and work with, Jerry Hogg and our our general managers. And then we’re also gonna have a point of view on what we think the future of AI is relative to the business. But this is a perfect category for us to focus on automation. And then with respect to the revenue model, I think we can we can maybe go into it a little bit in detail after the call. But we do we do work collectively with our clients to manage the IDR process, and that I’ll go into maybe the details of the revenue model with you in the follow-up call.

Derek Grosse, Analyst, Piper Sandler: Okay. Thanks. And then my follow-up is on Lantern. Could you just elaborate on if the partnership is live and, you know, some of the early returns you’re seeing from it, if so? Thank you.

Travis Dalton, President and Chief Executive Officer, Claritiv Corporation: Yeah. I think we’re look. We’re early in that in that discussion. I mean, as we talked about last time, we think what they do is really important. We think especially networks matter a lot.

We think the work they’re doing, is well aligned to us, and it’s an innovative idea for us to go and work on something like that. So I think we’re we’re very early in that process. We’ll be able to provide, I think, more color on the revenue contribution over time. Yeah.

Doug Barrett, Executive Vice President and Chief Financial Officer, Claritiv Corporation: It was it was very small this quarter. I think, you know, as we start to activate deals and as we establish our kind of partnership go to market channel, I think we’ll we’ll have a lot more meat on the bone. But whether it’s Lantern or Echo or some of the other meaningful go to markets with Oracle and Athena, I think the point of those is you you don’t have to hire a whole bunch of new salespeople to get your products to market.

Travis Dalton, President and Chief Executive Officer, Claritiv Corporation: Yeah. And I’ll just add a color commentary of I call partnerships the land of interesting conversations if you don’t, focus and execute. So, you know, kind of I said in my prepared comments, this I ever our team hears from me every day, move faster with more urgency, but the idea of urgency is really about picking the right thing and getting behind it. And so, we brought in a new person to run a partnership program, who’s very, very talented, who’s, I think, doing a great job of helping us align more clearly on the critical few, to where we can better size those market those partnerships, the market potential, and demonstrate revenue contribution, for all of you that are are keeping track. That’s why we made it its own markets vertical.

That is actually one of our verticals so we can focus on it more versus, just cover the field.

Derek Grosse, Analyst, Piper Sandler: Great. Thank you so much.

Sami, Call Coordinator: We currently have no further questions. So I’d like to hand back to Travis Dalton for some closing remarks.

Travis Dalton, President and Chief Executive Officer, Claritiv Corporation: Okay. So thanks, everyone, for your time. We appreciate it. Just a a couple just a minute or two of closing here. So, you know, I had a question earlier, but how my view is health care continues to be complex and opaque, and costs are continuing to rise.

We think technology products and services that bring value to those challenges are gonna be important. Those challenges are really what is driving us as we work on affordability, transparency, and quality, and all of our people know that’s what we’re here to do. I think that’s what sets us apart, is we don’t just do one thing narrowly, that we provide a suite of solutions that can work across the value chain to provide access to care with our networks, deliver insights with our our products, pricing and risk, and tools that can really help providers and employers increase revenue and reduce cost. And we have a very aligned business model with our clients. We we win only if they if they win.

And so, challenges are many. We’re gonna everyone here knows as a consumer of health care, we need to improve health care economics. As we build the foundation, we’ve also been focused on getting the company fit, laying the foundation, leaning into the turn, and all of our people understand our story and what we’re trying to achieve here, in generating hard return on investment. So we shared a lot of information today, and I’ll just close really by saying we’re delivering on our promises. As Doug said, the say do ratio, our say do ratio is gonna be high, and we demonstrated this with q two and first half twenty twenty five revenue growth, supporting our raised outlook and full year top line and bottom line guidance.

Significant organic and white space wins with a renewal of top five and a top 20 client for five year periods, nine new logos across multiple market segments, diversifying the business, and a record setting enterprise subscription. So we’re delivering on the turn in ’25, with strong financial performance and discipline and a growing pipeline. We’re excited about, the momentum and the way forward in the ’26 and beyond, and we remain very confident in our ability to drive sustainable growth here and very proud of, the hard work that our people are doing and, the belief and the dedication that they get up with every single day to serve our clients, which is ultimately what matters most. And so with that, I’ll, close out the call. Say we’re really looking forward to the future, taking some big swings, and going forward to improve health care.

Thank you.

Sami, Call Coordinator: This concludes today’s call. We thank everyone for joining. You may now disconnect your lines.

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