Earnings call transcript: WELL Health Q3 2025 reports strong EPS beat

WELL Health Technologies Corp reported its third-quarter earnings for 2025, showcasing a notable earnings per share (EPS) of CAD 0.16, surpassing the forecast of CAD 0.1013 by 57.95%. The company achieved record quarterly revenue of CAD 364.6 million, despite falling short of the expected CAD 373.89 million, resulting in a revenue surprise of -2.48%. Following the announcement, WELL Health's stock price reacted negatively, dropping by 7.96% to close at CAD 4.51, indicating investor concerns over the revenue miss.

Key Takeaways

• WELL Health's EPS significantly surpassed expectations by 57.95%.
• Quarterly revenue reached a record CAD 364.6 million but missed forecasts.
• The stock price dropped by 7.96% following the earnings release.
• The company continues to expand its digital health and AI solutions.
• WELL Health plans to IPO its WELL Star platform in early 2026.

Company Performance

WELL Health Technologies demonstrated robust performance in Q3 2025, achieving record quarterly revenue and EPS. The company has shown substantial growth, with year-to-date revenues surpassing CAD 1 billion, marking a 48% increase from the previous year. WELL Health continues to lead in the Canadian healthcare technology market, focusing on digital health solutions and AI-enabled healthcare services.

Financial Highlights

• Revenue: CAD 364.6 million (record high)
• Earnings per share: CAD 0.16 (57.95% above forecast)
• Adjusted EBITDA: CAD 59.9 million (296% increase year-over-year)
• Adjusted net income: CAD 41 million

Earnings vs. Forecast

WELL Health's EPS of CAD 0.16 exceeded the forecast of CAD 0.1013, resulting in a positive surprise of 57.95%. However, the revenue of CAD 364.6 million fell short of the forecasted CAD 373.89 million, leading to a negative surprise of -2.48%. This mixed performance reflects WELL Health's strong profitability but challenges in meeting revenue expectations.

Market Reaction

Despite the strong EPS performance, WELL Health's stock price declined by 7.96%, closing at CAD 4.51. This drop suggests investor concerns over the company's revenue miss and potential future growth challenges. The stock's performance is also influenced by broader market trends in the healthcare sector.

Outlook & Guidance

WELL Health provided guidance for 2025, projecting revenue between CAD 1.4 billion and CAD 1.45 billion and adjusted EBITDA between CAD 190 million and CAD 210 million. The company aims to achieve CAD 800 million in revenue for WELL Canada within 18 months and plans to launch an IPO for its WELL Star platform in early 2026.

Executive Commentary

CEO Hamed Shahbazi emphasized the company's growth trajectory, stating, "Our revenues have grown more than 30 times in five years." He highlighted WELL Health's focus on delivering value and efficiency to healthcare markets, asserting, "WELL's growth engine has never been stronger."

Risks and Challenges

• Revenue growth challenges, as evidenced by missing Q3 forecasts.
• Potential market saturation in Canadian healthcare technology.
• Macroeconomic pressures affecting healthcare spending.
• Integration risks with recent acquisitions like Neutro.
• Competitive pressures from other digital health solutions providers.

Q&A

During the earnings call, analysts inquired about margin improvements across business segments and the strategic review of US assets. WELL Health's acquisition strategy for WELL Star and valuation expectations for virtual care assets were also discussed, highlighting investor interest in the company's future growth plans.

Full transcript - WELL Health Technologies Corp (WELL) Q3 2025:

Operator: Good afternoon, ladies and gentlemen, and welcome to the WELL Health Technologies Third Quarter 2025 Earnings Release Conference Call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you need assistance, please press star zero for the operator. This call is being recorded on Thursday, November 6th, 2025. I will now turn the conference over to Tyler Baba, Investor Relations Manager. Please go ahead.

Tyler Baba, Investor Relations Manager, WELL Health Technologies: Thank you, Operator, and welcome everyone to WELL Health's Fiscal Third Quarter Financial Results Conference Call for the three months ended September 30, 2025. Joining me on the call today are Hamed Shahbazi, Chairman and CEO, and Eva Fong, the Company's CFO. I trust that everyone has received a copy of our financial results press release that was issued earlier today. Portions of today's call, other than historical performance, include statements of forward-looking information within the meaning of applicable securities laws, including future-oriented financial information and financial outlook information. These forward-looking statements involve known and unknown risks, uncertainties, assumptions, and factors, many of which are outside of WELL's control that may cause the actual results, performance, or achievements of WELL to differ materially from the anticipated results, performance, or achievements implied by such forward-looking statements.

These factors are further outlined in today's press release and in our management discussion and analysis. We provide forward-looking statements solely for the purpose of providing information about management's current expectations and plans relating to the future. We do not undertake any obligation or undertake to release publicly any updates or revisions to any forward-looking statements to reflect any change in our expectations or any change in events, conditions, assumptions, or circumstances on which any such statement is based, except if it is required by law. We may use terms such as adjusted gross profit, adjusted gross margin, adjusted EBITDA, adjusted EBITDA margin, shareholder EBITDA, adjusted net income, and adjusted free cash flow on this conference call, all of which are non-GAAP and non-IFRS measures.

For more information on how we define these terms, please refer to the definition set out in today's press release and our management's discussion and analysis. The Company believes that adjusted EBITDA is a meaningful financial metric as it measures cash generated from operations from which the Company can be used to fund working capital requirements, service future interest and principal debt repayments, and fund future growth initiatives. Adjusted EBITDA should not be construed as an alternative to net income or loss determined in accordance with IFRS. Let me turn the call over to Mr. Hamed Shahbazi, Chairman and CEO.

Hamed Shahbazi, Chairman and CEO, WELL Health Technologies: Thank you, Tyler, and good day, everyone. We appreciate everyone for joining us today as we discuss our Q3 2025 financial results. Q3 2025 was an excellent quarter for WELL, driven by strong performances network-wide, but especially in our core Canadian business. We're seeing our technology-enabled approach, which is increasingly AI-enabled, drive real business results across the enterprise. We feel qualified and authentic to say that we're firmly delivering on our mandate of delivering high-quality tech-enabled care and/or supporting physicians across the continent in delivering high-quality tech-enabled care in their environments. We generated approximately CAD 365 million in revenues for the quarter, which were up by 56% year over year and surpassed CAD 1 billion in revenue and CAD 137 million in adjusted EBITDA in just the first nine months of the year. Five years ago, for perspective, our quarterly revenues were CAD 12 million.

Year-to-date revenue as of Q3 2020 was approximately CAD 33 million, with negative adjusted EBITDA. Our revenues have grown more than 30 times in five years, while our adjusted EBITDA is trending to meet our stated guidance of between CAD 190 million and CAD 210 million this year. We also witnessed improvements in a number of operations and productivity metrics, which we will discuss later on this call, which we feel demonstrate that we are not just growing but delivering real value and efficiency to the healthcare markets we serve. We achieved adjusted EBITDA of CAD 59.9 million in Q3, an increase of 296% as compared to CAD 15.1 million in Q3 2024. If one were to exclude the impact of Circle Medical deferred revenues, Q3 would have been CAD 347 million, representing 48% year-over-year growth, while adjusted EBITDA would have been CAD 42.3 million, representing a 180% increase compared to the previous year.

I'm also very pleased to report that, given management's very intense focus on margins, we've improved our gross margins by 510 basis points to 45.5% from 40.4% last year, and our operating adjusted EBITDA margins have improved by 990 basis points year over year. Free cash flow attributable to shareholders in Q3 was CAD 30.2 million, including one small divestiture we had in our CRH platform, and CAD 15.1 million in Q3 without it. Eva will speak to this in greater length later. I will now share with you some of our operational highlights for Q3. As of the end of Q3 2025, WELL had over 4,500 billable and non-billable providers delivering care across our entire network of physical and virtual clinics. Of that number, we now have over 1,300 physicians in Canada operating with WELL, which is just over 1% of all physicians practicing in the country.

We continue to focus on achieving 10% market share within 8-10 years so that we have a tremendous amount of runway left to continue to expand our footprint across Canada. As a reminder, we are the market leader. In addition, over 43,000 healthcare providers across the country, the majority of which are physicians, continue to benefit from our SaaS and technology services. We estimate that more than 40% of all physicians in Canada engage with our WELL Star technology platform in some capacity. Looking at our patient visits, which are a strong indicator of our revenue growth and progress. Patient visits are very strong for the quarter, especially in Canada. Total care interactions were over 2.7 million in Q3, which represented a 29% increase compared to last year and represented 19% organic growth.

For the second quarter in a row, Canadian patient visits surpassed 1 million in a single quarter, reaching 1.08 million patient visits in Q3 2025. Total patient visits increased 38% year over year, including organic growth of 9%, accounting for both clinic absorptions and same-clinic expansion. System-wide, inclusive of US and Canada, we delivered over 1.7 million patient visits in Q3, a 19% increase from the prior year, with organic growth of 3%. We note that the slower organic growth in patient visits system-wide was attributable to Circle Medical, whose patient visits were lower than last year because of the significant focus on compliance. However, I'm pleased to note that Q3 was a bounce-back quarter for Circle Medical compared to Q2. We'll talk a bit more about these positive results at Circle Medical later in the call.

I'd like to now share with you an updated overview of WELL Health and its key operating subsidiaries. We think it's important to convey what the Company will look like as the dust settles on its journey to simplify and streamline operations, especially with the divestiture processes we have underway in the United States currently. As you can see, our core operating business and capital allocation focus is our Canadian clinics network. This is where we have a leadership position in Canada and where we are able to generate the highest return on invested capital, or ROIC. Our three key areas of focus here are primary care, diagnostics and specialized care, and of course, our preventative and executive health line of business. Complementing our Canadian clinic network assets, we have our strategically controlled operating platforms.

This includes WELL Star, for which we are planning an IPO next year on the TSX, and HealWell, which is already a publicly listed company on the TSX. WELL Star is focused on providing digital enablement solutions for healthcare providers and clinics, while HealWell is building AI solutions and data science healthcare information systems for public health, as well as other solutions for big pharma and life sciences companies. An easy way to think about this is that WELL Star generally serves SMB or small and medium-sized businesses and clients, such as outpatient medical clinics and doctors, whereas HealWell serves large enterprises around the globe, such as the NHS. It is important to note that both HealWell and WELL Star are able to fund their future acquisition plans through their own fundraising and capital allocation programs.

This structure is very capital-efficient for WELL shareholders, who will continue to benefit from the consolidated financial statements and enterprise value of both WELL Star and HealWell without seeing any dilution in WELL's own share capital. Incidentally, CyberWell is another strategically controlled operating platform, but has been excluded from this slide for the moment due to its small size. It is currently generating less than 1% of WELL's total revenue. Now that we've covered off the key results, I'd like to go over a few key presentation themes we'll be covering in the rest of the presentation. One, of course, will be our Canadian clinics update. Two, WELL Star. Three, HealWell AI. And fourth, we'll provide an update on the strategic alternative processes for our US assets. The first key theme I'd like to address this morning is the success of our Canadian business.

As you can see from these charts, the historical performance of our Canadian clinics business has been exceptionally strong. Over the past four years, our Canadian clinics business has exceeded a 50% compound annual growth rate. During the nine months ended September 30, Canadian clinics achieved revenue of CAD 325.3 million. Our year-to-date revenues have already surpassed our total revenue for all of 2024. For perspective, five years ago, our Canadian clinics revenue was CAD 9.7 million for the quarter and CAD 26.4 million on a year-to-date basis. Again, well over 10 times. Adjusted EBITDA attributable to our Canadian clinics business has grown at a compound annual growth rate of over 44%. During the nine months ended September 30, 2025, Canadian clinics achieved adjusted EBITDA of CAD 45.7 million.

Notably, our year-to-date adjusted EBITDA for the first nine months has also surpassed our total adjusted EBITDA last year, with an additional $5 million so far. Our Canadian clinics network has grown to 227 clinics at the end of Q3 2025. Our Canadian clinics business continued a strong growth trajectory in Q3 2025. Patient visits in our Canadian clinics network totaled 1.08 million in the third fiscal quarter, our second quarter in which we surpassed 1 million patient visits and up 38% from 780,000 in Q3 2024. The number of billable providers within the network reached 2,068 in Q3, up 17% from 1,769 in Q3 of last year, highlighting the growing magnitude of our scale. Note that the number of doctors here is just over 1,300, as mentioned earlier. In the quarter, we recruited 44 physicians versus acquiring 64 physicians into our platform through our M&A program.

We're pleased to note that we are now recruiting more physicians than ever before, as the WELL brand is gaining recognition as an attractive place for physicians to work and build their practice. This is due to the hard work we're doing to win the hearts and minds of doctors by making their lives easier and helping them be more successful in their practice. A major goal of our platform is to allow providers to spend more quality time seeing patients without having to worry about the overhead tasks or managing a clinic or spending countless hours on charting patient records. This shows that our business model is working. In fact, in Q3 2025, our number of patient visits per billable provider was 524, compared to 441 in Q3 of last year, representing a year-over-year increase of 19% in this very important metric.

With patient visits growing faster than the number of billable providers in WELL's Canadian clinic network, we're demonstrating increasing efficiency in our clinics. While there are many more contributors to this improvement, we believe improved tooling and technology to be one of those key reasons. Looking at our Canadian business, including Canadian clinics, WELL Star, and CyberWell, but excluding HealWell, our WELL Canada business is experiencing accelerating growth, as you can see from both of these graphs. In Q3 2025, WELL Canada generated revenue of CAD 129.3 million compared to CAD 93.5 million in the prior year's quarter, an increase of 38%, as compared to the prior year's growth of 27%. We're also quite proud to report that our adjusted EBITDA is growing faster than our revenues now, which was not the case last year.

In Q3 2025, adjusted EBITDA for our total WELL Canada business reached CAD 21 million, up from CAD 14 million year-over-year, representing an increase of 50% as compared to the prior year growth rate of 16%. Onto our Canadian clinics capital allocation track record slide. If you were on last quarter's conference call, you would have likely remembered this slide. We've updated it to demonstrate our capital allocation record at Canadian clinics. As a reminder, this slide speaks to all of our clinical acquisitions and absorptions since inception. On the right hand of this slide, we provided total figures relative to our capital allocation record in Canadian clinics. As you can see, we've allocated about CAD 280 million overall in 31 separate transactions, where we have acquired CAD 273 million in revenues. Our total deal multiple for all acquisitions was 9.4 times EBITDA at the time of acquisition.

Since then, we've grown the EBITDA of all of our acquired assets by 117%. Re-rating the implied multiple to 4.3 times. If one takes out MyHealth, the specialized care and diagnostic imaging platform, which was our single largest and most expensive acquisition to date in Canada, the average original multiple that we transacted against was 5.8 times EBITDA. Given that we've substantially improved the EBITDA for these businesses, the implied multiple after these improvements currently stands at just 2.2 times shareholder EBITDA. This yields an adjusted EBITDA growth of 164%. In Q3 2025, we continued executing on our strategic growth plan through the expansion of our clinic network. During Q3, we acquired five clinics, generating over CAD 27.5 million in annual revenue. Our owned and operated clinic network welcomed 68 new billable providers in the third fiscal quarter, further strengthening our capacity to deliver high-quality care.

As we articulated at the beginning of our call, the main focus of our capital allocation focus is our Canadian clinics business. As such, we have picked up the pace of our M&A program relative to Canadian clinics. Year-to-date, we have already completed 12 transactions and acquired CAD 67 million in clinical revenue, which includes acquired and absorption revenue, which exceeds our full-year metrics in the prior year. By comparison last year, we completed 10 transactions in this full year, accounting for CAD 53 million of acquired business. We continue to tool up our M&A program and are getting ready to improve these numbers as we get into 2026. We have now spent considerable time and effort streamlining, automating, and where possible, AI-enabling our corporate development efforts, with the goal of evolving our M&A efforts into a true efficient machine.

As for our growing M&A pipeline, we're pleased to report that we are working on some of our largest acquisitions to date in Canadian clinics and have approximately CAD 235 million in clinics under LOI, with approximately a quarter of a billion overall under LOI enterprise-wide, including WELL Star and HealWell. The CAD 235 million figure reflects eight signed LOIs and 61 clinics and includes some of the largest targets we've had locked down in quite some time. As a comparison, on our prior call in August, we had 25 clinics and only CAD 48 million in annual revenue under LOI. We also have a very large pipeline of target acquisitions that are in the pre-LOI stage. For our total pipeline, including both LOI and pre-LOI, we now have more than 35 targets engaged, representing over CAD 350 million in annual revenue and more than 130 clinics.

The second theme I'd like to talk about is WELL Star. As a reminder, WELL Star is a WELL subsidiary, which we intend to spin out as a publicly listed, high-growth, profitable, pure-play software-as-a-service, or SaaS healthcare technology company, which would still be majority owned by WELL. WELL Star is laser-focused on addressing the diverse needs of healthcare providers by streamlining care delivery, integrating fragmented healthcare systems, reducing provider burnout, and improving patient experiences and outcomes. Last week, we announced a CAD 62 million equity financing for WELL Star, which is expected to close by early December 2025. The financing was led by a syndicate of investors, including three of Canada's most prominent fund investors, Mawer Investment Management, EdgePoint Wealth Management, and Picton Mahoney. We're very grateful for the support provided by these investors and extremely proud to have the support of such outstanding Canadian institutions.

This equity offering was done at $1.50 per share, which is a 50% premium compared to the prior WELL Star financing that we completed at $1 per share in December of 2024. On a fully diluted basis, the post-money valuation for WELL Star is approximately now $535 million, and WELL's ownership stake is approximately 70%. This would imply that WELL Star should contribute approximately $375 million to WELL's valuation on a sum of parts valuation. Thus, you can see we are unlocking the value of WELL Star as we believe it is not properly reflected in the total value of WELL Health, which we believe remains undervalued. We continue to believe WELL Star would be a very strong IPO candidate on the TSX main board sometime early in 2026, depending on market conditions.

Our plan is to build additional scale before going forward with the Go Public initiative by completing additional acquisitions that will position WELL Star towards achieving more than CAD 100 million in annualized revenue run rate. WELL Star has already signed an agreement to acquire a healthcare billing company, which is expected to close in early December, subject to regulatory approval, and earlier this week announced the acquisition of Neutro, a leading Canadian AI scribe platform. We are also pleased to report that WELL Star delivered another exceptional quarter, generating revenue of CAD 18.3 million, an increase of 67% as compared to revenue of CAD 10.9 million in Q3 of the prior year. WELL Star achieved monthly recurring revenue, or MRR, of CAD 5.5 million at the end of Q3 2025, an increase of 63% as compared to Q3 of 2024.

WELL Star continues to have a strong profitability profile with adjusted EBITDA of $6.4 million in Q3, an increase of 69% as compared to adjusted EBITDA of $3.8 million in Q3 of 2024. Adjusted EBITDA margins were 35% in Q3 for WELL Star on a pre-shared services basis. WELL Star's EBITDA margins were boosted by a significant provincial Ocean eHealth e-referral contract. However, I want to point out that once we add in the shared services and public company overhead costs, the EBITDA margins will be expected to be slightly lower when we go public. The third theme I would like to talk about is HealWell AI. As a quick reminder, HealWell is a global healthcare software company with enterprise-grade data science and AI offerings.

Serving 70 of the largest health systems here in Canada and globally in 11 countries, including customers such as the NHS in the U.K. and the governments of France, Spain, Saudi Arabia, Abu Dhabi, New Zealand, Australia, and various health systems in the United States. Earlier this week, HealWell announced three transactions which allow the company to evolve into becoming a pure-play, high-margin AI and SaaS software-as-a-service focused business on large enterprise customers such as health systems and life sciences pharmaceutical companies globally. The transactions include the following. First, HealWell has divested its polyclinic family medicine and specialty group of clinics to WELL Health Clinic Network. This includes two clinics and approximately 40 physicians. WELL had already been managing these two clinics for HealWell since January of 2024, and so it's highly logical that WELL now becomes the owner-operator of these clinics.

Secondly, HealWell sold its majority interest in Neutro Health Solutions to WELL Star. As you may recall, Neutro is primarily focused on selling solutions to doctors and clinics, which actually aligns better with WELL Star's mandate and its Nexus AI platform as opposed to HealWell and its focus on public health and enterprise customers around the globe. The divestiture of Neutro enables HealWell to concentrate resources on its core digital healthcare solutions while Neutro strengthens WELL Star's Nexus AI platform. For clarity, HealWell is building category-leading AI solutions for public health and life sciences while WELL Star advances digital enablement for healthcare providers and clinics across Canada. Third, HealWell has formed a 50/50 clinical research JV, or joint venture, with WELL. This joint venture includes biopharma services and Canadian phase onward, which will no longer be consolidated under HealWell.

We intend to continue the strategic evaluation process for this joint venture to find the best solution to support the growth opportunity in clinical research and will keep our shareholders updated. These three transactions will allow HealWell to place a greater focus on integrating its industry-leading and third-party validated AI solutions with its healthcare software segment and obtain important synergies that will result in margin expansion and organic growth. HealWell's new pure-play yearly revenues are currently at CAD 120 million and profitable on an adjusted EBITDA basis. We are also very pleased to report that this would be our second quarter of inclusion of HealWell into our financial statements, which were released earlier this morning by the company. HealWell achieved quarterly revenue from continuing operations of CAD 30.4 million for Q3, an increase of 354%.

Also, during Q3 2025, HealWell reported positive adjusted EBITDA of $700,000 compared to an adjusted EBITDA loss of $2.8 million for the same quarter last year. We're extremely proud of the progress made by HealWell, a company that we helped launch and incubate with management more than two years ago and in which we took a majority voting position this past April. The fourth theme I'd like to talk about is our current strategic review process for our US assets. We are, of course, limited in what we can say about these strategic review processes with our US assets, especially given the advanced nature of some of our work here, but I will try to give you some high-level color.

We remain committed to our strategy of divesting the company's US care delivery assets, including Wisp, Circle Medical, and CRH, noting that Circle Medical will likely take longer and be more of a 2026 project due to our focus on clearing the previously noted regulatory inquiry. Currently, we have multiple advanced conversations occurring across two of these assets, and our objective, which is consistent with our announcement back in August at our Q2 earnings event, is to announce at least one divestment by the end of the year. Given the significant revenue and EBITDA attributable to these assets, we also have worked very hard to improve our executable pipeline of deals that would benefit from these divestments, which we obviously covered quite comprehensively earlier as part of our M&A pipeline review. Now a quick word on Wisp.

Wisp continues to demonstrate strong business fundamentals with consistent revenue growth and operating margin expansion. Wisp had a strong Q3 with quarterly revenues of $30.3 million and an increase of 13% from $26.9 million achieved in Q3 last year. Wisp continues to achieve positive adjusted EBITDA of $1.3 million in Q3 of this year. Moving on to Circle Medical, last year, we were just getting started on executing our strategic alternatives process for Circle, and we had to slow down the process. Due to the regulatory inquiry, year-end audit, and reclassification of deferred revenue. Circle Medical reported revenue of $42 million in Q3, an increase of 120% compared to revenue of $19.1 million last year. Revenue was boosted by approximately $17.6 million of deferred revenue in Q3. If you remove the deferred revenues, Circle Medical's revenues did decline on a year-over-year basis.

However, with the greater focus on compliance and execution, it did also see an improvement in EBITDA, generating $4.8 million in EBITDA, not including the deferred revenues, which was an improvement from the previous year, again excluding the impact of deferred revenues. We are encouraged by the stabilization of revenues and improvement of EBITDA at Circle Medical and continue to be focused on improving our compliance program and clearing our regulatory review process. We look forward to providing updates there too. Finally, CRH and provider staffing. As for CRH, the combined CRH anesthesia and staffing business has been performing very well, having generated revenue of $125.1 million in Q3 compared to $94.7 million in Q3 of 2023, an improvement of 32% year-over-year. Adjusted EBITDA for combined anesthesia and staffing was $22.7 million in Q3 compared to $20 million in Q3 of last year, an improvement of 14%.

These results are indicative of the growth and strong profitability of these two assets. I will now turn the call over to our CFO, Eva Fong, who will review the financials in greater detail for Q3. Eva. Thank you, Hamed. Let's start with the factors that led to this strong revenue growth in the quarter. As you can see from the graph on the left, WELL achieved record quarterly revenue of CAD 364.6 million in Q3 2025, driven by positive contribution from HealWell of CAD 37.9 million and very strong net growth of CAD 57.4 million. The Circle Medical deferrals attributed CAD 35.2 million. Adjusted EBITDA in Q3 2025 was CAD 59.9 million, a 296% increase, which was due to CAD 35.2 million from the Circle Medical deferrals and CAD 8.2 million from growth. HealWell's contribution to adjusted EBITDA was small at CAD 1.4 million.

In the fourth quarter, we expect a positive contribution of approximately $16 million from the Circle Medical deferred revenue and approximately $18 million contributions in the first half of 2026. Negligible thereafter. On a year-to-date basis, in Q3, we achieved revenues of over $1 billion as compared to revenues of $685 million last year, reflecting growth of 48%. Year-to-date EBITDA for the nine months of 2025 was $137 million, which was 172% higher than the previous year. Now on to quarterly adjusted net income. Overall, our Q3 2025 results reflect continued profitability in the business. WELL reported record adjusted net income of $41 million, or $0.16 per share, in Q3 2025, compared to adjusted net income of $4.1 million, or $0.02 per share, in Q3 of last year. During the quarter, the net impact of Circle Medical deferrals was $17.7 million.

HealWell's contribution was a negative impact of $1.9 million to adjusted net income, while we had a one-time gain of $8 million from the divestment of a clinical asset in CRH, resulting in net growth of $13.1 million to the record adjusted net income. This growth represents a significant improvement in profitability over the past year. WELL achieved adjusted free cash flow attributable to shareholders of CAD 15.1 million in Q3 2025. A slight decrease from CAD 16.1 million in Q3 of last year. Free cash flow was positively impacted by a CAD 4.8 million increase in adjusted shareholder EBITDA, but however, this was offset by taxes, interest, and capital expenditures, and a small negative cash flow at HealWell. During the quarter, we had higher quarterly cash taxes compared to last year due to the higher profitability for the company.

Capital expenditures were also greater than normal due to investments in new equipment and clinical facilities to drive new revenue, especially related to our executive health and longevity clinics. One thing to note, including proceeds from divestment in our free cash flow attributable to shareholders, our actual cash flow in the quarter was $30.2 million, including the cash of $15.1 million from the divestment of the CRH asset. Now turning to our balance sheet as of September 30, 2025. WELL ended Q3 2025 with a solid balance sheet, holding cash and cash equivalents of CAD 82.5 million. We remain in good standing and fully compliant with all components related to our two credit lines at WELL, JPMorgan Chase in the United States and Royal Bank of Canada. The outstanding debt from these credit lines was approximately CAD 347 million as of September 30, 2025.

This does not include HealWell's credit line with the Bank of Nova Scotia, which is also in good standing with outstanding debt of CAD 49 million as of the end of September 2025. We resumed our normal course issuer bid on NCIB in the second quarter. Year-to-date as of November 5, 2025, the company has bought back approximately 297,000 shares in 2025. We are expecting to continue with our share buyback program for the remainder of the year as permitted. I am pleased to report that we have the cash and available resources to continue to fund our organic and inorganic growth program. This is true for Canadian clinics and WELL Star, where the majority of our M&A pipeline is focused. That concludes my financial update, and I will now turn the call back over to Hamed. Thank you, Eva.

With the record results achieved in Q3 of 2025 and the size of our M&A pipeline under LOI, I'm very excited and confident about our outlook for the balance of the year and into 2026. In the fourth quarter, we believe shareholders can expect to see us continue to achieve new levels in revenue, adjusted EBITDA, and adjusted net income. As for guidance, we are reaffirming our prior guidance, which was as follows. Our 2025 annual guidance for revenue is to be between CAD 1.4 billion and CAD 1.45 billion, representing 52%-58% annual growth as compared to 2024. Furthermore, we reaffirm our guidance for annual adjusted EBITDA to be in the upper half of our previously provided guidance of CAD 190 million-CAD 210 million.

Excluding the impact of Circle Medical deferrals, the company's annual revenue guidance would be between CAD 1.36 billion and CAD 1.41 billion, and excluding the impact of those deferrals, our guidance for annual adjusted EBITDA would be in the range of between CAD 150 million and CAD 170 million. Our present guidance for the balance of the year is sensitive to a number of factors, including the timing of additional M&A and/or divestitures, which may cause these figures to slightly change or be reissued or updated accordingly. For example, if we have a significant divestiture, that may require us to discontinue that revenue line item, which would obviously change our financial results, and we would update accordingly. Our longer-term view of the Canadian clinic market remains very bullish.

For WELL Canada, which includes Canadian clinics and WELL Star, we are targeting to be over CAD 800 million in revenue and over CAD 100 million in adjusted EBITDA within 18 months. We remain resolutely committed to the sale processes of all of our US assets, including Wisp, Circle Medical, and CRH Healthcare, as discussed earlier. Our objective continues to be, again, to announce at least one of these transactions that unlocks value by the end of the year. Note that we did have a small divestiture within CRH Healthcare, but of course, we are in process with all of CRH Healthcare as well. In summary, we are very pleased with the strengthened fundamentals of our business and look forward to delivering strong results in 2025 and beyond. Thematically speaking, WELL management is very much focused on streamlining, integrating, and unlocking value from its parts to achieve optimal shareholder value.

WELL's growth engine has never been stronger. Our organic growth continues to be strong, especially in Canada, where we are executing on an extremely healthy M&A pipeline. We have a strong balance sheet and are well-positioned to improve shareholder value. In closing, I'd like to thank our board of directors, WELL's senior management team, as well as the senior teams at WELL Clinics, WELL Star, HealWell, and CyberWell, and all of our employees and contractors for their tremendous effort and support. In particular, I'd like to thank our team of healthcare practitioners and other frontline workers who provide outstanding patient care every day. They're the true heroes of the healthcare ecosystem, and we're grateful to have an opportunity to serve them. It brings meaning to everything that we do.

I also want to thank you all for joining us today on this call and thank our shareholders and investors for their continued support, as well as the valued analysts that helped tell these important stories and shed light on our performances. We appreciate everyone's support. With that, Operator, we'd be pleased to answer some questions. Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. Should you have a question, please press the star followed by the one on your touchtone phone. You will hear a prompt that your hand has been raised. If you wish to decline from the polling process, please press star followed by the two. If you are using a speakerphone, please lift the handset before pressing any keys. The first question comes from David Kwan at TD Cowen. Please go ahead. Hey. Good morning.

I was just wondering on the margin front, you've done a pretty good job of producing the margins throughout this year. When you look at it, I guess, excluding the deferred revenue from Circle, came in at 12.2%. That's up from roughly 11.5% in the first half of this year. How should we be looking at the margin profile, I guess, in the coming quarters, assuming you don't sell any of your US businesses? Yeah, thanks, David. Yes, I agree. This has been a real bright spot for us. As you know, this has been an area of focus for management. Look, I think a lot of this has to do with the shift of our revenue mix, not only as a whole with all the different parts of the business, but also within areas like Canadian clinics, where we're not just actioning absorptions and things of that nature.

We are leaning into higher margin, higher quality type assets. This past year, we've acquired more preventative health and executive health type businesses, which have improved margins. Obviously, the growth of WELL Star, which has significantly higher margins than our general clinic business, drives up the mix, as does HealWell, given the large SaaS and services component there. I think those growth trends, I think, are going to continue to be areas that we focus on. We'd like to see HealWell and WELL Star continue to grow, and as well, we're going to be very balanced in the way that we grow our Canadian clinics business. That's helpful color, Hamed.

I guess digging a little bit further into that, though, maybe specifically on the Canadian clinics business, and you talked about the absorptions and your ability to really boost the margins there, how much of that margin uplift that we've seen, at least relative to the first half of this year and even last year, is coming from the ability of your clinic transformation team to really boost the margins versus some other stuff like you alluded to revenue mix? If you recall, the capital allocation slide in the script, I think that tells a real compelling story. Demonstrating and kind of bringing that slide back quarter over quarter, I think, is really indicative of how we continue with that same clinic population to improve those numbers. That is all due to the progress that we're making with our technology.

That's all due to—and if you remember also in the script, we're seeing more patient visits on a per provider basis, 19% increase year over year. That is coming as a result of our execution on the ground. This is what makes us so hopeful about the business. It's candidly also becoming a new growth engine because happy doctors cause them to talk in the community. We're now getting pretty close to recruiting more physicians than we're acquiring through our M&A program, which candidly has never been the case. This quarter, it was pretty close. I think you're correct to point out that clinic transformation continues to be a really important factor for us. We are executing quite well there and achieving our goals. That's great. One last question.

At WELL Star, also on the margin side, we saw them quite strong this quarter, roughly 37%. That was roughly in line with what we saw last year, but relative to other quarters, Q1, Q2, Q4, at least from what you've disclosed, it's notably higher. I was just wondering, is there something seasonal that happens in Q3 that leads to this jump in margins? Yes. As I mentioned in my script, we did also have a pretty significant win in our e-referral business with a significant provincial client. Not only did we have that win, but we were able to harvest that into revenue and begin that journey with that customer and that new contract. I think this is indicative of the continued growth and momentum of the WELL Star platform, and especially with sort of landmark key areas of focus like e-referrals within the Ocean platform.

That's great. Thanks. Thank you. The next question comes from Derek Greenberg at Maxim Group. Please go ahead. Hi. Thanks for taking my question. I was wondering, with the recent raise for WELL Star and your plans to boost revenue there, I was wondering, in terms of potential acquisition targets, what you're really looking for and what framework you're applying in terms of multiples. Yeah. Great question. Look, with WELL Star, we essentially have a three-pronged business model today. We're industry leaders here in billing. We are top three in electronic medical records in the outpatient market. Really our digital health applications or apps, productivity apps to support physicians. These are sort of the three key areas. We have real targets across all three of these core areas and have been pretty proficient at executing on those in the past year or so.

I will note that in the script today, we talked about the billing company that we have signed an SPA with, which has not closed because it is subject to regulatory approval. We also acquired, of course, Neutro from HealWell, which is the ambient scribe company that was already being invoked and used within the Nexus AI platform. Essentially here, you have two of those three components where we've made acquisitions. I think you're going to continue to see us really layer in a very comprehensive sort of approach to how we think about growing that platform. We are going to be very disciplined and continue to build out under these three areas. As far as further to your question about multiples, we continue to be very disciplined, right? I think we look at these opportunities on a price-to-sales basis or ARR.

We also look at them on an EBITDA basis. We generally do not like transacting unless we can find our way to a 20% IRR. Hopefully, that is helpful. Yes. Thank you. That is really helpful. I was wondering just on the CRH side and the divestment of the asset you made this quarter. I was wondering maybe what the financial impact of that may look like on the current business. Yeah. Look, I think we have done divestments in the CRH portfolio before. We do that when we feel that there is an opportunity to transact at a higher multiple. There are situations where private equity may be consolidating assets in the US in the GI space. Of course, we partner with GIs within the CRH platform when we provide the anesthesia for colonoscopies in partnership with those GIs.

Those PE firms sometimes are motivated to transact because they're trying to capture the entire platform. These are the signature of these types of transactions. This one was an over 10 times multiple. It doesn't have the revenue or EBITDA profile that would make us change our guidance or anything like that. Obviously, it added some nice cash and returned some cash to our treasury this past quarter. We're pretty pleased about that. Okay. Got it. Helpful. Thanks for taking my question. Got it. Thank you. The next question comes from Rob Goth of Ventum. Please go ahead. Thank you very much for taking our question and congrats on the quarter. My question would be on the competitive dynamics of the clinic absorption. Are you finding that the sellers are changing expectations? Are you seeing new potential competitors when you are in negotiations?

You mentioned that you've been much more able to recruit doctors. Do you find that opening up new clinics is more and more of an option for you, given the greater availability of physicians? Yeah. Great questions, Rob. Thank you. I'm very pleased to report that the competitive dynamics haven't changed much, especially not in primary care. We definitely do have PE to contend with in sort of more of the specialized care side of things, but in primary care, not so much. We aren't seeing a changing dynamic on the ground in terms of negotiations so much. There is more competition at the diagnostic specialty care level, but again, not nearly as much as you would find south of the border. Further to your question about physicians and our recruitment efforts, we don't love doing greenfields unless there's an opportunity to do so.

Without having to put up the capital for a new facility. One of the great things about absorptions is we're typically acquiring or absorbing clinics that candidly could use more doctors. We absorb all of that, all of those leaseholds, right? Clinics do cost money. If we were to be starting those from scratch, that would require a significant amount of capital. This is what's so compelling about our M&A program and absorption program that I think is overlooked sometimes, is that if you were to be doing this without the kind of dynamic that we have, you'd be expending a very significant amount of capital to set up these types of clinics and their respective leaseholds. We're just not seeing that. This has been a very capital-efficient build. We did, of course, have a little bit more CapEx this quarter.

Again, a lot of that went to support our higher-end executive health and preventative health clinics, which do require a more significant experience. Yeah, no, we feel really encouraged by the fact that we are able to recruit more doctors. That incremental doctor, when we drop an incremental doctor in an existing clinic that we have acquired, this is, in addition to our clinic transformation efforts, what drives operating margins up really significantly. That incremental doctor makes a big difference. This is what is so encouraging about what we are reporting to you today. Very good. Thank you. Good luck. Thanks, Rob. Thank you. The next question comes from Erin Kyle at CIBC. Please go ahead. Hi. Good morning. Thanks for taking my questions. I just wanted to follow up with a question on the virtual care assets and the strategic process there.

I think last quarter, you noted there was an uptick in interest for those assets. My question is around valuation expectations and whether those are more aligned than maybe what you've seen in the past. Yeah. Thanks, Erin. Appreciate the question. Look, the valuation expectations we have are very much, I would say, in line with what we're seeing in the market. Of course, digital health was seeing very different valuation profiles for these types of care-enabled, tech-enabled care delivery strategies or virtual health strategies in the US. That obviously came off quite significantly over the last few years. You are starting to see some transactions occur, but not those sort of pandemic-type rates. I would say that they are quite reasonable. They're essentially, we're likely seeing double-digit EBITDA. Or.

What tends to be kind of that Teladoc multiple of roughly one-time sales for virtual care. Teladoc, obviously, is not seeing very good growth, and so they're not even trading at a one-time sales mark. That is kind of where the market is today. Yeah, we're pleased with the looks that we're getting and the conversations we're having so far. Okay. Thank you. That's helpful, Tyler. If I could just ask one more on the WELL Star business. Maybe just speak to the demand for Nexus AI and maybe more broadly where you would expect the organic growth profile for WELL Star to land for 2025. Yeah. The demand for Nexus AI has been strong. I mean, we've continued to see good, strong double-digit growth. As you may remember, Nexus is a member, was selected as part of the InfoWave program that is awarding, I guess, cost-free.

Enablement for physicians for a period of time. Mutual, by the way, is another partner with the InfoWave program. This has paved the way for some additional growth. Look, there is a lot of scribes out there. That is what is so unique about Nexus. Nexus is not just an AI scribe. It is an agentic platform that invokes a multitude of different actions. AI scribe is sort of one component of that. We feel like we are ahead of the pack here. While there are a lot of AI scribes, very few of them enjoy the kind of connectivity with integrated EMR connections that we have. We feel that we are in a really good position to continue our journey of double-digit growth here overall. The key, I think, is going to be to innovate. I think the one thing that is really exciting about.

Our WELL Star platform is that this is a team that can innovate, that can build software. It's not a team that is just growing by acquisition. They're developing a really solid platform here. Thank you. I'll pass the line. Thank you. The next question comes from Michael Freeman at Raymond James. Please go ahead. Hi, Hamed, Eva, Tyler. Congratulations on these results. Just sort of putting some breadcrumbs together. Looking at the under-LOI pipeline for Canadian clinics that jumped in a big way between quarters. So you obviously signed a few large LOIs. Looking at the amount of revenue that that would bring in and estimating some multiples, the capital you'd need to deploy toward that. If I were to match it up with one of your US assets or a collection of them, it seems like you would need to sell CRH in order to.

Go and acquire those clinics. You tell me if I'm wrong there. Given this process started later, I was sort of assuming that the CRH process would close later. Given this divestment this quarter and these new LOIs, what can you tell us about the advancement of the CRH process? Yeah. Look, the CRH process is going really well. I think we've advanced it quite quickly. Look, it's an insightful view that you've provided here. We have to be very clear and very focused on being able to backfill that revenue and EBITDA that CRH would vacate once we have a successful transaction. We are working really hard to make that happen. Yes, we are very much looking to make sure that we don't just have a successful sale event and then we sort of.

Sit there with a big hole in our revenue and EBITDA. I think shareholders and analysts can feel confident that we are thinking about how to backfill and create new momentum in Canada, as we've mentioned several times before over the last few quarters. We are being very intentional about bringing those together. As things move into LOI, that obviously creates a lot more urgency for us to execute on US divestitures. You are not far off in your thinking. Of course, we are not there yet. Otherwise, we would have announced it. We are very much focused on a great outcome, not only in terms of divestitures, but also being able to turn around and allocate that capital in a really compelling way that demonstrates the kind of on-strategy and focus that I think shareholders can expect to see from us. All right.

Thanks, Hamed. Thanks for carefully answering that question. I wonder, you mentioned that there was some good success with Ocean MD this quarter with a provincial contract. I wonder if there's any more color you can provide on what province, magnitude of contract, and anything else? Yeah. Thanks, Michael. Unfortunately, I can't talk about the particular contract that we are working on with the particular customer to make sure that we disclose at a time that they're comfortable with. We're quite pleased that we were able to bring into revenue a pretty significant amount of ARR, sort of several million dollars' worth of ARR has been activated already. This was more than we had expected when we had pulled together our forecast for this year. Of course, these are not customers and opportunities that happen without a lot of foresight and preparation.

They tend to be multi-year sales cycles. It is really great to see that WELL Star is indexing ahead of its expectations, for sure. Thank you. Very last for Eva, I noticed a $10.5 million impairment charge. I wonder if you could describe what that is associated with. Yeah. That is related to our HealWell divestment of its clinical operations. HealWell recognized an impairment on these assets, which is included in WELL's consolidated result. I can give you more details when we meet later too. That is good. Okay. Thanks. I will pass the line. Thank you. That concludes today's Q&A. I will turn the call back over to Hamed Shahbazi for closing comments. I would like to thank everyone for attending today. We look forward to an exciting next several weeks and hopefully delivering.

The type of results that we are all expecting for Q4 and beyond. I look forward to speaking to you next in, I'm guessing, March of 2026. Thank you very much. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating, and we ask that you please disconnect your lines.

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