WELL Health Technologies Corp.

Good afternoon, ladies and gentlemen, and welcome to the Well Health Technologies Corp. second quarter 2026 conference call. At this time, our lines are in a listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you need assistance, please press star zero for the operator. This call is being recorded on Thursday, August 6, 2026. I would now like to turn the conference over to Pardeep Sangha. Please go ahead.

Thank you, operator, and welcome everyone to Well Health's fiscal second quarter financial results conference call for the period ended June 30th, 2026. Joining me on the call today are Hamed Shahbazi, chairman and CEO, and Eva Fong, the company's CFO. I trust that everyone has received a copy of our financial results press release that was issued earlier today. A portion of today's call, other than historical performance, includes statements of forward-looking information within the meaning of applicable securities laws, These four looking statements involve known and unknown risks, uncertainties, assumptions, and other factors, many of which are outside of wealth control, that may cause the actual results, performance, or achievements of wealth to differ materially from the anticipated results, performance, or achievements implied by such four looking statements. These factors are further outlined in today's press release and in our management discussion and analysis. We provide forward-looking statements solely for the purpose of providing information about managers' current expectations and plans relating to the future. We do not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in our expectations or any change in advanced conditions, assumptions, or circumstances on which any such statement is based, except if it is required by law. We may use terms such as adjusted gross profit, adjusted gross margin, adjusted EBITDA, Adjusted EBITDA Margin, Sharehold EBITDA, Adjusted Net Income, and Adjusted Free Cash Flow on this conference call, all of which are non-GAAP and non-IFRS measures. For more information on how we define these terms, please refer to the definitions set out in today's press release and in our management discussion and analysis. The company believes that Adjusted EBITDA is a meaningful financial metric as it measures cash generated from operations, which the company can use to fund working capital requirements. Service Future Interest and Principal Debt Repayment and Fund Future Growth Initiative. Adjusted EBITDA should not be construed as an alternative to net income or loss determined in accordance with IFRS. And with that, let me turn the call over to Mr. Hamed Shahbazi, Chairman and CEO.

Thank you, Pardeep, and good day, everyone. We appreciate everyone for joining us. Before we get into the quarter, I'd like to step back and highlight what WELL has accomplished over the past several months. This quarter wasn't defined by a single financial result. It was defined by Execution across every key pillar of our strategy. Expanding our Canadian Clinics platform through acquisitions and organic growth, reaching a major profitability milestone ahead of schedule, strengthening our balance sheet, and unlocking additional growth capital for Wellstar to accelerate its next phase of growth. Specific highlights are as follows. We reached our $100 million adjusted EBITDA run rate milestone for Well Canada three quarters ahead of schedule and at margins meaningfully ahead of our original expectations. Two, we successfully completed our inaugural $150 million senior unsecured bond offering, strengthening our balance sheet by extending our debt maturity profile to 2031. Three, last week WellStart completed a $50 million financing, which included both primary and secondary components in conjunction with its planned standalone public listing in September, attracting high quality institutional investors while positioning the business for its best phase of growth. And four, we completed two highly strategic acquisitions, Ontario Imaging Diagnostics and UnionMD. which expand our leadership in Canadian outpatient healthcare while adding approximately $22 million of annual EBITDA. Taken together, these milestones demonstrate that our strategy is working. We're building a larger, higher quality, better capitalized healthcare platform. One that is delivering stronger profitability today while creating multiple avenues for future growth. That execution is why we're increasing our 2026 guidance today. Our new 2026 guidance is revenue of $1.58 billion to $1.65 billion compared to previous guidance of $1.55 billion to $1.65 billion. We have raised the bottom end of our guidance and narrowed the range to the upside. For adjusted EBITDA, our new guidance is $185 million to $195 million, up a full $10 million from $175 million to $185 million. As you can tell, the EBITDA guidance range has been significantly improved versus the revenue guidance range, which speaks to our execution and focus on higher margin growth opportunities. And now to the quarter itself. Revenue in Q2 was approximately $400 million, up 12% year over year. Adjusted EBITDA was $48.1 million, down 3%. And adjusted EBITDA attributable to well shareholders was $35 million, down about 6%. On a normalized basis, meaning once accounting for the circle medical deferred revenues, revenue grew 14% to $395.6 million, and adjusted EBITDA grew 8% to $43.3 million, and adjusted shareholder EBITDA grew 4% to $32 million. In terms of the gap between reported and normalized matters, This quarter, again, we had $9.7 million of deferred revenue in Q2 2025 versus $4.8 million this quarter. That swing, combined with roughly $8.7 million of one-time retro reimbursement revenue in the Canadian patient services business in the prior year period dampened our reporting growth rate, even though the underlying business grew much faster. With that context in mind, let's turn to the rest of the financial highlights. Adjusted gross profit was $178.4 million, up 12% year-over-year, with adjusted gross margin improving 10 basis points to 44.6%. Once normalized for deferred revenues, adjusted gross profit was $173.6 million, up 17%, with margin expanding 90 basis points to 43.9%. Our margin expansion continues to be driven by the shift in revenue mix towards higher margin WellSTAR, diagnostics, and executive and longevity health revenue. Adjusted net income was $11.6 million in Q2, 2026. On a normalized basis, adjusted net income was $9.2 million. I'll let Eva walk through the detailed bridge behind these numbers later on the call. First, I want to spend a moment on June specifically because the shape of the quarter matters as much as the total. We exited Q2 materially stronger than we entered it. June revenue was up 24% year over year or up 28% normalized for deferred revenues. June adjusted EBITDA was up 12% reported and up 43% normalized. June adjusted shareholder EBITDA was up 28% reported and up and a strong month within the quarter and that strength flowed through to our margins as well. The positive results in June were also driven by recent acquisitions of OID and Union as well as improvements in WISP's business, again in June. That is the exit rate underpinning today's guidance increase and is the clear signal indicator we have of where the Canadian business is heading in the second half. These results reflect a business that continues to compound. Now turning to our operational metrics. Well's clinic network now includes over 5,000 providers, including more than 1,500 physicians in Canada. Beyond our own clinics, more than 45,000 unique providers are supported by WellSTAR's technology. Remember, there are only just over 100,000 physicians in the entire country. System-wide, inclusive of Canada and the US and excluding HealWell AI, patient visits grew 19% year-over-year to 2 million with 5% organic growth. In Canada, patient visits reached 1.4 million up 28% year-over-year or 5.6 million visits on an annualized run rate basis. Total care interactions which we define as patient visits plus technology interactions exceeded 3.1 million in the quarter up 21% with 11% organic growth. Care interactions are growing faster organically than patient visits. And that tells you that our technology layer is increasingly doing more of the work alongside our clinical platform. Moving on, strong financial and operational results are the output of something more important. The real world positive impact our platform is delivering for patients and providers every single day. Here are three new and updated examples of how we are making an impact to Canadian healthcare. First one, well cardiologists are seeing patients in approximately two weeks against the 15.3 week industry average reported by the Fraser Institute. Second, technology enablement at well clinics has driven an 80% reduction in no-shows, which means more efficient use of provider time and shorter effective wait lists for everyone else. and in partnership with HealWell, we have collected now over 85,000 well trust consents as of June 30th, giving patients a consent-first way to participate in research and data-driven care. These are not theoretical efficiencies. They are measured, repeatable improvements at scale and they are why patients and providers continue to keep choosing well.

Moving on to our team.

I'm very pleased to report that four high-caliber leaders joined well this quarter to support the next phase of our growth. Derek Clark joined as COO, Chief Operating Officer, bringing over 20 years of healthcare and digital health leadership from Callion and GE Healthcare to support our next phase of operational execution and scale. Welcome, Derek. Loretto Grimaldi joined as Chief Legal Officer, bringing more than 25 years of legal governance and M&A leadership previously at Medivale Technologies and most recently as CEO of Tricor Automotive Group. Welcome, Loretto. Kaitek Przybylski joined as Chief Digital and Information Officer, bringing more than 25 years of enterprise technology and digital transformation experience, most recently as Chief Digital Officer at Lantern and previously EVP and Chief Data and Technology Officer at Lifeworks, previously known as Morneau-Chapelle. Welcome Kitech. And Dr. Andrew Bond joined as Chief Health Officer and Head of Public Sector. Andrew brings more than two decades of clinical and health system leadership, most recently as SVP and Chief Medical Officer at Green Shield. Andrew now leads clinical governance across the Well Group and is spearheading our public sector strategy, including the One Well Vision, which I want to talk you through next. Welcome, Andrew. The next few slides lay out the strategic frame, and I will be brief because it has not changed. Canada's healthcare system is remarkably complex and faces six structural pressures, access, provider burnout, chronic disease, acute capacity, and acute capacity, the fiscal ceiling and aging population, and data fragmentation. I won't get into the details of of all this now, but this slide sizes each of these challenges. Virtually everything you read in the news concentrates in one of those six. That's the high level view of where Canadian healthcare stands today. And I want to show you how Well is specifically built to address these pressures at once. Well's vision is to be the operating system underpinning outpatient healthcare at scale for a more modern Canadian healthcare system. We are the only integrated example in the country that combines care delivery at scale, the technology to run and continuously improve that delivery, and an intelligence layer that turns the resulting data back into better care and better tools for providers. Clinics that deliver care, technology that runs it, and AI that makes it smarter. Our above average NPS or net promoter scores are demonstrating that patients appreciate our tech enabled approach. that values their time, and we continue to work hard to improve our offerings every day. And now on to One Well. We call the integrated offering across the well group of companies One Well. In Canada, this consists of over 275 clinics and more than 1500 physicians delivering 5.6 million annualized visits, including the country's largest diagnostic group at over 85 locations. It is WellSTAR's technology running intake scheduling, clinical decision support with a human always in the loop, billing and cybersecurity for those providers. And it's HealWell's clinical AI identifying patients with rare and chronic disease for our clinicians and enterprise life sciences partners. We are built as an interoperable system builder, not a silo builder, which aligns with the Bill S-5 Connected Care for Canadians Act, now before the House of Commons. and with the Pan-Canadian Interoperability Roadmap that WellSTAR and HealWell are leading contributors to. One Well is about bringing together the best of the Well group to support Canadians' healthcare at a time when Canadians supporting Canadians is more important than ever. Turning to our capital structure, on June 15, 2026, we closed Well's inaugural senior unsecured notes offering. $150 million aggregate principal amount of 6.875% senior unsecured notes due 20 to 31 issued at par and ranking equally with our other senior unsecured indebtedness. The proceeds of the offering will be used to repay our convertible to ventures due December 2026 and the balance for general corporate purposes. The oversubscribed offering was led by BMO Capital Markets on behalf of the syndicate of banks, The demand we saw across the syndicate is a meaningful vote of confidence from fixed income investors in the durability of our cash flows, and it turns out our maturity profile to 2031. Now let's look at Well Canada, which includes Canadian Clinics, WellStar, and CyberWell, but excludes HealWell. Well Canada generated revenue of $176.6 million, up 32% year over year, or approximately 41% including the prior year's one-time reimbursement list from the base. As mentioned earlier, this was roughly 8.7 million of one-time retro reimbursement revenue. Adjusted EBITDA was 27.4 million, up 19% on a reported basis or approximately 56% excluding that same prior year item. Either way you look at it, this is the compounding growth in our Canadian business that underpins today's guidance increase. Canadian clinics which includes both primary care and diagnostics generated revenue of 151.6 million and adjusted EBITDA of 22.3 million up from 114.9 million and 18.2 million a year ago. Our primary care adjusted EBITDA margin expanded to 8.6% from 5.2% reflecting both the creative acquisitions and continued execution of our clinic transformation program. On a trailing basis, Canadian clinic revenue has compounded at a 47% CAGR and adjusted EBITDA at a 44% CAGR. The network has grown from 128 clinics at the start of 2022 to over 275 today. Patient visits in our Canadian clinics network totaled 1.36 million, up 28%. Billable providers reached 2,444, up 26%. Note that these figures include our union MD and OID acquisitions, which contribute their full provider count, but only one month of visits as they closed in June. Excluding these acquisitions, visits continue to grow faster than the provider count. So visits per billable provider rose to approximately 576 from approximately 584. And from approximately 449 two years ago, AI transcription and digital workflows remain a key driver of that productivity gain. Including these acquisitions, visits per billable provider were approximately 557. Zooming out, in a highly burdened healthcare environment, productivity improvements such as these really matter. Now turning our attention to Canadian clinic M&A activity, in Q2 2026, we had a big quarter and completed three transactions, adding 23 clinics and 67.8 million in annual revenue and 117 new providers. Q2's activity mainly reflects the OID and Union MD acquisitions mentioned previously. And turning to the pipeline, the total Well Canada pipeline remains strong. and including pre-LOI targets represents more than 30 targets engaged, over 340 million in annual revenue and more than 70 clinics. As noted before, our definition of Well Canada includes Canadian clinics, WellStar and CyberWell, but excludes all of HealWell due to its international focus. For Well Canada, total revenue under LOI or advanced stage represents approximately 193 million across five signed LOIs. and unsigned LOI opportunities. Combined with the balance sheet flexibility from our new bond offering, this gives us strong visibility into our Canadian growth trajectory through 2026 and beyond. And now turning our attention to Wellstar. Last week, we announced that Wellstar closed a brokered private placement, raising gross proceeds of $50 million in conjunction with its planned standalone listing on the TSX Venture Exchange. The financing was made up of $36.2 million of new treasury subscription receipts and $13.8 million from a secondary offering by an existing shareholder, which was not well. It was anchored by a large Canadian bank-owned asset manager, together with new institutional investors and existing shareholders, and led by TD Securities, RBC Capital Markets, and Stifel. on behalf of a syndicate of agents. WellSTAR is expected to begin trading on the TSX Venture Exchange in September of 2026. Two years ago, you may recall, we said we wanted WellSTAR to be around $100 million in revenue by the time it went public. And we've achieved that goal. WellSTAR is expected to generate approximately 95 million in revenue in 2026. at an expected adjusted EBITDA margin of approximately 21%, with a three-year organic revenue growth target of over 20%. A standalone listing gives WellSTAR enhanced strategic flexibility, greater access to growth capital, and increased visibility with investors. Use of proceeds includes strategic acquisitions, AI-driven product innovation, organic growth initiatives, and general corporate purposes. Well and WellSTAR executives as well as Well Health itself participated in the offering and is expected to remain a majority long-term controlling shareholder and growing customer. And now WellSTAR's performance. WellSTAR generated revenue of $23 million up 37% from $16.8 million one year ago. Justa Deepita was $5.8 million up 32% from $4.4 million. After approximately $193,000 worth of one-time public company costs incurred in preparation for the listing, adjusted EBITDA was $5.6 million, still up 27%, maintaining its Rule of 40 performance. The next topic I'd like to address is our ongoing strategic alternatives processes for our U.S. care delivery assets, CRH Medical, WISP, and Circle Medical. Across the three processes, we currently have more than 10 parties engaged at various stages of review, split roughly evenly between strategic acquirers and financial sponsors. While we have active and engaged parties as part of the processes, nothing has reached a stage that would warrant disclosure, and consistent with our obligations, we will inform the market promptly when something does. One structural point worth noting, Well owns 100% of the shares of CRH Medical, whereas we are a controlling shareholder in WISP and Circle Medical with share ownership of just over 50%, 53% in Circle Medical and as well in WISP. Combined with its scale, that is why CRH carries the most weight in our financial profile. Turning briefly to how businesses performed, WISP had a challenging start to the year with losses through the first five months, but returned to profitability in June under a sharper focus on margins and cost management. Quarterly revenue was $29.3 million, up from $28 million with an adjusted EBITDA loss of $200,000 against an EBITDA profit of $866,000 for Q2 2026. Note that adjusted EBITDA for the month of June alone was over 1.2 million Canadian. Circle Medical's reported revenue of 29.5 million against 34 million year-over-year reflects IFRS 15 deferral timing rather than any change in the business. Normalized Circle grew modestly, and the team continues to focus on margin improvement, improvement in compliance, and adding four states by year-end. and CRH Anesthesia together with provider staffing generated combined revenue of 129.6 million, up 5%, with combined adjusted EBITDA of 24.9 million, up 4%. Year over year growth was impacted by the radar staffing business, which experienced some attrition in its customer base. The balance of the staffing business continued to perform well, as has the GI-focused services anesthesia business. Overall, the team has done an excellent job continuing to keep the business healthy and growing. With that, let me turn the call over to Eva to walk through the balance of our financial results.

Thank you, Hamed. Good afternoon, everyone. Thank you for joining us today. First, let me walk you through the bridge from our Q2 2025 revenue of $356.7 million to Q2 2026 revenue of $404 million. On the left side of the chart, removing $9.7 million of circle medical net deferral impact from Q2 2025 get us to normalize Q2 2025 revenue of $347 million. From there, removing $8.7 million of one-time reimbursement lips from Canadian patient services revenue received in Q2 2025 for services provided in prior quarters shows the net growth of our business consisting of $51.2 million from Well Canada and $6.1 million from U.S. patient services and other businesses such as HealWell and Well Research. which gets us to normalized Q2 2026 revenue of 395.6 million. On the right side of the chart, including 4.8 million of circle medical net deferral impact in Q2 2026, gets us to Q2 2026 revenue of 404 million. While Canada's growth of 51.2 million was driven by organic and inorganic growth, in our Canadian clinics and well-started businesses. The adjusted EBITDA bridge follows a similar pattern. This slide shows that the bridge from our Q2 2025 adjusted EBITDA of 49.7 million to Q2 2026 adjusted EBITDA of 48.1 million. On the left side of the chart, excluding 9.7 million of circle medical net deferral impacts Get us to normalized Q2 2025 adjusted EBITDA of $44.1 million. From there, removing $5.4 million of one-time Canadian patient services revenues reimbursement lift show us a clearer picture of the adjusted EBITDA growth. While Canada's adjusted EBITDA increased by approximately $9.8 million, while U.S. patient services adjusted EBITDA increased by 2.8 million compared to Q2 of last year, which gets us to normalized Q2 2026 adjusted EBITDA of 43.3 million. Now on the right side of the chart, including 4.8 million of circle medical net deferral impact in Q2 2026 gets us to adjusted EBITDA of 48.1 million in Q2 2026. The underlying AetNets adjusted EBITDA growth of Wealth Canada reflects the continued revenue and margin expansion in our Canadian clinics and well-started businesses. Turning to adjusted net income. This slide shows the bridge from our Q2 2025 adjusted net income of $25.8 million to Q2 2026 adjusted net income of $11.6 million. Similarly, on the left side of the chart, removing SoCo Medical net deferral impact of $4.9 million gets us to normalize Q2 2025 adjusted net income of $20.9 million. From there, removing $3.8 million of one-time Canadian patient services revenues reimbursement lift, we had $8.2 million of legal fees and other costs, $3.9 million of higher interest expense, which were partially offset by 3.5 million of favorable non-operating items and 0.6 million of net growth, which gets us to normalized Q2 2026 adjusted net income of 9.2 million. On the right side of the chart, excluding 2.4 million of circle medical net deferral impact in Q2 2026 gets us to adjusted net income of 11.6 million in Q2 2026. Now for clarity, non-operating items include depreciation expense, foreign exchange gain and loss, gain on disposal of assets, and non-controlling interest or NCI included in that income. The increase in non-operating items is partially due to an increase in NCI from recent acquisitions. Legal and other costs include litigation, settlement, and defense costs, net of insurance recovery. Now on to free cash flow. Adjusted free cash flow eligible to shareholders was $11.7 million in Q2 2026, in line with Q2 2025. The bridge demonstrates that $2.5 million of higher spend on corporate and world research, $1 million of higher cash interest, and 3.6 million of higher capital expenditures, partially offset by 3.3 million of lower cash taxes and 3.8 million of net growth. The capital expenditures increased reflects clinic upgrades and renovation of key clinic and private care facilities. We expect those elevated costs to decline slightly, though maintenance capex will run slightly higher given our expanded diagnostic business and we expect free cash flow conversion to improve as the investment space normalizes through the second half of the year. Turn into our balance sheet as of June 30th, 2026. Well held cash and cash equivalents of 130.6 million as of June 30th, 2026 compared to 133.8 million at December 31st, 2025. Total loans and borrowings were $628.7 million as at June 30, 2026, compared to $425.4 million at December 31, 2025, reflecting the drawdown of credit facilities to fund acquisitions during the period ahead of the bond offering Hamed mentioned earlier. We remain in full compliance with all financial covenants across our syndicated credit facilities with J.P. Morgan in the U.S., RBC, and the Bank of Nova Scotia in Canada. During the six months ended June 30, 2026, we generated $54.4 million of cash from operating activities. used $176.6 million in investing activities, primarily $152 million on business and asset acquisitions, and generated $118.3 million from financing activities, primarily from the net credit facility proceeds ahead of the bond offering. We have renewed our normal course issuer bids program in May 2026, repurchasing a total of 162,600 shares in Q2 2026 and we expect to continue our NCIB program through the balance of 2026 as permitted. With the bond proceeds earmarked to repay the convertible debentures maturing in December 2026, and continued capacity under our credit facilities, we are very well positioned to continue funding growth in Canadian clinics and WorldStar. That concludes my financial update, and I will now turn the call back over to Hamed.

Thank you, Eva. And now onto our outlook. I gave you the guidance numbers at the top of the presentation, so I won't repeat them here. But as we discussed, especially on the EBITDA side of things, they represent a healthy increase in expectations. What I do want to add here are two new markers for how we're thinking about growth ahead. Now that the $100 million Well Canada milestone is behind us. First, Well Canada is targeting a run rate of over $1 billion in revenue by the end of 2028, both inclusive of organic growth and acquisitions. Well Clinics on its own is targeting a run rate of over $100 million in adjusted EBITDA by the end of this year, 2026. Also Wellstar, as I mentioned earlier, is expected to begin trading on the TSX Venture Exchange in September. So our capital allocation logic remains unchanged. Canadian Clinics remains the primary destination for incremental Well parent company capital, which is also the central Thank you for joining us today. and support staff across the world and across all our operating subsidiaries and above all, our healthcare practitioners and frontline workers who make a difference in the lives of our patients every day. Thanks also to you, our retail and institutional shareholders and analysts for your continued support. Operator will now open the call for questions.

Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press the star followed by the one on your touchtone phone. You will hear a prompt that your hand has been raised. If you wish to decline from the polling process, please press star followed by the two. And if you are using a speakerphone, please lift the handset before pressing any key. David Kwan with TD Cowen, please go ahead.

Thank you. Good afternoon. I was wondering, Hamed, if you could talk about WellStar and particularly the nice pickup that we've seen in e-referral volumes in the first half of this year. Where is that volume growth coming from and how do you see the growth kind of over the next year or two?

Yeah, thanks, David. You know, generally speaking, we had a fairly significant win This past year in Ontario, as you may remember or be aware, there was a very significant procurement effort that essentially shortlisted, despite us sort of piloting before, it shortlisted essentially three vendors that were presented to all regions across the province. And all of the regions ended up going with Ocean. And that was a very significant event for and really I think demonstrated the quality of the product and engagement that it has. And so we continue to see e-referral growth really everywhere, but obviously that big win in Ontario was a big step function gain for us. And look, we continue to see lots of opportunities for Ocean to win. And if you look at where Ocean has now won, we have key contracts from British Columbia through to and others. And, you know, we're seeing a lot of also growth and interest from other provinces. So I think it's a great story and it's one that we're going to be tracking closely for investors.

Thanks. I was just wondering whether there was anything in B.C. I think it was a couple of years, a year and a half, maybe two years ago, how the ramp is going in B.C.

Yeah, the EC business continues to grow. I will say it is definitely smaller still than places like Ontario, which have gone through significant pilots and have been at it for much longer. So these programs do take a little bit of time because you really need to get the originating physicians and the physicians being referred to all on the program and that there's a little bit of lead time associated with that and you know we're making progress every day and we're excited about the future of BC as well.

I appreciate it. Maybe it's one last one. There hasn't been much talk on clinic absorptions compared to say a couple years ago when you were a lot more active on that front. Are you finding fewer clinic absorption opportunities in the market today and Can you maybe talk about what mix they would account for in the pipeline?

Yeah, great observation, David. Yes, we're definitely not doing as many and that has a lot to do with just the bandwidth of our clinic transformation team. You know, look, you can see the activity associated with our clinic acquisitions is quite extensive. and so we just have to be very thoughtful and choosy about where we want to allocate those resources. We will probably now put our attention more on in areas like Absorptions just because We've spent quite a bit of capital this year, especially capping our capital allocation activity with OID and union. So you'll probably see some more, but keep in mind that the absorptions also take just a lot more time and energy than your standard clinic. And so we're now seeing really substantial EBITDA gains. So we have to, just like our capital, our clinic transformation time is limited and we have to think about that. as prudent allocators of that time and expertise. So we're just trying to think about it a lot more strategically.

I appreciate it. Thanks.

Daniel Rosenberg with Paradigm Capital. Please go ahead.

Hi. Thanks for taking my question. My first one comes on the M&A process. I appreciate you segmenting some of the LOI and the pipeline versus total pipeline. I was wondering if you could speak to how you're thinking about M&A through the different divisions that you have, whether it be allocating capital, allocating resources, or otherwise, how are you splitting the resources you have?

Yeah, no, it's a great question. And look, you'll notice that Particularly this month and really all this year, we've been allocating capital in higher margin areas. That is very, very intentional. Overall, I would say that the majority of our EBITDA in Canadian clinics does come from diagnostic imaging and what was legacy, our My Health platform that we really built on top of. We really like that business. We think that that's a business that particularly performs well in an increasingly AI-disrupted world. It is one of the rare areas where AI actually helps augment your capability and helps you deliver care more quickly. And it's not an area where we think that there's any kind of friction or any kind of autonomous service delivery. And I'm talking about many years downstream. The margins are strong. And because of AI enhancements, we think the throughput will be higher. So we continue to really like that business. We, as far as if you look at, you know, our union MD acquisition, that one has a lot to do with, you know, procedural health, you know, different processes and procedures, you know, pain injections, you know, light kind of, you know, surgical like aesthetic treatments, you know, dermatological kind of procedures. These are the types of things, non-aesthetic Botox uses that are addressing various different health ailments. These are higher margin types of areas that we like quite a bit. Our e-referral business, for example, is one that in Alberta, you may remember the acquisition of our and the referral asset in the previous quarter. That's performing very well right now. And so I would say that the benefit of being this far into our M&A program now is we have a much better understanding of all the different niche areas. And we can see we have excellent view and understanding of their margin profiles, their growth profiles. and as we centralize and think about our capital allocation, we're very choosy as to where we put that capital. And so the longevity in executive health areas, for example, have also really performed nicely for us. But a lot of the public clinics also continue to perform better well for us. But I would say that we're much more choosy about which of those public clinics to take on because the margins are more challenging than some of the private alternatives. Hopefully that gives you a little bit of perspective. But yeah, we tend to favor higher margin areas where kind of the juice is worth the squeeze from a clinic transformation perspective as well.

Thanks. Appreciate that. Kind of adjacent, last question for me. Just along the lines of allocating the capital, you had a couple of larger acquisitions in the quarter. and I'm wondering how you're thinking about debt levels, that balance. Obviously there's a growth opportunity with M&A, but in the near term there's also debt levels and repayments and the recent debt instrument that you secured. So just any commentary on where you're comfortable with the balance sheet being relative to the growth opportunities you have. And I'll pass the line, thank you.

Yeah, no, it's a great point. Well, look, as we improve EBITDA generation or organic growth, we will see more EBITDA returns. That'll have a natural kind of force to push down our leverage ratio. And we'll put that capital back to work. And this is where my commentary about kind of doing lower-end clinics comes in. We may now traffic in some of those lower-end clinics in order to, which are much more capital efficient for us. They take a little bit more time, but we're through kind of, I would say for now, some of these bigger purchase ticket items. And look, as the divestiture processes come to maturity, there will be additional capital that we'll put to work there. I mean, for bigger ticker items, but you'll continue to see, I think, a good diet of bolt-ons occur even notwithstanding that. So I would say, look, we probably go back to a more normalized M&A rhythm, but we'll keep the bigger ticket items warm as we bring forth non-dilutive capital to help us tackle those bigger items.

Great, thank you.

Justin Keywood with Stifel, please go ahead.

Hi, thanks for taking my call. Nice to see the results. On the new $1 billion Well Canada goal by 2028, that's quite the expansion from the current $700 million run rate. I assume there's some operating leverage potential if that goal is reached. What type of margin profile should we expect?

Yeah, great question. Look, we think that in general margins are on the way up, right? And so obviously you know further to my to the last question and answer process that we just had you know on where I talked a little bit about the absorptions you know clearly absorptions do have a you know initially a you know they sort of drag down overall margins I think overall given how much A higher margin revenue we're adding and will add. I do believe that on balance we'll see margins increase. That's kind of our goal. We're going to be very intentional about that. And so while that is a goal, what's equally important to us is to not see margin degradation. And so that's, I think, what makes that such a compelling goal. Now, I want to be clear that that does require us to get some, you know, some liquidity from our U.S. assets in order to be able to deliver on some of that. But we're comfortable that that will happen in due time.

Understood. And just on the organic strength with the Canadian clinic network seems to be pretty robust in the low double digit range. I'm wondering if there was anything particular in the quarter to drive that organic growth rate. We know that the generic GLP-1 has just arrived in Canada. Is that having an impact or is there any other particular health trends of note?

Yeah, look, our organic growth has been generally very strong over time. It sort of bobs around a little bit. I would say that, of course, as the numbers get bigger, it's harder to keep that higher. If you could, you know, generally speaking in in healthcare, you see organic growth that's roughly flat to about 3%. And so we've been running quite a bit better over a very significant period of time. And I'd say what's driving a lot of that for us right now is really kind of the best practices and tech enablement strategies that we're deploying. A lot of it has to do with WellStars, clinic orchestration and physician empowerment tools. Also, I will say, you know, we're starting to now get, you know, broader deployment of some of the heal well stuff as well. But generally speaking, I think that, you know, tech enablement is going to sort of lead the way and the mix of what we bring into the network and how we power those clinicians. You know, again, we're being really thoughtful as we grow. A prime example is the e-consult business. That's something that we brought on just a couple quarters ago, and we're already seeing significant double-digit increases in performance from that asset, which, as you may remember, was a fairly material asset. And so we're trying to both kind of drive in and activate growth in our existing business, but also ensure that we are buying into growth vehicles that continue to provide us with tailwinds.

Very helpful. Thank you.

Rob Gough with Ventim Financial. Please go ahead.

Thank you very much. Yet another question on the M&A outlook in Canada. A question there. Are you seeing others show up and you're facing bidding situations or is it still pretty much non-competitive? And on the other side of the table, are sellers getting a bit more motivated to go along with the consolidation given the pressures of automation and digitization, et cetera, et cetera?

Yeah, good questions. Thanks, Rob. We are definitely seeing competition here and there in some of our processes. I will say one of the things that we've been very good at is also just trying to find unique opportunities where we don't have competitors, where they're not organized processes. I think what's improved, I may have mentioned this on a previous conference call, we have now really tech and AI enabled our own M&A process. So our current M&A process as well as the identification and registration of deals is unrecognizable to what it was a year ago. In terms of our depth of understanding of the market, our depth of understanding of Margin Profiles, Growth Rates, Who's Doing What? And I think that's really demonstrating a clear advantage for us. So I would think that, yes, we do see people out there from time to time. But I do think that we're also trying to find unique opportunities. I also think that Dwell's brand is attracting folks. I think we've been in a couple of scenarios where we're just seen as an aspirational company to sell to. So I think that's sort of one of the things. And then your second point, yeah, in terms of, I think you talked about motivation along the lines of automation and digitization. Is that motivating folks? I'm not sure that is motivating folks. I think that for the longest time, especially in the diagnostic business, we just saw that When multiples have declined after the pandemic, a lot of people just didn't want to sell. They had their hearts set on higher multiples. And while there is some competition in that sort of diagnostic space, it is still, I would say, a fraction of what it is in the United States. and so we do see some competition there. But tech enablement I don't think has necessarily driven people to want to sell more. If anything, I would think that tech enablement is a force that takes the pressure off from a provider if they implement it well. The problem with providers is that it's really hard for them to execute on that tech enablement by themselves. And this is why, for example, Wellstar acquired Bluebird IT is because it's also got, a lot of people don't recognize this about Wellstar, it has a very substantial network of break-fix maintenance of being able to deploy and manage technology. And of course, on the well side, we have a whole managed service. And that's one of the reasons why we're so successful with technology because we don't put it on the provider. When you show up, To conduct your business at well, we have a whole talented team of support people and technology people around you to make you successful. And it's all using the latest and greatest technology. I will say that if your question was within the context of do they want to come into our network so that they can benefit from those technologies, I would say yes. I do see a lot of evidence of that, particularly in the absorptions or very little multiple acquisitions that we make.

Great.

Thank you, and good luck.

Gianluca Tucci with Hayworth Securities. Please go ahead.

Hey, Helmut. Congrats on the quarter. Just one question from our end here.

An update to the work with the Competition Bureau that's going on right now. Hamed, thank you.

Yeah, no, thank you, Gianluca. We submitted all of the requests for information that we had been asked for, and we have not had any other reach outs or bona fide discussion with them. And so, you know, You know, there's not much more that I can say. I think that we, of course, you know, have reviewed all the same documents ourselves and we feel that we're in an excellent position. And as you know, we don't feel that we are in any way anti-competitive. And as you're likely aware, what started this whole journey with the Competition Bureau is kind of a miss by our, you know, counsel on the Heal Well acquisition where, you know, that was a noticeable transaction that didn't get properly noticed. And so we fell into a different queue with the Competition Bureau. It wasn't necessarily kind of started by any other exceptional or anomalous matter in the marketplace. And so, look, we're very confident of our actions. We're definitely a company that values competition and works really closely with the market. In fact, I would say that when you think about things like Wellstar's at Marketplace, there's no company in the country that is as open and standards-based and supportive of innovation and connectivity than we are. And I think folks understand that and I'm optimistic as to the results of that assessment.

Thanks, Hamed.

Congrats again. Thank you, Javikos.

Michael Freeman with Raymond James. Please go ahead.

Thanks for taking my question. I wonder if we could talk about your recent acquisitions with Uni and MD and OID. How has their performance been in their first month in-house? And just thinking about the historical 25% plus, just to give you a bit of margins, how do we see these trending as you move forward, as you integrate, and potentially as you expand capacity? Thanks.

Yeah, no. Thanks. It's a great question. Look, both of these are strong margin generators. They have slightly different growth profiles. So what's interesting about Union, again, it's a platform for dermatology and procedural health. And it's one that we feel that we can successfully integrate into some of our other clinical environments as well. So that really excites us. So not only does it have a nice growth profile in terms of its own sort of same clinic sales growth, also new sites, but also its ability to then be integrated and extended. And so I think that that one may have, you know, kind of more of an effect in terms of, you know, future growth and in terms of its potential to impact the business. OID is just a great performer. We already found them to be extremely efficient. We hope to improve it a little bit over time. But note that in Ontario, where OID is based, everything that you do needs to have a license. And so keep in mind that when we make these acquisitions, we're also acquiring the underlying licensure. and those licenses cost real money. And so if you remove the underlying cost of those licenses, you'll find that what we actually pay for these acquisitions is very, very reasonable considering the long-term terminal growth and profitability of them. And so generally speaking, I think that you know we have seen above average organic growth in our diagnostic business so I think you will continue to I think expect to see that that kind of growth from us and to answer your first question both are doing very well the first month was excellent and we have really a good view into where they're headed now and feel that they will be you know performing at or better than than the deal EBITDA

Okay. All right. Thank you, Hamed. And just a quick last one. If you could please remind us if the circle medical-related revenue deferrals will continue into the third quarter, or are we substantially done with those in the second quarter?

Yeah, I think we're generally done. Eva, do you want to confirm that? My understanding is that this is the last quarter. Yeah.

Q2 will completely fully recognize all the deferred revenue that was deferred in 2025. So we're completely done. No more deferrals.

There you go. That simplifies things. All right. Thank you very much and congratulations.

Thank you as well. Appreciate it.

Thank you. This concludes our Q&A session for today. I will turn the call back over to Hamed Shahbazi for closing comments.

Thank you very much for joining everyone. We really appreciate it. And we look forward to speaking with you again in November. Meanwhile, we will obviously be in touch on our upcoming initiatives and catalysts. All the best.

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.