CorVel Corp.

Greetings, and welcome to the Corvell Quarterly Earnings Report. At this time, all participants are in listen-only mode. A question-and-answer session will follow the whole presentation, and you may be placed into the question queue at any time by pressing star 1 on your telephone keypad. As a reminder, this conference is being recorded, and if anyone should require operator assistance, please press star 0. It's now my pleasure to turn the call over to President and CEO, Michael Combs. Please go ahead, sir.

Thank you. Good morning. Thank you for joining us to review Corvell's March quarter and fiscal year results. Brian Nichols, Corvell's chief financial officer, is on the call with me today. Today, I will review business performance, the current environment and market trends, and progress on product and service offerings. But let's start with Brian providing an overview of the March quarter and fiscal year results. Brian?

Thank you, Michael, and good morning, everyone. The March quarter revenues were $249 million, an increase of 7% compared to $232 million in the March 2025 quarter. Earnings per share for the quarter ended March 31, 2026, were 61 cents, up from 51 cents in the same period of the previous year. For the fiscal year 2026, revenues were $959 million, up 7% from $896 million in the prior fiscal year. and earnings per share was $2.14, an increase of 17% compared to $1.83 for the fiscal year ended March 31, 2025. The effective tax rate increased compared to the prior year, which included a discrete benefit from stock option exercises that did not recur at similar levels. For the fiscal year, Network Solutions delivered strong results with double-digit revenue and profit growth, driven by continued momentum across its offerings and solid execution in both property and casualty and commercial health. Results within network solutions included the impact of certain one-time events, primarily within Cirrus, which contributed in part to elevated revenue and profit during the period and added two cents of earnings per share. This performance was driven by accelerated post-payment recoveries associated with large payer engagement, reflecting a timing-related benefit. Importantly, this engagement, along with these additional large payer wins, is expected to contribute to ongoing revenue and profit tailwinds as these programs scale and mature. Patient management generated low single digit revenue and profit growth, reflecting a stable demand environment and consistent focus on operational efficiency. The company is making targeted investments to enhance service quality and consistency as a key differentiator. while advancing systems and technology to support more scalable delivery. Personnel levels increased during the period to support service delivery and implementation activity, reflecting near-term execution priorities. These levels are expected to normalize as deployments mature, and as automation and AI-enabled workflow enhancements are deployed through the remainder of the year and into 2027, The company expects to realize sustained productivity gains, reduce reliance on manual processes, and further improve operating leverage. Overall, the company's balanced portfolio positions it to deliver scalable growth through network solutions while driving increased differentiation and future growth in patient management through ongoing technology and AI-enabled investments. New bookings in the March quarter increased 56% year over year. reflecting high demand and accelerating commercial momentum across the business. RFP activity rose 20% over the same period, supporting steady pipeline expansion. Importantly, these bookings, primarily multi-year, are expected to contribute meaningfully to revenue and profit growth in the back half of the calendar year as implementation scale.