Vitalhub Corp.

Hi, good morning everyone, and thank you for joining us today for our 2024 fourth quarter conference call. With me on the call today are Vital Hub CEO Dan Matlow and CFO Brian Gothenburg. 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. 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, as well as in our CDAR 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 CDAR filings. With that, I'll hand the call over to our CFO, Brian Gothenburg, to go over financial highlights for the quarter. Over to you, Brian.

Thanks, Christian. Good morning, everyone, and thank you for joining the call today. We are pleased to report the results for the fourth quarter and full year of 2024. The fourth quarter was a record for us, for the first time achieving over 20 million in revenues, over 5 million in adjusted EBITDA, and organic AR growth of 2.6 million. Our progress over the full year reflects the success of our two-pronged growth strategy to deliver organic and acquisition growth. On an organic basis, we grew the annual recurring revenue by 15% in 2024. As well, we closed four acquisitions in the year, growing our annual recurring revenue base to over $70 million. We are well positioned and well capitalized to continue on this growth strategy. In a moment, Dan will provide commentary around the business and the outlook. First, I'm excited to share with you the financial milestones we achieved in the quarter. Detailed full year results and support can be found in our CDAR filings. For today's call, I'll go over select highlights from our fourth quarter. Our annual recurring revenue was 71.1 million to close the year, an increase of 59% over the prior year. In the fourth quarter, total revenue was 20.6 million, an increase of 51% year over year. Concurring revenue or term license maintenance and support segment comprised 17.17 million or 86% of total revenue. This compared to 11.3 million or 83% in the prior year period. Compared to our license revenue was 100,000 in the quarter, a decrease from 300,000 in the prior quarter. Our services, hardware and other revenue was 2.9 million in the quarter, an increase of 42% year over year. gross margin was 81% of revenue as compared to 83% in the prior period. Moving down the income statement, net income before taxes was 0.2 million compared to 2 million in the prior year period. With two acquisitions closing in the fourth quarter, we recognized 2.6 million of business acquisition restructuring and integration charges as compared to only 300K in the prior year period. Adjusted EBITDA for the quarter was 5 million or 25% of revenue compared to 4 million or 29% in the prior year period. Turning to our balance sheet. As of December 31, 24, we had cash on hand of 56.6 million. Subsequent to year end, we completed a board deal financing for total gross proceeds of approximately $34.5 million. We have no debt currently and recently expanded our borrowing capacity to 65 million. This in combination with our strong cash generation, which gives us significant financial flexibility for growth in 2025. With that, I'd like to hand the call over to Dan for an update on the business.

Good morning, everybody. I'll try to give everyone a little bit of outlook and commentary on the quarter and then turn it over some questions and hopefully fill some of the gaps that the entire people might have. I just wanna recap what our strategy is. I know we're starting to get some newer people starting to look at the story and have done some, a lot of investigative work, but just as a reminder of our approach, we're a healthcare IT software company, primarily focused on single payer based systems, which is outside of Canada, UK, Australia and the Mideast are our primary areas where we market products and we're have a two pronged approach of acquisitions as well as M&A with a very um high powered synergistic based model that is really geared to organic growth and some really good cost rationalization uh in the strategy and uh really what 2024 was in my opinion was just again more definition and concrete awareness of what the model can do and what the ability of what the model can do. And it was a good proof of what our model was. I think the real important thing for 2024, from my perspective, although the results were great, was really internally within the company, I think the awareness of what the potential of our model do and really the synergistic approach internally of the staff and the excitement of our staff of what our model is and how effective it can be and really the understanding of what this can be from a growth perspective. So that was something exciting and it's something that might not be visible to the investor approach, but definitely visible internally with the company and we're excited what that was about. The fourth quarter, yeah, it was record ARR and really it came again from multiple base sources. In Canada, the treat continues to add customers and the services backlog is still really, really high for that product in terms of delivering those solutions to our customer base. The province of Nova Scotia still keeps kicking on in terms of adding users to And we started to see some increase from the Strata-based business in the Canadian market. The nice part about Strata is it continues to grow. As new pathways become available and as new areas of use come available, we start extending that solution and that leads to increased ARR. And we're starting to see some synergistic growth. approach of strata with our treat client in terms of doing referrals in the community agencies and the mental health and a lot of our bigger clients have started to approach us as using strata as a solution as opposed to alternative um solutions in the marketplace um that could be out there such as ocean etc um so we're excited that we are re you know bringing in some new life into that community agency for the the strata-based product uh that's out there in the uk um it continues to move along um shrewd definitely continues to add stuff. We're starting to see some impact from the InTouch again. It was a little bit quiet in, you know, over the last year it did work, but we're starting to see some increase work in that area. And the Oriel product and the HiCom continues to add users on a regular basis. And all of this is leading to increased ARR. We continue to work on cost rationalizations. Our Sri Lankan team is up to close to 200 employees. We've started the work in getting the Sri Lankan group primarily working on the strata-based solutions. There's AI initiatives that are in place that we are working through as terms of add-on solutions that we hope to introduce into the product over the next year. And we're hoping that that starts increasing revenue as well as we continue to grow. You know, we're comfortable in terms of where our A&R figures and we continue to move along. Typically, the Q1 is somewhat of a strong quarter for us. You know, you never know, but we like some of the activity that continues to work on as government year ends keep moving through there. On the acquisition side, we got lots in play. As the awareness keeps approaching, the more acquisitions that start coming to us is starting to increase and our pipeline is continuing to grow. We do have 90 million that we're sitting on in cash and we're looking to deploy that as effectively as we can, making the right decisions in terms of solutions that we think add value and are synergistic to our approach that we can increase our organic growth in terms of a strategy of how these things fit together from a cohesive narrative. We're proud of what we did in 2024. It's already March of 2025, so it's hard to think of that. And we're well into Q2 planning in our company, but it is a good time to reflect on what we have accomplished in 2024. And we look forward to 2025 and continuing to perform in the same way that we have before. and happy to turn it over to any questions that anyone might have. Thanks, Dan.