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.

We'll now open up the line to questions from analysts. Please press star one or use the raise hand function to indicate if you'd like to ask a question. Today's first question comes from Gavin Fairweather of Cormac Securities. Gavin, your line is open.

Good morning. Thanks for taking my questions and congrats on the strong numbers. Maybe just to dig a little bit deeper on kind of Strata and Medcurrent. I know a big part of the investment thesis there was kind of plugging those products into your sales team to accelerate growth. Maybe we can discuss where we are in that process and to the extent that you're seeing pipeline increasing post-acquisition on those deals.

You know, still, still early days. We just got it three months ago, but yeah, Med current continues to evolve. There's, there's, there's a lot of activity going on in the UK from it. It's sort of that team there is just, you know, continues to plot along. They were plotting along before we've had some things that we're going through there and there can, you know, they've added, they keep adding deals and continue to add deals on a, on a regular basis. And, and, We continue to move forward there. We haven't really done much in terms of, you know, technology integration or things like that with the lab yet. It's a pretty tight, small group. And it's really, you know, it's really set up to organically to continue to make money, even though without many changes to it. So but we are introduced that to our UK team, into our Australian teams, and they're getting equipped to build leads with that in the Canadian team as well. So, you know, things are done. Strata Yeah, it's definitely more synergistic than Medcurrent is, although Medcurrent is as well. But Stratas really hits the bullseye in terms of what we do. And we're seeing a lot of activity and we expect a lot of activity in the referral business, not just across all of our geographies where we expect that. That's a big issue. with healthcare in terms of integrating all the disparate patient pathways. So it's an issue that's there and Strata has a really good solution that we think will really do better with how we market and how we integrate it to some of our ideas. We are seeing definitely an uptick in the UK pretty extensively, and we are seeing a lot of activity in the Canadian marketplace with our treat customers, especially on the large size, which are looking for... pathways and referrals into their organizations where they take referrals. So if you can think of all the referrals that get referred into mental health and community agencies and the size of what our install base fees for a treat product. And we already started working on a treat integration with Strata before. So that's being polished up and it's, you know, it's ready to go. So, you know, that's really what's going on with those two products.

Appreciate that, Keller. And one thing that stands out in your 2024 results is just how efficient you are in turning your sales and marketing spending into ARR organic growth. Curious if you're seeing any opportunities across your regions to add a bit more sales investment and generate, you know, even higher ARR bookings.

Yeah, we're, you know, we're adding, um, a few new people into it in, in really, well, a focus of 2025 is to, um, beef up the operational expertise of, of our, of our sales team, as you can appreciate, we're a bunch of small companies that have had salespeople and have used, um, approaches before that have made them successful. We, we feel that we can, um, get our sales and our customer success people to the next level by increasing a little bit more structure and investing in tools to automate those processes and really trying to put our Salesforce system on steroids and our other marketing systems on higher value props. So We're going to have an emphasis in terms of what we can do from productivity tools to really get our Salesforce up there. There could be some capital expenditures that go with that or some operational costs as we invest in those tools. But I don't anticipate it's a large increase in headcount. It's more efficiencies and how do we mine these accounts more effectively in a scientific process. So that's a little bit of emphasis that's going to start going into 2025 into the organization.

Got it. And then lastly, for me in the UK, saw the news recently that the NHS England is kind of folding into the Department of Health. Curious for your take on, you know, how that could influence ARR bookings in the near term or the longer term, you know, if you're seeing anything in Q1 and how the team feels about that structural shift over the next little while.

Yeah, it's concerning in general. in a little bit of ways and exciting in other ways. And I really think the concerning part of it really comes from the unknown factor of where this is going to sit. We haven't seen any impact of it yet, and we're not sure we will see any impact negatively or positively, but it's the unknown that's really there. What we do know is our systems are used and they're happy and there's interest from all levels of government to digitize the NHS in a more efficient manner. And we're right at the center of it. And when we speak to our customers and we speak to the people, they keep stressing that message across to us and they keep saying, hey, they don't think that this part is going to be impacted. But yeah, we really don't know that answer as of yet of where it goes. And you always get concerned when there's change going on. But we think overall that change will be positive, um, in terms of the focus of this, uh, of how digitization works and so forth. But, um, it will take time for that change to work through the system and we expect them to be still investing in systems, you know, during that process. But, uh, no one's 100% sure how this will all go and we'll just have to keep monitoring it and keep going from our organization. The good part is we've got a huge install base and a big chunk of our sales are add-on sales to those particular groups and it's not new initiatives and it's usually a lot of the time. So we expect those add-on sales to continue for sure.

Appreciate it. Thanks so much. I'll pass the line.

The next question comes from Doug Taylor with Canaccord Genuity. Doug, your line is open.

Yeah, thanks. Good morning. And I'll echo the congratulations on a strong finish to Q4 and to 2024. It sounds like, you know, top line synergies from the Strata and Medcurrent, Strata at least, are already starting to show through. The margins also for the business overall held in pretty well despite the two acquisitions in that quarter being, to my knowledge, at least starting below Vital Hub's corporate average. So maybe I'll get you to speak to the integration steps and stage you're in now with the benefit of a couple more months behind you and the considerations as we try to map the linearity of any margin compression and then the subsequent expansion that was anticipated for the year.

Yeah, we, you know, we, we, we knew exactly what we were going to do with, with MedCorp and Strat and, and, you know, we moved pretty quickly to get some changes and, and, you know, the two organizations came in with, you know, with Pipeline already that we knew was looking to close. So, you know, we knew that when we did it and those deals did happen from, you know, what they said would happen. So, you know, that was, you know, a good part of why we we did some, you know, good ARR for the quarter and, you know, will that continue? I don't know, but, um, you know, both those organizations have solutions that are in demand and, uh, you know, they, they continue to add value. Um, you know, we, we still had work on the cost rationalization to do in, in the company outside of Strata and, and, you know, that continued to happen and still continues to happen. Um, You know, we've we've looked at the organization and have done some more combinations, especially in the UK, to get some cost effective effectiveness going. And we continue to move stuff into into Sri Lanka. So, yeah. you know, that's, that's really where, where that's going. We haven't done, you know, cost synergistic stuff on both Strata and Medcurrent. There's some stuff that has happened for sure. And you can see that in the restructuring and so forth that, that was put to that quarter. So yeah, I don't know if that helps you answer your question. I think, you know, we were, We were 25% in Q4 versus 28, but 25 of a bigger number is a bigger number, and it's still pretty good. I think we can get this thing back to 28 again, and that's what we're trying to do here.

So, I mean, maybe to put a finer point on that, you said you're expecting typically strong seasonality in Q1 as it relates to ARR. build and you know we're only a couple days from the end of the quarter and based on what you just said i mean should we be expecting as you as we get med current and strata for a full quarter here in q1 for there to be any ebitda margin compression from the 25 level or i mean do you see that as a as a good place to start the run rate um you know with these acquisitions in the fold

Probably a good place to start, I think. What's that, Brian? Probably a good place to start. You always get some additional costs with any acquisition. There's IT things as we move over, some infrastructure costs and adjustments to compensation and stuff like that. And then as we get more synergies, you'll start seeing the margin, I think, compressing as we go forward throughout the year.

expanding um i think you mean yeah okay um well i mean you've been able to move quickly there that's that's great to see uh one last question you know for me you're you're pretty explicit in you know both the press release and your comments you've made here so far about the your ability to keep up the pace of m&a after closing last year with a couple of you know medium-sized deals um you say there's a lot at play i mean have valuation expectations shifted in your favor here as well? Or is there something else that's giving you confidence to make the statement that you're going to be able to keep up this pace?

I just think it's the deal flow, right? Um, yeah, you know, there's, uh, Yeah, there's some deals that are value compression that are distressed out there that are somewhat attractive to us just based on the ARR and the ability to take those companies and potentially turn them around scenarios that are out there. And on the bigger side, don't think there you know there yeah there's there's some reduction that probably than the past but it all just depends on the the asset and the competitive nature of the bid really doug that drives us i think on the bigger acquisitions there's um not as much you know reduction we're not seeing it a good a good asset is a good asset but on the smaller side there's some struggling um there's some struggling companies out there where we're seeing that we can take things over. And it might be some work in progress, but at the end of the day, we can make some good money at those things. So we're seeing it on both sides. Okay.

I'll pass the line. Thanks. Thanks, Doug.

The next question comes from Simon Rana of TD Securities. Simon, your line is now open.

Good morning, everyone. Congrats on the strong Q4 numbers. Salman on behalf of David. So first of all, my question is on how much activity, Dan, do you think has moved to Sri Lanka with respect to the Strata and Metgrind acquisitions? And what do you think is still planned or in the works there?

It takes time to move things over there. And we've started to ramp up people in Sri Lanka for Strata. And the Strata team was over to Sri Lanka in Q1. And I think they've got projects that are... are kicking off there and, uh, you know, we're, we're starting to kick off projects to get, move things and get expertise, uh, moved over there. So, uh, yeah, that's, that's all started to happen. Um, Yeah, Medcurrent already runs a very small development group. The IP in that company isn't the tech, although the tech is very good. And it is still pretty comprehensive, but it's really in the clinical aspect of that product that is the driver to that solution. And it's already a very cost-effective based organization that just needed to get its sales up and get that 80% margin ARR into the business to start getting the returns that we want. So in that group, we're just being patient and waiting for that pipeline, which it seems to continue to add and is getting closer to our rule of 40. When we get our companies and we do that, we always look at what is it going to take to get it to the rule of 40 and put a plan in place to get it and we start executing on it. It doesn't necessarily happen day one, but we look for an approach to get it there within three to four quarters for sure. And we're on our way with those two organizations.

Understood. So earlier on in your commentary, you talked about Strata and, you know, bigger clients starting to take a look at that. I'm just wondering, like, what do you think is differentiating Strata versus other solutions out there versus OceanMD?

Um, they, they cross paths in some places, but really they got their own separate rails. Ocean is a, uh, physician referral system. So it goes from a physician out, um, Strat is more of an enterprise-based system where it works from the acute care from the hospital out to the community. So it goes inward out where something like Ocean would go outward in to the acute care or they also go outward. clinician to clinician. I think clinician to clinician is really where their sweet spot is. And we're really more geared to a larger enterprise based system. So they do interfere in some places. But yeah, I think they got their own lanes that they run in.

Understood. And have you seen any material changes in the sales environment lately because of like due to the ongoing macro challenges, like the potential headwinds we could see from the tariff slash trade war? Are you seeing any sales cycles lengthening?

I don't, the tariffs don't affect our industry at all, right? You're talking about healthcare and I don't think government, I don't think there's anything the US can really do to affect our internal healthcare systems in UK, Canada, Australia, or the Mideast. And we're, none of that affects us at all.

Okay. Just one last question for me. So given your sequential organic error growth was again, really solid. It's been in the 1 to 2.6 million range for the last two years. Do you think your target of adding 0.8 to 1.5 million is pretty conservative at this stage now?

Yeah, it's probably conservative. We could probably take that up to 1.1 to 1.7, 1.8 type of thing. I'm still I've been in this industry for 30 something years and I understand government healthcare and I understand feast and famine and really approaches. And I still also understand that the way our products work, right? there's opportunity to really have a lousy quarter um in here and there's opportunities to have an amazing quarter i think we are starting to get enough products in our suite that one will pick up for the other to really get some consistency in there but um you know i don't i i don't have visibility into like oh wow we can the pipeline is strong and we can do things but I don't have visibility into like, you know, this is going to be record all the time, right? So I'm conservative by nature and, you know, I'm going to be there because I don't want to be on the other side of this, you know, this phone someday. But we continue to strive to build as much ARR as we can and we're pretty bullish that we can. But at the same time, you know, I want to be conservative.

Thank you. That was great, Culler.

Thanks, Simon. The next question comes from Richard Chu of Scotia Capital. Richard, your line is open.

Morning. Thanks for taking my questions and congrats on another strong quarter. So I was wondering, can you provide a further color on the composition of AR added in this quarter? I know it was very well balanced between the two markets, but were there any particular products that did better or any big wins that you had?

Um, you know, as I said in my narrative, uh, it really was spread across. I think we had, um, uh, a couple shrew deals in there. Nova Scotia continued to add users. We had some Strata expansions in there. We had some MedCurrent deals that got live and started recognizing revenue in the quarter. Our services was pretty good for the quarter, so that added to it. You know, we had CDS was a contributor in Australia that quarter and Treat continued to add, you know, new deals and continue to do that. And we started to see some an impact from the Caseworks and Coyote products as well in the Canadian marketplace on the smaller market. government agencies. So it really was spread across and there's nothing that really stands out as, hey, there was no million dollar ARR deals, if that does anything. I think there was a lot of transactions that happened in the quarter and a lot of smaller ones.

Okay, thank you. And I know you mentioned you're not seeing any tariff specific headwinds, but are we able to offer any additional color on AR trends in Q1 so far, given we're almost through the quarter?

Yeah, I'm not comfortable in terms of doing that. 2.6 is a pretty high goalpost to get to. And we knew we were coming into some deals from Strata and Medcurrent that were in the works when we got this accomplished. And we were excited to get those over the finish line. We still got a pipeline. It is Q1. 2.6 could be hard to get to, but we got things in the works and we continue to do it. But yeah, I'm not prepared to put any guidance at this point. It's sometimes challenging to get bookings into recognized revenue. Although we see things, it doesn't mean from a RevRec perspective that's going to come through. So just not comfortable at this stage.

Got it. Thank you. I'll pass the line.

The next question comes from Michael Freeman of Raymond James. Michael, your line is open.

Hey, good morning, Dan, Brian, Christian. Congratulations on closing out a great year, and I'm the new guy, so happy to be the caboose here. Um, I'm, uh, I'm curious if you could describe some of your areas of, of your toughest, most direct competition in, in winning new customers. You mentioned ocean a few times during this call. I wonder if you could highlight a few other areas.

Um, you know, there's a, there's other data platforms in the, in the NHS. There's a company called radar, which we compete with in the NHS on the, on the shrewd side. Um, you know, in touch, there's some, um, I'm sorry, with treat, there's, um, there's smaller players. We sometimes get into, you know, the tell us competing and sometimes into the like air. And sometimes we're competing with, uh, you know, the big EHRs depending on what's going on there. Um, so, you know, it's hard to say where, where that sits. There's a bunch of small players, um, that would competing there. Um, In touch, we start competing. Epic has its own kiosk-based strategy, and sometimes they use it and sometimes they don't. And Cerner has other partners that they've done kiosk work with in the US that you start seeing floating around once in a while in UK bids. And so they come from... different angles depending on the solutions. And this space is really serviced by just a lot of smaller base vendors that are there. I think Medcurrent doesn't really have any competition, but some group out of Ireland came through the other day with attempting to try to do where it is and they haven't seen it before. So yeah, that's sort of the way this landscape is, Michael.

Okay. That's super helpful. I appreciate all that color. I'm curious now, you mentioned, you mentioned the deployment or at least the preparation of AI by your, your Sri Lankan team to extend some of your products. I wonder if you could describe more sort of how you intend to leverage AI into your businesses and just like your overall AI posture.

Yeah. Those like the HR product, you know, that, Like the treats and those things like you know scribing is is a big one right and in in that world and there's a lot of progress notes and. Things that are coordinating it and we are the electronic record for these organizations so adding that functionality makes a ton of sense and it's an easy win and and. An easy upsell into that base, so you know that's one that we're we're definitely focused on and then. Um, things that are predictive, like our MCAT product, which is a clinical criteria based product, um, it makes sense to, as opposed to, uh, data entries to extract those, uh, um, that information out of the EHR and apply it into our criteria to get the results, as opposed to having the frontline, uh, caregiver, um, enter that data into that product. So that that's another one that is, um, is visible to us in terms of what we can create out there. Those are our two examples. Medcurrent already has AI initiatives that they've started and already have some of that stuff approached in their product in terms of predictability and should patients go through imaging or not go through imaging as a predictive analysis. So it's a light version, but they continue to work on that. Those are examples of three, and there's some other work going on on the shrewd side and the predictive side there as well. Some evidence of some things that we're trying to do.

Okay, thanks, Dan. If I could shoehorn one more in here. You mentioned basically as your portfolio expands, you might be able to smooth out, the way you described it, like the the potential for you to have a tough quarter in organic ARR growth. So as you think about the acquisitions of new businesses, what kind of businesses are you seeing out there that would best complement your portfolio? Are you thinking about broadening your capabilities or going deeper into a customer set?

Yeah, I think broadening our capabilities and going deeper in our customer set is the same thing. The more solutions we can get, the more comprehensive we can talk to those customers and the more narratives we can have of, okay, you got this one product. Here's some ideas of how to extend this into others and what our approaches are and what we can do for you as an organization. So we look at all the pathways of patients and how they move through the healthcare system. all the different ideas that people have come up with in terms of streamlining that approach, be it from an analytical perspective or from an end user's perspective or how they can streamline those processes and make it better. And we look for evidence that those solutions have been rolled out at customers and customers are actually getting the benefits of those system and it's comprehensive enough for us to continue to grow those solutions, um, out there. So there's, yeah, there, you know, the pathways are really big, right? There's lots of different, um, ideas and approaches on how we can get patients moving more effectively through the healthcare system on the patient flow side. And we're looking for solutions all the time on, on how that, um, how that can help. And, uh, On the HR system we are just on the HR front we're just looking for similar systems that might be a little lighter weight that will eventually upgrade to a higher. Value based system, such as trading and trying to get that install base and see what we can do to lift that we've been successful and do that in Canada and we're looking for acquisitions, where we continue to continue to do that.

Okay, terrific. Thanks very much, guys. Looking forward to a great 2025 and very happy to be up on the name. Take care.

Thank you. All right, Phil. Next question comes from Gabriel Young of Beacon Securities. Gabriel, your line is now open.

Good morning and thanks for taking my questions. I wanted to ask about your Canadian business. Obviously, that's bulked up with the recent acquisitions and Given the by Canada sentiment, I imagine your hit rate can only improve at this point. Also, a lot of tailwinds for Canada. Dan, can you just talk about what you're seeing in terms of the pipeline here in Canada, maybe the size of some of the opportunities you're working on and timing for some of these opportunities? Sure.

Yeah. I never thought it would in Canada. We do get a little bit more influence of us solutions coming into the marketplace and, and, uh, Our sales team did tell me the other day that they spoke to some organizations that I won't mention that, yeah, we're looking at this, but they've actually told me to remove that from the buying process. And we're just going to look at you guys from that perspective. So I never thought I would hear it, but we did hear that in a couple of different places. So it's a good question, Gabe.

anything you can talk about in terms of, uh, maybe the quantum of opportunity you're seeing or expect to early days, like, you know, this does just started.

Right. So you don't see a ton of us. Um, like you see the bigger solutions in the Epic and the Cerners of this world, you know, um, well, that sentiment changed that that could be interesting if it does. I don't expect it. Like it could, if this continues to go on, right. Like, um, In my personal belief, it should to some degree. There's better answers for those equations. I think there's no Canadian vendors that can actually do what they do. So I don't think that will change. But yeah, there's a company called Meditech, which has started to go into... it does the smaller hospitals and it does go into the, the, the community and the rehab based world to, to a different degree. And yeah, that could see some issues with those guys in that market for sure. You know, that, that you would see, but yeah, For the most part, the competitors that we see aren't U.S.-based, although you are giving me an idea. There is one competitor that we see a fair bit that is owned by U.S. private equity that our sales reps should actually talk about a little bit more. But I actually didn't think about it much until the question and just some of the stuff that you're there with.

Gotcha. Brian, just a follow-up question for you. Anything we should be watching out for in terms of additional restructuring charges as you go through the integration over the coming quarter or two? And anything unusual about CapEx we should be expecting this year?

I think we probably will add a little bit more to CapEx as we try and get more systems in place. But nothing, I don't think anything will be really material. And as far as the restructuring, I think as you go forward, there will be some. I don't think to the level that we had a lot of, you know, in the last year, there were a lot of external issues. legal fees and valuations and stuff like that which really added to the complexity and the cost so i don't think you'll see to that level but there will be some obviously i think as we as we make changes to the businesses gotcha i appreciate that and congrats on the progress thanks guys thanks gabriel the next question comes from daniel rosenberg of paradigm capital daniel your line is open

Good morning. My first question was around the sales options. I was curious if you've seen any changes in the trends of just inbound leads versus your outbound lead generation. How's that shifted over time and you expect it to shift as you're kind of getting bigger and bigger scale and more of a presence in your markets?

Yeah, you know, this is the type of business that, you know, most of the Most of the players that buy the stuff know of us to some degree. Some of the products, I think, in different markets could have better... In Canada, we're stronger in some geographies than other geographies and provinces, I mean. Yeah, we are seeing definitely more inbound leads overall in the business. If you think about it, the inertia of one product in coming through. And we just got more people on the street every time we do this and more customers and more ideas. And we're being talked about a little bit more in that area. Word of mouth is definitely the better way of things happening. I'm not sure how much people look at their marketing in terms of inbound leads in our space, but presence and ideas are definitely how people buy. So yeah, we definitely see more inbound leads.

Thanks. I'm wondering if there's anything like built out specifically in your products and processes that can trigger kind of that realization for, you know, somebody to want to cross sell. Could you speak to any examples of that? Or is that untapped territory? Like, I'm trying to, you know, connect that virtuous cycle that you're seeing in your organic grief.

yeah like you know treat is um your treat is the electronic medical record that really drives the uh the the process of how patients are taken care of some of these large agencies and um uh These patients come into these organizations because they get referred by a specialist or a hospital or something to go for care or counseling or or services based on there. But how does that referral work and how does that come in to those agencies? they don't want that working on two different systems they're going to want that referral to come right into the electronic record and and how that connectivity all works right so you know they're they're definitely will they buy the system that um we own because we also own the electronic record i think they would um but you know that's uh that's that's an i you know ideas that we have and Um, we got a system called diamond in the UK, which does all about 60 customers that does all the diabetes based work and it would get a ton of referrals too. So, you know, we'll strata fit into that base world. And, uh, You know, we have Shrewd who's showing you all the visibility of patients within a particular region. Would you not like to see those patients that are in transitional services that are in transition as part of that data? 100% you're going to want to see that data. Um, those are evidence of how we can talk about how our products fit together and different ideas that will, will continue to happen. And, uh, you know, we gotta get better at teaching our sales reps on that narrative and how that all stuff fits together. But, um, there is, there, there's a method to our madness on what we buy and how this all fits together and different ideas of how that can lead to upsells. Okay.

Okay, thanks for that color. It sounds like certainly opportunities to explore there. Last question for me, maybe one for Brian. I was just wondering, the contingent consideration on the balance sheet seemed to have gone down quite a bit. So I'm just wondering how you're booking the earnouts or potential liabilities from earnouts for your recent acquisitions. Did it go into any other lines?

I know that the value basically the value of the valuation does that calculates what they think the expectation of the contingent payout of the contingent consideration is. And that's what we end up looking through in the balance sheet. So you can see the expectation is relatively low. That's great.

Thanks for taking my questions. I'll pass the line.

Thank you. There are no further questions at this time. I'll hand the call back to you, Dan, for any closing remarks.

Yeah, just, you know, there's a lot of questions. I think everyone's got some visibility into where we are and what we're doing. you know, again, just trying to stress, we, we believe in our model and we believe in it for the longterm with ups and downs. And we just came through an up quarter. So we'll take that win and, and move on to the next one and hope it's again, another up quarter and, uh, continue just to move. But we believe in the big picture of this and, and, uh, And I'm just trying to stress to the analysts and to the investors out there, we invest in our business as shareholders for what the long-term approach is and believing in what the business model is. And we like these calls to try to really effectively articulate that. So if you've got questions, we're always open to it. And feel free to get in contact with us.

Thanks very much. And this now concludes today's conference call. Thank you all for joining.

Thanks, everyone.

Bye-bye.