Earnings call transcript: Claritev Corp Q3 2025 sees revenue growth, stock rises

Claritev Corp reported strong financial results for the third quarter of 2025, with a 6.7% year-over-year increase in total revenue, reaching $246 million. The company's stock rose by 3.21%, closing at $61.96, reflecting positive investor sentiment following the earnings announcement. Claritev's strategic focus on international expansion and innovative product launches contributed to its performance, while the company also raised its full-year revenue guidance to 2.8-3.2% growth.

Key Takeaways

• Claritev Corp's Q3 total revenue increased by 6.7% year-over-year to $246 million.
• The company achieved a 9.5% growth in adjusted EBITDA, with margins at 63.1%.
• Stock price increased by 3.21% following the earnings announcement.
• Raised full-year revenue guidance to 2.8-3.2% growth.
• Strategic partnerships and international expansion are key growth drivers.

Company Performance

Claritev Corp demonstrated robust performance in Q3 2025, achieving its best absolute revenue performance in 12 quarters. The company reported significant growth across its core service lines, including a 15% increase in network revenue and a 7% rise in payment revenue integrity. This performance is in line with the company's strategic objectives of expanding its international presence and enhancing its product offerings.

Financial Highlights

• Total Revenue: $246 million, up 6.7% year-over-year.
• Adjusted EBITDA: $155.1 million, reflecting a 9.5% growth.
• EBITDA Margins: 63.1% in Q3, 62.8% year-to-date.
• Network Revenue: Nearly 15% growth.
• Analytics Revenue: 4.2% year-over-year growth.

Outlook & Guidance

Claritev raised its full-year revenue guidance to 2.8-3.2% growth and tightened its adjusted EBITDA margin guidance to 62.5-63%. The company expects to secure $60 million in new annual contract value, with 60-65% expected to convert to revenue in 2026. Claritev continues to focus on organic investments, debt reduction, and value-creating mergers and acquisitions.

Executive Commentary

Travis Dalton, CEO of Claritev, emphasized the company's upward trajectory, stating, "We are on the way up to 2026." He also highlighted the significance of consecutive strong quarters, noting, "One strong quarter is a data point, but two strong quarters are the start of a trend."

Risks and Challenges

• Rising healthcare inflation, expected to increase by 6-9%, could impact cost structures.
• Regulatory pressures and demands for transparency continue to shape the market environment.
• The stability of out-of-network claims, currently at 5-7%, remains a concern.

Claritev's strategic initiatives and solid financial performance in Q3 2025 position the company for continued growth, despite potential market challenges.

Full transcript - Claritev Corp (CTEV) Q3 2025:

Sammy, Call Coordinator: Hello, everyone, and thank you for joining us today for the Claritev Corporation Third Quarter Earnings Call. My name is Sammy, and I'll be coordinating your call today. You. I will now hand over to your host, Todd Friedman, Head of Investor Relations to begin. Please go ahead, Todd.

Todd Friedman, Head of Investor Relations, Claritiv Corporation: Thank you, Sammy. Good morning, everyone, and welcome to Claritib's third quarter twenty twenty five earnings call. I'm excited to be on my first earnings call since joining the company. I look forward to working with all of you in the months to come. Joining me today are Travis Dalton, President and Chief Executive Officer and Doug Garish, EVP and Chief Financial Officer.

During the call, we will refer to the supplemental slide deck that you can find in the Investors portion of our website along with the third quarter twenty twenty five earnings press release that we 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 that we will 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 Clarita's underlying operating results. An explanation of these non GAAP measures and the reconciliations to their comparable GAAP measures can be found in the earnings press release and the supplemental slide deck. And with that, I will turn the call over to Travis.

Travis Dalton, President and Chief Executive Officer, Claritiv Corporation: Thanks, Todd. Good morning, everyone, and thank you for joining us today. This is an exciting call for Claritev and for me personally. When I joined the company early last year, we laid out a multiyear journey to create a vision and a foundation that would deliver sustainable growth. We call 2024 the year of the foundation and established our guiding principles of clarity of purpose, alignment of talent and focus on results and boldly declared 2025 as the year of the turn.

I'm proud to stand here today and say the turn has happened. We set out to be fit for growth by investing in people, tools and processes that will allow us to have better visibility into the business to apply our critical resources to areas with the highest impact. This has allowed us to have better telemetry into the business to call a number and hit a number, thus improving our credibility with internal and external stakeholders, what I call the say do ratio in simple terms, and we are keeping our word. We will go into more detail over the next twenty minutes, but our Q3 results show a second consecutive beat in raised quarter and most significantly is our core business driving that strong performance. We will roll into Q4 ready to close a transformative year for Claritiv and begin executing on the next phase of our five year strategy, what we will call the way up in 2026.

On today's call, I'll provide some of the highlights from the quarter and share how we made the turn ahead of schedule. Then Doug will come on for the financial discussion and I will end with some thoughts on the state of health care and how we see it impacting our progress. One strong quarter is a data point, but two strong quarters are the start of a trend. Revenue growth of 6.7% and adjusted EBITDA growth of 9.5% were both ahead of our internal expectations. Our strong results last quarter were important to build confidence and demonstrate the power of our strategy to drive horizontal products across multiple vertical markets.

It is working. The Q3 results show focus, discipline and our sense of urgency. I tell the team urgency is about discerning the critical few priorities from the many things that hit the windshield and intense focus on finishing them. We are executing. We are building a company that delivers on our promises through our clarity alignment and focus on executing with clear priorities and performance metrics.

I want to take a moment to explain why I think we successfully made the turn earlier than planned. It starts with our intense focus on our clients, our people and a clear mission that all of our associates understand. We exist to serve our clients and the consumers of the healthcare ecosystem. Put simply, we make healthcare more transparent and affordable for all. Our core solutions across our network analytics and payment and revenue integrity businesses combined with our commitment to delivery play an important role in addressing healthcare's biggest challenges.

Our significant investments in technology, data and AI give us a platform to continue to evolve and innovate as the market evolves. We have continued to align and upgrade our talent, provide opportunities for our existing associates and align the organization to focus KPIs built on our pillars for growth. All of this has enabled us to play a significant role in providing access to care, reducing costs for consumers, combating waste in a misaligned system and bringing pricing transparency to an opaque industry. Most importantly, we are an honest broker in healthcare that aligns market participants with the needs of the consumer, the patient. We have demonstrated the value of our solutions and with our improved execution throughout 2025, we have demonstrated how the core will continue to be a launching point that will deliver our long term aspirations.

Underpinning this confidence, as recently announced, we have renewed our top 10 clients for extended terms. This includes the single client we have discussed previously. These renewals provide visibility and stability for us to build upon as we enter the way up. Beyond that board, we have solidified our expansion into new market verticals, adding new clients, partners and solutions that I'll describe in more detail in a few minutes. Now turning to the highlights from the quarter.

As we have noted previously, our company is now aligned to six focused market verticals each with a clearly accountable leader and sales incentives to serve existing clients and new opportunity. This focus is a primary driver of the success we are seeing across the business. We are seeing increases in white space for existing clients, adding new logos and new solutions that expand our total addressable market. The underlying metrics in our core business support this view of a business that is on the rise. During the first three quarters of this year, we're seeing improvements in the percentage of actionable claims, while also increasing our revenue per claim, which Doug will cover in additional detail.

In fact, we are seeing positive trends in our key growth metrics across the business. We added five new logos bringing our year to date total to 20 and closed 180 opportunities. We closed another $15,000,000 in annual contract value or ACV. Our average ACV per transaction is up more than 25% over last year and our funnel continues to grow with a 67% increase in pipeline year to date. This is directly attributable to our strategy focus on existing client value and also drive our horizontal solutions into new client acquisition across those vertical markets.

The growth team has done an outstanding job and honestly is just getting started under the leadership of our Chief Growth Officer, Tiffany Mysenschek. Now let's look at Q3 in each of our market verticals. At the core of Claritiv are our payer and PPA client relationships. The growth in this vertical is the biggest reason we made the turn in our strategic vision ahead of schedule. We added four new logos and closed several 7 figure deals this quarter, coming from expansion with existing clients who see our commitment to client success and value for them.

As mentioned earlier, we now renewed our top 10 clients during this year. That combination of growth, stability and visibility is the key reason we are optimistic about our continued success in this vertical. That optimism is bolstered for a solid Q4 based on early wins and a diverse pipeline. The broker and employer market continues to be a highlight for our vision to expand our reach across the healthcare landscape. We signed over 100 deals including our first premier broker agreement with several more in progress to drive greater expansion of our products, including VDHP.

We also hosted our first ever Broker Virtual National Summit with more than 300 attendees, which is in addition to four additional webinars and seven broker conferences that we attended. Our traction in this vertical is growing and we are seeing the results and continued pipeline growth. Turning to the provider market. We continue to see the opportunity to have a meaningful impact with healthcare providers who are seeking transparency and analytics solutions to optimize their operations and financial performance. Simply put, with CompleteView and analytics, we can drive revenue up, costs down, and with efficiency give providers more resources to deploy to patient care.

We now have over we now have opportunities with 60 provider organizations in our active pipeline and continue to demonstrate success. We signed EPHC a 13 hospital consortium in the Eastern Plains Of Colorado to use our payment accuracy and market analytics solutions. Rural hospitals like those in the EPHC face unique challenges, especially in light of regulatory changes coming from HR1. Healthcare consumers in rural areas will face significant barriers to care, and we are proud to work with the hospitals that serve them as they strive to continue meeting this critical health care need. We opened our newest vertical market just over five months ago with our expansion to international, specifically The Middle East.

We believe the international markets represent a significant growth opportunity where U. S. Standards are widely used and our solutions can be quickly adapted and marketed in new countries. We launched our advanced code editing solution in The UAE with our first client ahead of schedule, while signing new existing partnerships with IOHealth and Claim to accelerate development of new AI driven solutions. I have personally spent time in the MENA region including last week in Riyadh at Global Health and FII, and believe this is one of our most exciting growth opportunities.

Partnerships with IO and Claim, while grounded in the MENA region, have also have the potential to bring more value and solution innovation to our core U. S. Markets. You'll hear more from us about this exciting potential. Briefly touching on the government vertical.

We expect to have some positive news to share in the near term with real tangible impact. We've been working on a number of opportunities with prime contractor partners and are seeing some decisions being made. I'm going to speak to some market trends later in the call, but we see opportunity with core set of solutions across existing government needs, but also with opportunities that we believe will arise with the implementation of HR1. Our vision is very much aligned with government initiatives on price transparency services and reducing waste, and we are actively engaging in discussions where our experience can deliver immediate value. Lastly, it's been a busy quarter for our strategic partnership team.

I mentioned a couple of our international partnerships. We also closed an agreement with Kinetic to provide health and wellness consulting as an added service for Event Insights and PlanOptics products. Perhaps the most visible sign of our partner engagement model was at Oracle AI World, where we were a title sponsor, gave a number of theater and breakout presentations, and earned a shout out in Oracle's subsequent Investor Day. We are actively working with our first pilot client and continue to make meaningful progress on embedding our solutions within Oracle's human capital management products. This would bring real time insights and prediction to help employers proactively manage their health plans, identify risk, drive costs down and improve wellness.

We're also seeing active pipeline growth with our payments powered by Echo with over 30 opportunities. When you look at Clarative Payments powered by Echo in our most recent partnership with Claim, who is an AI driven healthcare payment acceleration solution provider, you are beginning to see the early stages of a growing financial solutions business. It is one that we believe can expand our presence in healthcare market and create another new vector for future growth. I won't elaborate just yet, but expect to hear more from us on an innovative approach to one of healthcare's most vexing problems in the coming months. Before I turn the call to Doug, I want to take I to make one last comment about our rebrand.

As I've said to the team before, you don't simply change your name, a rebrand must be earned. Kudos to our marketing team as we aggressively campaign and create greater awareness in the market. Brand engagement is running high. Website visits are up more than 100% and engagement is growing across multiple channels. We're sponsoring more events and building an exciting calendar for 2026.

This all becomes part and parcel of a consistent market leading company. You build the brand, you do the hard work to build pipeline, win rates go up, sales cycles begin to shrink, and most importantly, you listen to your clients and solve problems. It is all part of the focus and discipline at the heart of a transformational journey. I'll come back in a few minutes to wrap up our prepared comments, but I'll close these opening remarks by saying this is the most energized I've been professionally. I visited a number of our offices this quarter on a CEO roadshow, and you can tell the momentum is building and enthusiasm across the company is palpable.

Our teams are showing it and our clients are feeling it. It's a good time to be at Claritiv, and I'm excited for how we're doing how we're going to finish the year. With that, I'll turn

Doug Garish, EVP and Chief Financial Officer, Claritiv Corporation: it to Doug. Thank you, Travis, and good morning, everyone. Q3 truly marked the turn in our business. Delivering on our promises is a grounding principle, and it's a reward for us to be able to share these results with you today. I will cover selected Q3 and year to date financial highlights and will also give more color by service line as reflected in our supplemental earnings deck posted on our website this AM, and then I'll end by sharing our updated capital allocation priorities.

Let's get right into the numbers. Total revenue in Q3 was $246,000,000 up 6.7% year over year. Adjusted EBITDA was $155,100,000 for the quarter, reflecting a 9.5% growth rate. Corresponding EBITDA margins were 63.1 in Q3 and 62.8% year to date, tracking to our guidance on a full year basis. Year to date revenue through September is up nearly 3% and adjusted EBITDA is up 3.7%.

This is our best absolute revenue dollar performance in the last twelve quarters. It is worth a shout out to our whole team who stayed on mission and executed with focus and discipline as we navigated through a foundation year in 2024 and who have turned Claritiv back into a growth business. The strength of our core offerings should be reiterated. Our multiyear vision is based on strategically investing across the business and nurturing our expanding portfolio of products, solutions and end markets. We are in the middle of '26 planning and it's the stability, visibility and profitability in our core solutions that allow us to confidently think about next year and beyond.

During Q3, core revenue grew year over year and sequentially. On a year over year basis, all three of our service lines grew at healthy rates, led by network revenue at nearly 15%. Analytics, our largest service line, grew 4.2 year over year, and Payment revenue integrity grew better than 7%. On a year to date basis, core revenue is up approximately 3%, further supporting our statement that the turn has happened. Digging into these numbers a little bit further, we are seeing strength in our two largest solutions, Data EyeSight and Financial Negotiations, with strong savings in revenue per claim performance on slightly lower volumes.

Payment revenue integrity continues to see good volume growth and higher savings yields on process claims. Our AI based advanced code editing product ACE posted yet another strong double digit growth quarter and is poised to gain momentum as we more broadly deploy to new end markets. And it's worth noting, while a small contributor, Q3 marked our first revenue from our international expansion. We expect to continue to have good updates on progress overseas in coming quarters and years. Finally, similar to last quarter, a new commercial arrangement in the P and C business resulted in approximately $5,000,000 of nonrecurring revenue benefit in the network business this quarter.

We expect a similar benefit in Q4 that will not repeat in 2026. The approximate total of this benefit from this arrangement is expected to be between 15,000,000 to $18,000,000 on a full year basis in 2025. Our growth areas are also developing nicely. Growth pipeline continues to mature in dollars and number of opportunities with the expansion of our go to market team and now represents approximately 40% of our total dollar weighted funnel. We have generated an additional net $80,000,000 in new pipeline during the first nine months of 2025, representing a 67% increase since January.

Notably, we are seeing pipeline growth across all lines of business, demonstrating the success of our diversification efforts and the growing contribution from our growth areas with a roughly equal weighting between net new business and upsellcross sell opportunities organically present within the current installed base. We have closed approximately 500 opportunities for $45,000,000 of ACV year to date. In total, we expect to book approximately $60,000,000 of incremental ACV this year, which will largely convert to revenue in 'twenty six and beyond. The volume and velocity improvements we have conveyed in our go to market stem from one of the key transformation objectives of business realignment. As the numbers indicate, this effort is starting to deliver tangible and measurable results.

We remain disciplined with operating cost. Adjusted expenses grew roughly 2% in Q3. Personnel costs were higher due to talent and transformation related investments, partially offset by lower expenses in facilities, legal and other operating cost. Our multiyear transformation road map is pacing on schedule. And as we progress, we may elect to pull forward investments if our business continues to perform ahead of internal expectations.

Moving on to cash flow. Levered free cash flow was a use of 16,300,000 in the quarter and was driven by investment in our transformation program and timing of interest payments, partially offset by lower cash paid during the period for income taxes net of refunds. Notably, unlevered free cash flow of $113,000,000 and adjusted cash conversion of 73% are the strongest we posted in nine quarters. We ended the quarter with $39,000,000 in unrestricted cash and successfully moved back under 8x net leverage. Now on to guidance.

Based on our performance in Q3 and throughout 2025, we are raising full year revenue guidance to approximately 2.8% to 3.2% growth versus prior year and tightening our adjusted EBITDA margin guidance range to 62.5% to 63%. Combined, those two measures are helping us pace towards our aspiration to become a Rule of 70 company, rare air for any public company in any sector. We are maintaining our free cash flow guide and narrowing our forecasted CapEx spend range to a range of 165,000,000 to $175,000,000 I wanted to end by sharing that our capital allocation priorities remain clear and disciplined. At the highest level, we continue to focus on organic investments to fuel our Vision 2030 plan. That's where most of our capital and energy are directed.

These investments are driving innovation, operational excellence and helping us get fit for long term growth. At the same time, we're maintaining a high priority on debt paydown with a renewed focus on value creating M and A, both of which will strengthen our balance sheet and position us for sustainable and intelligent expansion. All of this aligns with our guiding principles to diversify and accelerate, expanding our solutions, verticals and channels to drive growth while also delevering and derisking to enhance cash flow and operating agility. On our next call, I will be excited to provide a lot more color on how we're thinking about 'twenty six and beyond. I echo Travis' opening comments that this past year has been among the most rewarding in my professional career.

With that, I'll turn it back over to Travis for some closing remarks before taking your questions.

Travis Dalton, President and Chief Executive Officer, Claritiv Corporation: Thank you, Doug. Before taking questions, I'd like to discuss the health care market and the trends shaping Claritiv's work. The industry continues to face structural, regulatory and reimbursement pressures heightened by inflation, rising employer plan costs, shifting employee burdens, complex regulation and growing demand for transparency. Fragmentation still drives inefficiency and waste, but that's where Claritib creates the most value. Our solutions in network advancement, pricing transparency, NSA and surprise billing compliance, and payment and revenue integrity, powered by world class analytics are designed to address these challenges and strengthen our financial performance.

We anticipate healthcare inflation will rise 6% to 9% without a network claim stable at 5% to 7% and increasing high cost in an increase of high cost cases, particularly those in behavioral health. Our analytics and BEN Insights platform are uniquely positioned to help clients optimize benefit plans, control costs and improve their outcomes. Healthcare remains a complex space with competing interests and misaligned incentives. Claritab sits at the intersection of healthcare, innovation and technology with a business model that's grounded in measurable ROI. We're well aligned with the administration's focus on transparency and efficiency to reduce system misalignment and benefit patients.

In Q3, we demonstrated strong execution of our strategic transformation, delivered our best revenue quarter in 12 quarters, renewed our top 10 clients, advanced our six market verticals and progressed in our digital transformation migrating to OCI and modernizing applications for better speed and data integration. Claritev is on the way up to 2026. As we reflect on twenty twenty five's achievements, I'm confident in our ability to drive sustainable growth, serve clients, support our associates and deliver shareholder value. Thank you for your continued trust and support. And with that, we'll take questions.

Sammy, Call Coordinator: Thank you very much, Travis. Our first question comes from Joshua Raskin from Nephron Research LLC. Your line is open, Joshua. Please go ahead.

Joshua Raskin, Analyst, Nephron Research LLC: Thanks. Thank you. Good morning. I was wondering if you could talk a little bit about just starting with the guidance, revenues going up and then the EBITDA margin, at least at the high end, tempering a little bit. So obviously, a lot of fixed costs in the business.

But were there investments that you were accelerating? Or is this part of that bundling strategy that you've talked about in terms of the the top 10 accounts and others?

Doug Garish, EVP and Chief Financial Officer, Claritiv Corporation: Josh. Good morning. How are doing? Hey, this is Doug. I'll take a shot at that.

Yes. So I think we've actually done a pretty good job of managing costs this year. And as we think about Q4, I know there's probably going to be a couple of questions. We really look at the business on a year over year basis. And so we've provided sequential information historically just to show the trends, and we've improved our some of our supplemental materials.

But if you take a look at the guide for Q4, it implies a quarter up roughly 2% to 6% on revenue with EBITDA up roughly three percent to 9%. So we feel pretty comfortable with that as a benchmark and again, sustained year over year performance. But that's how we're thinking about Q4 and the rest of the year. And then as

Daniel Grosslight, Analyst, Citigroup: we go forward, we have

Doug Garish, EVP and Chief Financial Officer, Claritiv Corporation: a multiyear transformation, and we're running in a little bit ahead of our internal expectations. So to the extent that we have capital projects or OpEx that we might want to pull forward to drive revenue growth, we'll opportunistically do that as the quarters arise.

Joshua Raskin, Analyst, Nephron Research LLC: Okay. That makes a lot of sense. And then I know it's early for 2026, and we'll wait till next quarter. But maybe outside of that 15,000,000 to $18,000,000 of nonrecurring revenue that you suggested maybe we take out of the baseline, any other big headwinds or tailwinds that we should be thinking about next year? And maybe more specifically, single digit revenue growth in the second half, is that a reasonable starting point for 2026?

Doug Garish, EVP and Chief Financial Officer, Claritiv Corporation: I would say yes in the second half without giving too much on guidance. Recall that the 15,000,000 to $18,000,000 started in Q2 of this year. There will be a lapping effect for Q1. But I think tailwinds are health care inflation. If you look at the sequential improvements to our PSA volumes, Travis had mentioned that we still think volumes out of network claims, all else equal, will be approximately 5% to 7%.

And we're seeing between 3,000,000 to $3,500,000 claims come through our windshield a quarter that we grab and price. And then you're also seeing things like behavioral health and even some inpatient. Some things go out of network inpatient that are higher dollars that have benefited us in the near term. What's really hard to predict is when you look at the regulatory environment and the government shutdown, we're not so sure when those are going to resolve. But the underlying, I would say, price environment for our business is very favorable, and we're highly encouraged.

And then we're going to continue to focus on managing our large accounts, which we have a pretty good funnel. But I think that's probably a fair assumption for the second half of the year.

Joshua Raskin, Analyst, Nephron Research LLC: And maybe if I could just sneak in. And just on your last comment there, the 10 renewals then, as I think about headwinds, tailwinds, we shouldn't be thinking about that as headwinds. Is it fair to say that those were renewed generally similar to previous contracts? I know with big extensions, typically, you see a little bit of pressure on the margin.

Travis Dalton, President and Chief Executive Officer, Claritiv Corporation: That's correct. Yes. I'll just comment on that. Mean, we're yes, that was Josh, that was foundational to kind of have the stability that we're trying to achieve inside of this year and last year. We actually knowledge is not a headwind in my mind to tailwind because we now have we can plan against that.

We can execute with them. We've noted the last two quarters that our white space is growing dramatically inside of our installed client base. And so we view that as a great opportunity for us. And so I think the macro of health care, the stability of our client set are tailwinds for us. And the headwinds are normal business factors that you would expect, not existential things that we may have experienced.

And competition, uncertainty, all of those things you navigate as a business leader are there for us. But we actually feel very good about the wind at our back as it relates to our core business and the macroeconomics and our growth thesis.

Daniel Grosslight, Analyst, Citigroup: Our

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

Daniel Grosslight, Analyst, Citigroup: Hi, thanks for taking the question and congrats on another beaten race here. Maybe I'll just stick on the twenty twenty six line of questioning. It does seem like you have a fair amount of visibility now just given the renewals and all the ACV you've signed. But maybe I just want to double click into how we should be interpreting that ACV growth. I think you mentioned it was it's going to be around $60,000,000 of new ACV signed this year by the end of the year.

Is all of that going to convert into revenue next year? And is that incremental on top of the core business or these renewals so that if the core business is growing, I don't know, call it mid single digit 4% to 5%, we should think about $60,000,000 being layered on top of that growth? Thanks.

Doug Garish, EVP and Chief Financial Officer, Claritiv Corporation: Thank you, Daniel. So for the let me answer the ACV first. So I think we had stated this in the last call. I know we introduced it as a new metric, and I think that's something that we'll continue to provide. The incremental the ACV that we booked this year, the approximately 60,000,000 that we expect to book is incremental.

So I would think about that as an addition to the core business, even though a lot of the ACV that we booked is within our core customers. And so our opportunities that we booked, the 500 that we booked year to date, it's actually a very good mix of payers and TPAs within our core 700 customer set. The $60,000,000 of ACV will largely convert to revenue next year. And so there is a timing element to convert with any business to convert a booking into the first dollar of revenue. That's something we expect to take a few quarters for each new deal to show up as revenue.

Some deals will be a little

Daniel Grosslight, Analyst, Citigroup: bit quicker. If you have software,

Doug Garish, EVP and Chief Financial Officer, Claritiv Corporation: you turn it on and you have first productive use within a quarter. Some of our larger installs like Payment Revenue Integrity or Data EyeSight or our network business might take two or two point five quarters to turn on. We feel pretty confident that at least 60% to 65% of the ACV we booked turns into revenue and converts to revenue next year. And then, you know, without spending most of our time focused on '26, because we'll do that in the next call, the reason why we're being a little bit cautious is because the pricing environment and the inflationary environment is really high. Right now, it's hard to tell if that's going to cool down or not next year.

We still feel very good about the core business. And then I would give a big shout out to our operations team who's actually identifying more savings, commanding more savings and revenue per claim. And when you look at Slide 14 on our supplemental deck, you've really seen the fruits of those efforts in putting in a general manager model over the last ten to twelve quarters where we've been able to make our products work better, which provides more values to our customers and ultimately patients. And so without giving you all of the tea leaves for 26, we feel good about the kind of demand environment. We feel good about where out of network claims are landing in the volume environment.

And then we're going to continue to expand our funnel and expand in new markets, and we think those all bode well for our medium- long term growth objectives that we laid out in March.

Daniel Grosslight, Analyst, Citigroup: Yes, that's great. That's great. And I'd also love to get an update on your NSA products and how that market is trending. We've heard that there are now a slew of third party NSA vendors that are working with providers to really aggressively go after the national payers, particularly in the IDR process. What are you seeing there?

Has that is that trend isn't new, but is it accelerating? Is it diminishing a little? And has it had any material impacts on you guys?

Doug Garish, EVP and Chief Financial Officer, Claritiv Corporation: Yes. Maybe I could start that off. And then, Travis, if you have a general comment. When you look at our NSA business, it's performed pretty nicely with the exception of we've mentioned the one large customer did in sourcing. The rest of our business, we've actually put a lot of operational focus.

And we've actually taken our unit cost down approximately 70% to service each IDR claim over the last year. And so we continue to think that is a growth area for us. But the reality is from a regulatory and a top of the house perspective, providers still win 80% of NSA disputes, which is a structural problem that while we I would say we have the best performing NSA product in the market, and I think CMS we shared last quarter, CMS published a study in June that highlighted that It's still not a fairly weighted scale when you think about the relationships and the abrasion between payers and providers. We've seen a bunch of point solutions come up, and I think they have modest improvement. But when you look at the scale, it's still roughly eightytwenty towards the provider with our products performing pretty well, but our large customers have sent us more business, and that business is performing pretty nicely for us.

Travis Dalton, President and Chief Executive Officer, Claritiv Corporation: I would just add So a couple comments yes, think Doug kind of hit it, but I'll just reiterate. We actually are significantly better than any of our competition as it relates to the value we bring to clients with that product set. So we view it as a positive and a differentiator for us and an opportunity. We're going to continue to invest in the NSA business and automation and using our AI tools, along with PRI and network and other areas. And Doug mentioned some of the structural elements of that policy that I think many think it should be looked at and that we participate in.

So it will be an area of focus, area of investment for us. And as Doug brought up a broader point, I won't barge on it, but I'll just say, one of the things I think that makes us unique with our clients is that we're not simply a point solution or a widget that's narrowly focused on a single area. So we actually hold a unique position across the network analytics, PRI and data science and prediction that we can bring. So I think that that creates a positive opportunity for us with clients, but also really puts a moat around some of our capability with our core clients as we go forward. So NSA is an important area for us, matters to our clients.

We're going focus on it as we go forward.

Sammy, Call Coordinator: Our next question comes from Jessica Tassan from Piper Sandler. Your line is open Jessica.

Joshua Raskin, Analyst, Nephron Research LLC: Hi. Please go ahead.

Jessica Tassan, Analyst, Piper Sandler: Thanks for taking the question. On the NSA business, I want to follow-up. So we know you're supporting a large number of payers, obviously, in the IDR process. How does Claritiv get paid on these disputes? Is your revenue contingent upon the IDR judge selecting the payers bid?

Do you get a portion of savings? Can you just remind us how the contract economics work for this business? And then what segment you're reporting the revenue in?

Doug Garish, EVP and Chief Financial Officer, Claritiv Corporation: Yes, sure. Thanks, Jessica, for the question. And I think we spent a little bit of time, and we can do so on post call again, walking through the economics, but it's a piece of business. The IDR dispute process happens, right? There's an IDR fee.

We work with our clients. We actually front that fee. We take them through the arbitration process. And as a matter of fact, I think only a small less than 20% of the IDR claims get disputed post QPA. So if you think about the funnel of potential claims that go through Surprise Bill and the ones that get disputed, it actually is a small fraction where we're able to offset any potential abrasion before it gets all the way through the end of the funnel.

But to the extent that a claim does get disputed and we're not able to resolve it and we win the claim on behalf of the payer, we capture a percentage of the savings on the negotiated rate or the win rate. So it's very much aligned with our TSA business. And then the final I think your second question was where does that fall? That's within our analytics based services. Surprise bill is our third largest product behind data eyesight and financial negotiations.

Jessica Tassan, Analyst, Piper Sandler: Awesome. That's really helpful. And then I wanted to just follow-up about the client renewals. I think in your response to Josh's question, we can infer that these were conducted at stable levels of 2025. Is there anything else we should be inferring about these renewals or anything that you wanted to share context wise on that process?

And congrats, obviously, on closing all 10 of your top customers. Yes.

Travis Dalton, President and Chief Executive Officer, Claritiv Corporation: Just a little color on. I mean, I'll just say that that was a major focus for me. Been here over a year now. One of the key focuses was shoring up our key clients and ensuring that they understood the value that we had, not just in what we're providing today, but ultimately also in new capabilities. So I'm not just focused on renewal activities.

I'm actually focused on growth of those clients with our new products, which I think we're getting more and better education understanding of that. And I also have to note that Encompass, I was asked once, I was asked 100 times about some single client issues that we were able to renew our single client that we've talked about publicly and open. And that's a big deal for us that shows trust and focus going forward collectively. And as noted, we think this underpins the business and creates a nice place for us now to launch forward with a little more predictability and focus and stability. So those are kind of be some additional comments I'd make, Jessica.

Jessica Tassan, Analyst, Piper Sandler: Great. Thanks.

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

Travis Dalton, President and Chief Executive Officer, Claritiv Corporation: Yes. Appreciate the time. I'll just close out by saying that I'd be remiss if I didn't have a quick shout out to the entirety of our team. I'm very proud of the team. We have existing resources that have been here a long time that are understanding what we're trying to do, worked extraordinarily hard and are embracing change.

That's not always an easy thing to do. And then we've tightened up our and shored up our management team and talent. So I couldn't be more excited about going into 2026, considering this will be the first full year I've been able to have the team that I've wanted to put together on field. And so we're very enthusiastic about it. And we look forward to the next call talking about results, but also talking about our guidance for '26 and beyond.

Thank you.

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

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