Claritev Corporation

Ladies and gentlemen, welcome to the Claritiv Corporation second quarter 2026 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, just press star followed by the number one on your telephone keypad. And if you would like to withdraw your question, press star one again. And please limit to one question and one follow up. Also, please note that this call is being recorded. I would now like to turn the call over to Todd Friedman, Head of Investment Relations. Todd, you may begin.

Thank you, Mark. Good morning, everyone, and welcome to Clarity's second quarter 2026 earnings call. Joining me today are Travis Dalton, President and Chief Executive Officer, and Doug Garis, Chief Financial Officer. During our call, we will refer to the supplemental slide deck that is available in the investors portion of our website, along with the second quarter 2026 earnings press release that we issued earlier this morning. Our remarks and responses to questions today will include forward-looking statements. These forward-looking statements represent management's beliefs and expectations only as of the date of this call. Actual results may differ materially from these forward-looking statements due to a number of risks. A summary of these risks can be found on the second page of the Supplemental Slide Deck and a more complete description in our annual report on Form 10-K and 10-Q and other documents that we follow at the SEC. We'll also be referring to several non-GAAP measures, which we believe provide investors with a more complete understanding of Clarity's underlying operating results. An explanation of these non-GAAP measures and the reconciliations to their comparable GAAP measures can be found in the earnings pressure relief and in the supplemental slide deck. And with that, I would now like to turn the call over to Travis.

Good morning. Thank you for joining us. We're pleased to announce another strong quarter for Clarity to continue progress on our turnaround journey. You are what your record says you are, and our results demonstrate that our strategy is working, our execution is strengthening, growth is returning, and we are building forward momentum across the business. The hard work and discipline over the last two years of laying the foundation of Clarity and Alignment Focus resulted in the turn last year, which has positioned us to take advantage of the opportunities in front of us. At our investor day in March, we introduced 2026, as the year of the way up, which is a return to sustainable growth in our multi-year transformation. The first half of the year has demonstrated that our strategy of driving horizontal solutions into vertical markets is working. In addition to focusing on our core client solutions and attacking new markets, we're building leaders and a culture of growth at the company. I'm most proud of the way our people have embraced change and new opportunities to impact healthcare. We also have made thoughtful and smart investments and our technology, platforms, data architecture and talent over the last two years. Our technology modernization positions us to quickly adapt and harness the power of new tools and technology like AI to bring more value to clients much faster. The organizations that have the knowledge and align structurally to unleash the potential of AI will be winners going forward. Our greatest asset is the knowledge and industry acumen we possess versus the competition. On today's call, I'll cover our strong second quarter results, the macro healthcare environment that demonstrates the challenges we are so good at tackling for consumers of healthcare, the continued progress and potential we see in AI. Let me begin with our Q2 performance, which exceeded our expectations on nearly every key metric. Revenue and adjusted EBITDA both came in above planned. We had another great bookings quarter, exceeding $70 million ACV for the first half of 2026 and well on our way to achieve our $100 million full-year stretch target. Just as important, we are seeing larger deal sizes, broader contributions from our entire sales team, improving win rates, and a healthy and growing pipeline. Doug will give some color on the conversion cycle from booking to revenue. The first quarter's business performance validates the foundation against the multi-year financial goals that we outlined in our investor day. I do want to highlight one area that we stressed on our first quarter earnings call where we have ramped up our focus and brought in new leadership in that third-party administrator or TPA business. The TPA vertical represented our largest contributor to second quarter bookings with several seven-figure deals. Among them was MarPi, which selected our payment and revenue integrity solutions for both prepay and postpay claims. We also expanded adoption of our network and advanced code editing solutions across the TPA market. Equally important is the breadth of our momentum with wins spanning large national TPAs, regional mid-market organizations, and technology-focused players. Our new segment leader, Dallas Grip, has provided immediate energy to the business and we expect this segment to contribute roughly 30% of our total new bookings this year, second only to our payer segment. We also see an expanded opportunity in Medicare Advantage. We recently signed a high six-figure ATV deal and new logo in the quarter to build an MA network. While not a significant revenue driver for us today, we believe it represents a meaningful long-term growth opportunity as plans increasingly seek solutions that improve payment accuracy, optimize networks, identify high-cost trends, and enhance provider performance. This is an example of the diversification strategy we've set in motion over the past two years, and we're beginning to see it translate into a broader, more durable growth profile. Taken together, our bookings momentum and revenue growth reinforce our confidence in the long-term strategy. Focus on our core solutions Thank you for joining us. to maximize long-term value. Next, I'd like to highlight several macro trends that continue in healthcare and make our mission of affordability and transparency so important. First, medical cost trends continue to rise with medical inflation running between 8% and 10% annually, well above overall economic growth. Healthcare spending almost 20% of the US GDP, creating significant pressure on employers, the government, and consumers. Thirds that exist that help solve that problem, whether it's our network providing access to predictable care, transparency solutions bringing insights, PRI solutions tackling waste, or claims intelligence driving cost savings. Simply put, we make healthcare more affordable for consumers. Second, self-funded plan enrollment remains stable and out-of-network claim volumes have remained in the mid Thank you all for joining us today. will only be met by nimble-scale technology-enabled companies like Claritev. Portability and transparency remain central priorities for the federal government, aligning closely with our core capabilities and strategies. Let me highlight the key area where government intervention is most measurable. The 2022 introduction of the No Surprises Act and the independent dispute resolution process. The recently finalized IDR rules increase the operational compliance requirements for both payers and providers. As those requirements grow, our scale, technology, and expertise become even more valuable. No company has demonstrated a greater ability to manage NSA claims at scale than Claritin. Our arbitration outcomes continue to outperform the industry by approximately 8 percentage points, and we're seeing existing clients consolidate more of their NSA workflow onto our platform. The same dynamics are driving demand across our payment and revenue integrity portfolio. As healthcare organizations face increasing pressure to reduce costs, identify fraud, waste, and abuse, and improve payment accuracy, our solutions become increasingly strategic. We're proud that Eversgroup recently recognized Clarity as a leader in payment integrity, and wins like the MarPi engagement underscore a growing momentum continue to see across this portfolio. Finally, let me turn to AI. We view artificial intelligence as an accelerator of both growth and operating leverage in an area where Clarityv has built a meaningful competitive advantage. AI is only as valuable as the quality of the data behind it, the harness engineering engaged, the workflows it improves, and the trust users place in its recommendations. Those are areas where Clarityv stands apart. Our multi-year digital transformation positioned us well before AI became today's headline. We have organized data, modern cloud-based workflow, and deep domain expertise that allows us to deploy AI responsibly and at scale. Today, we're already using AI across numerous models and production use cases to improve efficiency, accelerate decision-making, and deliver better outcomes for our clients. We have AI initiatives All solutions and business functions, but I'll focus today on a few IDR examples where the need and the impact can be seen immediately. If you listened to recent healthcare earnings calls or read any of the current articles related to NSA, you know that the system is being overwhelmed with volume that drives unnecessary administrative costs and delay. Payers on behalf of employers often have only a narrow window to validate claims identify missing information, screen out ineligible submissions. Our analysis indicates nearly half all IDR submissions are ineligible, highlighting a significant opportunity to use AI to improve efficiency and accelerate our client's ability to respond quickly. This is where Clarity's combination of scale, data, and AI makes a meaningful difference. Over the past six months, We've launched AI-powered capabilities that automate provider data validation and ineligibility assessments, improving both speed and accuracy. We're also automating case creation for resubmission and enhancing predictive models that optimize pre-arbitration strategy. Together, these types of innovations reduce operating costs, improve outcomes, and resolve disputes earlier in the process, which is good for both parties. Finally, we operate in a highly competitive environment with large and growing challenges facing our clients. The need for more healthcare affordability and transparency has never been greater. Our strategy is delivering results, and we have the people, technology, data, and client relationships to capitalize on the opportunities to deliver right now and in the future. With that, let me turn the call over to Doug.