Earnings call transcript: Vitalhub Q3 2025 misses EPS, stock rises 6.55%

In its Q3 2025 earnings call, Vitalhub reported a revenue of CAD 32 million, surpassing forecasts by 12.54%, despite missing earnings per share (EPS) expectations with an actual EPS of -0.01 against a forecast of 0.03. Following the announcement, Vitalhub's stock rose by 6.55%, closing at 10.58, reflecting investor optimism driven by strong revenue growth and strategic initiatives. According to InvestingPro data, Vitalhub holds more cash than debt on its balance sheet, a positive indicator of financial stability despite the EPS miss.

Key Takeaways

• Vitalhub's revenue exceeded expectations, growing 94% year-over-year.
• EPS fell short of forecasts, resulting in a -133.33% earnings surprise.
• Stock price increased by 6.55% post-announcement.
• Strategic focus on AI and acquisitions to drive future growth.
• Strong cash position with CAD 123.8 million and no debt.

Company Performance

Vitalhub demonstrated robust performance in Q3 2025, with total revenue reaching CAD 32 million, a 94% increase from the previous year. Despite missing EPS expectations, the company's strong revenue growth and strategic focus on AI and acquisitions have kept investor sentiment positive. Vitalhub continues to capitalize on digital health solutions, expanding its presence in Canada and the UK.

Financial Highlights

• Revenue: CAD 32 million (+94% YoY)
• EPS: -0.01 (forecast was 0.03)
• Gross margin: 81%
• Adjusted EBITDA: CAD 7.2 million (22% of revenue)
• Cash position: CAD 123.8 million, no debt

Earnings vs. Forecast

Vitalhub's Q3 2025 earnings showed a significant EPS miss, with a surprise of -133.33%. However, the company delivered a substantial revenue beat, with actual revenue of CAD 32 million against a forecast of CAD 28.47 million, marking a 12.54% surprise.

Market Reaction

Despite the EPS miss, Vitalhub's stock price rose by 6.55%, closing at 10.58. This positive movement suggests that investors are focusing on the company's strong revenue performance and strategic initiatives, such as AI development and acquisitions, which are expected to drive future growth.

Outlook & Guidance

Vitalhub remains optimistic about its future, targeting a return to a 26-28% adjusted EBITDA profile and expecting margin improvements through 2026. The company plans to introduce AI product add-ons by late 2026/2027, aiming for a 10% uplift in annual recurring revenue.

Executive Commentary

CEO Dan Matlow emphasized Vitalhub's growth trajectory, stating, "We're close to CAD 94 million of ARR. I always thought, 'Hey, can we get this thing to 100?'" He also highlighted the potential in digital health within the NHS, noting, "Digital health is definitely needed within the NHS. There is a lot of room for improvement."

Risks and Challenges

• Integration risks from recent acquisitions (Novari, Zesty).
• Market challenges due to NHS restructuring.
• Dependence on successful AI integration and monetization.
• Potential cost pressures impacting margins.
• Competitive pressures in the digital health sector.

Q&A

During the earnings call, analysts inquired about the performance of recent acquisitions and the impact of NHS market restructuring. The discussion also covered Vitalhub's AI strategy and its approach to mergers and acquisitions, highlighting the company's operational bandwidth and future growth plans.

Full transcript - Vitalhub Corp (VHI) Q3 2025:

Call Moderator: With me on the call today are Vitalhub CEO Dan Matlow and CFO Brian Goffenberg. After our prepared remarks, we will 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'll 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 CDR 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 CDR filings. With that, I'll hand the call over to our CFO, Brian Goffenberg, to go over 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 third quarter of 2025. I'll provide a summary of the financial highlights from the quarter and then hand it over to Dan for an update on the business. At the end of September, our annual recurring revenue was CAD 93.7 million. Organic growth was 15% over the previous year, and total growth was 75%, including the acquisitions and foreign exchange. Total revenue in the quarter was CAD 32 million, an increase of 94% year over year. Recurring revenue, or term license maintenance support segment, was CAD 23.6 million, or 74% of total revenue. Virtual care term license revenue was CAD 2.5 million. This was the first full quarter contribution from the virtual care segment. Petrol license revenue was CAD 500,000 in the quarter, an increase from CAD 300,000 in the prior year period.

Services, hardware, and other revenue was $5.5 million in the quarter, compared to $2.3 million in the prior year period. Our services and other non-recurring revenues were higher than expected due to timing of project delivery and revenue recognition. We expect our recurring revenue mix to steadily increase to historical levels. Our gross margin was 81% of revenue, consistent with the prior year period. Adjusted EBITDA for the quarter was $7.2 million, or 22% of revenue, compared to $4.6 million, or 28% of the prior year period. We closed the quarter with CAD 123.8 million of cash and no debt. We closed a small asset purchase in the U.K. subsequent to the quarter end for CAD 140,000 and are otherwise generating cash and building on this balance. With that, I'd like to hand the call over to Dan for an update on the business.

Dan Matlow, CEO, Vitalhub: Thanks, Brian. I'll make my remarks brief. I know we got a lot of analysts that are potentially out there and ready to ask some questions. I think with what I have to say and the questions, you guys should be able to get a complete picture of the quarter. Yeah, we're excited about the results, just based on the fact that we came across the two large acquisitions that now represent 30% of our revenue. Both of those companies came into not meeting our profile in terms of what we want, in terms of the rule of 40, but we're working on it. We're close to CAD 94 million of ARR. I always thought, "Hey, can we get this thing to 100?" We're really just knocking on the door of that CAD 100 million ARR company.

Services helped us a fair bit in the quarter due to a couple of factors. Both Zesty and Novari do come with a significant amount of services attached in their implementations. They did make a contribution to that. TREAT has always continuously added into from a services perspective. We had some milestones that were met on services that allowed us to recognize some services. With the new company, services is a different element of our game. We are excited to have that as part of our revenue mix going forward. In terms of ARR, again, contributions from all products that were coming into the equation, none that really stood out relative to the other one.

We are seeing a little bit of headwinds for the SHRU-based products in the NHS, not due to anything except that they're changing all their structures in terms of ICSs and ICBs. While that's going on, I don't think they'll be making many purchases, although we are still selling that product in other areas of it. That was always a big part. That will settle down at some point in 2026. We do expect that to start opening up again and start seeing that, start seeing that to contribute. In terms of the integration, it's going great. We're starting to see that all coming together. We really got some great people with those acquisitions. We had a planning session last week where 50 people of the management team got together for planning.

It was just really nice to see how all these different groups are coming together. We're excited about the synergistic aspects of how we're going to be able to integrate products and integrate sales campaigns and how these products fit into really a cohesive fashion. We're excited to do that. We immediately after the acquisition started working on cost reduction programs. That's in progress. There's a little bit of that in the quarter, for sure. Really, that would have just come in for the last month of that quarter. We're continuing through that process. That's going to take into 2026 until we start working that through the complete system.

We expect to steadily, through the next few quarters, start to see the results of both new revenue coming in and cost reductions to get us into our profile that we're proud of and we always want to get to. We do have acquisitions in play. We continue to look at acquisitions. We've recently noticed over the last month or so, a lot more heated stuff in the smaller-based stuff. We continuously look at and explore the larger acquisitions that are out there and continue to work through. It is still a big part of our program. We continue to work through that every day. We're getting to the point that we think we can be able to digest some small ones and continue to work through that. We are working through our 2026 budgets right now. We're excited about what we can do.

That is where we are at. It was really one of those bridge quarters after those two acquisitions. We are excited about how we are bridging it. I think it was better than expected for a lot of people. We are excited about that. I will turn it over to any questions anyone has.

Call Moderator: Great. Thanks, Dan. We'll now open up the line to questions from analysts. Now, 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.

Oh, hey, can you hear me?

Yep.

Great. Thanks so much. Congrats on the great quarter. Maybe just, Dan, to start, I mean, the business has now achieved a fairly significant scale, approaching that CAD 100 million of ARR. That obviously has some cash flow benefits. Curious if that's opening up other opportunities to you to be more strategic to your customers or organize or run things more differently or invest. Any thoughts on what this newfound scale opens up for the business?

Dan Matlow, CEO, Vitalhub: Yeah, I think it was exciting at that planning session where we're starting to get to the mode where we're seeing tenders and we're seeing situations where we can put multiple products into the equation to go get a more comprehensive solution. We're also starting to be able to connect things together for more strategic-based offerings, especially in the patient flow and the patient journey, patient engagement-based side. We have customers that have agreed to and use multiple products and have agreed to integrate those products. That's exciting from my perspective. That was always what the vision is and so forth. That's also coming together with the Canadian products and the U.K. products. The Novari opportunity, I think, opens up a lot of opportunities for the U.K. products in Canada, a lot more effective.

Our U.K. team is definitely in a position to get Novari into the U.K. market a lot more effectively. They did close their first U.K. deal, and it got a lot of press in the U.K. It is really a pretty strategic deal over there from us in the mental health-based world, which they do a lot of in Canada, but we do not see very much in the U.K. We do think Novari is going to be able to get a significant amount of traction in the U.K., at least we are hoping that way.

Helpful. Just secondly for me, I noticed in the notes to the financials that you bought Definition Health at a bankruptcy for a pretty nominal sum. It looks like it digitized the surgical pathway. Maybe you can just discuss kind of the client base there, if you can integrate that with my pathway, and if you think you can grow it.

We really bought that for a technology purpose-based settings, and it's not the whole product. It's a pre-operative-based assessment. They've done a really good job in terms of content for patients before they come into a healthcare setting, although the solution itself was just used by a handful of what I would call semi-implemented solutions that are out there, right? It was just a group of people making some technology. It really didn't make a lot of progress, but that was a component that we wanted in our Synopsis product. It was really a technology decision to add it to it.

Helpful. Lastly for me, just on the Attend Anywhere, when we talked last quarter about how you thought that was a more mature asset, the revenue did surprise me to the upside this quarter. Wondering, as you've gotten to know that asset better, if you've kind of refined your view on the outlook for that.

Yeah, that solution, we immediately, that solution is built through a development team in Australia. We did not get much exposure to them during the due diligence process and so forth. We immediately went down to go meet that group. We were extremely impressed by the industrial nature of that product and how it was really designed for a clinical-based setting. We looked at the usage of the product in its base, and it is used pretty extensively. With that being said, we knew that when we got it, there are headwinds for it in respect to things like Teams and Zoom and things like that, although the customers that do use it seem to use it. In fact, the usage increased during the quarter, which led to some of those financials being the way they are for it.

We're not sure that's sustainable or not sustainable. We're just going to follow it along. We do have ideas where that product can get added into some of our other products. Example, maybe it can get added into the TREAT or EHR products that do have a requirement for telehealth and other areas. We discussed that in our planning session. We're going to explore that over the last little while. It's still early to tell on that, Gavin, of where that's going to go for it. We've always been transparent that that was a little bit of risk profile for that acquisition. We didn't pay a big valuation for that company because of the potential risk for that. It was more we wanted the Zesty product. We were pleasantly surprised by, A, how it performed in the quarter, and, B, on the usage of it.

We'll just keep monitoring on a go-forward basis and see what happens.

Thanks so much. I'll pass the line.

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

Yeah, thank you. Good morning. Let me just pick up that last train of thought there as it relates to Attend Anywhere. It seems like from your language, it might be a more meaningful part of the future than you might have expected at the time of acquisition. You do not really call it recurring revenue. It is in a different bucket. Can you, one, confirm that and maybe talk about how we should think about that and the repeatability of that business on a quarterly basis going forward? Help us with the modeling around that.

Dan Matlow, CEO, Vitalhub: I'll try, Doug. Yeah, we don't put it in ARR because it's usage-based. We're not 100% sure; it's a very different model than our software-based. It's a services solution as much as it is there. We thought it is more appropriate to identify it by itself. It should make life clearer for you guys and us on how it is performing. As I said to Gavin, let's see how this thing performs in the next couple of quarters in terms of usage and so forth. It's hard to tell. In our history of it, it's been all over the—I wouldn't say all over the map, but it's been lower than the range that we had last quarter, for sure. It's been a little higher than that range on a quarter-by-quarter basis just based on what it's doing.

Overall, the overall approach has gone down over the last few years, mainly because of price reduction, not as much as from loss of customers because it was very highly priced when it was a national deal that was sold to the NHS, I guess, five years ago or whatever it was. It went through a ton of price reduction to get it into a space that made sense relative to being able to compete against the other free products. Now I think it's holding on its own. We got new ideas of where we think we can use that technology in our world, which will take a while to bring to fruition. Yeah, I think, yeah, it's hard to say. We can meet with you afterwards and try to go through it. As I said, it's been lower.

has been a little bit higher. Both are feasible in there. It could come—it is not going to be radically different than what it is, I think, on a quarter-by-quarter basis, but it could fluctuate.

Okay. I mean, you said in the statement, "Results better than I think most expected, both top and bottom line." You said you'd barely started with the cost savings related to some of your recent acquisitions, just a month or so into any savings. And lots more to go. I just want to make sure there aren't any other short-term or one-time benefits that flowed through this quarter you'd call out anywhere as it relates to the margin profile. Any outliers, or is that a fair place to now start from 22.5% EBITDA margins and then break from there?

Yeah, I think it's—yeah, I think it's a fair place to start in a sense of where we're going. We're going to make more deals, which are going to come to the bottom line. We're going to keep—we'll keep looking for cost synergies as we continue to move along this, right? I'm not sure it goes up in a straight line or meanders a little bit throughout the process of the next two to three quarters. We do have a plan in place. We know exactly what we're doing and where these changes are going to be done. We're in the middle of executing it. It's just how long will it take and the timelines that will get associated with it. We do have a plan to get us to where we think we will be.

We do expect by the middle, end of next year that we're going to be meeting that profile of where we want to be pretty nicely. We have a plan to go do it.

Okay. Last question for me. You flagged some of the success with initial referral or Novari business's business being one in the U.K. There's some chatter that there's been some movement on some of the programs here in Canada. Can you speak to any successes you've had with the Novari product here recently in Canada as well to go alongside the U.K. success?

Yeah, there's a significant amount of chatter going on for Novari. Referral management is a hot topic in many geographies right now. I think that's where health systems are really trying to integrate all the areas of care and moving that patient around. Referral management's a big part of that. Novari does a very good job in terms of that in their particular niches. They've been doing it for a lot of years throughout Canada. As we've seen in other areas, you sort of get things started, and then government says, "Hey, let's just go for it and get a big chunk of this done." We're seeing those opportunities coming to fruition. Nothing to report at this stage, for sure, but there are things in play. You're dealing with government.

You never know how long these things take or what happens, and do they ever follow through with these things. We're cautiously optimistic of some things going through next year, for sure.

I appreciate your insights. I'll pass the line.

Call Moderator: Thanks, Doug. The next question comes from David Kwon of TD Securities. David, your line is open.

Hey, thanks. Curious about the recent acquisitions. It sounds like particularly Novari was quite R&D-heavy, especially relative to sales and marketing spend. It seems like there could be some good opportunities there to shift a good amount of work over to Sri Lanka and thus help boost the margin. Wondering if you could help elaborate on your plans on that front and how we should think about margin uplift in Novari.

Dan Matlow, CEO, Vitalhub: Yeah, our playbook has not changed, right? Our Sri Lankan group is well over 200 people now in that group. It keeps maturing year over year in terms of its ability to execute on many different things. We have a huge team of Sri Lankans already in Kingston to work with Novari. We have proceeded to work on that stuff. We continue to work that playbook, and that should not be of any surprise to anyone. That is what we do.

That's helpful. Thanks, Dan. On the integration front as well, we're, I guess, past the one-year anniversaries for MedCurrent and Strata. Curious if you can get an update there. Are the margins kind of up to where you guys were targeting and close to maybe where they were pre-acquisition?

Yeah, MedCurrent has proceeded just like we thought it would do. It continues to work. It has got into our profile, and we're happy with it. They just keep continuing to click. Strata is not as quick as we would like it to be, although with Novari, there's definitely some synergistic value. We hope to see some better things. We have made some changes in Strata in terms of salespeople and other aspects. We think that product is 100% very sellable. The customers that use it love it. In the extremes, I think it's just a process of not being exposed to as many customers as we would like it to get exposed to. We are seeing more activity for it just based on now that it's in our U.K. Salesforce.

The Novari Salesforce will be involved with that as well in terms of lead generation, in terms of coming through to it. We have added a more senior sales rep recently from our group onto that product. It has not contributed to as much as we would like it to, but there is a really good install base. It makes money for us, and we are fine with it. We still think there is more to get out of it, and we think we will.

No. Thanks, Dan. One last one. Just on the M&A pipeline, you kind of talked about potential for more, I guess, tuck-in deals. Curious from an operational standpoint, how you feel with the integration work that you're doing with Novari and Induction. Do you still think that maybe a larger chunkier deal, especially something the size of a Novari, is probably more of a 2026 timeline?

Listen, if the right deal comes across next week and it's like Novari, we would do the deal. We're not going to walk away from a deal because we don't think we can absorb it. We're still working those deals and would be doing—I think we could absorb it and do our things, although it might take a little bit more time to go do it. We would do it, and we would work on it. You need to be opportunistic. If the right scenarios come across and they meet our profile, we're going to execute on those deals. Who knows if it will be 26, 27, 28, or could be two months from now. If the right scenario is there, we're going to do it.

It sounds like you feel like you've got enough operational bandwidth. It might be pretty tight right now, but not too tight to the point where you pass.

Yeah, I think we're—I think we're getting pretty good at this. If we had to, we could do it, for sure.

That's great. Thank you.

Call Moderator: Thanks, David. Next question comes from Richard C of National Bank. Richard, your line is open.

Yes, thank you. I actually had a related question to that last question. Obviously, you've had a tremendous record of success here. As you get better with each of these deals, as you learn more, is it reasonable to think that the pace of capital deployment as we look ahead over the next year or two should accelerate?

Dan Matlow, CEO, Vitalhub: Yeah, I do not know if that is ever—Richard, I think it is more a question on, can we get the deals done with the right profile that we need to do the deals on versus the digestion of the deals relative to what it—there is a fair amount of activity out there. I think we still have been there. Are we going to—we have done four deals a year in a lot of the years, right, for the last three years, right? Is that going up to eight deals? Probably not relative to where we are at this stage yet. I still think it is more of the exact same thing. It is just a question on the size of the deals and are the deals there. It has never been really a question on our capacity. It has just really been a question on the right profile of the deals to get done.

We definitely walk away from a lot more deals than we do. It is just a question on the right ones.

Okay. Fair enough. Just my other question has to do with—I was sort of reading through the MD&A, and you talk about sort of cross-sell, upsell. Are there any sort of metrics that you could share with us to kind of allow us to evaluate how that success is among your existing base in terms of the ability to do that?

We haven't published any metrics relative to do that except the narrative that we have a lot of customers that use a lot of our different products. But our customers are just all over the place, right? Different naming conventions, different worlds. The NHS, you could call it a customer, and it uses all of our products. Within the NHS, you have different areas and different groups that change over time that use multiple areas of product. It is a challenge to get there. We're working on updating our Salesforce and our whole customer area in terms of exploration. We do got significant data on that, but it needs to be more comprehensive. Nothing that we've published as of yet, but we're looking to be able to do that a lot more effectively in the future.

Okay. Great. Thank you.

Call Moderator: Richard. The next question comes from John Shooter of RBC Securities. John, your line is open.

Thanks for taking my question. I appreciate the color on Strata in terms of the integration and the margin profile there. I'm curious from a top-line perspective over the last year how that's performed relative to your initial expectations and what you guys expected of that business going forward.

Dan Matlow, CEO, Vitalhub: Strata?

Yeah, on Strata.

Yeah. There's a lot of noise going on in the referral management business in terms of Strata already has a—it has a very large footprint in Alberta, British Columbia, and the Maritimes relative to it. None of us do a ton of work in the Quebec marketplace, although they do have a little bit of implementation there. They also do have a footprint in Manitoba that we're trying to grow. Nothing's discussion. It's really been the wildcard's been Ontario, which they do have a fairly good footprint. However, there's been more focus on referrals into the hospital setting as opposed to outside of the hospital setting relative to the spending by those governments. We do think that's going to change. Novari is the leadership of it, where they have seen their growth has been in the U.K. marketplace because we do see some more activity on there.

I do think that product is sellable and should be sold more than it is. Has it met our expectations? Probably a little less than what we thought it would at this stage, but we're not done there yet, right? I just think it's—I think it's not the product, the value proposition is there. We still think there's a big need for it. I think it's just been more execution. We think we're going to get business out of that product. To date, it has been less than expected.

Got it. Appreciate that. Just one more from me on you commented on the changes in the structures in the NHS and some headwinds for SHRU there. I'm curious, into 2026, what kind of visibility you have to potential new programs and how you see yourself being positioned in that market under the new structure?

Yeah. What they've done is they've got these regional bodies that they've—instead of one region being a certain population size, they've said, "Hey, let's combine these two together for a bigger population size." While they're going through those changes, yeah, they're not looking at buying new software to go through it. Our software's in a lot of those. Yeah, it's going along. It goes together with the integrations, right? There could be opportunity where one group gets integrated to another group that doesn't have our product where we could get added into that whole scenario. We've seen those. We do expect that. As far as new sales, that's going to be challenging as they go through that through the first part of 2026. That's been a bit of a challenge for us with that product.

We do expect that to settle down. The regions that do use our product love it. We were on our way for a national view of SHRU in the U.K. We do have a footprint of that on a product called Opal, which we built for them. We are seeing some stuff there. We are also starting to see activity in the other surrounding areas of Wales and Scotland and Ireland as well for SHRU. It continues to do its thing. It went through, I do not know, a couple of years of really leading the charge of our organic growth. Although it is still going to contribute, it is not going to be the leading charge probably in 2026. We would expect that. We think that slack will get picked up by other products. We will still get deals from SHRU.

We do think through the first half of 2026, it's going to be going through that reorg structure.

Got it. Yeah. Appreciate you taking my questions. Thanks.

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

Thanks, everybody. Can you hear me all right?

Yeah.

Excellent. Actually, just following on that last question on the NHS, when we're talking about merging these regional bodies, does, I guess, the overall reduction of regional bodies, I guess, reduce the possible TAM for SHRU? I guess I'm asking a question about the revenue model.

Dan Matlow, CEO, Vitalhub: Yeah, not really. SHRU, in that particular setting, is sold on population size. And so the population size remains the same. It's just one buying entity for a larger population group.

Okay. All right. Gotcha. I wonder, the NHS published a 10-year plan recently describing how it would deploy its budget. Digital health was mentioned throughout. I wonder how you think about the opportunity with the NHS sort of after things settle down following this reorg. Do you see opportunity for Vitalhub's products expanding in this new environment?

Digital health is definitely needed within the NHS. There is a lot of room for improvement, and there are still opportunities for new solutions to come into that market. We expect to be a player in that world. We have a team out there that is all they do, try to get those solutions into that world. It is a little bit of a complicated world in terms of how it changes and how it is structured and where money is coming from and so forth. We have a lot of experienced people there that know how to do that. We expect to be a part of it for sure.

All right. All right. Thanks for that. Now, last one for me. At the top of the call, you mentioned that the last couple of acquisitions, you had to step outside your typical acquisition parameters. I wonder what motivated you to make these steps outside of these parameters? Are you more sensitive to staying within those parameters for next deals, or are these barriers you're happy to cross for the right deal?

Every deal is different. I think the only one we crossed through our barrier would have been the Novari deal to a degree. Definitely not an Induction. I think we paid less than one time's revenue for that base solution for it, but Novari a little bit higher. I think our basis on Novari was really just understanding where it sit in the marketplace and what that solution can do and our level of confidence of its ability to add significant ARR in the next couple of years just based on where it's based and looking at the profile of that company and understanding what we could do to enhance its processes for development and work on cost-effectiveness in a pretty meaningful way to get it into the profile that we would like. Both of those are in play.

We're really excited about that acquisition and think it's great. The people are great, and they're solving great problems. We're really happy to have those guys on board.

Do you think Novari will be the product that leads the organic growth charge if SHRU is no longer holding that seat?

Yeah, I think potentially, yeah. I think it could. Time will tell. There are other products in our arsenal that continue to add there. We'll see where it goes. We're excited about a lot of our products, but definitely Novari's got some footprints into next year, which we're excited about.

All right. Thanks, Dan. I'll pass that on.

Call Moderator: Thanks, Michael. The next question comes from Kevin Krishnaratne of Scotia Capital. Kevin, your line is open. You may be on mute there.

Can you hear me now?

Yes.

Hey, guys. Sorry, I did join the call late, so maybe this was discussed. Good to see the consistent organic ARR being added. Did you talk about the areas of strength in the quarter? As we think about Q4, this is maybe leading on the last question. Last Q4, we had some pretty sizable strength there. As you think about Q4, how do you see ARR building? SHRU maybe less of a driver. Novari, you talked about more 2026, but do you start to see some pretty good benefit in the Q4? I'm just wondering about your year. You had some pretty good strength last Q4. Curious about how to think about the near term.

Dan Matlow, CEO, Vitalhub: Yeah. I think consistently, Kev, we've had contribution from many products. We've seen a recent uplift in our In Touch with Health-based space, and you've seen some professional licenses, and that comes with the recurring base as well, right? So that's added some revenue. There's still definitely some revenue that comes from SHRU in other areas. Yeah, Zesty and Novari do add a significant amount of potential revenue that's coming from that perspective. I do think both of those products will pick up the slack, I think, for SHRU in the short term. We're hoping SHRU comes back again towards the middle of next year when things get settled down in the NHS. That's really how we're thinking things on a go-forward basis. Q4 pipeline looks like other pipelines, and it's still early to tell where things get through. It's really hard to tell.

We still got a lot of different ways to add ARR to us, and it's not one consistent way. It does get hard to predict. Typically, I don't know, if you look over the last three years in terms of percentage of where products would come, I don't think there's one product or one quarter. Sometimes it's more or less from one product that contributes to any type of quarter. We feel confident in our mix of products. I don't know where it's going to come from, but I do think having Zesty and Novari in our mix is nice to have.

Appreciate the color. Maybe just one last one from me. It's a question that is being generally brought up by clients I talk to about just software vendors generally, and that's the impact of AI. I think just given the nature of your customer base, maybe it's too early. Maybe if you could share any sort of thoughts there. I know your team is pretty tight with NHS when they're going in there and having discussions. Are there any signs of experimentation on AI?

Yeah, for sure. I think the biggest use case we're seeing for AI in our healthcare base is just the concept of scribing for doctors as they take or clinicians as they take notes in their systems, right? That's really in our community health-based world, the TREAT and the Coyote products and the CDS products in Australia. We're well on our way of getting scribing into those products, which we think will be add-on solutions for those solutions. There's other elements that we're working on, such as predictive data in SHRU, so we can predict or we can look at the dashboards and read those dashboards and just in words give a profile of what those dashboards mean to the person that's looking at those dashboards effectively.

Novari's got work going on in terms of the referral process where we do a summary of a form on a referral that can be created. So we have, I think, about half a dozen or so AI things that are being built in our products. Right now, we're really viewing those as add-ons to our solutions the same way Copilot is getting added into all the different office-based solutions. We're looking at where add-ons can be used on our solutions using AI and how we can monetize those from a group. If we could add, we got CAD 93 million worth of ARR, if we can come up with AI solutions that get a 10% uplift. That's CAD 10 million, right, worth of stuff. It's really the we've challenged our product managers to come up with ideas. We put together an AI development team.

Yeah, we're looking on how to monetize that. Do we see that happening in the next couple of quarters? No. Could happen towards the end of 2026? Yeah, maybe. And definitely into 2027, I think we'll be having AI products in the marketplace, which will be add-ons to our solutions, which will help our ARR growth. That's how we're thinking of it.

Gotcha. Okay. No, appreciate the thoughts, Dan. I'll pass the line. Thank you.

Christian, you're on mute.

Call Moderator: Yeah. There we go. There are no further questions at this time. Dan, I'll hand the call back to yourself if there are any closing remarks you want to make.

Dan Matlow, CEO, Vitalhub: Yeah, I think in typical Vitalhub mode, it's just steady as she goes. We're excited by what Q3 was. It was a bridge quarter for us based on the acquisitions. I think we did a good job, and the team's doing a really good job of executing the plan on those acquisitions that we made up as part of the thesis for why we bought those acquisitions. The plan is still being executed. It's going to take a while to execute it, but we're being executed it. We really have a goal of getting back to our 26-28% adjusted EBITDA profile as quickly as we can. That's what we're working on. If anybody got more questions, questions available, I'm available on a go-forward basis. I'd just like to thank everyone for joining us. I know it's earning seasons.

You guys are running from call to call. If anyone's got any more questions, feel free to put them forward. Thanks, everyone.

Call Moderator: Thanks, Dan. This concludes today's call. Thanks, everyone, for joining.

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