Earnings call transcript: Vitalhub Q2 2025 revenue beats forecast, stock rises

Vitalhub Corp reported its second-quarter 2025 earnings, revealing a mixed financial performance with revenue surpassing expectations but earnings per share (EPS) falling slightly short. The company’s revenue reached $23.9 million, exceeding the forecast of $22.09 million, marking an 8.01% surprise. However, EPS came in at $0.04, missing the forecast of $0.0434 by 7.83%. Following the earnings release, Vitalhub’s stock rose by 0.81% to $13.70, reflecting a positive market reaction to the revenue beat. According to InvestingPro analysis, the company currently trades near its 52-week high and shows strong financial health with an overall score of "GOOD."

Key Takeaways

• Vitalhub’s Q2 2025 revenue exceeded expectations by 8.01%.
• EPS fell short of forecasts, with a 7.83% negative surprise.
• Stock price increased by 0.81% post-earnings announcement.
• Annual Recurring Revenue (ARR) grew 55% year-over-year.
• Company focuses on integrating recent acquisitions and expanding product offerings.

Company Performance

Vitalhub Corp demonstrated robust growth in the second quarter of 2025, driven by significant increases in recurring revenue and strategic acquisitions. The company reported a 47% year-over-year increase in total revenue, with ARR rising to $79.6 million, up 55% from the previous year. This growth was supported by a 14% contribution from organic growth. The healthcare IT market’s resilience and increased tech budgets, particularly in the UK, provided a favorable environment for Vitalhub’s diverse product portfolio.

Financial Highlights

• Revenue: $23.9 million, up 47% year-over-year
• Earnings per share: $0.04, a slight miss from the forecasted $0.0434
• Adjusted EBITDA: $6.3 million, representing 26% of revenue
• Cash balance at quarter-end: $94 million, with a post-quarter balance of over $45 million

Earnings vs. Forecast

Vitalhub’s actual revenue of $23.9 million surpassed the forecast of $22.09 million, delivering an 8.01% positive surprise. However, the EPS of $0.04 fell short of the expected $0.0434, resulting in a 7.83% negative surprise. This divergence highlights the company’s strong revenue-generating capabilities but also points to potential areas for operational efficiency improvement.

Market Reaction

Following the earnings announcement, Vitalhub’s stock rose by 0.81% to $13.70. This increase suggests that investors were encouraged by the company’s strong revenue performance despite the EPS miss. The stock’s movement places it closer to its 52-week high of $14.34, indicating positive investor sentiment compared to broader market trends. InvestingPro analysis indicates the stock is currently undervalued based on their proprietary Fair Value model, with strong fundamentals supported by a P/E ratio of 3.79 and robust return metrics.

Outlook & Guidance

Vitalhub aims for a 10-15% organic growth target, focusing on integrating its recent acquisitions and exploring further strategic opportunities. The company is also targeting a return to a 26-27% adjusted EBITDA margin. With ongoing expansion in Canada and the UK, and partnerships with key players like Cerner, Vitalhub is well-positioned to capitalize on emerging opportunities in the healthcare IT sector.

Executive Commentary

CEO Dan Matlow emphasized the company’s strategic focus, stating, "We’re health care people... We’re trying to actually add some value to what we do." He also highlighted the company’s growth trajectory, noting, "We’re getting close to that 100,000,000 of ARR and the model continues to grow." These comments underscore the company’s commitment to value creation and growth.

Risks and Challenges

• Integration of recent acquisitions could pose operational challenges.
• Potential market saturation in key geographic areas.
• Macroeconomic pressures may impact healthcare budgets and spending.
• Competition from other healthcare IT providers remains strong.
• Fluctuations in currency exchange rates could affect international revenue.

Q&A

During the earnings call, analysts inquired about the NHS technology budget and its implications for Vitalhub. The company explained the strategic rationale behind the Navarre acquisition and discussed potential cross-selling opportunities across geographies. These discussions highlighted Vitalhub’s proactive approach to leveraging market opportunities and enhancing its product offerings.

Full transcript - Vitalhub Corp (VHI) Q2 2025:

Conference Moderator: Twenty twenty five second quarter conference call. With me on the call today are VitalHub CEO, Dan Matlow and CFO, Brian Goffenberg. After our prepared remarks, we’ll open up the line to questions from analysts. Please press star one or use the raise hand function to indicate that you would like to ask a question. Now before we begin, I will read our cautionary note regarding forward looking information.

Certain information to be discussed during this call contains forward looking statements that involve risks and uncertainties. Actual results may differ materially from those set forth in such statements. For a discussion of these risks and uncertainties, please review the forward looking statements disclosure in the earnings press release and in our SEDAR filings. As well, our commentary today will include adjusted financial measures, which are non IFRS measures. These should be considered as a supplement to and not a substitute for IFRS measures.

Reconciliations between the two can be found in our SEDAR filings. Now with that, I will hand the call over to our CFO, Brian Goffenberg, to go over the financial highlights for the quarter. Over to you, Brian.

Brian Goffenberg, CFO, VitalHub: Good morning, everyone, and thank you for joining the call today. We are pleased to report results for the 2025. In the June, we added $1,900,000 of organic annual recurring revenue and delivered a 26% adjusted EBITDA margin. In a moment, Dan will provide an update on the business. First, I’ll provide a summary of our second quarter financial performance.

Our annual recurring revenue was $79,600,000 to close the quarter, an increase of 55% over the prior year. Over the previous year, organic growth contributed 14%. In the second quarter, total revenue was 23,900,000.0, an increase of 47% year over year. Recurring revenue for the term license maintenance and support segment was 19,900,000.0 or 83% of total revenue. This compared to 13,000,000 or 80% in the prior year period.

We added a new segment, virtual care term license that relates to the attend anywhere platform acquired with the induction acquisition. Virtual care term license revenue was 300,000 in the quarter. For reference, total induction revenue was 500,000 from the date of closing to 06/30/2025. Perpetual license revenue was 1,000,000 in the quarter, an increase of $22,000 in the, over the prior year period, an increase from $22,000 in the prior year period. Services hardware and other revenue was 2,700,000 in the quarter, a decrease from $3,200,000 in the prior year period.

Our gross margin was 81% of revenue consistent with the prior year period. Net income before taxes was $2,300,000 up 63% year over year. Adjusted EBITDA for the quarter was $6,300,000 or 26% of revenue compared to 4,200,000.0 or 26% in the prior year period. We think this is a strong proxy for cash flow. We closed the quarter with $94,000,000 of cash.

After June 30, we paid about $38,500,000 to Punavari and repaid $15,000,000 bridge loan. All considered our cash balance is north of $45,000,000 to date. We’re in a comfortable position to execute on growth and acquisition opportunities as we work to integrate the new acquisitions. And with that, I’d like to hand the call to Dan for an update on the business.

Dan Matlow, CEO, VitalHub: Good morning, everyone. As I always do, I’m just gonna do this in a in a little bit of an informal sense, and then, very happy to take questions from analysts and and try to fill in the gaps that we haven’t told them. But, yeah, we are happy with our our our q two results, you know, considering we’ve had met current and strata just a little while ago and and both those organizations came into the organization on a on a not really on a profitable basis, and there’s still work to to go on into those organizations. So, the rest of the company definitely came up to to fill that, scenario in in respect to our costs, in our our our basis there. And we’re excited about that.

We’re we’re still working on strat and and, you know, hopefully expect to get some more gains, from that. Again, we we like to think that the quarter again just proves the model. And and I think the model is the most important thing that we’re trying to focus on right now is that, you know, we we like to think it it’s it’s a good model. It’s doing what we, hope it will do, and we continue to execute it in our teams, that we acquire and in our management team, executive team understand what we’re trying to do and what we’re trying to accomplish, and we’re we’re really getting some momentum internally in terms of of what that’s about. We’re busy, though.

We you know, it’s really four acquisitions and some significant size over the last six months, and, we’re continuing to to work on those, every day, that we’re doing. You know, we’re we’re at the, the 90,000,000, ARR level. Hopefully, you know, it gonna be pretty cool when we can hit that $100,000,000 ARR level, but it’s knocking on the doorstep. And, we continue to work, and it just provides that really, big base of of good revenue that allows us to do what we know to do and and if we had to absorb some bumps in

Conference Moderator: the road. So we’re, we’re excited to to be able to do that. Organic growth continues to do what it does. We continue to to provide it, and, our hope is we we continue to provide it. You know, again, as I always say here, we’re not

Dan Matlow, CEO, VitalHub: a single product based vendor. We got a whole bunch of multiple ways to make organic growth, and we got a whole multiple ways of not making organic growth. So predictability is is challenge for for that. And but so far, so good. We we continue to do that.

But, you know, I always caution and and stay in our investor meetings. Like, don’t get too excited if we do 2,500,000.0 of ARR and don’t freak out if we do 500,000 of ARR in a quarter. It’s just that type of business to do it. We like our ARR. We want we want our growth.

We want our organic growth, but, we’re we’re you know, it’s always cost first, the bottom line first here for us, and, that’s sort of how how we work here as an organization. The macro level still seem pretty good for organic growth levels. We’re still seeing government activity in segments of our portfolio where they’re buying solutions and seeing changes in other parts of the portfolio where they’re not buying it as much. And, you know, it’s the value of having all these different acquisitions is when one area is not going, the other areas can. So we’re we’ve continued to move and and continue to to do what we’re doing.

You know, there’s the discontinuing, you know, in a bunch of different fronts. I’ll talk a little bit about induction. Induction is a UK based business. It’s a challenging acquisitions in terms of it was publicly traded and there was a significant amount of costs in that business that we felt was not being run correctly. And and we felt there if we could take this thing over and we paid a pretty good price for the organization, but we have work to do to get that business right sized, and we’re in the middle of it right now.

So we’re working hard at it, and we we we expect to get a lot of the work done in in q three and and hopefully start right sizing that thing in in q four and then, you know, a little bit by little bit on the quarters after. But, it’s we’re not taking our time here, and, we’re we’re moving pretty quick at it to to try to get it, to the right format that that we need. We really did that acquisition for the Zesty solution. We didn’t have a portal based solutions in that. It really, that provides the front end to get into health care organizations.

So we have our own electronic health record systems such as, Trade and Caseworks and Diamond and Twinkle in The UK that, can use a front end solution. So Zesty will become that that front end solution where where required to do that. And we also felt there was opportunities to integrate that solution with our InTouch and our Synopsys and MyPathway solution to provide one comprehensive solution to the marketplace where it’s needed. So we’re excited about that product and what it can do. It has a partnership with Cerner in The UK.

So every time Cerner is sold in The UK, Zesty is sold along with it. So it continues to to do that business to do it. So we continue to to work on that. Attend Anywhere, very different product. We we purposely took it out of our ARR numbers because it’s not ARR.

It’s user based license based on usage. And there’s, you know, there’s there’s there’s minimum thresholds and but there’s no real contractual requirement to to do, you know, to recur or not recur. So it’s usage based type of product. So we did not want it to model what we’ve called pure SaaS software ARR. And we we leave leave that as a separate segment.

So us and and the and the analyst can dissect that on its own basis, and we think it was a smarter thing to do with it. Onto, Navarre. We are really excited about Navarre. It was bit of a competitive process to get it, and we got it. Navarre has been around for a very long time, a very strong brand in Canada based out of Kingston, it’s done some good work, it has started to make headway in The UK and Australia.

So we think we can take it to the next step in in UK and so forth. There’s a lot of buzz in the Canadian marketplace for the referral management based system and connecting organizations together. And and Navarre is right in the middle of that for certain pathways, primarily the surgical and what they call central intake, which is really mental health and imaging referrals. And we think it’s it’s it it will provide a a significant amount of the organization’s ARR going into, you know, ’26 and ’27 and and onward, of our business. So we’re looking forward to that business and and working together.

We’ve known each other for a long time, and we’re we’re excited to have John and, John Sinclair and and the team as part of VitalHub. It’s really a good fit, and we’re excited to do that. You know, where are we sitting now? What do we do now? We think we’re in a pretty good state.

We’re we’re generating good cash. We’re we’re north of 45,000,000 of cash in the in the account at this stage. So we’re still coming out of here. We’re generating cash. There still are other acquisitions that are are coming at us, and we’re being a teeny bit more careful trying to get this thing to get these guys digested a little bit.

But, you know, if they’re a little on the smaller side or if it’s something that we just have to do because it makes sense, we’re we’re gonna do it. So we continue to to move along in all those directions. And that’s it for me today. I’d be happy to answer some questions.

Conference Moderator: Great. Thank you, Dan. We’ll now open up the line to questions from analysts. Again, please press star one or use the raise hand function if you would like to ask a question. Today’s first question comes from Gavin Fairweather of Cormark Securities.

Gavin, your line is open.

Gavin Fairweather, Analyst, Cormark Securities: Oh, hey. Good morning, and thanks for taking my questions. Maybe just to start at at the funding level. The NHS just announced a massive tech budget increase recently. Dan, maybe you can just touch on your read on their priorities and which of your solutions are well suited to benefit from that increased spending.

Dan Matlow, CEO, VitalHub: Yeah. It’s interesting in the NHS, like they’re in a bit of, you know, there’s money floating around, but they’re in a bit of flux as well, at least in the ICB level, which is where we sell some of our product sets to do it. The the product sets that I actually think will will will get money from this stuff will be the InTouch, Zesty, MyPathway, Synopsys type of product. There’s there’s PEP project, funding that they call that, I forget what the acronym is, that is being released, and it’s a significant amount of money in our area that our teams are are currently going after in those areas. So we’re hoping to get a bunch of that.

That money also fits into the referral area. So we do believe, you know, we know we’ve got a half a dozen strategy implementations that are there. We think Navarre is close on its first deal in The UK, and our teams are getting up to speed pretty actively on the referral based projects. So we’re we’re definitely trying to pivot a little bit toward those things in in The UK. But, yeah, there there’s always funding roaming around in The UK in different areas, and it’s just trying to find it and get part of it.

Yeah. We’ll go after it. We’ll see what happens with it and and go from there.

Gavin Fairweather, Analyst, Cormark Securities: Thanks for that. And then secondly on Navaria and induction. I know you do diligence these things like crazy from an external perspective, but now that you own them, I’m curious for what’s surprised you about the organizations or or products now that you’re kinda under that.

Dan Matlow, CEO, VitalHub: Navarre. What was the other, Gavin? Sorry.

Gavin Fairweather, Analyst, Cormark Securities: Induction.

Dan Matlow, CEO, VitalHub: You know, we’re just yeah. Navarre, we’re, you know, we’re literally, I don’t know, four or five weeks into it. Right? So we’re we’re we’re we’re going there. Induction has a really a lot of really good people there that some got some really good experience and and have done some things.

There’s just too many of them. So we’re we’re excited about some of the the talent that we’re we’re potentially gonna get there, you know, from that organization, especially on the technology side, to do that. So there’s some good people there, and and we think they’re they’re gonna help us in a lot of different areas. And and, you know, they really good methodologies, good ideas, good people. So it’s a bigger scale organization.

I think they all know how to run properly. You know, that’s a bit pleasure to do. Yeah. It’s the same thing with with Navarre. You know, it’s a company that we’ve known for a long time, and and we’ve evaluated over the years.

And and, they purposely have made commitments to process and change and and putting in proper, metrics and so forth to monitor its business. So pretty good structure and really run,

David Kwan, Analyst, TD Securities: you

Dan Matlow, CEO, VitalHub: know, pretty well. Probably the best run company that we’ve acquired so far. So, yeah, that’s pretty cool when you get something that big and they already understand how to run properly and, and we can get our stuff, we can get joined at the Hilton. And, they actually got some solutions, I think, that will overall help us, as well. So, yeah, it’s, you know, it’s it’s it’s pretty good when you walk into a company and, you know, our our integration team goes, hey, guys.

We got a problem. They actually do this better than us. We can’t take them backwards. So, you know, and we we think we do pretty good on their stuff. And not all of their stuff, but some of their stuff.

So it’s a really good run company, and we think it’s it’s gonna be really helpful for us.

Gavin Fairweather, Analyst, Cormark Securities: That’s great. And then lastly for me, just sticking on the Navarre theme. Given their pretty sizable installed base in Canada and and the sales team that they have there, do you think that can end up being a bit of a channel for your UK products where you you’ve got a much bigger installed base in in Canada just just to help accelerate the adoption in in Canada of those UK products?

Dan Matlow, CEO, VitalHub: Yeah. Good good question, Gav. Well, we do think they are. They have a a couple salespeople there. Like, it Canada’s not a big health care IT market, you know.

And, you know, if you gotta go there you know, there’s a I would call them more than a handful, but there there’s there’s not that many, like, highly experienced sales reps, you know, that that are running around here unless they’re, you know, working for the the and and so forth of those world. But they have they have a a couple salespeople that I would regard as, like, you know, blue chip a one salespeople. They’ve been doing this for both of them for, I think, north of twenty years in this market. They got great connections, and I think they’ll do I think our coverage, along with our Canadian team is is just gonna take us to a little bit of a higher level in Canada. So that’s a little bit exciting.

Gavin Fairweather, Analyst, Cormark Securities: Thanks so much, and congrats on the strong numbers.

Dan Matlow, CEO, VitalHub: Thanks.

Conference Moderator: Thanks, Kevin. The next question comes from Doug Taylor of Canaccord Genuity. Doug, your line is open.

Doug Taylor, Analyst, Canaccord Genuity: Thank you. Good morning. I wanted to ask another couple questions about induction health and, you know, as it relates to how we should model it in here. They were, I think, doing about $20,000,000 in trailing revenue. You’ve added only $4,000,000 to the ARR, which is just the Zesty, and I I think you explained well your your rationale for doing that.

So this new line for attend anywhere, can you help us with the modeling parameters around that? How we should think about the size of that line, you know, initially for a full quarter, you know, seasonality, maybe some churn, if if that’s what we should anticipate and bake into our model?

Dan Matlow, CEO, VitalHub: Yeah. It’s it you know, it’s about a little less than 4 and a half million pounds of and it and it varies. It could go it it it could go lower than that, depending on quarter to quarter, Doug, just on usage. That’s probably a number to use there for it in terms of of where it’s starting for.

Brian Goffenberg, CFO, VitalHub: That that’s an annual number. Right?

Dan Matlow, CEO, VitalHub: That’s an annual number, Doug. Churn, you know, the they they have gone through pricing changes and usage changes to remain competitive with other organizations to do that. There could be churn in this product. We’re we’re prepared for churn in this product, and it’s one of the reasons why the price point was the price point for for that organization. So we’re prepared for it, but we also think it’s gonna generate some significant, cash for us.

And we’re not so sure it’s gonna churn, you know, very fast either if it if it does at all, but we’re suspicious of it only because of the the Zooms and the and the Teams type of of businesses. There are definitely a lot of features in Attend Anywhere that are clinically based, and and I think the users that like it like it. I think they’ve done a really good design of that application. But it’s just, you know, you got IT groups that are looking for a uniform base and and wanna get Zoom and and other stuff in there. So it could come under pressure and but it might not.

And if it doesn’t, you know, we we’ve modeled in that there will be a little bit. I don’t know how to look at it, you know, in a in a in a productive way, at least gonna sit on on on on this call and and give that information to to you because we actually don’t really know ourselves what that will happen. I know that we’re the way that we’re planning to structure it and do it, we’re we’re gonna make some really good money at it while we have it and maybe for a long time. So, you know, that’s how we’re we’re looking at that asset.

Doug Taylor, Analyst, Canaccord Genuity: Okay. So to to use the, you know, £4,500,000 annually as in just, you know, model that flat line is not a bad place to start with pretty high margins.

Dan Matlow, CEO, VitalHub: Yeah. Yeah. I think it is. Well, not margins yet. K.

Well,

Doug Taylor, Analyst, Canaccord Genuity: I’ll ask more about margins in a minute. But just to to close the that thought, I mean, there’s a the balance of the you know, there’s a pretty big step up in services revenue that came with induction as well and strata, if I’m not mistaken. That would form the balance of the sort of 10,000,000 you’ve talked about to to 20?

Dan Matlow, CEO, VitalHub: Yeah. They, yeah, they have done they have in the past have done, what I’ll call, one off services projects that had nothing to do with their technology. So we don’t think the services revenue is gonna at least under our privilege, we’re not gonna do that work. We’re gonna do services work to our product. We’re not we’re a software company, not a services company.

So that could be a little bit different, as it goes forward. But, you know, there still is services on every single, you know, zesty implementation that happens that that is pretty that is significant.

Doug Taylor, Analyst, Canaccord Genuity: So it’ll step up, just maybe not the full amount that we’ve seen historically. Good. Appreciate that. You know, you mentioned margins, so, you know, maybe I’ll ask a question. You’ve got Navarre in the fold.

You know? And despite everything you said about how well it it has been run historically, I believe you’ve also identified, you know, r and d as a function where, you know, there’s a lot of promise in terms of synergizing with with VitalHub’s operating system. You know, I know it’s been only a month, but maybe you can talk about, you know, near and medium term integration milestones milestones as I’m sure you’ve begun the work there and sort of map us the path back to 25% EBITDA margins that we’re now seeing from VitalHub as both of those acquisitions are folded in here? It’s a question I get a lot from investors.

Dan Matlow, CEO, VitalHub: Yeah. You know, I think, I don’t think Navarre is gonna be one of those organizations that’s given us, you know, 25%, EBITDA overnight here. I think we’ll get it we’ll get it profitable, and we’ll look at it. And then the real chat the real test is how fast that how fast that revenue comes in that we see coming at them pretty close. Right?

Is it gonna be you know, how how soon in ’26 is is that stuff gonna start coming in and and start getting on the books. Right? So, if all that revenue is coming in, they’re gonna need, they’re gonna need people to implement it and do stuff. But at the same time, we we believe there’s a program for adding people. We already have adding people in Sri Lanka and and, and doing work for them.

They they have used a group in Columbia in Columbia, so they’re prepared to use offshore development group. And and so we we are moving, pretty quickly to try to help that out and and, you know, and and see what we need to do from other parts of the organization to help them, deliver what we think will be a significant amount of of business there.

Doug Taylor, Analyst, Canaccord Genuity: And so induction, you know, maybe a little quicker than that based on what you’re saying and the work you’re doing? Yeah. Yeah. Okay. Yeah.

And so maybe last question for me then. You’ve been pretty consistent, remarkably so in delivering double digit AR growth. And I understand everything you said about the lumpiness quarter to quarter that you alluded to in your prepared remarks. But I guess I just want to gauge your confidence in continuing to do so on the recurring revenue side as you scale into a 100,000,000 in ARR. I ask this because I think if I look at, you know, consensus expectations, it shows a bit of a a deceleration into, you know, sort of the high single digits by my math.

And I just wanna explore with you whether, you know, the pipeline you’re talking about with Navarre and other, you know, supports continuing to punch it at a double digit clip here.

Dan Matlow, CEO, VitalHub: You know, the it’s it’s so hard, Doug, and I and I and I just and the internal part of me always wants to be warning our group on the cautious part of that side of our our business. Like, we got, you know, we got some outlier implementations of software that you know, a lot of these companies, like, remember what we’re buying. Right? They’re owner operated businesses that have done it. Right?

And, you know, before they get into, like, their core business, like, they diddy that all, and they pivot a bunch of times. And so we got outlier solutions that are out there that we know at some point are gonna churn out of their world. We’ve been pretty although, you know, health care is pretty resilient, and they continue to keep going. But, like, you know, when we when we buy these things, we go, well, okay. Let’s model that that’s gonna stick around for two years, and it’s still here, like, six years later and, you know, no indications of it.

But there are there are pieces of software roaming around here, like, that we think are gonna churn throughout the this process. And and then you have one, like, quarter of of no sales, and then boom. All of a sudden, you’re, like, in this, like, single, you know, low volume type of business, and and boom. It grows. And then other quarters, like, there’s, like, a there’s a funding for, coming in from some area, and you gotta get this by a certain date and you just boom.

ARR grows like grows like crazy. Right? So it it just could be all over the map. Right? We’re excited about what Navarre can bring, but, you know, that could get offset by some slowness of no funding for other type of solutions that we might have had a couple years ago.

So I think our comfort level still sits in this, like, you know, 10 to 15 area to do that. We’ve always said, you know, over time as that denominator grows, they are gonna be harder, and it’s like we could be going to, like, to this, you know, twelve, twenty eight, ten, thirty type of business. I still believe that’s probably where it’s going. As this type of business. It just gets harder to get that amount of deals through there.

So, yeah, that’s where the the challenge comes in us projecting that to everybody in a pretty effective way. But, you know, I I’ve been saying that for a while, historically, we’ve been doing what we do. And I you know, there’s no indication that says that should change. But I do want everyone always to be prepared for, like, don’t get too excited when it’s too high, and don’t get crazy if, like, we, you know, we crapped it. We we have just have a crappy quarter because the model is the model, and it’s not gonna change anything.

Doug Taylor, Analyst, Canaccord Genuity: Yeah. You’ve been consistent on that. Okay. Thank you. I’ll pass the line.

Conference Moderator: Great. Thanks, Doug. For all questions going forward, we ask that you limit yourself to two questions per analyst. We’ll try to get everyone, you know, in the queue within the hour. The next question today comes from John Shao of National Bank.

John, your line is open.

John Shao, Analyst, National Bank: Hey. Good good morning. Thanks for taking my question. It looks like your perpetual license revenue is very strong this quarter. I know it’s all time related, but any particular reasons for such a timing, and how should we model this line going forward?

Dan Matlow, CEO, VitalHub: John, if you can tell me how to model it, we’ll we’ll all be good. We we had two products that have a perpetual component to it. One is InTouch, and the other one is Caseworks. And and both of them both of them provide revenue on a pretty consistent basis. Just sometimes InTouch will get bigger deals there, and it’s just a and then it’s a question of when do we go live and actually represent the delivery of it.

But we do have a you know, we we do have a fair amount in our in in touch funnel, and and I think we I think they were very you know, if you’re going a couple years back, a year and a half back before you were involved, mean, touch was a pretty significant part of our revenue stream and it, you know, maybe tailed off a little bit over the last year and a half, but we are seeing a little bit, of resurgence in activity of that stuff. So, yeah, I do think there’ll be some perpetual, sales over the over the next two, three quarters for sure.

John Shao, Analyst, National Bank: Great. That’s great colors. And my other question is you you added multiple pathways in the past eighteen to twenty four month. So any other particular pathway you think that’s missing at this point that could be complemented by future acquisitions?

Dan Matlow, CEO, VitalHub: Yeah. I still think there’s there there’s stuff around the emergency room that would be would be nice to do. There’s the there’s the ambulance route where there’s software in in those route. There’s so many of them. Like, care are just these little niche y solutions that go provide automation and and so forth into that doing stuff.

So we continue to look at at all different areas inside hospital itself, bed bed utilization, and moving people around the beds to to do that. So there’s still, you know, there’s still significant amounts of things to do here.

John Shao, Analyst, National Bank: Okay. Thank you. I’ll pass the line.

Conference Moderator: Thanks, John. Your next question comes from David Kwan of TD Securities. David, your line is open.

David Kwan, Analyst, TD Securities: Thanks, Kristen. So Ken, you’ve completed three of the largest deals to date within the last year. Can you maybe talk about what you’ve learned from kind of going through the sale process and then post close integrating these businesses? You know, has there been any new challenges that you’ve come across that you hadn’t seen, with the smaller tuck in acquisitions you’ve done, and and how did you deal with them?

Dan Matlow, CEO, VitalHub: Yeah. I think the only one that I think that’s any different would be induction. It it’s it was a publicly traded company. It was it it it had a significant amount of revenue, and it wasn’t making money. And we looked at that and just said, this is just ridiculous.

This is this you know, we think we can get this thing making some money. So we you know, we’re moving quickly on that one, and we have to move quickly to to get it right sized or it’s just gonna hit our our profile. Right? And, yeah, I think the you know, the you go you know, we’re hitting 20 per six adjusted EBITDA, and it took a lot of work for us to get to that 26%, 27%, you know, 28% level of adjusted EBITDA, and we like it up there. And, yeah, we’re we’re about we’re about to, you know, go into q three where that profile is gonna go down because of the acquisitions because we’re rightsizing, and it’s just like, guys, this isn’t making me feel very comfortable.

Like, how fast are we, you know, gonna get these companies here? Let’s go. Right? So I think we, you know, we we never had the urgency to on a speed perspective that we’ve had before, and we’re we’re off and running because we have to be.

David Kwan, Analyst, TD Securities: Well, that that’s that’s helpful, Dan. Is there anything that you could take maybe from the the Strata acquisition now that you had had two quarters with it that you can leverage for Induction and or Navarre?

Dan Matlow, CEO, VitalHub: On Navarre and Strata, we’ll we’ll definitely, know, we’re we’re we’re already off and running on that. They’ll be working together much more closely as our you know, to to stuff. Right? There’s both of them are strong in their own way, and both of them are pretty strong in in their pathways. But, you know, we also got resources that can be, because we got the domain experience, and we got the stuff that they can help each other out, right, in those respects.

So, yeah, I think the two are are nice together. They’ve known each other for a while. They’re they’re professionals, and, I think we’re we’re excited to have both those groups together.

David Kwan, Analyst, TD Securities: That’s great. Thank you.

Conference Moderator: Thanks, David. The next question comes from Michael Freeman of Raymond James. Michael, your line is open.

Michael Freeman, Analyst, Raymond James: Hey. Good morning, guys. Congratulations on the strong quarter and all the action recently. I wonder if you could if you could just give us an overview of, of the the major booking activity from from the quarter, and then I have a follow-up.

Dan Matlow, CEO, VitalHub: What do you mean by that? Where where we got our revenue from?

Michael Freeman, Analyst, Raymond James: Exactly. Yeah. Sources of business.

Dan Matlow, CEO, VitalHub: It was really just diversified. I think that we’ve had contributions, yeah, from all levels. You know, we consistently get contributions from that O’Real project that add users on a regular basis, and that that was there. But I think there was really no one area that stuck out, Michael, in terms of of where we got our revenue from.

Michael Freeman, Analyst, Raymond James: Alright. That’s helpful. I wonder if you, I wonder if you could give us a sense of, you know, some software products that have a, you know, a a major base of business or installed base in one geography, for instance, The UK, that might be, you know, finding some traction crossing over into your other geographies of focus, for instance, Canada?

Dan Matlow, CEO, VitalHub: Say that again? The question sorry. I just sort of missed it. What other products are going back and forth or which ones are?

Michael Freeman, Analyst, Raymond James: Exactly. One ones that have a strong installed base in in a in in one geography that is starting to

Dan Matlow, CEO, VitalHub: come in another. So I think induction is something that’s strong in The UK that we brought over to Canada. That that’s that’s been something that’s been brought over. Zesty will be brought over to Canada very quickly because we’re gonna put it on the front end of our stuff. And, you know, Strata was already in both countries, so it’s it’s it’s there.

Navarre is just is already knocking on the door that it’s there. And MedCurrent is sold in both countries, you know, pretty consistently with the team. So they they go that goes back and forth a a fair bit. Those would be the main ones at this stage.

Michael Freeman, Analyst, Raymond James: Okay. Alright. Thank I’m just gonna squeeze in one more question. The I wonder you’ve discussed you’ve talked about Navarre as a as a strategic asset. I wonder if you could dig in a little bit more on on the strategic nature of that acquisition.

Dan Matlow, CEO, VitalHub: They they got a footprint right across Canada, which is gonna you know, we when you look at our our Canadian business, right, our our big business in Canada has been the treat electronic record based system. Yes. We’ve ditty daddled with, know, a little bit of the other products roaming around. But, you know, our business is about cross selling into accounts. Right?

So Strata got us a a definitely good base in Canada, but now we get Navarre into here as well. So our footprint, we, you know, always used to go and say, hey. Our footprint in The UK was in every single implementation. We can pretty much start saying that about Canada now as well. We we got presence in in most of Canada with all of our solutions right now.

So, that just creates a a good avenue for cross selling our products into into that those bases and so forth. Right? So we, you know, we buy technology. We we buy good people. We’re getting a lot of really good people with Navarre, and we buy customers so that we can cross sell.

So and we buy, you know, we buy you know, customers come with partnerships that they have in place. Navarre has a very good very, very, very strong customer relationship with Cerner in in Canada, and we got a a very, very good relationship with Cerner in The UK. So, you know, hopefully, you know, can we leverage these partnerships a little bit better off multiple more products and multiple things. Right? So those are just all things that come with each acquisitions.

There’s always intangibles that we see as as operators. But, yeah, Navarre brings just a lot of those intangibles.

Michael Freeman, Analyst, Raymond James: Thank you, Dan. I’ll pass it on.

Conference Moderator: Great. Thanks, Mike. Your next question comes from Daniel Rosenberg of Paradigm Capital. Daniel, your line is open.

Daniel Rosenberg, Analyst, Paradigm Capital: Thanks, and good morning. My first question was around the Navarre, acquisition. You had mentioned that it was a competitive process. I was wondering if you could speak to some of the factors that you thought thought drove you to winning it outside of price.

Dan Matlow, CEO, VitalHub: Yeah. Yeah. I say this everywhere I go is we’re health care people. Right? Like, you know, we we go into an acquisition and you go into a meeting and, you know, I go in with my team and it’s pretty obvious.

We can we start talking health care. We start talking health care problems. We start talking IT problems. We start talking trends. We start talking ideas and, of how stuff fits together and and where we do.

And, you know, we can go out for a drink and just talk for hours of, you know, what do we gotta do? How does this go? How can we position this? And where are you seeing and what are we seeing? And that’s a lot of a different conversation than if a banker walks in and says, oh, what’s your ARR?

What’s your margin on this? And where do you go? And, yeah, sure, money counts, numbers count. And I I know my numbers, and Brian knows his numbers. I think we all everybody on this phone on the analyst perspective knows our numbers, but there’s really the intangibles of of and it’s something that I care for deeply.

It’s like, how are we gonna get these health systems better and how are what can we do to add some impact to actually make change so that we can do things better and we can help them save lives. And that’s conversations that we have. And, you know, and then it’s just a case of getting to the numbers. Right? So, you know, John and his team at at the core of what it is, like, they really believe in their business, and and they really believe they’re doing good work, and and they’re passionate about it, what they do.

And I appreciate that, and and I appreciate that for everything that we buy. Like, we’re trying to actually add some value to what we do, and and that value comes out in our ability to sell and and solve problems. Right? So, yeah, I think that’s what it is. Like, we’re just not about numbers here.

We got, like, numbers. We want numbers, and we the reason we get numbers is because we’re pretty passionate about what we do. So, you know, I think that’s where it goes with people like, John and the Navarre guys. And, these guys put a lot of work into building these things out of a office in Kingston General Hospital, and I think they wanted this to come into a good home where it’s gonna take it to the next level and and and bring it. I think that’s what that’s what we’re all about.

Daniel Rosenberg, Analyst, Paradigm Capital: Thanks for that and, certainly resonates with, anybody who’s gone through the health care system. For my second question, I I just was curious. You had mentioned some shifts and some products perform well and and some’s some may have a slow quarter. I was wondering as you think about the product portfolio, what levers you have to shift resources across products, and how you think about that as some products go into more of a driver phase? Just any commentary there.

Dan Matlow, CEO, VitalHub: Yeah. We about two years ago, we decided to as we got each one of these companies, r and d used to sit in its separate its separate technology group, and they just used to build their own products and and doing their own things. And they all had their own different methodologies and they’re different people, and all we would do is just sort of, oh, hang on. You got too many people or not enough people. We’d add people to the the lab, and they would work out as a group.

We changed that a a couple years ago in delivery and and development as a corporate function. So we, you know, we drive all the development groups off of a group. And and depending where we need resources, we have the ability to move them around as needed now. So it it it makes a big difference, and they all work the same way in the same methodologies on the same tools, and our services groups work all the same way. So it allows us to to effectively move people as needed.

Daniel Rosenberg, Analyst, Paradigm Capital: Great. Appreciate you taking my questions. Thank you.

Conference Moderator: K. Thanks, Daniel. There are no further questions at this time. So, Dan, I’ll hand the call back to yourself for any closing remarks you might have.

Dan Matlow, CEO, VitalHub: Yeah. Nothing really to add. You know, we’re we’re continuing to be excited. It’s just another chapter, another quarter. We’re we’re on to the next one.

But, yeah, we’re in a really good position. We’re hitting that. We’re getting close to that 100,000,000 of ARR and the model continues to the model continues to grow. And we got our work we got our work ahead of us to get ourselves back into that, you know, 26, 27% adjusted EBITDA percentage, and and that’s what we’re focused on right now.

Conference Moderator: That’s great. Thanks, Dan. And thanks, everyone, for joining today. That concludes today’s conference call.

Brian Goffenberg, CFO, VitalHub: Thank you.

Conference Moderator: Thanks, everyone.

Dan Matlow, CEO, VitalHub: Bye bye. Bye.

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