Vitalhub Corp.

O'Brien Goffenberg. After our prepared remarks, we will open up the line to questions from analysts. Please press star 1 or use the raise hand function to indicate that you would like to ask a question. Before we begin, I will 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 and 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 Brian to go over financial highlights for the quarter. Over to you, Brian.

Thank you, Christian. Good morning, everyone, and thank you for joining the call today. We are pleased to report the results for the second quarter of 2026. Vitalab reached a new milestone this quarter, exceeding $100 million of annual recurring revenue. We closed June at $101.5 million, representing 10% organic growth over the prior year. Adjusted EBITDA margin continued to increase sequentially at 26% in the second quarter. Some of the key financial highlights for the quarter are as follows. We report a total revenue of $31.7 million, an increase of 33% year over year. Recurring revenue or term license maintenance and support segment was $24.5 million or 77% of total revenue. Virtual care term license revenue was $2.3 million. Perpetual license revenue was $800,000. Services, hardware, and other revenue was $4.1 million compared to $2.7 million in the prior year period. Our gross margin was 79% of revenue compared to 81% in the prior year period. Adjusted EBITDA for the quarter was $8.2 million. Thank you for joining us. We had strong cash conversion this quarter. Our cash balance increased by over $15 million this quarter, benefiting from collection activity and continued platform integration. Subsequent to quarter end, we completed the acquisition of Buddy Healthcare. And post the transaction, we continue to have over $120 million of cash that we're ready to deploy on our M&A strategy. as well with the addition of Buddy Healthcare pro forma ARR as of June 30th, 2026 would have been approximately $106 million. With that, I'd like to have the call over to Dan for an update on the business.

Thanks everyone. Welcome today. Just on reflecting back, it's exciting to see us get over $100 million of recurring. And I know our people and our staff, we're really excited about that. I think when we started this eight, nine years ago, that was a goal and it's achieved. So just take another one off of the bucket list and we continue to move forward. Just a little bit about the buddy acquisition just before I get into some of the other things. We're really excited about that. It's an organization that we've been speaking to for four years. The technology is really strong. They're a group that has entered into the UK with it, but it gives us a really strong digital backdoor solution. So we already have A very good digital front door solution with Zesty that is moving through our markets. And our customers have been asking us to say, that's good that you can get us into the hospital, into the setting, but what about after we leave? We want to continue to communicate with you. Our plans will be to integrate that with that backdoor solution. It also fits in nice with the Strata solution, which does the discharge process. And now we've got a way to communicate with the patients as we go through that discharge. So we expect, you know, once we get the technology all integrated and so forth, that that will be a good addition into our cross-cell methodology. So it's good people, great technologies, and we're excited about that. to add that piece onto it. In respect to the quarter, in terms of numbers, you see the recurring, recognized recurring growth. Services revenue a little bit, you know, a little bit behind in previous quarters, but it still reflects that. Services revenue is always tough to, you know, nail at 100%. I think we had a $5 million quarter a couple quarters ago, and down here it comes and adds and flows. Just based on revenue recognition and how that gets delivered to the customer. So we're happy with that. And we were happy with the way the virtual care renewal process came through. About 85 to 90% of that anywhere renewal process comes at the end of March. And as you can see that they are held up pretty hard for that so we're we're contribution came from really all of our products but mainly from the Zesty and the Q2 care coordination products the Strata and Novari product we're starting to of course Novari continues to move through Canada but what we're really excited about is um the momentum that's starting to get a little bit in our UK marketplaces and a little bit in other markets. But it's a unique solution and we're excited and think it has great opportunity to do that. The revenue number was offset by still some challenges with our product and the FCC, that's the system control centers with the ICPs. and the FTP and the Palantir based solutions along with the mergers and acquisitions. So we had some customers that I'm going to say suspended use during the quarter waiting for the outcome of what's happening with the FTP and Palantir situation just to refresh people. The NHS has a national contract for Palantir, but there's a break clause in that contract in Q1 of 2027 and it's right up at the parliamentary level and indications are suggesting that that product will be getting removed and hopefully that will continue that momentum for us on that Shrewd product through the UK marketplaces. In addition to that, we still have renewals coming through. So it's just some of our cases. In other cases, they are renewing. It just depends on the ICB and the approach. So it's a little bit just up in the flux, and we keep working on it. But even with that, we see a really good pipeline of all of our other solutions and still expect to continue with our organic growth profile. You know, we've introduced AI products into the marketplaces. There's two. We have the protocoling solution that started in Avari product. We're starting to move that into other products and we're starting to see some revenue streams from that. and we're really excited about our transcription solutions for our community services. We've been working on that for about a couple of quarters that is now in the hands of customers to get ratification on that and we expect that to start hitting the revenue streams hopefully end of this year, but definitely going into next year, we expect that to continue on that place. You know, we're getting close to the complete integration of the Navarre and the induction transaction. And as you can see, our thesis for both of those two large acquisitions have come to fruition. Our adjusted is back to 26%. We're generating some pretty good cash flow, I think. and many more. We've managed to integrate them. They're producing new organic revenue and they're adding to the bottom line pretty nicely. So we're excited about what our accomplishment was on that and we continue to still work on it. But it's getting towards the visibility in terms of trying to get that number back up to the high 20s, which we're at. I also just want to talk about the NCIB. I know as we go through and have met investors, people have asked about that. We have put it in place. We do think our financial results will continue to improve the stock to some degree, you know, staying still. We think it is a good value for us to, with lots of cash, to start looking at buying back our own stock. So we decided to put that in place and We continue to work on M&A deals. We have some large things that we're looking at and some small things. But the activity still seems to be there in that marketplace. And we continue to go and we do expect to do more M&A through 2026. And and more. But yeah, we're happy where we are as a company. We're making money. We're growing. We're adding customers. We've got lots of cash to remedy and we think we're in a good position. And I think we can continue to prove our business model and we're happy with what we've accomplished here. Any questions?