Vitalhub Corp. — Call Transcript 2026

Hi, good morning everyone, and thank you for joining us today for our 2025 fourth quarter conference call. With me on the call today are Vitalhub CEO, Dan Matlow, and CFO, Brian Goffenberg. 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 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 SEDAR 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 SEDAR filings. With that, I will hand the call over to Brian to go over financial highlights for the quarter. Over to you, Brian. Good morning, everyone, and thank you for joining the call today. We are pleased to report results for the fourth quarter and full year of 2025. I'll provide a summary of the financial results and then pass it over to Dan for an update on the business. For the full year, we are proud to report over CAD 100 million of total revenue, a milestone for all of us at Vitalhub. At the end of 2025, we reported annual recurring revenues of CAD 96.1 million, representing net organic growth of 10% over the prior year. We achieved 24% adjusted EBITDA margins and increased sequentially, showing progress on integration. For the fourth quarter of 2025, we reported total revenue of CAD 31.4 million, an increase of 52% year-over-year, and slightly lower than Q3 primarily due to the unusually high services revenue in Q3. Recurring revenue for the term license maintenance support segment was CAD 23.6 million, or 75% of total revenue. Virtual care term license revenue was CAD 2.4 million, down 4% sequentially. Perpetual license revenue was CAD 500 thousand, an increase from CAD 100 thousand in the prior year period. Service, hardware, and other revenue normalized sequentially at CAD 4.9 million compared to CAD 2.8 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 CAD 7.4 million or 24% of revenue, compared to CAD 5 million or 25% of revenue in the prior year period, and 22% in Q3 as we continue to gain synergies from our latest acquisitions and operations. On the balance sheet, we closed the year with CAD 119.2 million of cash and no debt. With that, I'd like to hand the call over to Dan for an update on the business. Good morning, everybody. It's good to have you this early, but we're excited to be here. Before I start, I just want to appreciate it and just talk about the delay that we had. There was nothing material that came out of that at all. It was just growth pains with the new auditor, new people, new teams, getting to know the business. In some ways, we were just ahead of our skis a little bit. If you noticed, we booked one week earlier than we did last year with the new auditor. Probably, not the smartest thing that we did, but we're really happy with the results that came out. EY did a great job. We're in great spirits with them, and we're off moving in the right direction. Just thank everyone for their patience to do it. I'm not gonna talk that much about the year results. You know, those things all came through the quarter. We're excited about how the overall results. It's good to look at that. We did surpass CAD 100 million in revenue and all the metrics on a yearly basis were you know as expected, and we're very excited about our performance. We're very happy with our Q4 results, especially in respect to the integration of Novari and Induction. Those integrations are going really well. They're pretty good contributors. You can see the cost lines in perspective of those things and how they're starting to impact with that. Again, services revenues were lower, primarily because Q3 was higher. We called that out in Q3 that that number probably isn't sustainable. It was a good surprise to have in Q3, and it definitely helped our numbers as we were working through getting the cost synergies from the acquisitions to do it. The same thing in our term licenses in Q3. Our term licenses for the most part represent ARR when you try to correlate it, but we do have timing issues, you know, for some of those ARRs on we get renewals where we do catch-ups for the rev rec perspective to do it. It's usually not that material that corresponds with it, but sometimes it's not 100% mapping on what they do. Yeah, we're pretty happy with operations. Our backlog for services is really strong as we move into the year. We're doing a great job on new deals. We're excited about the pipeline for Novari, both in Canada and in the U.K. There's a lot of work that's going on through provincial initiatives across all the different provinces that we're in the mix of. Unfortunately, not all those provinces or customers allow us to announce these deals at the time of signing them in all circumstances. We have a lot of activity to do. We're moving resources across organizations really effectively at this point. You know, we're excited about things that are going on through. We did have contribution from all the different products for the quarter, and we're excited about what the pipeline is to get the company to the Rule of 40, you know, coming into the new year a lot quicker. We still expect to see cost synergies moving throughout our product sets, and we expect revenue to start contributing on the ARR side, which will start contributing to income as well as we continue to move forward. I also wanna talk a lot about AI or a little bit about AI. We've embraced it. We've set up AI development teams, AI projects. We've seen revenue come from one of our Novari projects. I think we announced that. We are close to seeing revenue going into market. We're jointly developing other AI projects with our customers. All of our AI projects are being driven by our customers for initiatives, and we have a lot of those that are going on. We do expect those to start contributing into the revenue line as we start moving through the middle to the end of 2026 as they start coming in through our portfolio. We've also embraced it internally. We've added AI initiatives into our development processes, into our sales processes, into our support processes. We continue to look for ways that AI can improve our productivity, and we've started to make those investments as we continue to move there. We're excited about what AI can bring as an opportunity going forward. That's all I have to say today. We'll look forward to getting some questions and fleshing out any details that we might get. Great. Thanks, Dan. We'll now open up the line to any questions from analysts. As a reminder, please press star one or use the raise hand function if you would like to ask a question. Today's first question comes from Gavin Fairweather of ATB Capital Markets. Gavin, your line is open. Oh, hey, good morning. Thanks for taking my questions, and congrats on the strong results. Maybe just to start on the macro, I mean, the incremental ARR was strong this quarter, but maybe down a little bit against a strong compare year over year. I know we talked about the NHS restructuring that was moving through the system in 2025. Maybe you can just discuss kind of the spending environment that you saw in the quarter and maybe touch on if you've seen any changes in Q1, which is historically the strongest quarter for bookings. Yeah. You know, Q4 can be challenging just on the timing. You're coming into the Christmas year-end, and you're seeing procurement people, you know, not being around. Then they know they got Q1 to get those things over the finish line to use the budgets up. Sometimes it is a challenge getting things over in Q4. I think that's really, you know, what it is. We did see contribution. There were a lot of deals in the quarter, just not the size of the deals, just based on the way the mix worked for the quarter. Yeah, I think that's where it is, you know, relative to what we're doing. We never thought this would go up in a straight line, Gavin. I've always said that. You know, we're excited to see what our Q1 results look like from a new ARR booking. We continue to move in the right direction. Appreciate that. Maybe just on costs. I mean, they were down about 8% sequentially on the OpEx line, which was great to see. I guess I'm just curious for your assessment of kinda what proportion of your targeted cost synergies have kind of moved through the system and been actioned on Novari and Induction. We're continuing to move costs out, and you know, to do that. It is somewhat gonna get, you know, offset by some investment in AI initiatives, but I think overall the costs are still going to continue to move down. We're trying to move a lot of those AI initiatives to the lab. We, you know, we do have training and other things that are going on sequentially in the core business. Yeah, well, we still got work to do on moving resources. Both Novari and Induction had their own offshore development groups, and that's really you know, there are some initiatives that are going on and continue to go on in terms of people. Yeah, we've managed to recently integrate Induction into the greater U.K. world and that's working out pretty well. You know, I would say we still got work to do, but we're banging through it. That's great. Just lastly for me, you know, with the progress on integration that you've seen, curious how the M&A environment is shaping up here in 2026, just in terms of the amount of deal flow that you're seeing, you know, the seller valuation expectations and competition for those deals. Yeah, we're definitely seeing deals. We're working on deals. We continue to work on deals. We expect to do deals in 2026. We're, you know, constantly on the go in those perspectives. Nothing has changed in those markets. Always with valuation, we value what we see in a company. I do think we're starting to see some companies. You know, there's definitely a lot more scrutiny on the companies by the PEs in perspective, and I don't think we're seeing. You know, there are some scenarios going on where maybe a couple years ago we would see PE that would get the price up on those deals, and we're not seeing PE in those deals anymore. We are also starting to see a significant amount of tired investors in some deals that you know, it's just question on are they gonna take a down round on their sale or not, right? They came in at these higher valuations. Those scenarios are there and we still continue to value the deals by using our methodology. It doesn't really change how we think. You know, the opportunity to get deals at how we think at our prices is currently there in a bunch of scenarios and we're working through those. Thanks so much. I'll pass the line. Thanks, Kevin. The next question comes from Kevin Krishnaratne of Scotia Capital. Kevin, your line is open. Hey there. Good morning, guys, Dan and team. Congrats on a great quarter. Dan, can you just expand on the AI product roadmap? You know, it's definitely early days, but you talked about. You saw the press release last week on Novari. What are some of the other, you know, kind of logical areas where we could see, you know, AI first? Then you talked about, you think you're gonna see the contributions midyear to end of year. Is that gonna show up in. Like, how do. Does that, is that revenue contribution in terms of, you know, price uplifts or module attach, or is it just sort of. You know, how do you see that sort of, like, flowing through? Like what Yeah, I think you know, our mandate of our product managers was to come up with AI use cases for the solutions, and then we worked backwards to the ones that we thought would get the most demand by our customers and ratified that with our customer base and attempted to try to price that out of what this is going to cost us. That's where some of the challenges come into the works until you actually get this thing in production. I think we know with Novari where that sits, and Novari does have a module for protocolling built into its imaging solutions, which is demanded by our customers and you know, that's the first one out the door in there. We also have two other initiatives that are going on in our definitely in a transcription solution in all of our EHR case management based solutions. We think that's low-hanging fruit. We got customers that are taking that, and there will be uploads that get associated with that towards the latter part of this year, and that's currently being worked at in with our partners customers and our hope is to have something in production, you know, midyear for that. We also are working on our SHREWD product set. Again, very much how we can use voice to understand the analytics and understand the data and ask the system what's going on, as opposed to interpreting the system of what's going on. You know, that project's going really well with some partners as well and we're hoping to get some incremental revenue from that. We got other ones that are going on, but those are three very good examples of things that we're doing with AI and what we think we can do incrementally with it. Awesome. Yeah, thanks for that. Maybe the second question, just in your press release, you talked about how you're considering M&A of all sizes and also adjacent geographies. Maybe if you can remind us here on how big you go in a deal. You know, how big would you go on putting on debt on the balance sheet? And then when you talk about adjacent geographies, would you consider the US or is that you're thinking more about regions in Europe or Asia Pacific? I think it's more in Europe than Asia Pac. We still see that's primarily where we're looking for deals and we continue to see deals. You know, there are large initiatives that are floating around. You know, they're floating in these markets. It's just, you know, the challenge being, you know, what are the valuations for these organizations relative to how we look at businesses in what we do. Yeah, we would use debt if the business was right and we felt comfortable that that business could service that debt effectively to get through it. You know, we would really have to be extremely bullish on what that organization is going to do for our overall makeup of our business, right? You know, we traditionally have been somewhat conservative, and we continue to work that way. Great. Thanks for all the color. I'm gonna pass the line. Congrats again on a good quarter. Yeah. Thanks, Kevin. The next question comes from Richard Tse of National Bank Financial. Richard, your line is open. Yes, thank you. Yeah, sort of a related question on AI with respect to your customers? Yeah. What are they saying about the advancements there? Is it sort of changing their buying decisions at all? You know, I think that in your space, it's probably something that is less, let's say disruptive, you know, given the healthcare industry. But you know, what are their comments in terms of, you know, how it impacts their buying decisions here? I think they're interested in it, but they're a long way off suggesting how that's gonna drive their business changes relative to what it is. There's some low-hanging fruit, I'd mentioned a couple of them, that we will and should be putting into our product sets. It's not making or breaking our deals, and it's not making or breaking our churn profile of what we have. It's important that we get to it, and we are, but our customer base is not that, you know, crazily as involved as other sectors for sure. Yeah, we do view it as an opportunity where we can add new modules. Our biggest asset is our customers, and we let our customers drive our initiatives and, of course, if you bring up what we're gonna do and discuss it with them, they're excited about new functionality and new things within our install base. We bring it to our install base first and ideas and that's sort of what we do. Okay. Great. With respect to Novari, I think I noticed in the filings that you marked up the earn-out a bit, which I think sort of is positive in terms of what maybe sort of represented the business. What's sort of driving that markup, you know, that you can maybe comment on? I'm sorry, Richard, I don't understand the question. Markup? The earn-out. There's a lot of activity going on there. Right. Okay. Across Canada and now across the UK. Our UK team has driven on that. They did sell that one implementation that's going on. It's getting a lot of notice within the UK that we're seeing at the moment. The way the auditors and so forth do that contingent, it's always based on what they see and what's going on. Yeah, you know, there are initiatives going on that give a little more probability to paying that out, but that would be a good thing. Yeah. That was sort of what I was intimating here. I guess related to Novari and perhaps the other acquisitions, are there any metrics that you can just share around the success with respect to, you know, cross-selling, you know, some of the products into the existing base? It's not specific to Novari, but, you know, probably more your sort of entire product. Yeah. We're starting to see the MedCurrent product and Novari are really starting to hit it off. I think we got our first cross-selling deal in that world that's coming to fruition and we're doing a lot of presentations, especially in the UK marketplace. MedCurrent's done a really good job in there and Novari's imaging solution just dovetails right in to that solution. MedCurrent's got a pretty big base in the UK that they've established over the years. That one seems to be progressing. We're progressing to move the Zesty portal into our EHR product, so that will become the portal per se on a go-forward basis. We're starting to also you know work integration between our Intouch platform and our Zesty customers. The Zesty product can be used as the patient engagement application, you know, as we go forward and do all the check-ins and so forth with that. We are starting to see some cross-selling, you know, from those components, definitely in the markets. Okay. Great. Thanks. Thanks, Richard. The next question comes from David Kwan of TD Securities. David, your line is open. Thanks, Christian. Apologize, I was late jumping on the call if these questions have been addressed. Just wondering, as it relates to the margins, how we should be kind of looking at it through the balance of or through 2026, assuming that you don't make any kind of incremental material acquisitions. Like, do you think we could get back to the pre-acquisition levels, kind of pre-MedCurrent, pre-Strata in the kind of 27%-28% range exiting the year? Yeah, if you think about it, right, like, you know, we're continuously working at the cost side of things and trying to get integration and so forth that are there. I think equally as important that is if we can add incremental new ARR without increasing costs, you're gonna start getting it on both sides, right? I think it could be a little bit of both that starts coming to the equation. We do expect to add ARR, which should start coming to the bottom line as we close it. You know, combined with that with a little bit of some more synergistic work that we're doing, to do it. That's what we're aiming to do, and that's what we're trying to do, you know, as part of the year, right? We've always said where we wanted to get to, and nothing's changed from that perspective. We're budgeted to get there, and we're trying to get there. No, that's great. Thanks, Dan. On the AI side, appreciate the color that you've provided. I think you kinda hinted and talked about some of your customers kind of working with you on some of these AI projects and initiatives. Like, to what extent are they funding or helping fund some of these initiatives? Yeah, we do have initiatives on the transcription product where customers have actually given us money to build it for them. You know, that's showing evidence of it to that degree. We do got stuff there. On the case of the Novari side, it's a separate SKU. We had customers buy it before it was built, with them and helped in the design and in the process to do that. Yeah, that's sort of how we like to work. We always have been in terms of trying to partner with those initial customers and try to get some skin in the game from them, and that's how we build software. That's great. Just last question. Just on the cash flow this quarter, can you provide some color as to why there was such a significant drag? I think cash taxes was one thing in particular, but anything you could provide, that'd be great. Timing is always an issue when it comes to cash. Q4, we have a lot of our business turns over at the end of Q1. You know, like Attend Anywhere. The whole Induction stream, Attend Anywhere, all comes up for renewal at the end of Q1. That's a big cash driver in the business, right, in terms of funding that. There's other products that are definitely there more skewed to Q1. Our AR number is higher than we want it to be in terms of the collections. I think operationally, both Induction and Novari had challenges in terms of how they were set up to collect money and do billings. Operationally with that, we've improved that tremendously. Yeah, it's giving a bit of a drag on getting the money through the doors, through that perspective. I think that's all it is, really. Do you expect that we could see a reversal either this quarter or next quarter? Yeah, I think Q2 is probably our big cash collection item. There's some pretty big deals that come in Q2 and Q1 that have traditionally driven our cash balances. Right. Thanks. Thanks, David. The next question comes from Paul Treiber of RBC Capital Markets. Paul, your line is open. Hi, good morning. Thanks for taking the question. Just a question on Sri Lanka. You know, your operations there, I think they've moved to a four-day work week in the last few days. Do you see any operational impact or how you plan to mitigate any operational impact from that change? They didn't move to a four-day workday. They moved to a four-day in-office workday. They're all working five days a week at home. We always did have a hybrid workplace there. Certain teams come in certain days of the week, and certain teams come in other days of the week into that office setting, depending on what they do. There's no disruption at all in operations there. Okay, thanks. Thanks for that insight. Just in terms of AI and then also just in regards to M&A, to what degree or how have you changed your due diligence to take into account either, you know, potential AI opportunities or potential AI risks at some of the targets that you're looking at? You definitely throw it into the mix of the criteria where we look at, you know, number one, can AI replace us down the road? How simple is the tech? How complex are the workflows? Most of the time we come to the conclusion that the workflows are pretty complex, that they wouldn't if they weren't complex, they wouldn't actually be applications. But we're definitely, you know, dotting the I's and crossing the T's on it. And also we're, you know, we have seen a few companies that have built some AI components, or they call them AI components, but when you actually look underneath the covers, it's pretty simplistic. It's not really much to do with AI. We're definitely going to start asking those companies, have they started any AI initiatives? Do they see what AI use cases do they see? Have they spoken to their customers and about AI and tried to understand what the direction for those products would be with AI? I wouldn't say it's the sole criteria in how we buy things, but, you know, we definitely cover it off as part of our buying process, for sure. Okay, great. Well, thanks for taking the questions. Thanks, Paul. The next question comes from Michael Freeman of Raymond James. Michael, your line is open. Good morning. Congratulations on a great big year. I'm gonna also jump on the AI theme. You know, you've discussed AI as an opportunity in your own business. I wonder if you could expand a bit about how you see, you know, the potential for it to be a competitive threat. Maybe touch on the stickiness of your contracts. You know, change management in healthcare and potentially it. I wonder if you could point out if there are any pieces of software in your portfolio that you might identify as particularly vulnerable to, you know, to an AI competitor. Yeah, I don't think there's anything in our portfolio that fundamentally is a risk to an AI competitor. There is stuff that's a risk for other factors, but I don't think it's at the root of AI. I think the complexity of our applications in terms of workflow and structures is a pretty big moat. I also think the size of the TAM that we work in and the slow moving-ness of our customers is a pretty big moat. You know, for someone to recreate our software in AI, they'd have to rebuild it. Sure. That's something that's all part of it. You know, rebuilding, you still gotta sell it, you still gotta replace it, you still gotta go through a change management process with the customer. You gotta get them to believe that, it's there. You gotta cross a significant amount of investment in security solutions and compliance-based solutions to work in that world. I think it is a pretty big moat to get into. You know, it's not. We're not waking up in fear that there's someone. We still haven't, for sure, seen it, where all of a sudden you see someone put up a website that says a competitor to our product and it's go-to-market and we've used it building AI. Like, nothing even close to that scenario in our market at this stage of the game. Okay. No, I appreciate that. I'll typically ask questions about the changes going on at the NHS. Could you just touch on a little more how the reorganization of the NHS has been showing up in buying patterns among your customers for your software? Yeah. I think the biggest effect of the NHS is. I've mentioned this in the last couple of conference calls. It is affecting our SHREWD product line. There's these groups in the UK called ICB which are owned by government, and it's regional oversight of them. They're reorganizing those ICBs right now, and they're merging them, and they're making employee cuts in those particular areas. Really what it's done is slow down our operations. It slowed things down relative to what it is. You know, we'll see how that goes. It could be a really great opportunity for us to try to get the rest of those sites that we don't have once the dust settles here. It's gonna take a few more quarters for the dust to settle and work with that. They're definitely until they understand how all these places are gonna work and do stuff, there's buying decisions. That's really the only products that we sold to that group. The rest were sold to the other regions that are actually, you know, controlled by the actual hospitals and the other groups amongst them, to do that. They're regionalized in, like, a double layer mode in the NHS, and the top layer is a challenge, but the second layer where they actually operate as a region as opposed to oversight. SHREWD is an oversight product. It's a viewing product. As they try to integrate operations, such as things like Novari and Strata and things where they're starting to talk to each other, that stuff is still going and we're seeing a really nice trend there of them looking for products like ours right now in terms of referral management. Gotcha. Thank you. Very quickly, you know, with the stock price having come down over the last couple of months, I wonder if you have looked at your capital allocation strategy and considered an NCIB or a buyback at these prices. Yeah. We have considered it, although we do think our cash can be used for acquisitions and we'll get a better return based on that when we do the math, that corresponds with that. You know, we think at the end of the day we're looking to produce a good company and produce good results and good financials. We're trying to get, you know, as well as we can. It's always been our mandate. That's our mandate from the board. I think our major investors understand what we do and would like us to continue to do that. Yeah, we, at this stage, we're not going that route. Okay. Perfect. I'll pass it on. Congrats again. Thanks, Michael. The next question comes from Daniel Rosenberg of Paradigm Capital. Daniel, your line is open. Good morning, everybody. My first question comes around just the product roadmap. You mentioned putting together this AI team inside your business. Right. I was curious if that changes how you think of product development, whether it should be build versus buy. Just how do you think about that, given the changes in productivity in the internal teams? Yeah. We are putting AI into our building processes of product. We are starting to use it. We, you know, we need to introduce this and have introduced it in a controlled fashion. We got a lot of compliance and security requirements on how we build things and how we use AI and it's important that we have strategies and regular processes as we build that. We are using AI in our work, and we are investing in those initiatives. There's some really good low-hanging fruit to do. We've introduced the products such as Gong into our sales and marketing group, which are AI-based initiatives in terms of transcribing sales calls and understanding the whole sales world, and it's really been a really good initiative for us. You know, we've definitely upgraded our Freshdesk support systems to do that. We're exploring the NetSuite AI modules that are available in the marketplace. Yeah, we are starting to look at the productivity tools that they can enhance relative to what we have. We got the same debate that's going on. Do we use Copilot? Do we use Claude? Do we do stuff? We got pockets that are using one or the other. We're in the same mode, I think, where a lot of companies are at this stage in the game. Thanks for that. You spoke to low-hanging fruit, which a lot of it sounds like kind of scribe transcription type technologies. I was wondering, you know, as you think of the longer term use cases, you know, does this go to agentic type solutions? You know, where does your mind go when you think longer term about the possibilities? Yeah, in our world, it's you know, we got unique workflows. We gotta report to governments. We got to do things. I do think they'll like transcribing. I don't think they're looking at it through the same lens as a hospital's gonna be looking at them or the complexities of what we do. You know, we primarily sell to social services, mental health. It's pretty unique models, and we need to build our products in a different way. Yeah, I think, yeah, they're definitely gonna wanna use them, and we think, you know, as we start getting towards 2026, 2027, that we'll start seeing results. At some point, I can't see regular. You know, I don't think anyone's gonna do note-taking, right? They're gonna come do it through the system. We're embracing it, and we're putting it into our product sets. Fair enough. I guess lastly for me, I was curious around the pricing of these things. You know, can you comment on kind of there's some debate around usage-based pricing versus seat-based pricing? How do you strike that balance, when you think about rolling out these solutions? I think we're getting charged usage, so we sort of have to pass that on to the customers and be transparent about it. That's really where the challenge, I think, comes for AI is, who's gonna make the money here, right? Are the vendors gonna cost more than what our customers are willing to pay for that, or can you get it done cost-effectively? I think the one conclusion that we've come to is we need to build our own modeling for our systems and not use third parties for it. We need to train our own models for that stuff and as opposed to getting a third-party tool to become a layer in there in order to make money at this. That's sort of what we're investing in. Very interesting. Thanks for taking my questions. I'll pass the line. Thanks, Daniel. The next question comes from Justin Keywood of Stifel. Justin, your line is open. Good morning. Thanks for taking my call. Just on the earlier comments of recapturing Rule of 40 status, are you able to walk us through how that may be achieved? The EBITDA margins in the Q were 24% and the exit ARR growth was a little lower, so just wondering the factors in recapturing the Rule of 40 status. Thank you. Well, let's hypothetically say, you know, for every CAD 1 million of ARR that we add no cost. You start adding, you know, 1% on both sides of those equations. And then if you start getting those costs down a little bit more, you increase that speed. Yeah, I think it's done both ways. We gotta sell some more software and just get that ARR coming. That's high gross margin-based business. Yeah, of course, we are adding some costs in other areas along the side of it, but yeah, sort of how we work as a business. Is there a target exit EBITDA margin for 2026 or target ARR organic growth range? We've always said, as an organization, that we're probably a 27%, 13%, 28%, 12% type of business, right? In terms of getting to the Rule of 40, that's where we were before these two acquisitions. We've made it very clear that that's what we were aiming for after these acquisitions, and we were pretty clear on the timeframes that we thought that could be in. We're still in the middle of those timeframes, and we're continually trying to progress that forward. Thank you. One final question. Just the progression, you know, to those metrics. Realize there could be some variability, but any particular softness just in Q1 or the first half of the year? Softness in. Either in the ARR growth or maybe perhaps the margin expansion would be back-end weighted, if that's the correct way of looking at it. No, I think our margin increase is really coming from the integration of those organizations which we continue to work on. ARR growth will continue to be incremental. You know, we're aiming to have that in the 10-12% range on a continuous basis, and that's what we're trying to do. Great. Look forward to see it. Thank you very much. Thanks, Justin. There are no further questions at this time. I'll hand the call back to you, Dan, for any closing remarks. Yeah. I think in general, our Q4 is sort of when we did the Novari and Induction acquisition. I think our Q4 was pretty much on the mark, right? In some ways, the overachievement of Q3 affected the Q4 but we're happy with how we're progressing. We're integrating those organizations. The pipelines are strong. We're getting our AI initiatives into market and we're happy with what we do. We got a lot of cash to do some work. We're picking through some acquisitions, and we're just continuously trying to run the business model here. Another quarter behind us. We're excited to have this done and get into Q1, which is gonna close in a couple weeks. It's always the fun part about this. Yeah, we look forward to seeing you guys in, I guess, another 60 days or whatever and showing you what the Q1's all about. Thanks, Dan. This now concludes today's conference call. Thanks everyone for joining. Thanks, everyone. Bye-bye.

Speaker 11: Hi, good morning everyone, and thank you for joining us today for our 2025 fourth quarter conference call. With me on the call today are Vitalhub CEO, Dan Matlow, and CFO, Brian Goffenberg. 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 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 SEDAR filings. As well, our commentary today will include adjusted financial measures which are non-IFRS measures. Hi, good morning everyone, and thank you for joining us today for our 2025 fourth quarter conference call. hi good morning everyone and thank you for joining us today for our 2025 fourth quarter conference call With me on the call today are Vitalhub CEO, Dan Matlow, and CFO, Brian Goffenberg. with me on the call today are vitalhub ceo dan matlow and cfo brian goffenberg After our prepared remarks, we will open up the line to questions from analysts. 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. please press star one 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. 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. 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. 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 SEDAR filings. for a discussion of these risks and uncertainties please review the forward-looking statements disclosure in the earnings press release and in our sedar filings As well, our commentary today will include adjusted financial measures which are non-IFRS measures. 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 SEDAR filings. With that, I will hand the call over to Brian to go over financial highlights for the quarter. Over to you, Brian. These should be considered as a supplement to, and not a substitute for, 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 SEDAR filings. reconciliations between the two can be found in our sedar filings With that, I will hand the call over to Brian to go over financial highlights for the quarter. with that i will hand the call over to brian to go over financial highlights for the quarter Over to you, Brian. over to you brian

Speaker 1: Good morning, everyone, and thank you for joining the call today. We are pleased to report results for the fourth quarter and full year of 2025. I'll provide a summary of the financial results and then pass it over to Dan for an update on the business. For the full year, we are proud to report over CAD 100 million of total revenue, a milestone for all of us at Vitalhub. At the end of 2025, we reported annual recurring revenues of CAD 96.1 million, representing net organic growth of 10% over the prior year. We achieved 24% adjusted EBITDA margins and increased sequentially, showing progress on integration. Good morning, everyone, and thank you for joining the call today. good morning everyone and thank you for joining the call today We are pleased to report results for the fourth quarter and full year of 2025. we are pleased to report results for the fourth quarter and full year of 2025 I'll provide a summary of the financial results and then pass it over to Dan for an update on the business. i'll provide a summary of the financial results and then pass it over to dan for an update on the business For the full year, we are proud to report over CAD 100 million of total revenue, a milestone for all of us at Vitalhub. for the full year we are proud to report over cad 100 million of total revenue a milestone for all of us at vitalhub At the end of 2025, we reported annual recurring revenues of CAD 96.1 million, representing net organic growth of 10% over the prior year. at the end of 2025 we reported annual recurring revenues of cad 96.1 million representing net organic growth of 10% over the prior year We achieved 24% adjusted EBITDA margins and increased sequentially, showing progress on integration. we achieved 24% adjusted ebitda margins and increased sequentially showing progress on integration For the fourth quarter of 2025, we reported total revenue of CAD 31.4 million, an increase of 52% year-over-year, and slightly lower than Q3 primarily due to the unusually high services revenue in Q3. Recurring revenue for the term license maintenance support segment was CAD 23.6 million, or 75% of total revenue. Virtual care term license revenue was CAD 2.4 million, down 4% sequentially. Perpetual license revenue was CAD 500 thousand, an increase from CAD 100 thousand in the prior year period. Service, hardware, and other revenue normalized sequentially at CAD 4.9 million compared to CAD 2.8 million in the prior year period. Our gross margin was 79% of revenue, compared to 81% in the prior year period. For the fourth quarter of 2025, we reported total revenue of CAD 31.4 million, an increase of 52% year-over-year, and slightly lower than Q3 primarily due to the unusually high services revenue in Q3. for the fourth quarter of 2025 we reported total revenue of cad 31.4 million an increase of 52% year-over-year and slightly lower than q3 primarily due to the unusually high services revenue in q3 Recurring revenue for the term license maintenance support segment was CAD 23.6 million, or 75% of total revenue. recurring revenue for the term license maintenance support segment was cad 23.6 million or 75% of total revenue Virtual care term license revenue was CAD 2.4 million, down 4% sequentially. virtual care term license revenue was cad 2.4 million down 4% sequentially Perpetual license revenue was CAD 500 thousand, an increase from CAD 100 thousand in the prior year period. perpetual license revenue was cad 500 thousand an increase from cad 100 thousand in the prior year period Service, hardware, and other revenue normalized sequentially at CAD 4.9 million compared to CAD 2.8 million in the prior year period. service hardware and other revenue normalized sequentially at cad 4.9 million compared to cad 2.8 million in the prior year period Our gross margin was 79% of revenue, compared to 81% 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 CAD 7.4 million or 24% of revenue, compared to CAD 5 million or 25% of revenue in the prior year period, and 22% in Q3 as we continue to gain synergies from our latest acquisitions and operations. On the balance sheet, we closed the year with CAD 119.2 million of cash and no debt. With that, I'd like to hand the call over to Dan for an update on the business. Adjusted EBITDA for the quarter was CAD 7.4 million or 24% of revenue, compared to CAD 5 million or 25% of revenue in the prior year period, and 22% in Q3 as we continue to gain synergies from our latest acquisitions and operations. adjusted ebitda for the quarter was cad 7.4 million or 24% of revenue compared to cad 5 million or 25% of revenue in the prior year period and 22% in q3 as we continue to gain synergies from our latest acquisitions and operations On the balance sheet, we closed the year with CAD 119.2 million of cash and no debt. on the balance sheet we closed the year with cad 119.2 million of cash and no debt With that, I'd like to hand the call over to Dan for an update on the business. with that i'd like to hand the call over to dan for an update on the business

Speaker 2: Good morning, everybody. It's good to have you this early, but we're excited to be here. Before I start, I just want to appreciate it and just talk about the delay that we had. There was nothing material that came out of that at all. It was just growth pains with the new auditor, new people, new teams, getting to know the business. In some ways, we were just ahead of our skis a little bit. If you noticed, we booked one week earlier than we did last year with the new auditor. Probably, not the smartest thing that we did, but we're really happy with the results that came out. EY did a great job. We're in great spirits with them, and we're off moving in the right direction. Good morning, everybody. good morning everybody It's good to have you this early, but we're excited to be here. it's good to have you this early but we're excited to be here Before I start, I just want to appreciate it and just talk about the delay that we had. before i start i just want to appreciate it and just talk about the delay that we had There was nothing material that came out of that at all. there was nothing material that came out of that at all It was just growth pains with the new auditor, new people, new teams, getting to know the business. it was just growth pains with the new auditor new people new teams getting to know the business In some ways, we were just ahead of our skis a little bit. in some ways we were just ahead of our skis a little bit If you noticed, we booked one week earlier than we did last year with the new auditor. if you noticed we booked one week earlier than we did last year with the new auditor Probably, not the smartest thing that we did, but we're really happy with the results that came out. probably not the smartest thing that we did but we're really happy with the results that came out EY did a great job. ey did a great job We're in great spirits with them, and we're off moving in the right direction. we're in great spirits with them and we're off moving in the right direction Just thank everyone for their patience to do it. I'm not gonna talk that much about the year results. You know, those things all came through the quarter. We're excited about how the overall results. It's good to look at that. We did surpass CAD 100 million in revenue and all the metrics on a yearly basis were you know as expected, and we're very excited about our performance. We're very happy with our Q4 results, especially in respect to the integration of Novari and Induction. Those integrations are going really well. They're pretty good contributors. You can see the cost lines in perspective of those things and how they're starting to impact with that. Again, services revenues were lower, primarily because Q3 was higher. Just thank everyone for their patience to do it. just thank everyone for their patience to do it I'm not gonna talk that much about the year results. i'm not gonna talk that much about the year results You know, those things all came through the quarter. you know those things all came through the quarter We're excited about how the overall results. we're excited about how the overall results It's good to look at that. it's good to look at that We did surpass CAD 100 million in revenue and all the metrics on a yearly basis were you know as expected, and we're very excited about our performance. we did surpass cad 100 million in revenue and all the metrics on a yearly basis were you know as expected and we're very excited about our performance We're very happy with our Q4 results, especially in respect to the integration of Novari and Induction. we're very happy with our q4 results especially in respect to the integration of novari and induction Those integrations are going really well. those integrations are going really well They're pretty good contributors. they're pretty good contributors You can see the cost lines in perspective of those things and how they're starting to impact with that. you can see the cost lines in perspective of those things and how they're starting to impact with that Again, services revenues were lower, primarily because Q3 was higher. again services revenues were lower primarily because q3 was higher We called that out in Q3 that that number probably isn't sustainable. It was a good surprise to have in Q3, and it definitely helped our numbers as we were working through getting the cost synergies from the acquisitions to do it. The same thing in our term licenses in Q3. Our term licenses for the most part represent ARR when you try to correlate it, but we do have timing issues, you know, for some of those ARRs on we get renewals where we do catch-ups for the rev rec perspective to do it. It's usually not that material that corresponds with it, but sometimes it's not 100% mapping on what they do. We called that out in Q3 that that number probably isn't sustainable. we called that out in q3 that that number probably isn't sustainable It was a good surprise to have in Q3, and it definitely helped our numbers as we were working through getting the cost synergies from the acquisitions to do it. it was a good surprise to have in q3 and it definitely helped our numbers as we were working through getting the cost synergies from the acquisitions to do it The same thing in our term licenses in Q3. the same thing in our term licenses in q3 Our term licenses for the most part represent ARR when you try to correlate it, but we do have timing issues, you know, for some of those ARRs on we get renewals where we do catch-ups for the rev rec perspective to do it. our term licenses for the most part represent arr when you try to correlate it but we do have timing issues you know for some of those arrs on we get renewals where we do catch-ups for the rev rec perspective to do it It's usually not that material that corresponds with it, but sometimes it's not 100% mapping on what they do. it's usually not that material that corresponds with it but sometimes it's not 100% mapping on what they do Yeah, we're pretty happy with operations. Our backlog for services is really strong as we move into the year. We're doing a great job on new deals. We're excited about the pipeline for Novari, both in Canada and in the U.K. There's a lot of work that's going on through provincial initiatives across all the different provinces that we're in the mix of. Unfortunately, not all those provinces or customers allow us to announce these deals at the time of signing them in all circumstances. We have a lot of activity to do. We're moving resources across organizations really effectively at this point. You know, we're excited about things that are going on through. Yeah, we're pretty happy with operations. yeah we're pretty happy with operations Our backlog for services is really strong as we move into the year. our backlog for services is really strong as we move into the year We're doing a great job on new deals. we're doing a great job on new deals We're excited about the pipeline for Novari, both in Canada and in the U.K. we're excited about the pipeline for novari both in canada and in the u.k There's a lot of work that's going on through provincial initiatives across all the different provinces that we're in the mix of. there's a lot of work that's going on through provincial initiatives across all the different provinces that we're in the mix of Unfortunately, not all those provinces or customers allow us to announce these deals at the time of signing them in all circumstances. unfortunately not all those provinces or customers allow us to announce these deals at the time of signing them in all circumstances We have a lot of activity to do. we have a lot of activity to do We're moving resources across organizations really effectively at this point. we're moving resources across organizations really effectively at this point You know, we're excited about things that are going on through. you know we're excited about things that are going on through We did have contribution from all the different products for the quarter, and we're excited about what the pipeline is to get the company to the Rule of 40, you know, coming into the new year a lot quicker. We still expect to see cost synergies moving throughout our product sets, and we expect revenue to start contributing on the ARR side, which will start contributing to income as well as we continue to move forward. I also wanna talk a lot about AI or a little bit about AI. We've embraced it. We've set up AI development teams, AI projects. We've seen revenue come from one of our Novari projects. I think we announced that. We are close to seeing revenue going into market. We did have contribution from all the different products for the quarter, and we're excited about what the pipeline is to get the company to the Rule of 40, you know, coming into the new year a lot quicker. we did have contribution from all the different products for the quarter and we're excited about what the pipeline is to get the company to the rule of 40 you know coming into the new year a lot quicker We still expect to see cost synergies moving throughout our product sets, and we expect revenue to start contributing on the ARR side, which will start contributing to income as well as we continue to move forward. we still expect to see cost synergies moving throughout our product sets and we expect revenue to start contributing on the arr side which will start contributing to income as well as we continue to move forward I also wanna talk a lot about AI or a little bit about AI. i also wanna talk a lot about ai or a little bit about ai We've embraced it. we've embraced it We've set up AI development teams, AI projects. we've set up ai development teams ai projects We've seen revenue come from one of our Novari projects. we've seen revenue come from one of our novari projects I think we announced that. i think we announced that We are close to seeing revenue going into market. we are close to seeing revenue going into market We're jointly developing other AI projects with our customers. All of our AI projects are being driven by our customers for initiatives, and we have a lot of those that are going on. We do expect those to start contributing into the revenue line as we start moving through the middle to the end of 2026 as they start coming in through our portfolio. We've also embraced it internally. We've added AI initiatives into our development processes, into our sales processes, into our support processes. We continue to look for ways that AI can improve our productivity, and we've started to make those investments as we continue to move there. We're excited about what AI can bring as an opportunity going forward. That's all I have to say today. We're jointly developing other AI projects with our customers. we're jointly developing other ai projects with our customers All of our AI projects are being driven by our customers for initiatives, and we have a lot of those that are going on. all of our ai projects are being driven by our customers for initiatives and we have a lot of those that are going on We do expect those to start contributing into the revenue line as we start moving through the middle to the end of 2026 as they start coming in through our portfolio. we do expect those to start contributing into the revenue line as we start moving through the middle to the end of 2026 as they start coming in through our portfolio We've also embraced it internally. we've also embraced it internally We've added AI initiatives into our development processes, into our sales processes, into our support processes. we've added ai initiatives into our development processes into our sales processes into our support processes We continue to look for ways that AI can improve our productivity, and we've started to make those investments as we continue to move there. we continue to look for ways that ai can improve our productivity and we've started to make those investments as we continue to move there We're excited about what AI can bring as an opportunity going forward. we're excited about what ai can bring as an opportunity going forward That's all I have to say today. that's all i have to say today We'll look forward to getting some questions and fleshing out any details that we might get. We'll look forward to getting some questions and fleshing out any details that we might get. we'll look forward to getting some questions and fleshing out any details that we might get

Speaker 11: Great. Thanks, Dan. We'll now open up the line to any questions from analysts. As a reminder, please press star one or use the raise hand function if you would like to ask a question. Today's first question comes from Gavin Fairweather of ATB Capital Markets. Gavin, your line is open. Great. great Thanks, Dan. thanks dan We'll now open up the line to any questions from analysts. we'll now open up the line to any questions from analysts As a reminder, please press star one or use the raise hand function if you would like to ask a question. as a reminder please press star one or use the raise hand function if you would like to ask a question Today's first question comes from Gavin Fairweather of ATB Capital Markets. today's first question comes from gavin fairweather of atb capital markets Gavin, your line is open. gavin your line is open

Speaker 5: Oh, hey, good morning. Thanks for taking my questions, and congrats on the strong results. Maybe just to start on the macro, I mean, the incremental ARR was strong this quarter, but maybe down a little bit against a strong compare year over year. I know we talked about the NHS restructuring that was moving through the system in 2025. Maybe you can just discuss kind of the spending environment that you saw in the quarter and maybe touch on if you've seen any changes in Q1, which is historically the strongest quarter for bookings. Oh, hey, good morning. oh hey good morning Thanks for taking my questions, and congrats on the strong results. thanks for taking my questions and congrats on the strong results Maybe just to start on the macro, I mean, the incremental ARR was strong this quarter, but maybe down a little bit against a strong compare year over year. maybe just to start on the macro i mean the incremental arr was strong this quarter but maybe down a little bit against a strong compare year over year I know we talked about the NHS restructuring that was moving through the system in 2025. i know we talked about the nhs restructuring that was moving through the system in 2025 Maybe you can just discuss kind of the spending environment that you saw in the quarter and maybe touch on if you've seen any changes in Q1, which is historically the strongest quarter for bookings. maybe you can just discuss kind of the spending environment that you saw in the quarter and maybe touch on if you've seen any changes in q1 which is historically the strongest quarter for bookings

Speaker 2: Yeah. You know, Q4 can be challenging just on the timing. You're coming into the Christmas year-end, and you're seeing procurement people, you know, not being around. Then they know they got Q1 to get those things over the finish line to use the budgets up. Sometimes it is a challenge getting things over in Q4. I think that's really, you know, what it is. We did see contribution. There were a lot of deals in the quarter, just not the size of the deals, just based on the way the mix worked for the quarter. Yeah, I think that's where it is, you know, relative to what we're doing. Yeah. yeah You know, Q4 can be challenging just on the timing. you know q4 can be challenging just on the timing You're coming into the Christmas year-end, and you're seeing procurement people, you know, not being around. you're coming into the christmas year-end and you're seeing procurement people you know not being around Then they know they got Q1 to get those things over the finish line to use the budgets up. then they know they got q1 to get those things over the finish line to use the budgets up Sometimes it is a challenge getting things over in Q4. sometimes it is a challenge getting things over in q4 I think that's really, you know, what it is. i think that's really you know what it is We did see contribution. we did see contribution There were a lot of deals in the quarter, just not the size of the deals, just based on the way the mix worked for the quarter. there were a lot of deals in the quarter just not the size of the deals just based on the way the mix worked for the quarter Yeah, I think that's where it is, you know, relative to what we're doing. yeah i think that's where it is you know relative to what we're doing We never thought this would go up in a straight line, Gavin. I've always said that. You know, we're excited to see what our Q1 results look like from a new ARR booking. We continue to move in the right direction. We never thought this would go up in a straight line, Gavin. we never thought this would go up in a straight line gavin I've always said that. i've always said that You know, we're excited to see what our Q1 results look like from a new ARR booking. you know we're excited to see what our q1 results look like from a new arr booking We continue to move in the right direction. we continue to move in the right direction

Speaker 5: Appreciate that. Maybe just on costs. I mean, they were down about 8% sequentially on the OpEx line, which was great to see. I guess I'm just curious for your assessment of kinda what proportion of your targeted cost synergies have kind of moved through the system and been actioned on Novari and Induction. Appreciate that. appreciate that Maybe just on costs. maybe just on costs I mean, they were down about 8% sequentially on the OpEx line, which was great to see. i mean they were down about 8% sequentially on the opex line which was great to see I guess I'm just curious for your assessment of kinda what proportion of your targeted cost synergies have kind of moved through the system and been actioned on Novari and Induction. i guess i'm just curious for your assessment of kinda what proportion of your targeted cost synergies have kind of moved through the system and been actioned on novari and induction

Speaker 2: We're continuing to move costs out, and you know, to do that. It is somewhat gonna get, you know, offset by some investment in AI initiatives, but I think overall the costs are still going to continue to move down. We're trying to move a lot of those AI initiatives to the lab. We, you know, we do have training and other things that are going on sequentially in the core business. Yeah, well, we still got work to do on moving resources. We're continuing to move costs out, and you know, to do that. we're continuing to move costs out and you know to do that It is somewhat gonna get, you know, offset by some investment in AI initiatives, but I think overall the costs are still going to continue to move down. it is somewhat gonna get you know offset by some investment in ai initiatives but i think overall the costs are still going to continue to move down We're trying to move a lot of those AI initiatives to the lab. we're trying to move a lot of those ai initiatives to the lab We, you know, we do have training and other things that are going on sequentially in the core business. we you know we do have training and other things that are going on sequentially in the core business Yeah, well, we still got work to do on moving resources. yeah well we still got work to do on moving resources Both Novari and Induction had their own offshore development groups, and that's really you know, there are some initiatives that are going on and continue to go on in terms of people. Yeah, we've managed to recently integrate Induction into the greater U.K. world and that's working out pretty well. You know, I would say we still got work to do, but we're banging through it. Both Novari and Induction had their own offshore development groups, and that's really you know, there are some initiatives that are going on and continue to go on in terms of people. both novari and induction had their own offshore development groups and that's really you know there are some initiatives that are going on and continue to go on in terms of people Yeah, we've managed to recently integrate Induction into the greater U.K. world and that's working out pretty well. yeah we've managed to recently integrate induction into the greater u.k world and that's working out pretty well You know, I would say we still got work to do, but we're banging through it. you know i would say we still got work to do but we're banging through it

Speaker 5: That's great. Just lastly for me, you know, with the progress on integration that you've seen, curious how the M&A environment is shaping up here in 2026, just in terms of the amount of deal flow that you're seeing, you know, the seller valuation expectations and competition for those deals. That's great. that's great Just lastly for me, you know, with the progress on integration that you've seen, curious how the M&A environment is shaping up here in 2026, just in terms of the amount of deal flow that you're seeing, you know, the seller valuation expectations and competition for those deals. just lastly for me you know with the progress on integration that you've seen curious how the m&a environment is shaping up here in 2026 just in terms of the amount of deal flow that you're seeing you know the seller valuation expectations and competition for those deals

Speaker 2: Yeah, we're definitely seeing deals. We're working on deals. We continue to work on deals. We expect to do deals in 2026. We're, you know, constantly on the go in those perspectives. Nothing has changed in those markets. Always with valuation, we value what we see in a company. I do think we're starting to see some companies. You know, there's definitely a lot more scrutiny on the companies by the PEs in perspective, and I don't think we're seeing. You know, there are some scenarios going on where maybe a couple years ago we would see PE that would get the price up on those deals, and we're not seeing PE in those deals anymore. Yeah, we're definitely seeing deals. yeah we're definitely seeing deals We're working on deals. we're working on deals We continue to work on deals. we continue to work on deals We expect to do deals in 2026. we expect to do deals in 2026 We're, you know, constantly on the go in those perspectives. we're you know constantly on the go in those perspectives Nothing has changed in those markets. nothing has changed in those markets Always with valuation, we value what we see in a company. always with valuation we value what we see in a company I do think we're starting to see some companies. i do think we're starting to see some companies You know, there's definitely a lot more scrutiny on the companies by the PEs in perspective, and I don't think we're seeing. you know there's definitely a lot more scrutiny on the companies by the pes in perspective and i don't think we're seeing You know, there are some scenarios going on where maybe a couple years ago we would see PE that would get the price up on those deals, and we're not seeing PE in those deals anymore. you know there are some scenarios going on where maybe a couple years ago we would see pe that would get the price up on those deals and we're not seeing pe in those deals anymore We are also starting to see a significant amount of tired investors in some deals that you know, it's just question on are they gonna take a down round on their sale or not, right? They came in at these higher valuations. Those scenarios are there and we still continue to value the deals by using our methodology. It doesn't really change how we think. You know, the opportunity to get deals at how we think at our prices is currently there in a bunch of scenarios and we're working through those. We are also starting to see a significant amount of tired investors in some deals that you know, it's just question on are they gonna take a down round on their sale or not, right? we are also starting to see a significant amount of tired investors in some deals that you know it's just question on are they gonna take a down round on their sale or not right They came in at these higher valuations. they came in at these higher valuations Those scenarios are there and we still continue to value the deals by using our methodology. those scenarios are there and we still continue to value the deals by using our methodology It doesn't really change how we think. it doesn't really change how we think You know, the opportunity to get deals at how we think at our prices is currently there in a bunch of scenarios and we're working through those. you know the opportunity to get deals at how we think at our prices is currently there in a bunch of scenarios and we're working through those

Speaker 5: Thanks so much. I'll pass the line. Thanks so much. thanks so much I'll pass the line. i'll pass the line

Speaker 11: Thanks, Kevin. The next question comes from Kevin Krishnaratne of Scotia Capital. Kevin, your line is open. Thanks, Kevin. thanks kevin The next question comes from Kevin Krishnaratne of Scotia Capital. the next question comes from kevin krishnaratne of scotia capital Kevin, your line is open. kevin your line is open

Speaker 7: Hey there. Good morning, guys, Dan and team. Congrats on a great quarter. Dan, can you just expand on the AI product roadmap? You know, it's definitely early days, but you talked about. You saw the press release last week on Novari. What are some of the other, you know, kind of logical areas where we could see, you know, AI first? Then you talked about, you think you're gonna see the contributions midyear to end of year. Is that gonna show up in. Like, how do. Does that, is that revenue contribution in terms of, you know, price uplifts or module attach, or is it just sort of. You know, how do you see that sort of, like, flowing through? Like what Hey there. hey there Good morning, guys, Dan and team. good morning guys dan and team Congrats on a great quarter. congrats on a great quarter Dan, can you just expand on the AI product roadmap? dan can you just expand on the ai product roadmap You know, it's definitely early days, but you talked about. you know it's definitely early days but you talked about You saw the press release last week on Novari. you saw the press release last week on novari What are some of the other, you know, kind of logical areas where we could see, you know, AI first? what are some of the other you know kind of logical areas where we could see you know ai first Then you talked about, you think you're gonna see the contributions midyear to end of year. then you talked about you think you're gonna see the contributions midyear to end of year Is that gonna show up in. is that gonna show up in Like, how do. like how do Does that, is that revenue contribution in terms of, you know, price uplifts or module attach, or is it just sort of. does that is that revenue contribution in terms of you know price uplifts or module attach or is it just sort of You know, how do you see that sort of, like, flowing through? you know how do you see that sort of like flowing through Like what like what

Speaker 2: Yeah, I think you know, our mandate of our product managers was to come up with AI use cases for the solutions, and then we worked backwards to the ones that we thought would get the most demand by our customers and ratified that with our customer base and attempted to try to price that out of what this is going to cost us. That's where some of the challenges come into the works until you actually get this thing in production. I think we know with Novari where that sits, and Novari does have a module for protocolling built into its imaging solutions, which is demanded by our customers and you know, that's the first one out the door in there. Yeah, I think you know, our mandate of our product managers was to come up with AI use cases for the solutions, and then we worked backwards to the ones that we thought would get the most demand by our customers and ratified that with our customer base and attempted to try to price that out of what this is going to cost us. yeah i think you know our mandate of our product managers was to come up with ai use cases for the solutions and then we worked backwards to the ones that we thought would get the most demand by our customers and ratified that with our customer base and attempted to try to price that out of what this is going to cost us That's where some of the challenges come into the works until you actually get this thing in production. that's where some of the challenges come into the works until you actually get this thing in production I think we know with Novari where that sits, and Novari does have a module for protocolling built into its imaging solutions, which is demanded by our customers and you know, that's the first one out the door in there. i think we know with novari where that sits and novari does have a module for protocolling built into its imaging solutions which is demanded by our customers and you know that's the first one out the door in there We also have two other initiatives that are going on in our definitely in a transcription solution in all of our EHR case management based solutions. We think that's low-hanging fruit. We got customers that are taking that, and there will be uploads that get associated with that towards the latter part of this year, and that's currently being worked at in with our partners customers and our hope is to have something in production, you know, midyear for that. We also are working on our SHREWD product set. Again, very much how we can use voice to understand the analytics and understand the data and ask the system what's going on, as opposed to interpreting the system of what's going on. We also have two other initiatives that are going on in our definitely in a transcription solution in all of our EHR case management based solutions. we also have two other initiatives that are going on in our definitely in a transcription solution in all of our ehr case management based solutions We think that's low-hanging fruit. we think that's low-hanging fruit We got customers that are taking that, and there will be uploads that get associated with that towards the latter part of this year, and that's currently being worked at in with our partners customers and our hope is to have something in production, you know, midyear for that. we got customers that are taking that and there will be uploads that get associated with that towards the latter part of this year and that's currently being worked at in with our partners customers and our hope is to have something in production you know midyear for that We also are working on our SHREWD product set. we also are working on our shrewd product set Again, very much how we can use voice to understand the analytics and understand the data and ask the system what's going on, as opposed to interpreting the system of what's going on. again very much how we can use voice to understand the analytics and understand the data and ask the system what's going on as opposed to interpreting the system of what's going on You know, that project's going really well with some partners as well and we're hoping to get some incremental revenue from that. We got other ones that are going on, but those are three very good examples of things that we're doing with AI and what we think we can do incrementally with it. You know, that project's going really well with some partners as well and we're hoping to get some incremental revenue from that. you know that project's going really well with some partners as well and we're hoping to get some incremental revenue from that We got other ones that are going on, but those are three very good examples of things that we're doing with AI and what we think we can do incrementally with it. we got other ones that are going on but those are three very good examples of things that we're doing with ai and what we think we can do incrementally with it

Speaker 7: Awesome. Yeah, thanks for that. Maybe the second question, just in your press release, you talked about how you're considering M&A of all sizes and also adjacent geographies. Maybe if you can remind us here on how big you go in a deal. You know, how big would you go on putting on debt on the balance sheet? And then when you talk about adjacent geographies, would you consider the US or is that you're thinking more about regions in Europe or Asia Pacific? Awesome. awesome Yeah, thanks for that. yeah thanks for that Maybe the second question, just in your press release, you talked about how you're considering M&A of all sizes and also adjacent geographies. maybe the second question just in your press release you talked about how you're considering m&a of all sizes and also adjacent geographies Maybe if you can remind us here on how big you go in a deal. maybe if you can remind us here on how big you go in a deal You know, how big would you go on putting on debt on the balance sheet? you know how big would you go on putting on debt on the balance sheet And then when you talk about adjacent geographies, would you consider the US or is that you're thinking more about regions in Europe or Asia Pacific? and then when you talk about adjacent geographies would you consider the us or is that you're thinking more about regions in europe or asia pacific

Speaker 2: I think it's more in Europe than Asia Pac. We still see that's primarily where we're looking for deals and we continue to see deals. You know, there are large initiatives that are floating around. You know, they're floating in these markets. It's just, you know, the challenge being, you know, what are the valuations for these organizations relative to how we look at businesses in what we do. Yeah, we would use debt if the business was right and we felt comfortable that that business could service that debt effectively to get through it. You know, we would really have to be extremely bullish on what that organization is going to do for our overall makeup of our business, right? I think it's more in Europe than Asia Pac. i think it's more in europe than asia pac We still see that's primarily where we're looking for deals and we continue to see deals. we still see that's primarily where we're looking for deals and we continue to see deals You know, there are large initiatives that are floating around. you know there are large initiatives that are floating around You know, they're floating in these markets. you know they're floating in these markets It's just, you know, the challenge being, you know, what are the valuations for these organizations relative to how we look at businesses in what we do. it's just you know the challenge being you know what are the valuations for these organizations relative to how we look at businesses in what we do Yeah, we would use debt if the business was right and we felt comfortable that that business could service that debt effectively to get through it. yeah we would use debt if the business was right and we felt comfortable that that business could service that debt effectively to get through it You know, we would really have to be extremely bullish on what that organization is going to do for our overall makeup of our business, right? you know we would really have to be extremely bullish on what that organization is going to do for our overall makeup of our business right You know, we traditionally have been somewhat conservative, and we continue to work that way. You know, we traditionally have been somewhat conservative, and we continue to work that way. you know we traditionally have been somewhat conservative and we continue to work that way

Speaker 7: Great. Thanks for all the color. I'm gonna pass the line. Congrats again on a good quarter. Great. great Thanks for all the color. thanks for all the color I'm gonna pass the line. i'm gonna pass the line Congrats again on a good quarter. congrats again on a good quarter

Speaker 2: Yeah. Yeah. yeah

Speaker 11: Thanks, Kevin. The next question comes from Richard Tse of National Bank Financial. Richard, your line is open. Thanks, Kevin. thanks kevin The next question comes from Richard Tse of National Bank Financial. the next question comes from richard tse of national bank financial Richard, your line is open. richard your line is open

Speaker 10: Yes, thank you. Yeah, sort of a related question on AI with respect to your customers? Yes, thank you. yes thank you Yeah, sort of a related question on AI with respect to your customers? yeah sort of a related question on ai with respect to your customers

Speaker 2: Yeah. Yeah. yeah

Speaker 10: What are they saying about the advancements there? Is it sort of changing their buying decisions at all? You know, I think that in your space, it's probably something that is less, let's say disruptive, you know, given the healthcare industry. But you know, what are their comments in terms of, you know, how it impacts their buying decisions here? What are they saying about the advancements there? what are they saying about the advancements there Is it sort of changing their buying decisions at all? is it sort of changing their buying decisions at all You know, I think that in your space, it's probably something that is less, let's say disruptive, you know, given the healthcare industry. you know i think that in your space it's probably something that is less let's say disruptive you know given the healthcare industry But you know, what are their comments in terms of, you know, how it impacts their buying decisions here? but you know what are their comments in terms of you know how it impacts their buying decisions here

Speaker 2: I think they're interested in it, but they're a long way off suggesting how that's gonna drive their business changes relative to what it is. There's some low-hanging fruit, I'd mentioned a couple of them, that we will and should be putting into our product sets. It's not making or breaking our deals, and it's not making or breaking our churn profile of what we have. It's important that we get to it, and we are, but our customer base is not that, you know, crazily as involved as other sectors for sure. Yeah, we do view it as an opportunity where we can add new modules. I think they're interested in it, but they're a long way off suggesting how that's gonna drive their business changes relative to what it is. i think they're interested in it but they're a long way off suggesting how that's gonna drive their business changes relative to what it is There's some low-hanging fruit, I'd mentioned a couple of them, that we will and should be putting into our product sets. there's some low-hanging fruit i'd mentioned a couple of them that we will and should be putting into our product sets It's not making or breaking our deals, and it's not making or breaking our churn profile of what we have. it's not making or breaking our deals and it's not making or breaking our churn profile of what we have It's important that we get to it, and we are, but our customer base is not that, you know, crazily as involved as other sectors for sure. it's important that we get to it and we are but our customer base is not that you know crazily as involved as other sectors for sure Yeah, we do view it as an opportunity where we can add new modules. yeah we do view it as an opportunity where we can add new modules Our biggest asset is our customers, and we let our customers drive our initiatives and, of course, if you bring up what we're gonna do and discuss it with them, they're excited about new functionality and new things within our install base. We bring it to our install base first and ideas and that's sort of what we do. Our biggest asset is our customers, and we let our customers drive our initiatives and, of course, if you bring up what we're gonna do and discuss it with them, they're excited about new functionality and new things within our install base. our biggest asset is our customers and we let our customers drive our initiatives and of course if you bring up what we're gonna do and discuss it with them they're excited about new functionality and new things within our install base We bring it to our install base first and ideas and that's sort of what we do. we bring it to our install base first and ideas and that's sort of what we do

Speaker 10: Okay. Great. With respect to Novari, I think I noticed in the filings that you marked up the earn-out a bit, which I think sort of is positive in terms of what maybe sort of represented the business. What's sort of driving that markup, you know, that you can maybe comment on? Okay. okay Great. great With respect to Novari, I think I noticed in the filings that you marked up the earn-out a bit, which I think sort of is positive in terms of what maybe sort of represented the business. with respect to novari i think i noticed in the filings that you marked up the earn-out a bit which i think sort of is positive in terms of what maybe sort of represented the business What's sort of driving that markup, you know, that you can maybe comment on? what's sort of driving that markup you know that you can maybe comment on

Speaker 2: I'm sorry, Richard, I don't understand the question. Markup? I'm sorry, Richard, I don't understand the question. i'm sorry richard i don't understand the question Markup? markup

Speaker 10: The earn-out. The earn-out. the earn-out

Speaker 2: There's a lot of activity going on there. There's a lot of activity going on there. there's a lot of activity going on there

Speaker 10: Right. Okay. Right. right okay Okay. okay

Speaker 2: Across Canada and now across the UK. Our UK team has driven on that. They did sell that one implementation that's going on. It's getting a lot of notice within the UK that we're seeing at the moment. The way the auditors and so forth do that contingent, it's always based on what they see and what's going on. Yeah, you know, there are initiatives going on that give a little more probability to paying that out, but that would be a good thing. Across Canada and now across the UK. across canada and now across the uk Our UK team has driven on that. our uk team has driven on that They did sell that one implementation that's going on. they did sell that one implementation that's going on It's getting a lot of notice within the UK that we're seeing at the moment. it's getting a lot of notice within the uk that we're seeing at the moment The way the auditors and so forth do that contingent, it's always based on what they see and what's going on. the way the auditors and so forth do that contingent it's always based on what they see and what's going on Yeah, you know, there are initiatives going on that give a little more probability to paying that out, but that would be a good thing. yeah you know there are initiatives going on that give a little more probability to paying that out but that would be a good thing

Speaker 10: Yeah. That was sort of what I was intimating here. I guess related to Novari and perhaps the other acquisitions, are there any metrics that you can just share around the success with respect to, you know, cross-selling, you know, some of the products into the existing base? It's not specific to Novari, but, you know, probably more your sort of entire product. Yeah. yeah That was sort of what I was intimating here. that was sort of what i was intimating here I guess related to Novari and perhaps the other acquisitions, are there any metrics that you can just share around the success with respect to, you know, cross-selling, you know, some of the products into the existing base? i guess related to novari and perhaps the other acquisitions are there any metrics that you can just share around the success with respect to you know cross-selling you know some of the products into the existing base It's not specific to Novari, but, you know, probably more your sort of entire product. it's not specific to novari but you know probably more your sort of entire product

Speaker 2: Yeah. We're starting to see the MedCurrent product and Novari are really starting to hit it off. I think we got our first cross-selling deal in that world that's coming to fruition and we're doing a lot of presentations, especially in the UK marketplace. MedCurrent's done a really good job in there and Novari's imaging solution just dovetails right in to that solution. MedCurrent's got a pretty big base in the UK that they've established over the years. That one seems to be progressing. We're progressing to move the Zesty portal into our EHR product, so that will become the portal per se on a go-forward basis. We're starting to also you know work integration between our Intouch platform and our Zesty customers. Yeah. yeah We're starting to see the MedCurrent product and Novari are really starting to hit it off. we're starting to see the medcurrent product and novari are really starting to hit it off I think we got our first cross-selling deal in that world that's coming to fruition and we're doing a lot of presentations, especially in the UK marketplace. i think we got our first cross-selling deal in that world that's coming to fruition and we're doing a lot of presentations especially in the uk marketplace MedCurrent's done a really good job in there and Novari's imaging solution just dovetails right in to that solution. medcurrent's done a really good job in there and novari's imaging solution just dovetails right in to that solution MedCurrent's got a pretty big base in the UK that they've established over the years. medcurrent's got a pretty big base in the uk that they've established over the years That one seems to be progressing. that one seems to be progressing We're progressing to move the Zesty portal into our EHR product, so that will become the portal per se on a go-forward basis. we're progressing to move the zesty portal into our ehr product so that will become the portal per se on a go-forward basis We're starting to also you know work integration between our Intouch platform and our Zesty customers. we're starting to also you know work integration between our intouch platform and our zesty customers The Zesty product can be used as the patient engagement application, you know, as we go forward and do all the check-ins and so forth with that. We are starting to see some cross-selling, you know, from those components, definitely in the markets. The Zesty product can be used as the patient engagement application, you know, as we go forward and do all the check-ins and so forth with that. the zesty product can be used as the patient engagement application you know as we go forward and do all the check-ins and so forth with that We are starting to see some cross-selling, you know, from those components, definitely in the markets. we are starting to see some cross-selling you know from those components definitely in the markets

Speaker 10: Okay. Great. Thanks. Okay. okay Great. great Thanks. thanks

Speaker 11: Thanks, Richard. The next question comes from David Kwan of TD Securities. David, your line is open. Thanks, Richard. thanks richard The next question comes from David Kwan of TD Securities. the next question comes from david kwan of td securities David, your line is open. david your line is open

Speaker 4: Thanks, Christian. Apologize, I was late jumping on the call if these questions have been addressed. Just wondering, as it relates to the margins, how we should be kind of looking at it through the balance of or through 2026, assuming that you don't make any kind of incremental material acquisitions. Like, do you think we could get back to the pre-acquisition levels, kind of pre-MedCurrent, pre-Strata in the kind of 27%-28% range exiting the year? Thanks, Christian. thanks christian Apologize, I was late jumping on the call if these questions have been addressed. apologize i was late jumping on the call if these questions have been addressed Just wondering, as it relates to the margins, how we should be kind of looking at it through the balance of or through 2026, assuming that you don't make any kind of incremental material acquisitions. just wondering as it relates to the margins how we should be kind of looking at it through the balance of or through 2026 assuming that you don't make any kind of incremental material acquisitions Like, do you think we could get back to the pre-acquisition levels, kind of pre-MedCurrent, pre-Strata in the kind of 27%-28% range exiting the year? like do you think we could get back to the pre-acquisition levels kind of pre-medcurrent pre-strata in the kind of 27%-28% range exiting the year

Speaker 2: Yeah, if you think about it, right, like, you know, we're continuously working at the cost side of things and trying to get integration and so forth that are there. I think equally as important that is if we can add incremental new ARR without increasing costs, you're gonna start getting it on both sides, right? I think it could be a little bit of both that starts coming to the equation. We do expect to add ARR, which should start coming to the bottom line as we close it. You know, combined with that with a little bit of some more synergistic work that we're doing, to do it. Yeah, if you think about it, right, like, you know, we're continuously working at the cost side of things and trying to get integration and so forth that are there. yeah if you think about it right like you know we're continuously working at the cost side of things and trying to get integration and so forth that are there I think equally as important that is if we can add incremental new ARR without increasing costs, you're gonna start getting it on both sides, right? i think equally as important that is if we can add incremental new arr without increasing costs you're gonna start getting it on both sides right I think it could be a little bit of both that starts coming to the equation. i think it could be a little bit of both that starts coming to the equation We do expect to add ARR, which should start coming to the bottom line as we close it. we do expect to add arr which should start coming to the bottom line as we close it You know, combined with that with a little bit of some more synergistic work that we're doing, to do it. you know combined with that with a little bit of some more synergistic work that we're doing to do it That's what we're aiming to do, and that's what we're trying to do, you know, as part of the year, right? We've always said where we wanted to get to, and nothing's changed from that perspective. We're budgeted to get there, and we're trying to get there. That's what we're aiming to do, and that's what we're trying to do, you know, as part of the year, right? that's what we're aiming to do and that's what we're trying to do you know as part of the year right We've always said where we wanted to get to, and nothing's changed from that perspective. we've always said where we wanted to get to and nothing's changed from that perspective We're budgeted to get there, and we're trying to get there. we're budgeted to get there and we're trying to get there

Speaker 4: No, that's great. Thanks, Dan. On the AI side, appreciate the color that you've provided. I think you kinda hinted and talked about some of your customers kind of working with you on some of these AI projects and initiatives. Like, to what extent are they funding or helping fund some of these initiatives? No, that's great. no that's great Thanks, Dan. thanks dan On the AI side, appreciate the color that you've provided. on the ai side appreciate the color that you've provided I think you kinda hinted and talked about some of your customers kind of working with you on some of these AI projects and initiatives. i think you kinda hinted and talked about some of your customers kind of working with you on some of these ai projects and initiatives Like, to what extent are they funding or helping fund some of these initiatives? like to what extent are they funding or helping fund some of these initiatives

Speaker 2: Yeah, we do have initiatives on the transcription product where customers have actually given us money to build it for them. You know, that's showing evidence of it to that degree. We do got stuff there. On the case of the Novari side, it's a separate SKU. We had customers buy it before it was built, with them and helped in the design and in the process to do that. Yeah, that's sort of how we like to work. We always have been in terms of trying to partner with those initial customers and try to get some skin in the game from them, and that's how we build software. Yeah, we do have initiatives on the transcription product where customers have actually given us money to build it for them. yeah we do have initiatives on the transcription product where customers have actually given us money to build it for them You know, that's showing evidence of it to that degree. you know that's showing evidence of it to that degree We do got stuff there. we do got stuff there On the case of the Novari side, it's a separate SKU. on the case of the novari side it's a separate sku We had customers buy it before it was built, with them and helped in the design and in the process to do that. we had customers buy it before it was built with them and helped in the design and in the process to do that Yeah, that's sort of how we like to work. yeah that's sort of how we like to work We always have been in terms of trying to partner with those initial customers and try to get some skin in the game from them, and that's how we build software. we always have been in terms of trying to partner with those initial customers and try to get some skin in the game from them and that's how we build software

Speaker 4: That's great. Just last question. Just on the cash flow this quarter, can you provide some color as to why there was such a significant drag? I think cash taxes was one thing in particular, but anything you could provide, that'd be great. That's great. that's great Just last question. just last question Just on the cash flow this quarter, can you provide some color as to why there was such a significant drag? just on the cash flow this quarter can you provide some color as to why there was such a significant drag I think cash taxes was one thing in particular, but anything you could provide, that'd be great. i think cash taxes was one thing in particular but anything you could provide that'd be great

Speaker 2: Timing is always an issue when it comes to cash. Q4, we have a lot of our business turns over at the end of Q1. You know, like Attend Anywhere. The whole Induction stream, Attend Anywhere, all comes up for renewal at the end of Q1. That's a big cash driver in the business, right, in terms of funding that. There's other products that are definitely there more skewed to Q1. Our AR number is higher than we want it to be in terms of the collections. I think operationally, both Induction and Novari had challenges in terms of how they were set up to collect money and do billings. Operationally with that, we've improved that tremendously. Timing is always an issue when it comes to cash. timing is always an issue when it comes to cash Q4, we have a lot of our business turns over at the end of Q1. q4 we have a lot of our business turns over at the end of q1 You know, like Attend Anywhere. you know like attend anywhere The whole Induction stream, Attend Anywhere, all comes up for renewal at the end of Q1. the whole induction stream attend anywhere all comes up for renewal at the end of q1 That's a big cash driver in the business, right, in terms of funding that. that's a big cash driver in the business right in terms of funding that There's other products that are definitely there more skewed to Q1. there's other products that are definitely there more skewed to q1 Our AR number is higher than we want it to be in terms of the collections. our ar number is higher than we want it to be in terms of the collections I think operationally, both Induction and Novari had challenges in terms of how they were set up to collect money and do billings. i think operationally both induction and novari had challenges in terms of how they were set up to collect money and do billings Operationally with that, we've improved that tremendously. operationally with that we've improved that tremendously Yeah, it's giving a bit of a drag on getting the money through the doors, through that perspective. I think that's all it is, really. Yeah, it's giving a bit of a drag on getting the money through the doors, through that perspective. yeah it's giving a bit of a drag on getting the money through the doors through that perspective I think that's all it is, really. i think that's all it is really

Speaker 4: Do you expect that we could see a reversal either this quarter or next quarter? Do you expect that we could see a reversal either this quarter or next quarter? do you expect that we could see a reversal either this quarter or next quarter

Speaker 2: Yeah, I think Q2 is probably our big cash collection item. There's some pretty big deals that come in Q2 and Q1 that have traditionally driven our cash balances. Yeah, I think Q2 is probably our big cash collection item. yeah i think q2 is probably our big cash collection item There's some pretty big deals that come in Q2 and Q1 that have traditionally driven our cash balances. there's some pretty big deals that come in q2 and q1 that have traditionally driven our cash balances

Speaker 4: Right. Thanks. Right. right Thanks. thanks

Speaker 11: Thanks, David. The next question comes from Paul Treiber of RBC Capital Markets. Paul, your line is open. Thanks, David. thanks david The next question comes from Paul Treiber of RBC Capital Markets. the next question comes from paul treiber of rbc capital markets Paul, your line is open. paul your line is open

Speaker 9: Hi, good morning. Thanks for taking the question. Just a question on Sri Lanka. You know, your operations there, I think they've moved to a four-day work week in the last few days. Do you see any operational impact or how you plan to mitigate any operational impact from that change? Hi, good morning. hi good morning Thanks for taking the question. thanks for taking the question Just a question on Sri Lanka. just a question on sri lanka You know, your operations there, I think they've moved to a four-day work week in the last few days. you know your operations there i think they've moved to a four-day work week in the last few days Do you see any operational impact or how you plan to mitigate any operational impact from that change? do you see any operational impact or how you plan to mitigate any operational impact from that change

Speaker 2: They didn't move to a four-day workday. They moved to a four-day in-office workday. They're all working five days a week at home. We always did have a hybrid workplace there. Certain teams come in certain days of the week, and certain teams come in other days of the week into that office setting, depending on what they do. There's no disruption at all in operations there. They didn't move to a four-day workday. they didn't move to a four-day workday They moved to a four-day in-office workday. they moved to a four-day in-office workday They're all working five days a week at home. they're all working five days a week at home We always did have a hybrid workplace there. we always did have a hybrid workplace there Certain teams come in certain days of the week, and certain teams come in other days of the week into that office setting, depending on what they do. certain teams come in certain days of the week and certain teams come in other days of the week into that office setting depending on what they do There's no disruption at all in operations there. there's no disruption at all in operations there

Speaker 9: Okay, thanks. Thanks for that insight. Just in terms of AI and then also just in regards to M&A, to what degree or how have you changed your due diligence to take into account either, you know, potential AI opportunities or potential AI risks at some of the targets that you're looking at? Okay, thanks. okay thanks Thanks for that insight. thanks for that insight Just in terms of AI and then also just in regards to M&A, to what degree or how have you changed your due diligence to take into account either, you know, potential AI opportunities or potential AI risks at some of the targets that you're looking at? just in terms of ai and then also just in regards to m&a to what degree or how have you changed your due diligence to take into account either you know potential ai opportunities or potential ai risks at some of the targets that you're looking at

Speaker 2: You definitely throw it into the mix of the criteria where we look at, you know, number one, can AI replace us down the road? How simple is the tech? How complex are the workflows? Most of the time we come to the conclusion that the workflows are pretty complex, that they wouldn't if they weren't complex, they wouldn't actually be applications. But we're definitely, you know, dotting the I's and crossing the T's on it. And also we're, you know, we have seen a few companies that have built some AI components, or they call them AI components, but when you actually look underneath the covers, it's pretty simplistic. It's not really much to do with AI. You definitely throw it into the mix of the criteria where we look at, you know, number one, can AI replace us down the road? you definitely throw it into the mix of the criteria where we look at you know number one can ai replace us down the road How simple is the tech? how simple is the tech How complex are the workflows? how complex are the workflows Most of the time we come to the conclusion that the workflows are pretty complex, that they wouldn't if they weren't complex, they wouldn't actually be applications. most of the time we come to the conclusion that the workflows are pretty complex that they wouldn't if they weren't complex they wouldn't actually be applications But we're definitely, you know, dotting the I's and crossing the T's on it. but we're definitely you know dotting the i's and crossing the t's on it And also we're, you know, we have seen a few companies that have built some AI components, or they call them AI components, but when you actually look underneath the covers, it's pretty simplistic. and also we're you know we have seen a few companies that have built some ai components or they call them ai components but when you actually look underneath the covers it's pretty simplistic It's not really much to do with AI. it's not really much to do with ai We're definitely going to start asking those companies, have they started any AI initiatives? Do they see what AI use cases do they see? Have they spoken to their customers and about AI and tried to understand what the direction for those products would be with AI? I wouldn't say it's the sole criteria in how we buy things, but, you know, we definitely cover it off as part of our buying process, for sure. We're definitely going to start asking those companies, have they started any AI initiatives? we're definitely going to start asking those companies have they started any ai initiatives Do they see what AI use cases do they see? do they see what ai use cases do they see Have they spoken to their customers and about AI and tried to understand what the direction for those products would be with AI? have they spoken to their customers and about ai and tried to understand what the direction for those products would be with ai I wouldn't say it's the sole criteria in how we buy things, but, you know, we definitely cover it off as part of our buying process, for sure. i wouldn't say it's the sole criteria in how we buy things but you know we definitely cover it off as part of our buying process for sure

Speaker 9: Okay, great. Well, thanks for taking the questions. Okay, great. okay great Well, thanks for taking the questions. well thanks for taking the questions

Speaker 11: Thanks, Paul. The next question comes from Michael Freeman of Raymond James. Michael, your line is open. Thanks, Paul. thanks paul The next question comes from Michael Freeman of Raymond James. the next question comes from michael freeman of raymond james Michael, your line is open. michael your line is open

Speaker 8: Good morning. Congratulations on a great big year. I'm gonna also jump on the AI theme. You know, you've discussed AI as an opportunity in your own business. I wonder if you could expand a bit about how you see, you know, the potential for it to be a competitive threat. Maybe touch on the stickiness of your contracts. You know, change management in healthcare and potentially it. I wonder if you could point out if there are any pieces of software in your portfolio that you might identify as particularly vulnerable to, you know, to an AI competitor. Good morning. good morning Congratulations on a great big year. congratulations on a great big year I'm gonna also jump on the AI theme. i'm gonna also jump on the ai theme You know, you've discussed AI as an opportunity in your own business. you know you've discussed ai as an opportunity in your own business I wonder if you could expand a bit about how you see, you know, the potential for it to be a competitive threat. i wonder if you could expand a bit about how you see you know the potential for it to be a competitive threat Maybe touch on the stickiness of your contracts. maybe touch on the stickiness of your contracts You know, change management in healthcare and potentially it. you know change management in healthcare and potentially it I wonder if you could point out if there are any pieces of software in your portfolio that you might identify as particularly vulnerable to, you know, to an AI competitor. i wonder if you could point out if there are any pieces of software in your portfolio that you might identify as particularly vulnerable to you know to an ai competitor

Speaker 2: Yeah, I don't think there's anything in our portfolio that fundamentally is a risk to an AI competitor. There is stuff that's a risk for other factors, but I don't think it's at the root of AI. I think the complexity of our applications in terms of workflow and structures is a pretty big moat. I also think the size of the TAM that we work in and the slow moving-ness of our customers is a pretty big moat. You know, for someone to recreate our software in AI, they'd have to rebuild it. Sure. That's something that's all part of it. You know, rebuilding, you still gotta sell it, you still gotta replace it, you still gotta go through a change management process with the customer. Yeah, I don't think there's anything in our portfolio that fundamentally is a risk to an AI competitor. yeah i don't think there's anything in our portfolio that fundamentally is a risk to an ai competitor There is stuff that's a risk for other factors, but I don't think it's at the root of AI. there is stuff that's a risk for other factors but i don't think it's at the root of ai I think the complexity of our applications in terms of workflow and structures is a pretty big moat. i think the complexity of our applications in terms of workflow and structures is a pretty big moat I also think the size of the TAM that we work in and the slow moving-ness of our customers is a pretty big moat. i also think the size of the tam that we work in and the slow moving-ness of our customers is a pretty big moat You know, for someone to recreate our software in AI, they'd have to rebuild it. you know for someone to recreate our software in ai they'd have to rebuild it Sure. sure That's something that's all part of it. that's something that's all part of it You know, rebuilding, you still gotta sell it, you still gotta replace it, you still gotta go through a change management process with the customer. you know rebuilding you still gotta sell it you still gotta replace it you still gotta go through a change management process with the customer You gotta get them to believe that, it's there. You gotta cross a significant amount of investment in security solutions and compliance-based solutions to work in that world. I think it is a pretty big moat to get into. You know, it's not. We're not waking up in fear that there's someone. We still haven't, for sure, seen it, where all of a sudden you see someone put up a website that says a competitor to our product and it's go-to-market and we've used it building AI. Like, nothing even close to that scenario in our market at this stage of the game. You gotta get them to believe that, it's there. you gotta get them to believe that it's there You gotta cross a significant amount of investment in security solutions and compliance-based solutions to work in that world. you gotta cross a significant amount of investment in security solutions and compliance-based solutions to work in that world I think it is a pretty big moat to get into. i think it is a pretty big moat to get into You know, it's not. you know it's not We're not waking up in fear that there's someone. we're not waking up in fear that there's someone We still haven't, for sure, seen it, where all of a sudden you see someone put up a website that says a competitor to our product and it's go-to-market and we've used it building AI. we still haven't for sure seen it where all of a sudden you see someone put up a website that says a competitor to our product and it's go-to-market and we've used it building ai Like, nothing even close to that scenario in our market at this stage of the game. like nothing even close to that scenario in our market at this stage of the game

Speaker 8: Okay. No, I appreciate that. I'll typically ask questions about the changes going on at the NHS. Could you just touch on a little more how the reorganization of the NHS has been showing up in buying patterns among your customers for your software? Okay. okay No, I appreciate that. no i appreciate that I'll typically ask questions about the changes going on at the NHS. i'll typically ask questions about the changes going on at the nhs Could you just touch on a little more how the reorganization of the NHS has been showing up in buying patterns among your customers for your software? could you just touch on a little more how the reorganization of the nhs has been showing up in buying patterns among your customers for your software

Speaker 2: Yeah. I think the biggest effect of the NHS is. I've mentioned this in the last couple of conference calls. It is affecting our SHREWD product line. There's these groups in the UK called ICB which are owned by government, and it's regional oversight of them. They're reorganizing those ICBs right now, and they're merging them, and they're making employee cuts in those particular areas. Really what it's done is slow down our operations. It slowed things down relative to what it is. You know, we'll see how that goes. It could be a really great opportunity for us to try to get the rest of those sites that we don't have once the dust settles here. Yeah. yeah I think the biggest effect of the NHS is. i think the biggest effect of the nhs is I've mentioned this in the last couple of conference calls. It is affecting our SHREWD product line. i've mentioned this in the last couple of conference calls. it is affecting our shrewd product line There's these groups in the UK called ICB which are owned by government, and it's regional oversight of them. there's these groups in the uk called icb which are owned by government and it's regional oversight of them They're reorganizing those ICBs right now, and they're merging them, and they're making employee cuts in those particular areas. they're reorganizing those icbs right now and they're merging them and they're making employee cuts in those particular areas Really what it's done is slow down our operations. really what it's done is slow down our operations It slowed things down relative to what it is. it slowed things down relative to what it is You know, we'll see how that goes. you know we'll see how that goes It could be a really great opportunity for us to try to get the rest of those sites that we don't have once the dust settles here. it could be a really great opportunity for us to try to get the rest of those sites that we don't have once the dust settles here It's gonna take a few more quarters for the dust to settle and work with that. They're definitely until they understand how all these places are gonna work and do stuff, there's buying decisions. That's really the only products that we sold to that group. The rest were sold to the other regions that are actually, you know, controlled by the actual hospitals and the other groups amongst them, to do that. They're regionalized in, like, a double layer mode in the NHS, and the top layer is a challenge, but the second layer where they actually operate as a region as opposed to oversight. SHREWD is an oversight product. It's a viewing product. It's gonna take a few more quarters for the dust to settle and work with that. it's gonna take a few more quarters for the dust to settle and work with that They're definitely until they understand how all these places are gonna work and do stuff, there's buying decisions. they're definitely until they understand how all these places are gonna work and do stuff there's buying decisions That's really the only products that we sold to that group. that's really the only products that we sold to that group The rest were sold to the other regions that are actually, you know, controlled by the actual hospitals and the other groups amongst them, to do that. the rest were sold to the other regions that are actually you know controlled by the actual hospitals and the other groups amongst them to do that They're regionalized in, like, a double layer mode in the NHS, and the top layer is a challenge, but the second layer where they actually operate as a region as opposed to oversight. they're regionalized in like a double layer mode in the nhs and the top layer is a challenge but the second layer where they actually operate as a region as opposed to oversight SHREWD is an oversight product. shrewd is an oversight product It's a viewing product. it's a viewing product As they try to integrate operations, such as things like Novari and Strata and things where they're starting to talk to each other, that stuff is still going and we're seeing a really nice trend there of them looking for products like ours right now in terms of referral management. As they try to integrate operations, such as things like Novari and Strata and things where they're starting to talk to each other, that stuff is still going and we're seeing a really nice trend there of them looking for products like ours right now in terms of referral management. as they try to integrate operations such as things like novari and strata and things where they're starting to talk to each other that stuff is still going and we're seeing a really nice trend there of them looking for products like ours right now in terms of referral management

Speaker 8: Gotcha. Thank you. Very quickly, you know, with the stock price having come down over the last couple of months, I wonder if you have looked at your capital allocation strategy and considered an NCIB or a buyback at these prices. Gotcha. gotcha Thank you. thank you Very quickly, you know, with the stock price having come down over the last couple of months, I wonder if you have looked at your capital allocation strategy and considered an NCIB or a buyback at these prices. very quickly you know with the stock price having come down over the last couple of months i wonder if you have looked at your capital allocation strategy and considered an ncib or a buyback at these prices

Speaker 2: Yeah. We have considered it, although we do think our cash can be used for acquisitions and we'll get a better return based on that when we do the math, that corresponds with that. You know, we think at the end of the day we're looking to produce a good company and produce good results and good financials. We're trying to get, you know, as well as we can. It's always been our mandate. That's our mandate from the board. I think our major investors understand what we do and would like us to continue to do that. Yeah, we, at this stage, we're not going that route. Yeah. yeah We have considered it, although we do think our cash can be used for acquisitions and we'll get a better return based on that when we do the math, that corresponds with that. we have considered it although we do think our cash can be used for acquisitions and we'll get a better return based on that when we do the math that corresponds with that You know, we think at the end of the day we're looking to produce a good company and produce good results and good financials. you know we think at the end of the day we're looking to produce a good company and produce good results and good financials We're trying to get, you know, as well as we can. we're trying to get you know as well as we can It's always been our mandate. it's always been our mandate That's our mandate from the board. that's our mandate from the board I think our major investors understand what we do and would like us to continue to do that. i think our major investors understand what we do and would like us to continue to do that Yeah, we, at this stage, we're not going that route. yeah we at this stage we're not going that route

Speaker 8: Okay. Perfect. I'll pass it on. Congrats again. Okay. okay Perfect. perfect I'll pass it on. i'll pass it on Congrats again. congrats again

Speaker 11: Thanks, Michael. The next question comes from Daniel Rosenberg of Paradigm Capital. Daniel, your line is open. Thanks, Michael. thanks michael The next question comes from Daniel Rosenberg of Paradigm Capital. the next question comes from daniel rosenberg of paradigm capital Daniel, your line is open. daniel your line is open

Speaker 3: Good morning, everybody. My first question comes around just the product roadmap. You mentioned putting together this AI team inside your business. Good morning, everybody. good morning everybody My first question comes around just the product roadmap. my first question comes around just the product roadmap You mentioned putting together this AI team inside your business. you mentioned putting together this ai team inside your business

Speaker 2: Right. Right. right

Speaker 3: I was curious if that changes how you think of product development, whether it should be build versus buy. Just how do you think about that, given the changes in productivity in the internal teams? I was curious if that changes how you think of product development, whether it should be build versus buy. i was curious if that changes how you think of product development whether it should be build versus buy Just how do you think about that, given the changes in productivity in the internal teams? just how do you think about that given the changes in productivity in the internal teams

Speaker 2: Yeah. We are putting AI into our building processes of product. We are starting to use it. We, you know, we need to introduce this and have introduced it in a controlled fashion. We got a lot of compliance and security requirements on how we build things and how we use AI and it's important that we have strategies and regular processes as we build that. We are using AI in our work, and we are investing in those initiatives. There's some really good low-hanging fruit to do. Yeah. yeah We are putting AI into our building processes of product. we are putting ai into our building processes of product We are starting to use it. we are starting to use it We, you know, we need to introduce this and have introduced it in a controlled fashion. we you know we need to introduce this and have introduced it in a controlled fashion We got a lot of compliance and security requirements on how we build things and how we use AI and it's important that we have strategies and regular processes as we build that. we got a lot of compliance and security requirements on how we build things and how we use ai and it's important that we have strategies and regular processes as we build that We are using AI in our work, and we are investing in those initiatives. we are using ai in our work and we are investing in those initiatives There's some really good low-hanging fruit to do. there's some really good low-hanging fruit to do We've introduced the products such as Gong into our sales and marketing group, which are AI-based initiatives in terms of transcribing sales calls and understanding the whole sales world, and it's really been a really good initiative for us. You know, we've definitely upgraded our Freshdesk support systems to do that. We're exploring the NetSuite AI modules that are available in the marketplace. Yeah, we are starting to look at the productivity tools that they can enhance relative to what we have. We got the same debate that's going on. Do we use Copilot? Do we use Claude? Do we do stuff? We got pockets that are using one or the other. We've introduced the products such as Gong into our sales and marketing group, which are AI-based initiatives in terms of transcribing sales calls and understanding the whole sales world, and it's really been a really good initiative for us. we've introduced the products such as gong into our sales and marketing group which are ai-based initiatives in terms of transcribing sales calls and understanding the whole sales world and it's really been a really good initiative for us You know, we've definitely upgraded our Freshdesk support systems to do that. you know we've definitely upgraded our freshdesk support systems to do that We're exploring the NetSuite AI modules that are available in the marketplace. we're exploring the netsuite ai modules that are available in the marketplace Yeah, we are starting to look at the productivity tools that they can enhance relative to what we have. yeah we are starting to look at the productivity tools that they can enhance relative to what we have We got the same debate that's going on. we got the same debate that's going on Do we use Copilot? do we use copilot Do we use Claude? do we use claude Do we do stuff? do we do stuff We got pockets that are using one or the other. we got pockets that are using one or the other We're in the same mode, I think, where a lot of companies are at this stage in the game. We're in the same mode, I think, where a lot of companies are at this stage in the game. we're in the same mode i think where a lot of companies are at this stage in the game

Speaker 3: Thanks for that. You spoke to low-hanging fruit, which a lot of it sounds like kind of scribe transcription type technologies. I was wondering, you know, as you think of the longer term use cases, you know, does this go to agentic type solutions? You know, where does your mind go when you think longer term about the possibilities? Thanks for that. thanks for that You spoke to low-hanging fruit, which a lot of it sounds like kind of scribe transcription type technologies. you spoke to low-hanging fruit which a lot of it sounds like kind of scribe transcription type technologies I was wondering, you know, as you think of the longer term use cases, you know, does this go to agentic type solutions? i was wondering you know as you think of the longer term use cases you know does this go to agentic type solutions You know, where does your mind go when you think longer term about the possibilities? you know where does your mind go when you think longer term about the possibilities

Speaker 2: Yeah, in our world, it's you know, we got unique workflows. We gotta report to governments. We got to do things. I do think they'll like transcribing. I don't think they're looking at it through the same lens as a hospital's gonna be looking at them or the complexities of what we do. You know, we primarily sell to social services, mental health. It's pretty unique models, and we need to build our products in a different way. Yeah, I think, yeah, they're definitely gonna wanna use them, and we think, you know, as we start getting towards 2026, 2027, that we'll start seeing results. At some point, I can't see regular. You know, I don't think anyone's gonna do note-taking, right? Yeah, in our world, it's you know, we got unique workflows. yeah in our world it's you know we got unique workflows We gotta report to governments. we gotta report to governments We got to do things. we got to do things I do think they'll like transcribing. i do think they'll like transcribing I don't think they're looking at it through the same lens as a hospital's gonna be looking at them or the complexities of what we do. i don't think they're looking at it through the same lens as a hospital's gonna be looking at them or the complexities of what we do You know, we primarily sell to social services, mental health. you know we primarily sell to social services mental health It's pretty unique models, and we need to build our products in a different way. it's pretty unique models and we need to build our products in a different way Yeah, I think, yeah, they're definitely gonna wanna use them, and we think, you know, as we start getting towards 2026, 2027, that we'll start seeing results. yeah i think yeah they're definitely gonna wanna use them and we think you know as we start getting towards 2026 2027 that we'll start seeing results At some point, I can't see regular. at some point i can't see regular You know, I don't think anyone's gonna do note-taking, right? you know i don't think anyone's gonna do note-taking right They're gonna come do it through the system. We're embracing it, and we're putting it into our product sets. They're gonna come do it through the system. they're gonna come do it through the system We're embracing it, and we're putting it into our product sets. we're embracing it and we're putting it into our product sets

Speaker 3: Fair enough. I guess lastly for me, I was curious around the pricing of these things. You know, can you comment on kind of there's some debate around usage-based pricing versus seat-based pricing? How do you strike that balance, when you think about rolling out these solutions? Fair enough. fair enough I guess lastly for me, I was curious around the pricing of these things. i guess lastly for me i was curious around the pricing of these things You know, can you comment on kind of there's some debate around usage-based pricing versus seat-based pricing? you know can you comment on kind of there's some debate around usage-based pricing versus seat-based pricing How do you strike that balance, when you think about rolling out these solutions? how do you strike that balance when you think about rolling out these solutions

Speaker 2: I think we're getting charged usage, so we sort of have to pass that on to the customers and be transparent about it. That's really where the challenge, I think, comes for AI is, who's gonna make the money here, right? Are the vendors gonna cost more than what our customers are willing to pay for that, or can you get it done cost-effectively? I think the one conclusion that we've come to is we need to build our own modeling for our systems and not use third parties for it. We need to train our own models for that stuff and as opposed to getting a third-party tool to become a layer in there in order to make money at this. I think we're getting charged usage, so we sort of have to pass that on to the customers and be transparent about it. i think we're getting charged usage so we sort of have to pass that on to the customers and be transparent about it That's really where the challenge, I think, comes for AI is, who's gonna make the money here, right? that's really where the challenge i think comes for ai is who's gonna make the money here right Are the vendors gonna cost more than what our customers are willing to pay for that, or can you get it done cost-effectively? are the vendors gonna cost more than what our customers are willing to pay for that or can you get it done cost-effectively I think the one conclusion that we've come to is we need to build our own modeling for our systems and not use third parties for it. i think the one conclusion that we've come to is we need to build our own modeling for our systems and not use third parties for it We need to train our own models for that stuff and as opposed to getting a third-party tool to become a layer in there in order to make money at this. we need to train our own models for that stuff and as opposed to getting a third-party tool to become a layer in there in order to make money at this That's sort of what we're investing in. That's sort of what we're investing in. that's sort of what we're investing in

Speaker 3: Very interesting. Thanks for taking my questions. I'll pass the line. Very interesting. very interesting Thanks for taking my questions. thanks for taking my questions I'll pass the line. i'll pass the line

Speaker 11: Thanks, Daniel. The next question comes from Justin Keywood of Stifel. Justin, your line is open. Thanks, Daniel. thanks daniel The next question comes from Justin Keywood of Stifel. the next question comes from justin keywood of stifel Justin, your line is open. justin your line is open

Speaker 6: Good morning. Thanks for taking my call. Just on the earlier comments of recapturing Rule of 40 status, are you able to walk us through how that may be achieved? The EBITDA margins in the Q were 24% and the exit ARR growth was a little lower, so just wondering the factors in recapturing the Rule of 40 status. Thank you. Good morning. good morning Thanks for taking my call. thanks for taking my call Just on the earlier comments of recapturing Rule of 40 status, are you able to walk us through how that may be achieved? just on the earlier comments of recapturing rule of 40 status are you able to walk us through how that may be achieved The EBITDA margins in the Q were 24% and the exit ARR growth was a little lower, so just wondering the factors in recapturing the Rule of 40 status. the ebitda margins in the q were 24% and the exit arr growth was a little lower so just wondering the factors in recapturing the rule of 40 status Thank you. thank you

Speaker 2: Well, let's hypothetically say, you know, for every CAD 1 million of ARR that we add no cost. You start adding, you know, 1% on both sides of those equations. And then if you start getting those costs down a little bit more, you increase that speed. Yeah, I think it's done both ways. We gotta sell some more software and just get that ARR coming. That's high gross margin-based business. Yeah, of course, we are adding some costs in other areas along the side of it, but yeah, sort of how we work as a business. Well, let's hypothetically say, you know, for every CAD 1 million of ARR that we add no cost. well let's hypothetically say you know for every cad 1 million of arr that we add no cost You start adding, you know, 1% on both sides of those equations. you start adding you know 1% on both sides of those equations And then if you start getting those costs down a little bit more, you increase that speed. and then if you start getting those costs down a little bit more you increase that speed Yeah, I think it's done both ways. yeah i think it's done both ways We gotta sell some more software and just get that ARR coming. we gotta sell some more software and just get that arr coming That's high gross margin-based business. that's high gross margin-based business Yeah, of course, we are adding some costs in other areas along the side of it, but yeah, sort of how we work as a business. yeah of course we are adding some costs in other areas along the side of it but yeah sort of how we work as a business

Speaker 6: Is there a target exit EBITDA margin for 2026 or target ARR organic growth range? Is there a target exit EBITDA margin for 2026 or target ARR organic growth range? is there a target exit ebitda margin for 2026 or target arr organic growth range

Speaker 2: We've always said, as an organization, that we're probably a 27%, 13%, 28%, 12% type of business, right? In terms of getting to the Rule of 40, that's where we were before these two acquisitions. We've made it very clear that that's what we were aiming for after these acquisitions, and we were pretty clear on the timeframes that we thought that could be in. We're still in the middle of those timeframes, and we're continually trying to progress that forward. We've always said, as an organization, that we're probably a 27%, 13%, 28%, 12% type of business, right? we've always said as an organization that we're probably a 27% 13% 28% 12% type of business right In terms of getting to the Rule of 40, that's where we were before these two acquisitions. in terms of getting to the rule of 40 that's where we were before these two acquisitions We've made it very clear that that's what we were aiming for after these acquisitions, and we were pretty clear on the timeframes that we thought that could be in. we've made it very clear that that's what we were aiming for after these acquisitions and we were pretty clear on the timeframes that we thought that could be in We're still in the middle of those timeframes, and we're continually trying to progress that forward. we're still in the middle of those timeframes and we're continually trying to progress that forward

Speaker 6: Thank you. One final question. Just the progression, you know, to those metrics. Realize there could be some variability, but any particular softness just in Q1 or the first half of the year? Thank you. thank you One final question. one final question Just the progression, you know, to those metrics. just the progression you know to those metrics Realize there could be some variability, but any particular softness just in Q1 or the first half of the year? realize there could be some variability but any particular softness just in q1 or the first half of the year

Speaker 2: Softness in. Softness in. softness in

Speaker 6: Either in the ARR growth or maybe perhaps the margin expansion would be back-end weighted, if that's the correct way of looking at it. Either in the ARR growth or maybe perhaps the margin expansion would be back-end weighted, if that's the correct way of looking at it. either in the arr growth or maybe perhaps the margin expansion would be back-end weighted if that's the correct way of looking at it

Speaker 2: No, I think our margin increase is really coming from the integration of those organizations which we continue to work on. ARR growth will continue to be incremental. You know, we're aiming to have that in the 10-12% range on a continuous basis, and that's what we're trying to do. No, I think our margin increase is really coming from the integration of those organizations which we continue to work on. no i think our margin increase is really coming from the integration of those organizations which we continue to work on ARR growth will continue to be incremental. arr growth will continue to be incremental You know, we're aiming to have that in the 10-12% range on a continuous basis, and that's what we're trying to do. you know we're aiming to have that in the 10-12% range on a continuous basis and that's what we're trying to do

Speaker 6: Great. Look forward to see it. Thank you very much. Great. great Look forward to see it. look forward to see it Thank you very much. thank you very much

Speaker 11: Thanks, Justin. There are no further questions at this time. I'll hand the call back to you, Dan, for any closing remarks. Thanks, Justin. thanks justin There are no further questions at this time. there are no further questions at this time I'll hand the call back to you, Dan, for any closing remarks. i'll hand the call back to you dan for any closing remarks

Speaker 2: Yeah. I think in general, our Q4 is sort of when we did the Novari and Induction acquisition. I think our Q4 was pretty much on the mark, right? In some ways, the overachievement of Q3 affected the Q4 but we're happy with how we're progressing. We're integrating those organizations. The pipelines are strong. We're getting our AI initiatives into market and we're happy with what we do. We got a lot of cash to do some work. We're picking through some acquisitions, and we're just continuously trying to run the business model here. Another quarter behind us. We're excited to have this done and get into Q1, which is gonna close in a couple weeks. It's always the fun part about this. Yeah. yeah I think in general, our Q4 is sort of when we did the Novari and Induction acquisition. i think in general our q4 is sort of when we did the novari and induction acquisition I think our Q4 was pretty much on the mark, right? i think our q4 was pretty much on the mark right In some ways, the overachievement of Q3 affected the Q4 but we're happy with how we're progressing. in some ways the overachievement of q3 affected the q4 but we're happy with how we're progressing We're integrating those organizations. we're integrating those organizations The pipelines are strong. the pipelines are strong We're getting our AI initiatives into market and we're happy with what we do. we're getting our ai initiatives into market and we're happy with what we do We got a lot of cash to do some work. we got a lot of cash to do some work We're picking through some acquisitions, and we're just continuously trying to run the business model here. we're picking through some acquisitions and we're just continuously trying to run the business model here Another quarter behind us. another quarter behind us We're excited to have this done and get into Q1, which is gonna close in a couple weeks. we're excited to have this done and get into q1 which is gonna close in a couple weeks It's always the fun part about this. it's always the fun part about this Yeah, we look forward to seeing you guys in, I guess, another 60 days or whatever and showing you what the Q1's all about. Yeah, we look forward to seeing you guys in, I guess, another 60 days or whatever and showing you what the Q1's all about. yeah we look forward to seeing you guys in i guess another 60 days or whatever and showing you what the q1's all about

Speaker 11: Thanks, Dan. This now concludes today's conference call. Thanks everyone for joining. Thanks, Dan. thanks dan This now concludes today's conference call. this now concludes today's conference call Thanks everyone for joining. thanks everyone for joining

Speaker 2: Thanks, everyone. Bye-bye. Thanks, everyone. thanks everyone Bye-bye. bye-bye