Q2 2026 Healwell Al Inc Earnings Call

August 7, 2026

Speaker #1: Thank you for joining Healwell AI's 2026 second quarter financial results conference call. This call is being recorded. There will be a question-and-answer session at the end of the call, which will be limited to analysts only.

Operator: Thank you for joining Healwell AI's 2026 Q2 financial results conference call. This call is being recorded. There will be a question and answer session at the end of the call, which will be limited to analysts only. I'll now turn the call over to Mr. Hefton Seni, investor relations at Healwell.

Speaker #1: I'll now turn the call over to Mr. Hevton Seni, investor relations at Healwell.

Hefton Seni: Hello, thank you, operators. Joining on the call today are James Lee, CEO of Healwell, Dr. Alexander Dobranowski, President of Healwell, and Anthony Lam, Healwell CFO. I trust that everyone's received a copy of our financial results press release that was issued yesterday. Listeners are also encouraged to download a copy of our quarterly financial statements and management discussion analysis that was filed on SEDAR+. Please note, portions of today's call, other than historical performance, include statements of forward-looking information within the meaning of applicable securities laws. These statements are made under the safe harbor provisions of those laws. Please refer to yesterday's press release and to our management discussion analysis for more details on the company's risk and forward-looking statements. We provide forward-looking statements solely for the purpose of providing information about management's current expectations and plans relating to the future.

Speaker #2: Hello, and thank you, operator. Joining me on the call today are James Lee, CEO of Healwell, Dr. Alexander Dobranowski, president of Healwell, and Anthony Lam, Healwell CFO.

Speaker #2: I trust that everyone's received a copy of our financial results press release that was issued yesterday. Listeners are also encouraged to download a copy of our quarterly financial statements and management discussion analysis that was filed on CedarPlus.

Speaker #2: Please note portions of today's call, other than historical performance, include statements of forward-looking information within the meaning of applicable securities laws. These statements are made under the safeguarded provisions of those laws.

Speaker #2: Please refer to yesterday's press release and to our management discussion and analysis for more details on the company's risk and forward-looking statements. We provide forward-looking statements solely for the purpose of providing information about management's current expectations and plans relating to the future.

Speaker #2: We do not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in our expectations or any change in events, conditions, assumptions, or circumstances on which any such statement is based.

Hefton Seni: We do not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in our expectations or any change in events, conditions, assumptions, or circumstances on which any such statement is based, except if required by law. We use terms such as gross margin and adjusted EBITDA on this conference call, which are non-IFRS and non-GAAP measures. For more information on how we define these terms, please refer to the definition set out in our management discussion analysis. There will be a question and answer session at the end of the call, which will be limited to analysts only. To ask a question, analysts are required to call into the conference call using the dial-in number provided in our press release. With that, let me turn the call over to Healwell CEO, James Lee.

Speaker #2: Except if it was acquired by law. We use terms such as gross margin and adjusted EBITDA on this conference call, which are non-IFRS and non-GAAP measures.

Speaker #2: For more information on how we define these terms, please refer to the definition set out in our management discussion analysis. There will be a question-and-answer session at the end of the call, which will be limited to analysts only.

Speaker #2: To ask a question, analysts are required to call into the conference call using the dial-in number provided in our press release. And with that, let me turn the call over to Healwell CEO, James Lee.

Speaker #3: Thank you, Hevton. And thank you, Ron, for joining us today. Before Anthony takes you through the numbers, I want to spend a few minutes talking about something equally fundamental.

James Lee: Thank you, Hefton, thank you everyone for joining us today. Before Anthony takes you through the numbers, I want to spend a few minutes talking about something equally fundamental. A year ago, we announced our first quarter post the pivotal Orion acquisition and embarked on a two-year transition to integrate our businesses, embed our AI capability, and shift our sales mix to more enterprise healthcare sales from episodic life science sales. We knew we had a great opportunity in front of us, and we were excited about the possibilities. As I sit here today, we are feeling even more confident both of the opportunity, but more importantly about the progress we're making. We are through the difficult part of integration transition, and we're now seeing the benefit of the enterprise healthcare focus. We've successfully demonstrated an upsell of customers with our AI capability.

Speaker #3: A year ago, we announced our first-quarter, post-pivotal Orion acquisition, and embarked on a two-year transition to integrate our businesses, build our AI capability, and shift our sales mix to more enterprise healthcare sales from episodic life science sales.

Speaker #3: We knew we had a great opportunity in front of us, and we're excited about the possibilities. But as our city today, we are feeling even more confident both of the opportunity but, more importantly, about the progress are through the difficult part of integration and transition, and we are now seeing the benefit of the enterprise healthcare focus.

Speaker #3: We have successfully demonstrated an upside for our customers with our AI capability, we have integrated our business lines, and we have improved our balance sheet. We've expanded our AI footprint, and now we are moving to the exciting phase of delivering on those sales.

James Lee: We've integrated our business lines, and we've improved our balance sheet. We've expanded our footprint, and now we are moving to the exciting phase of delivering on those sales. At the same time, we've expanded our growth channels so that today we have the strongest pipeline of our potential deals we've seen. Importantly, we've at the same time expanded our scientific validation mode, begun investing in infrastructure to improve margin, and maintained a positive adjusted EBITDA throughout. The market we are building into is changing faster than any other point in the history of our company. What we have built is we are building a business position to meet that need. I'm excited to share this progress today, but more importantly excited to talk about what we'll be demonstrating in the coming phase. Our mission is to be the primary enabler of preventative care. What does that mean?

Speaker #3: At the same time, we've expanded our growth channels so that today we have the strongest pipeline of our potential deals we've seen. Importantly, we have at the same time expanded our scientific validation mode, begun vesting in infrastructure to improve margin, and maintained a positive adjusted EBITDA throughout.

Speaker #3: The market we are building into is changing faster, than any other point in the history of our company. And what we have built is we are built to building a business position to meet that need.

Speaker #3: I'm excited to share this progress today, but more importantly, excited to talk about what will be demonstrated in the coming phase. Our mission is to be the primary enabler of preventative care.

Speaker #3: But what does that mean? So we're going to talk about it in three simple sentences. Firstly, we connect. We take complex, fragmented healthcare data and turn it into longitudinal patient records that can be used to share across the system.

James Lee: We're going to talk about it in three simple sentences. Firstly, we connect. We take complex fragmented healthcare data and turn it into longitudinal patient records that can be used to share across the system. We surface. 80% of clinical data is unstructured, sitting in notes and reports that were never designed to be read at population scale. We abstract the clinically relevant information from that data with 95% accuracy and 95% of disease states. We enable. We give the healthcare system the ability to implement preventative care cost-effectively, not as a pilot, but as an operating model. Now the facts are really well known, so I won't go into them, but I'll give you more about the shape than the numbers themselves.

Speaker #3: We surface. Eighty percent of clinical data is unstructured, sitting in notes and reports that were never designed to be read at population scale. We abstract the clinically relevant information from that data with 95% accuracy and 95% of disease states.

Speaker #3: And we enable—we give the healthcare system the ability to implement preventative care cost-effectively, not as a pilot, but as an operating model. Now, the facts are really well known, so I won't go into them, but I'll give you more about the shape and the numbers themselves.

Speaker #3: So three of the world's largest healthcare systems all face three very different pressures, but they've all faced with the same outcome, which is the money's effectively gone.

James Lee: Three of the world's largest healthcare systems all face three very different pressures, but they have all faced with the same outcome, which is the money is effectively gone. Whether it is the debt servicing overtaking healthcare spend or the working age population being too small to carry the load, every one of the major healthcare systems around the world are running out of room within this decade. Underneath that sits a disease burden that no one is counting because most of the people who have these diseases do not know they have it. Here is the point that matters commercially. Each one of these diseases is detectable many years early before the costs arise. The signal exists, it is simply not being read. Four forces are converging, and converging is an important word. Any of these on their own would just be a trend, but all four occurring is a structural shift.

Speaker #3: Whether it's debt servicing overtaking healthcare spending, or the working-age population being too small to carry the load, every one of the major healthcare systems around the world is running out of room within this decade.

Speaker #3: Underneath that sits a disease burden that no one's counting. Because most of the people who have these diseases don't know they have it. And here is the point that matters commercially.

Speaker #3: Each one of these diseases is detectable many years early before the costs are rising. The signal exists that is simply not being read. Four forces are converging, and converging is an important word.

Speaker #3: Any of these on their own would just be a trend, but all four occurrences are a structural shift. The economics are broken. We've talked about that, and that's a well-known fact.

James Lee: The economics are broken. We have talked about that, and that is a well-known fact. Systems are having to intervene even earlier to ensure that they can spend less. The regulation is starting to catch up. Prevention is now mandated, not just aspirational with data access and interoperability rules that are a direct one way for our platform. The market is aligned. The payers, providers, and pharma are all reaching the same conclusion. The opportunity is that these diseases are detectable early. Prevention costs a fraction of the treatment, and our platform today connects the data, the science, and to delivery. You will hear us talk a lot today about the transition from episodic to enterprise, because that is the part that we have been focusing on, the part that matters. Whereas last year we were negotiating six-figure individual engagements, today we are discussing annualized licenses that exceed that.

Speaker #3: So systems are having to intervene even earlier, to ensure that they can spend less. The regulation is starting to catch up. Prevention is now mandated, not just aspirational, with data access and interoperability rules.

Speaker #3: That are a direct one-way for our platform. And the market is aligned. The payers, providers, and pharma are all reaching the same conclusion. The opportunity is that these diseases are detectable early, prevention costs a fraction of the treatment, and our platform today connects the data to science and to delivery.

Speaker #3: You will hear us talk a lot today about the transition from episodic to enterprise, because that is the part that we've been focusing on—the part that matters.

Speaker #3: Whereas last year we were negotiating six-figure individual engagements, today we're discussing annualized licenses that exceed that. The old model was project by project—services and patient identity reviews.

James Lee: The old model was project-by-project services and patient identity reviews. Revenue grew in a linear fashion, one clinic, one study at a time. Delivery was high touch and manual. Revenue was lumpy, non-recurring, and hard to forecast. Our current model we are moving towards is different in every single way. We have gone to enterprise licenses, data access, and a productized SMARTSuite. We deploy it once and expand it across our network. We are selling to global pharma centers of excellences. Delivery is now product-led. Revenue is larger, stickier, and multi-year recurring. The defensibility of our data activation, plus the DARWEN platform, is a real moat. Importantly, we are now through the trough of that transition. That transition has produced four key growth engines, all from the same platform across two key client segments. Firstly, engine one, our HIE and clinical data unlock.

Speaker #3: Revenue grew in a linear fashion, one clinic, one study at a time. Delivery was high touch and manual. Revenue was lumpy. Non-recurring and hard to forecast.

Speaker #3: Our current model we're moving towards is different in every single way. We're going to enterprise licenses, data access, and a productized smart suite. We deploy it once and expand it across our network.

Speaker #3: We're selling to global pharma and centers of excellence. Delivery is now product-led, and revenue is larger, stickier, and multi-year recurring. The defensibility of our data activation, plus our data when platforms are remote, is strong.

Speaker #3: And importantly, we're now through the trough of that transition. Now, that transition has produced four key growth engines, all from the same platform across two key client segments.

Speaker #3: Firstly, Engine One. Our HIE and clinical data unlock. Unlocking de-identified data across our partner networks creates value for every stakeholder. Right across the ecosystem.

James Lee: Unlocking de-identified data across our partner networks creates value for every stakeholder right across the ecosystem. We are seeing active interest from all markets in this capability. Engine two is our SMARTSuite. Whether it is Search, Summary, or ID, it is packaged, it is repeatable, and it is embedded into our platform. It is a single sale process, and it has been successfully deployed in North America, sold in the Middle East, and we look forward to giving further progressers in the H2. Engine three is our global life science enterprise business. We are moving to centralized agreements with pharma AI center of excellences, which is a cost saving for them against repeating patient ID and real world evidence studies region by region. Engine four is our consented data in Canada.

Speaker #3: We are seeing active interest from all markets in this capability. Engine Two is our smart suite. We're at search, summary, or ID. It's packaged, it's repeatable, and it's embedded into our platform.

Speaker #3: It's a single sale process, and it's been successfully deployed in North America, Southern Middle East, and we look forward to giving further progresses in the second half.

Speaker #3: Engine Three is our global life science enterprise business. We're moving to centralized agreements with pharma, AI-centered excellences. Which is a cost saving for them against repeating patient ID and real-world evidence studies region by region.

Speaker #3: And Engine Four is our consented data in Canada. We've talked a lot about World Trust, but activating this key partner network for life sciences, CROs, and public health has created a growing consented database with strong demand behind it, which has become a virtuous cycle.

James Lee: We've talked a lot about WELL Trust, but activating this key partner network is for life sciences, CROs, and public health, has created a growing consented database with strong demand behind it, which has become a virtuous cycle. The more consents we get, the faster our customers can innovate. A year into this transition, the execution signals are good. They're shown across all of our geographies, products, and partners. In 2025, we are predominantly a life science business with episodic revenue. Today, we have activity in all of our key markets with healthcare systems, and this will grow into a meaningful part of our revenue. Excitingly, the integrated offering of DARWEN and Amadeus is commercially compelling, is resonating with all of our customers. WELL Trust is opening genuine new commercial use cases and moving us towards meaningful enterprise discussions across new revenue streams.

Speaker #3: The more consents we get, the faster our customers can innovate. So a year into this transition, the execution signals are good. They're shown across all of our geographies, products, and partners.

Speaker #3: And 25, we're a predominantly life science business with episodic revenue. Today, we have activity in all of our key markets with healthcare systems, and this will grow into a meaningful part of our revenue.

Speaker #3: Excitingly, the integrated offering of Darwin and Armideus is commercially compelling, is resonating with all of our customers. World Trust is opening genuine new commercial use cases, and moving us towards meaningful enterprise discussions across new revenue streams.

Speaker #3: Smart suite, now means we sell as a single customer, and a single company. Through one sales process. With an AI land and expands in a customer base.

James Lee: SMARTSuite now means we sell as a single customer and a single company through one sales process. With an AI landing expands in the customer base, these conversations have been transitioned from project work to enterprise deals, and the platforms and businesses are working well behind that. Data activation. This brings us close to the customer and reduce the duplication, because we are helping our customers activate data they already hold. There's no new data assets to build, which shortens the pathway to evidence. Internally, AI data output overtook human output for the first time in May from a base of zero a year ago. We're seeing significant AI use case internally. Commercially, we've had wins across the Middle East, Canada, and the US, and we're seeing demand from all of our key geographies. These sales that we're winning are durable.

Speaker #3: These conversations have been transitioned from project work to enterprise deals, and the platforms and businesses are working well behind that. Finally, data activation. and reduces duplication, because we're helping our customers activate data they already hold.

Speaker #3: There's no new data assets to build, which shortens the pathway to evidence. Internally, AI data outputs overtook human output for the first time in May.

Speaker #3: From a base of zero a year ago, we're now seeing significant AI use cases internally. Commercially, we've had wins across the Middle East, Canada, and the US, and we're seeing demand from all of our key geographies.

Speaker #3: These sales we're winning are durable. They take a long time, more than a single quarter, but we're moving to an enterprise license with SaaS fees, and this is a shift that matters.

James Lee: They take a long time, more than a single quarter, but we're moving to an enterprise license with SaaS fees, and this is a shift that matters. I want to touch briefly on why the validation compounds across segments. I think that's underappreciated across the market. Obviously, we're focused on science first, with 57 peer-reviewed publication and pre-galerian recognition. But what this means is the healthcare systems can adapt preventative healthcare using validated evidence rather than assertations. And every adoption generates more data, which feeds into Amadeus and adds to 150 million lives. That scales what comes next, is that allows something so that underwriters can price. We can price that and we can move forward to the underwriter population. This is why we see insurance as the next and largest step in our opportunity, and we'll be talking about in the year to come.

Speaker #3: I want to touch briefly on why the validation compounds across segments, because I think that's underappreciated across the market. Obviously, we're focused on science first, with 57 peer-reviewed publications and pre-Galilean recognition.

Speaker #3: But what this means is that healthcare systems can adapt preventative healthcare using validated evidence rather than assertations. And every adoption generates more data, which feeds into Armideus, and adds to 150 million lives.

Speaker #3: That scales what comes next, is that allows something for underwriters can price. Because we can price that, and we can move forward into underwriter population.

Speaker #3: This is why we see insurances as the next and largest step in our opportunity. And we'll be talking about it in the year to come.

Speaker #3: Finally, I want to talk about our four key goals for the quarter. As you know, our indirect stake in SpaceX and our estimated is approximately 23 million Canadian dollars as of the 30th of June, 2026.

James Lee: I want to talk about our four key strategic goals for the quarter. As you know, our indirect stake in SpaceX is now estimated at approximately CAD 23 million as at 30 June 2026, up from a carrying value of approximately CAD 4.6 million as at 31 March 2026. Our holding remains subject to the customer pre-IPO lock-up period. We continue to commercialize our AI product suite across our carriers network. Our AI solutions include SMART Search and SMART Summary, and they've been cross-sold into the Orion Health network now. We completed a real world evidence Study demonstrating the effectiveness of Well AI Decision Support, identifying patients who may have been undiagnosed or unmanaged diabetes. WAIDS analyzed patient records and recommended clinical reviews and point of care assessments for high-risk patients.

Speaker #3: Up from a carrying value of approximately 4.6 million. As of March 31st, 2026. Our holding remains subject to the customer pre-IPO lock-up period. We continue to commercialize our AI product suite, across our carriage network.

Speaker #3: Our AI solutions include smart search and smart summary, and they've been cross-sold into the Orion network now. We completed a real-world evidence study demonstrating the effectiveness of well-AI decision support, identifying patients who may have been undiagnosed or unmanaged diabetes.

Speaker #3: Ways to analyze patient records and recommended clinical reviews and point-of-care assessments for high-risk patients. We completed a multi-province pilot evaluating our Darwin smart summary and search solutions across the healthcare systems, across British Columbia, Ontario, and New Brunswick.

James Lee: We completed a multi-province pilot evaluating our Darwin SMART Summary and SMART Search solutions across the healthcare systems across British Columbia, Ontario, New Brunswick, across both OSCAR Pro and IntraHealth Profile EMR. The results of that pilot were accepted for presentation at the American Medical Informatics Association, which will be taking place in November 2026 in Dallas, Texas. I'd like to hand over the call now to Anthony Lam to walk through our Q2 numbers.

Speaker #3: Across both Oscar Pro and InterHealth profile EMR, the results of that pilot were accepted for presentation at the American Medical Informatics Association, which will be taking place in November 2026, in Dallas, Texas.

Speaker #3: I'd like to hand over the call now to Anthony Lam to walk through our Q2 numbers.

Speaker #1: Thank you, James. Before I begin, I would like to remind everyone that all of the figures I will be discussing on our call today are expressed in Canadian dollars, and our financial statements are presented in accordance with IFRS, International Financial Reporting Standard.

Anthony Lam: Thank you, James. Before I begin, I would like to remind everyone that all of the figures I will be discussing on our call today are expressed in Canadian dollars, and our financial statements are presented in accordance with IFRS, International Financial Reporting Standard. Our Q2 2026 results as compared to Q2 2025 are as follows. Healwell achieved quarterly revenue from continuing operations of CAD 33 million in Q2 2026, in line with the CAD 33.2 million generated in Q2 2025. The comparison reflects an unusually strong Q2 2025, which benefit from elevated project-based professional services activity while our recurring subscription support and maintenance revenue continued to grow year-over-year, reflecting our continued transition from episodic project-based engagements to higher margin recurring enterprise sales.

Speaker #1: Our second quarter 2026 results, as compared to Q2 of 2025, are as follows. Healwell achieved quarterly revenue from continuing operations of $33 million in 2026.

Speaker #1: In Q2 2026, in line with the $33.2 million generated in Q2 of last year. The comparison reflects an unusually strong Q2 2025, which benefited from elevated project-based professional services activity, while our recurring subscription, support, and maintenance revenue continue to grow year over year, reflecting our continued transition from episodic project-based engagements to higher-margin recurring enterprise sales.

Speaker #1: Healwell reported positive adjusted EBITDA of 1.1 million, in Q2, 2026. Compared to adjusted EBITDA of 2.3 million, in Q2, 2025. Our prior year performance includes mutual which was disposed of in Q4 of 2025, together with a stronger number of life sciences studies in Q2, 2025, accounted this accounted for the change in year over year EBITDA.

Anthony Lam: Healwell reported positive adjusted EBITDA of CAD 1.1 million in Q2 2026 compared to adjusted EBITDA of CAD 2.3 million in Q2 2025. Our prior year performance includes Mutuo, which was disposed of in Q4 2025, together with a stronger number of life science studies in Q2 2025. This accounted for the change in year-over-year EBITDA. Healwell achieved gross profit of CAD 17.9 million during Q2 2026 compared to CAD 18.7 million in Q2 2025. The decrease is due to a lower margin mix of studies within the data science and AI segment in the current year period. Healwell achieved a gross margin of 54% during Q2 2026 compared to 56% in Q2 2025.

Speaker #1: Healwell achieved gross profit of 17.9 million during Q2, 2026, compared to 18.7 million in Q2, 2025. The decrease is due to a lower margin mix of studies within the data science and AI segment in the current year period.

Speaker #1: Healwell achieved a gross margin of 54% during Q2, 2026, compared to 56% in Q2, 2025. Looking at our first half of 2026, Healwell achieved revenue from continuing operations of 66.2 million, with a 6-month ended June 30, 2026.

Anthony Lam: Looking at our H1 2026, Healwell achieved revenue from continuing operations of CAD 66.2 million for the six months ended 30 June 2026, an increase of 60% compared to CAD 41.2 million generated in the six months ended 30 June 2025. The increase was driven primarily by the Orion Health acquisition, which closed on 1 April 2025, and contributed a full six months of revenue in the current period versus a partial period in the prior year. Healwell reported positive adjusted EBITDA of CAD 1.9 million for the six months ended 30 June 2026 compared to CAD 0.1 million in the prior year period, an increase of approximately 2,574%. The increase is primarily attributed to the Orion Health acquisition and improved performance across our operating segments.

Speaker #1: An increase of 60% compared to 41.2 million generated in the 6-month ended in June 30, 2025. The increase was driven primarily by the Orion Health acquisition, which closed on April 1st, 2025, and contributed a full 6 months of revenue in the current period versus a partial period in the prior year.

Speaker #1: Healwell reported positive adjusted EBITDA of 1.9 million, with a 6-month ended June 30, 2026, compared to 0.1 million in the prior year period. An increase of approximately 2,574%.

Speaker #1: The increase was primarily attributed to the Orion Health acquisition and improved performance across our operating segments. Healwell reported positive EBITDA of 1.9 million, sorry, Healwell achieved gross profit of 37.4 million during the 6-month ended June 30, 2026, an increase of 62% compared to 23.2 million in the prior year period.

Anthony Lam: Healwell achieved gross profit of CAD 37.4 million during the H1 ended 30 June 2026, an increase of 62% compared to CAD 23.2 million in the prior year period due to higher revenues driven primarily by the Orion Health acquisition. Healwell achieved a gross margin of 57% for the H1 ended 30 June 2026 compared to 56% in the prior year period. A key highlight this quarter is the continued positive trajectory of our operating cash flow. We generated CAD 4.5 million of positive operating cash flow for the H1 2026, a CAD 14.4 million improvement, approximately 145% compared to cash used in the prior year period, reflecting an underlying strength in increasing efficiency in our combined operations following the Orion Health acquisition.

Speaker #1: Due to higher revenues driven primarily by the Orion Health acquisition. Healwell achieved a gross margin of 57% for the 6-month ended June 30, 2026, compared to 56% in the prior year period.

Speaker #1: A key highlight this quarter is the continued positive trajectory of our operating cash flow. We generated $4.5 million of positive operating cash flow for the first half of 2026, a $14.4 million improvement, approximately 145%.

Speaker #1: Compared to cash used in the prior year period, reflecting an underlying strength in increasing efficiency in our combined operations following the Orion Health acquisition.

Speaker #1: This shift to sustained positive cash generation strengthens our balance sheet and liquidity position. We remain in compliance with all of our covenants under our credit facilities as of June 30, 2026.

Anthony Lam: This shift to sustained positive cash generation strengthens our balance sheet and liquidity position. We remain in compliance with all of our covenants under our credit facilities as of 30 June 2026. We continue to prioritize disciplined capital allocation as we build on this cash flow momentum and work towards sustained profitability. With that, I would like to now turn the call over to our President, Dr. Alexander Dobranowski.

Speaker #1: We continue to prioritize disciplined capital allocation as we build on this cash flow momentum and work towards sustained profitability. With that, I'd like to now turn the call over to our president, Dr. Alexander Dobranowski.

Speaker #2: Thank you, Anthony. Thank you, James. I'd like to take a moment to walk through the scale of impact of Healwell's platforms as we deliver globally.

Alexander Dobranowski: Thank you, Anthony. Thank you, James. I would like to take a moment to walk through the scale of impact of Healwell's platforms as we deliver globally. This is really the proof point behind everything James and Anthony have just walked you through. It is one thing to talk about an integrated platform and another to show you the reach it is actually achieving across patients, clinicians, and the broader healthcare system. Let us start with data. Across our global business units spanning 13 distinct clinical data domains, Healwell now maintains more than 150 million patient records. That breadth of longitudinal data is really the foundation of everything we do. It is what allows our AI models to identify at-risk patients earlier and more accurately than a single source system ever could. On the clinical side, more than 770,000 clinicians and physicians are now engaged across our platforms globally.

Speaker #2: This is really the proof point behind everything James and Anthony have just walked you through, and it's one thing to talk about an integrated platform, and another to show you the reach it's actually achieving across patients, clinicians, and the broader healthcare system.

Speaker #2: Let's start with data. Across our global business units spanning 13 distinct clinical data domains, Healwell now maintains more than 150 million patient records. That breadth of longitudinal data is really the foundation of everything we do.

Speaker #2: It's what allows our AI models to identify at-risk patients earlier and more accurately than a single-source system ever could. On the clinical side, more than 770,000 clinicians and physicians are now engaged across our platforms globally.

Speaker #2: That's a meaningful and growing share of the frontline healthcare workforce actively using Healwell software and technology in their day-to-day practice. And that engagement is translating directly into outcomes.

Alexander Dobranowski: That is a meaningful and growing share of the frontline healthcare workforce actively using Healwell software and technology in their day-to-day practice. That engagement is translating directly into outcomes. In the Q2 alone, our AI copilots, powered by our Darwin AI engine, identified over 62,000 high-risk patients. Patients who, in many cases, have not otherwise been flagged for early intervention. On the clinical technology side, our Darwin AI engine now supports and is able to screen for 123 rare, complex, and chronic diseases, reflecting the continued expansion of our clinical validation work and the depth of our disease detection capabilities. From a network perspective, we serve more than 22,000 healthcare service providers across our combined network of platforms and business units, underscoring just how embedded our technology has become across the broader healthcare ecosystem.

Speaker #2: In the second quarter alone, our AI co-pilots powered by our Darwin AI engine identified over 62,000 high-risk patients. Patients who in many cases have not otherwise been flagged for early intervention.

Speaker #2: On the clinical technology side, our Darwin AI engine now supports and is able to screen for 123 rare, complex, and chronic diseases, reflecting the continued expansion of our clinical validation work and the depth of our disease detection capabilities.

Speaker #2: From a network perspective, we serve more than 22,000 healthcare service providers across our combined network of platforms and business units. Underscoring just how embedded our technology has become across the broader healthcare ecosystem.

Speaker #2: And finally, on adoption, as of the second quarter, 1,291 physicians have been onboarded to our AI co-pilots, giving us a strong and growing base of active physician users to build on as we scale.

Alexander Dobranowski: Finally, on adoption, as of Q2, 1,291 physicians have been onboarded to our AI copilots, giving us a strong and growing base of active physician users to build on as we scale. Together, these figures reflect the scale and reach of the platform we've built and, more importantly, the depth of real-world impact we're delivering for patients and providers around the world. This is the kind of scale that we believe differentiates Healwell, and it's a big part of why we remain so confident in the growth opportunity ahead. From an outlook perspective, we remain focused on several key drivers of growth as we continue to build on the momentum we've established this quarter. First, on profitability.

Speaker #2: Together, these figures reflect the scale and reach of the platform we've built and, more importantly, the depth of real-world impact we're delivering for patients and providers around the world.

Speaker #2: This is the kind of scale that we believe differentiates Healwell, and it's a big part of why we remain so confident in the growth opportunity ahead.

Speaker #2: From an outlook perspective, we remain focused on several key drivers of growth as we continue to build on the momentum we've established this quarter.

Speaker #2: First, on profitability. Management and the team continue to target an approximately 10% adjusted EBITDA margin by the end of the year, reflecting continued operating leverage across the platform as we scale our revenue base and drive further efficiencies across our combined operations.

Alexander Dobranowski: Management and the team, we continue to target an approximately 10% adjusted EBITDA margin by the end of the year, reflecting continued operating leverage across the platform as we scale our revenue base and drive further efficiencies across our combined operations. Second, on revenue quality. We expect, as James reflected, a growing mix of enterprise recurring revenue led by subscription, support, and maintenance growth, which continues to make our overall revenue base more durable and more predictable quarter to quarter. Third, on deal economics. We now anticipate larger AI deal sizes as SMART Search and SMART Summary scale across our customer base, reflecting both deeper adoption within existing accounts and the growing maturity of our AI product suite. Fourth, on geographic expansion. We continue to see organic growth in new customer wins across our key geographies, and we expect that footprint to keep expanding as our enterprise pipeline matures.

Speaker #2: Second, on revenue quality. We expect, as James reflected, a growing mix of enterprise recurring revenue led by subscription, support, and maintenance growth, which continues to make our overall revenue base more durable and more predictable quarter to quarter.

Speaker #2: Third, on deal economics. We now anticipate larger AI deal sizes as smart search and smart summary scale across our customer base. Reflecting both deeper adoption within existing accounts and the growing maturity of our AI product suite.

Speaker #2: Fourth, on geographic expansion. We continue to see organic growth in new customer wins across our key geographies and we expect that footprint to keep expanding as our enterprise pipeline matures.

Speaker #2: Fifth, and finally, on the public sector, we're seeing extremely strong tailwinds supporting continued adoption of our platform as governments and health systems increasingly prioritize preventative data-driven care.

Alexander Dobranowski: Fifth, finally, on the public sector, we're seeing extremely strong tailwinds supporting continued adoption of our platform as governments and health systems increasingly prioritize preventative data-driven care. Beyond these five priorities, we also continue to see meaningful key value and growth alongside WELL Health, our strategic partner, across three specific areas of that relationship that James highlighted earlier. First is Well ID, our secure digital identity and single sign-on platform across the WELL Health network, which continues to streamline clinician access while strengthening the security and interoperability of our broader platform. The second is WAIDS, WELL AI Decision Support, our AI-powered clinician decision support platform for early disease detection, which continues to generate strong clinical validation and commercial momentum. Third is WELL Trust, our patient consent and data governance infrastructure that underpins secure data access across our platform.

Speaker #2: Beyond these five priorities, we also continue to see meaningful key value and growth alongside Well Health, our strategic partner, across three specific areas of that relationship that James highlighted earlier.

Speaker #2: First is Well ID, our secure, digital identity and single sign-on platform across the Well Health network, which continues to streamline clinician access while strengthening the security and interoperability of our broader platform.

Speaker #2: The second is Waze, Well AI decision support. Our AI-powered clinician decision support platform for early disease detection, which continues to generate strong clinical validation and commercial momentum.

Speaker #2: And third is Well Trust. Our patient consent and data governance infrastructure that underpins secure data access across our platform. Across all three of these areas, we're looking to expand these capabilities into additional geographies in the periods ahead, and we see meaningful runway to deepen this partnership even further.

Alexander Dobranowski: Across all three of these areas, we're looking to expand these capabilities into additional geographies in the periods ahead. We see meaningful runway to deepen this partnership even further. Taken together, the profitability discipline, the shift towards recurring enterprise revenue, the scaling of our AI products, our geographic expansion and public sector tailwinds, and the depth of our partnership with WELL Health, these priorities reflect our continued discipline in scaling a connected AI-enabled platform. It's a platform that we believe is built to deliver durable, long-term value for our shareholders, for the patients we serve, and for our healthcare partners around the world. In short, 2026 has been a year of focus on margin expansion and improvement, with 2027 being a year where we will focus again firmly on growth. With that, I'll now hand it back to the operator and move to the Q&A portion.

Speaker #2: So, taken together, the profitability discipline, the shift towards recurring enterprise revenue, the scaling of our AI products, our geographic expansion and public sector tailwinds, and the depth of our partnership with Well Health—these priorities reflect our continued discipline in scaling a connected, AI-enabled platform.

Speaker #2: It's a platform that we believe is built to deliver durable, long-term value for our shareholders, for the patients we serve, and for our healthcare partners around the world.

Speaker #2: In short, 2026 has been a year focused on margin, expansion, and improvement, with 2027 being a year where we will firmly focus on growth again.

Speaker #2: And with that, I'll now hand it back to the operator, move to the Q&A portion. Thank you.

Alexander Dobranowski: Thank you.

Speaker #1: Ladies and gentlemen, we will now begin the question and answer session. For analysts, if you would like to ask a question, please press star, then the number one on your telephone keypad.

Operator: Ladies and gentlemen, we will now begin the question and answer session. For analysts, if you would like to ask a question, please press star then the number one on your telephone keypad. If you would like to withdraw your question, please press star then the number two. Your first question comes from Kevin Krishnaratne from Scotiabank. Please go ahead.

Speaker #1: And if you would like to withdraw your question, please press star, then the number two. Your first question comes from Kevin Krishnarapne from Scotiabank.

Speaker #1: Please go ahead.

Kevin Krishnaratne: Hey. Good morning. Congrats on the continued success. I wanted to talk about your mention there of moving from episodic to enterprise. Maybe it's in public health, actually. I am wondering if you talk about the current pipeline of opportunities, what's that looking like on potential HIE RFPs? Maybe you can talk about opportunities by geo- Gio, and just curious how the discussions with customers are progressing. Is there any change in the macro or healthcare budgetary front that we need to be aware of as we think about the timing of potential RFPs and how that would translate to revenue?

Speaker #3: Hey, good morning. Congrats on the continued success. I wanted to talk about your mention there of moving from episodic to enterprise. Maybe it's in public health, actually.

Speaker #3: Wondering if you talk about the current pipeline of opportunities. What's that looking like on potential HIE RFPs? Maybe you can talk about opportunities by geo and just curious how the discussions with customers are progressing.

Speaker #3: Is there any change on the macro or healthcare budgetary front that we need to be aware of as we think about the timing of potential RFPs, and how that would translate to revenue?

Speaker #4: Kevin, look, great question. You probably asked enough in that question. I could probably spend the next 30 minutes covering it off. So let me try to bring that back and then just maybe ask a follow-up and push me if I could get some of it wrong.

James Lee: Kevin, look, great question. You probably asked enough in that question, I could probably spend the next 30 minutes covering it off. Let me try to bring that back and then just maybe ask a follow-up and push me if I get some of it wrong. Starting at your first point, it's not just a software, it's just not in healthcare. We've actually shifted all of our focus to enterprise sales. We're seeing potential deals not with our life science partners, with our data unlock partners, across HIEs, and across our SMARTSuite with enterprise sales. The pipeline now would be that we're seeing opportunities in all four areas, but importantly, we're seeing it across all geographies. It's very hard to isolate it down now.

Speaker #4: But starting your first point, it's not just the software, it's just not in healthcare. We've actually shifted all of our sales to sorry, all of our focus to enterprise sales.

Speaker #4: So we're seeing potential deals not just with our life science partners, but also with our data unlock partners, across HIEs and across our Smart Suite. With enterprise sales, the pipeline now shows that we're seeing opportunities in all four areas, but importantly, we're seeing this across all geographies.

Speaker #4: And so it's very hard to sort of isolate it down now. What we've actually seen the last six months is a shift in approach from the market, partly because there's been so much so many people trying to do small pilots, that what they're really looking for is much more enterprise platform outcomes.

James Lee: What we've actually seen in the last six months is a shift in approach from the market, partly because there's been so many people trying to do small pilots, that what they're really looking for is much more enterprise platform outcome. Not a single-point solution. What we're actually seeing is that the conversations are morphing much more quickly from a little pilot to show us what a proper RFP would look like at scale. To give you some context of size, a pilot we've talked about previously might have been CAD 200,000 or 300,000. What we're seeing now is that an enterprise agreement might be anywhere between CAD 1 and 3 million, depending on the size of the customer. As I said, it's across all parts of our business. Geography-wise, we've seen a lot of activity in the Middle East, a lot of activity in the US.

Speaker #4: So, not a single point solution. What we're actually seeing is that the conversations are morphing much more quickly from a little pilot, to show us what a proper RFP would look like at scale.

Speaker #4: To give you some context of size, a pilot, we've talked about previously, might have been two or three hundred thousand dollars. What we're seeing now is that an enterprise agreement might be anywhere between one and three million.

Speaker #4: Depending on the size of the customer. And as I said, it's across all parts of our business. Geography-wise, we're seeing a lot of activity in the Middle East, a lot of activity in the US. Canada is busy, and Europe has got some RFPs coming out towards the end of the year.

James Lee: Canada is busy, Europe have got some RFPs coming out towards the end of the year. Importantly for home markets, both Australia and New Zealand are busy at the moment as well. It's quite broad-brushed. What we've seen is it's across all of our product suites and across all of our geographies currently, which is why probably some of the optimism we're seeing currently in our language. Did I leave any out there, Kevin?

Speaker #4: And importantly, for home markets, both Australia and New Zealand are busy at the moment as well. So it's quite broad-brushed. What we're seeing is that it's across all of our product suites.

Speaker #4: And across all of our geographies currently, which is probably why we're seeing some of the optimism in our language. Did I leave it in the outlet, Kevin?

Speaker #3: Yeah, no, I think you captured it well. And maybe to get Anthony on board here, just as we think about the model—thanks again, good to see the confidence and the 10% EBITDA margin trajectory.

Kevin Krishnaratne: I think you captured it well. Maybe to get Anthony on board here, just as we think about the model. Thanks again. Good to see the confidence in the 10% EBITDA margin trajectory. How do we think about your thoughts or any guidance you want to give us on revenue growth by segment on the Data Science and AI, then the healthcare software for 2026? I know maybe it's a bit early, but if you can just talk about the trajectory into 2027 on your growth expectations.

Speaker #3: How do we think about your thoughts or any guidance you want to give us on revenue growth by segment on the data science and AI and then the healthcare software for 2026?

Speaker #3: And maybe it's a bit early, but if you can just talk about the trajectory into 2027 on your growth expectations.

Speaker #5: Yeah, Kevin, great question. As we look out here and as we talked about, the shift to our more enterprise sales is going to create an elongation of the sales cycle for us.

Anthony Lam: Kevin, great question. As we look out here and as we talked about the shift to more enterprise sales is going to create an elongation of sales cycle for us. While we started the year with a very exuberant sense that we do that 30% to 50% in terms of growth, we're likely to be more on the lower end of that growth range in terms of 2026. Really see 2027 on the heels of the health systems side of the AI and DS part of the business be a big contributor of our growth in 2027. Kevin, to your question on AI and DS, I think we can see that growth on that profile has probably shifted to the right for us from our perspective, given our real focus on enterprise.

Speaker #5: And so, while we started the year with a very exuberant sense of, "We do that 30 to 50" in terms of growth, we're likely to be more on the lower end of that growth range in terms of 2026.

Speaker #5: But really see 2027 on the heels of the health system side of the AI and DS part of the business, be a big contributor of our growth in 2027.

Speaker #5: So, Kevin, to your question on AI/DS, I think we can see that growth on that profile is probably shifted to the right for us from our perspective, given our real focus on enterprise.

Speaker #5: And then as we look at healthcare software, I think growth rates that we've been talking about to now, I think you can expect to see continue in that high single digits kind of range, really, as we look at that business as our steady-state, really stable core revenue stream.

Anthony Lam: As we look at healthcare software, I think growth rates that we've been talking about to now, I think you can expect to see continue in that high single digits kind of range, as we look at that business as our steady state, kind of really stable core revenue stream.

Speaker #3: Cool, great. Those are helpful goalposts. Thanks again. I'll pass the line. Thank you.

Kevin Krishnaratne: Great. Those are helpful goalposts. Thanks again. I'll pass the line. Thank you.

Speaker #1: Your next question comes from Gianluca. Tushi? From Haywood Securities. Please go ahead.

Operator: Your next question comes from Gianluca Tucci from Haywood Securities. Please go ahead.

Gianluca Tucci: Hi. Good morning, guys. I guess firstly, at a high level, can you speak to cross-sell attach rates so far for selling into the Orion legacy customer base? How is that tracking?

Speaker #6: Hi, good morning, guys. I guess firstly, at a high level, can you speak to cross-sell attach rate so far for selling into the Orion Legacy customer base?

Speaker #6: How's that tracking?

Speaker #4: Yeah, so our goal was to get 10% done this year. I think, as we sit here now, we have line of sight, as it’s halfway through the year, for that.

James Lee: Yeah. Our goal was to get 10% done this year. I think as we sit there now, we have line of sight as at halfway through the year for that. Feeling really comfortable with our current target that we'll achieve our cross-sell. We've got another big push coming H2 to go a bit wider. Realistically, we're probably towards capacity of what we want to get done that first year to make sure we do it well. Obviously, the enterprise sales cycle is probably more like 6 to 9 months, not 1 to 3. We're seeing that in the way towards H2.

Speaker #4: So, feeling really comfortable with our current target, that we'll achieve our cross-sell. We've got another big push coming in the second half to go a bit wider.

Speaker #4: But realistically, we're probably towards capacity of what we want to get done that first year to make sure we do it well. Obviously, the enterprise sales cycle is probably more like six to nine months, not one to three.

Speaker #4: So we're seeing that one way toward the second half.

Speaker #6: Okay, thanks, James. And then just perhaps a follow-up on the adjusted EBITDA margin target of 10%. That would imply a strong second half. Can you bridge that for us?

Gianluca Tucci: Great. Thanks, James. Then just perhaps a follow-up on the adjusted EBITDA margin target of 10%. That would imply a strong H2. Can you bridge that for us? What kind of cost actions or revenue combination helps get you there by the end of the year?

Speaker #6: What kind of cost actions or revenue combinations help to get you there by the end of the year?

Speaker #4: Yeah, there's three things you see there. Obviously, one is the enterprise sales done to kick in in healthcare and AI DS. So we'll start seeing that occurring in Q3 and Q4.

James Lee: Yeah, there's three things you said there. Obviously, one is the enterprise sales starting to kick in healthcare and AI & DS. We'll start seeing that occur in Q3 and Q4. Given that they were small numbers in H1, it'll shift that division materially in terms of margin profile. Then cost actions we've seen taken in H1, flowing through in H2 in the software business. Then finally, some continued growth in our software business items. There's obviously some timing issues between H1 and H2 within costs. H1 costs might have been slightly higher than H2. Effectively, those three things, Brian, they get.

Speaker #4: Given that they were small numbers in the first half, it'll shift that division materially in terms of margin profile. Then cost actions, we've seen taken in the first half flowing through in the second half and in the software business.

Speaker #4: And then finally, some continued growth in our software business items. There's obviously some timing issues between the first half and second half. Within costs, so first half cost might have been slightly higher.

Speaker #4: Then second half, but effectively those three things bridge that gap.

Speaker #6: Okay, that's helpful. Thank you guys. I'll pass the line. Congrats.

Gianluca Tucci: Okay, that's helpful. Thank you, guys. I'll pass the line. Congrats.

Speaker #1: Next question comes from Michael Freeman from Raymond James. Please go ahead.

Operator: Next question comes from Michael Freeman from Raymond James. Please go ahead.

Speaker #7: Hey, good morning, James, Anthony, Alex. So congrats on the quarter and the progress. I wonder if we could double-click on your pursuit of the insurance opportunity.

Michael Freeman: Hey, good morning, James, Anthony, Alex. Congrats on the quarter and the progress. I wonder if we could double-click on your pursuit of the insurance opportunity. I wonder if you could frame that again, and sort of update your view on it from when you introduced it, the pursuit of that last quarter.

Speaker #7: I wonder if you could frame that again and sort of update your view on it from when you introduced it, the pursuit of that last quarter.

James Lee: Yeah, sure. Look, I guess when you look at the framing of it, the best way to think about insurance is in the US, obviously, insurance replaces where the role of public health does in commonwealth countries, i.e., the fundamental payer. One of the things we're finding in the US is that the insurance market has a secondary use of risk, i.e., so looking for where there are gaps in care where they might get sued. What we've seen in the US is there's two different lenses. It's not only cost savings from an insurance point of view, but it is also risk mitigation. It's got a really different driver in that market. What we're also seeing in the US, in particular with the insurance side, is that they are tied to the provider network.

Speaker #4: Yeah, sure. I guess when you look at the framing of it, the best way to think about insurance is in the US, obviously, insurance replaces where the role of public health does and Commonwealth countries are.

Speaker #4: The fundamental payer. One of the things we're finding in the US is that the insurance market has a secondary use of risk, i.e., so looking for where there are gaps in care where they might get sued.

Speaker #4: And so what we've seen in the US is there's two different lenses. It's not only cost savings from insurance point of view, but it's also risk mitigation.

Speaker #4: And so it's got a really different driver in that market. And what we're also seeing in the US in particular with the insurance side is that they are tied to the provider network.

Speaker #4: So we're also seeing that where we're talking to providers in the US, they've actually got connectivity to their payer markets. And so we see those sales as much more intertwined what I would say is they are larger, but slower burn sales.

James Lee: We're also seeing that where we're talking to providers in the US, they've actually got connectivity to their payer markets. We see those sales as much more intertwined. What I would say is they are larger but slower burn sales, so we won't be expecting to make any of those in 2026. The sheer size of that market is what we're excited about, Michael.

Speaker #4: So we won't be expecting to make any of those in 2026. But the sheer size of that market is what we're excited about, Michael.

Speaker #7: Okay. All right. Great. I appreciate you framing that. Now, I wonder if you could touch on the balance sheet and how are you feeling about its profile and how you can anticipate it evolving in the second half of the year?

Michael Freeman: Okay. All right. Great. I appreciate you framing that. I wonder if you could touch on the balance sheet and how are you feeling about its profile and how you can anticipate it evolving in H2 of the year?

Speaker #4: Yeah, I'll open that. Then I might be answering; you can close it out. But I think the best way we think about our balance sheet, Michael, is that in terms of our short-term liabilities, post the disposal of SpaceX, we'll see net liabilities in the short term of circa 1x adjusted EBITDA.

James Lee: Yeah, I'll open that, maybe Anthony, you can close it out. I think the best way we think about our balance sheet, Michael, is that in terms of our short-term liabilities post the disposal of SpaceX, we'll see net liabilities in the short term of circa 1x adjusted EBITDA. Our long-term debt, CAD 30 odd million, is a convertible instrument, as you know, with four more years to go. We look at the balance sheet now as being a really stable part of the business to serve the needs we have today. Anthony, is there anything you want to add to that?

Speaker #4: Our long-term debt, 30-odd million dollars is a convertible, as you instrument, as you know, with four more years to go. So we look at the balance sheet now as being a really stable part of the business to serve the needs we have today.

Speaker #4: But Anthony, is there anything you want to add to that?

Speaker #5: Yeah, look, a big question on that because I think the big thing that James highlighted on the call was that with the our investment in SpaceX, I think, again, the intention is clearly to liquidate that position.

Anthony Lam: Yeah, look, great question on that because I think the big thing that James highlighted on the call was that with our investment in SpaceX, I think, again, the intention is clearly to liquidate that position. We will actually have a good source of capital there for our immediate needs. The balance sheet actually for us is we feel very good about because while we approach cash flow neutrality and generation towards the end of the year, we're now in a very solid position from a liquidity standpoint with that asset being one that we'll be liquidating. We feel very comfortable that we have all the resources we need to meet the expectations that we've been setting for ourselves, not only for this year, but also for next year.

Speaker #5: We will actually have good source of capital there for our immediate needs. And so the balance sheet actually, for us, is we feel very good about because while we approached cash flow neutrality and generation as towards the end of the year, we're now in a very solid position from a liquidity standpoint with that asset being one that we will be liquidating.

Speaker #5: To we feel very comfortable that we have all the resources we need to meet the expectations that we've been setting for ourselves not only for this year, but also for next year.

Michael Freeman: Okay. Well, thank you very much. I'm going to pass it on now.

Speaker #7: Okay. Well, thank you very much. I'm going to pass it on now.

Speaker #1: Your next question comes from Brian Kistillinger. From Alliance Global Partners. Please go ahead.

Operator: Your next question comes from Brian Kinstlinger from Alliance Global Partners. Please go ahead.

Speaker #7: Great. Thanks so much. So I appreciate your change in your approach to get away from episodic demand and the opportunity as it relates to preventative care is clearly large.

Brian Kinstlinger: Great. Thanks so much. I appreciate your change in your approach to get away from episodic demand and the opportunity as it relates to preventative care is clearly large. Subscriptions for AI technology are almost half what they were two quarters ago, and this is the part I'm focused on, not the services piece. First, what's driving this reduction? Next, what's the biggest impediment you're seeing right now to growth? And lastly, what gives you the confidence the ramp is imminent, as we've been talking about it for a bit?

Speaker #7: But subscriptions for AI technology are almost half what they were two quarters ago. And this is the part I'm focused on—not the services piece.

Speaker #7: So first, what's driving this reduction? Next, what's the biggest impediment you're seeing right now to growth? And lastly, what gives you the confidence that the ramp is imminent as we've been talking about it for a bit?

Speaker #4: Anthony, do you want to start on the first one? Because obviously, when I look at when I look at our services subscription revenue and AI and DS, I'm not seeing it down.

James Lee: Anthony, do you want to start on the first one? Obviously when I look at our services subscription revenue in AI & DS, I'm not seeing it down. Do you want to maybe comment what number you're talking about?

Speaker #4: So, do you want to maybe comment on what number you're talking about?

Brian Kinstlinger: Sure. You did CAD 531,000 in the June Q2 for subscriptions. Just two quarters ago, you were at about CAD 1 million, and it's come down each of the last two quarters.

Speaker #5: 531,000

Speaker #7: ...dollars in the June quarter for subscriptions. And just two quarters ago, you were at about $1 million, and it has come down each of the last two quarters.

Speaker #4: Anthony, again, I'm looking at a very different number. I see our numbers: 479 and MDNA. So,

James Lee: Anthony, again, I'm looking at a very different number. I see our number as 479 in DS&A.

Anthony Lam: Yeah. Brian, if I could just point out.

Speaker #5: Brian, if I could just point out. In our prior period, in our prior period numbers, if you're looking at the prior period numbers up until the beginning of the first quarter last year, we had a business called Mutual that was we have divested.

James Lee: You're looking year over year.

Anthony Lam: If you're looking at prior period numbers, up until the beginning of Q1 last year, we had a business called Mutuo that we have divested. Those numbers stay in our comparatives because it was sold. They were 100% subscription, and that's probably what's throwing off some of your numbers there. I would say otherwise, our subscription numbers have been pretty steady for every other part of our business. I think that might be the skew for you in terms of what you're seeing in terms of the subscription piece.

Speaker #5: Those numbers stay in our comparatives because we were sold. But they were 100% subscription and that's probably what's throwing off some of your numbers there.

Speaker #5: I would say otherwise, our subscription numbers have been pretty steady for every other part of our business. And so I think that might be the SKU for you, in terms of what you're seeing in terms of the subscription piece.

Speaker #7: Okay. Let me ask differently. Last quarter, when that business was not in the numbers, you did about 828,000 dollars. So we're down 36% sequentially.

Brian Kinstlinger: Okay. Let me ask differently. Last quarter, when that business was not in the numbers, you did about CAD 828,000. We're down 36% sequentially. It speaks to the same trend. Again, I'm curious, what's your biggest impediment growth? What's leading to the churn? What gives you confidence that imminently we'll be growing this?

Speaker #7: So it speaks to the same trend. Again, I'm curious: What's the biggest impediment to growth? What's leading to the churn? And what gives you confidence that imminently we'll be growing this?

Anthony Lam: Brian, look, I'm happy to take this up with you. We didn't have any churn in the quarter. The changes that we've had in any of our business is really around our episodic revenue or maybe a little bit on our professional services. Our subscription business remains pretty robust.

Speaker #5: So Brian, I don't look, I'm happy to take this up with you. We didn't have any churn in the quarter. So the changes that we've had in our in any of our business is really the around our episodic revenue or maybe a little bit on our professional services.

Speaker #5: But our subscription business remains pretty robust.

James Lee: We can take that piece back up online. In terms of what's giving us confidence in the H2 is revenue recognition is effectively the key issue there. When you're delivering on enterprise licenses, the revenue recognition is very different from the sales that we've made. We've announced sales in the Middle East, in Canada, and the US, and we're in the process of delivering those. We'll be able to recognize revenue against those as those delivery milestones are made in Q3 and Q4. Does that-

Speaker #4: We can tie that piece back up online. But in terms of what's giving us confidence and second half, is revenue recognition is effectively the key issue there.

Speaker #4: And so when you're delivering on enterprise licenses, the revenue recognition is very different from the sales that we've made. So we've announced sales in the Middle East, in Canada and the US.

Speaker #4: And we're in the process of delivering those. So we'll be able to recognize revenue against those as those delivery milestones are made in the third and fourth quarter.

Speaker #4: Does that.

Brian Kinstlinger: Sure. Hopefully we can take it offline. That's good. The numbers are down. In a previous question Anthony responded to, he said, "You'll probably be at the low end of the 30% to 50% growth for the AI segment." First of all, what number does that suggest for 2025 AI data science? Because what was reported was CAD 10 million. I'm sure that doesn't include the divested piece. I'm just kind of curious what that suggests for the H2 of the year.

Speaker #7: Sure. I mean, hopefully, we can take it offline. That's good. But the numbers are down. But in a previous question, Anthony responded to, he said you'll probably be at the low end of the 30 to 50 percent growth for the AI segment.

Speaker #7: First of all, what number does that suggest for 2025 AI data science? Because what was reported was $10 million. And I'm sure that doesn't include the divested piece.

Speaker #7: So I'm just kind of curious what that suggests for the second half of the year.

Speaker #5: Yes, Brian. We did start with so the comparable for 2025 is that 10 million dollar mark. And as I mentioned, we're going to be on the lower end of the growth scale on that in terms of year-over-year growth for '26.

Anthony Lam: Yes, Brian, we did start. The comparable for 2025 is that CAD 10 million mark. As I mentioned, we're going to be on the lower end of the growth scale on that in terms of year-over-year growth for 2026. That would suggest that we're closer to that CAD 13 million for the full year.

Speaker #5: And so that would suggest that we're in that closer to that 13 million for the full year.

Speaker #7: So that would suggest almost 9 million dollars the second half revenue for AI and data science? From 4 million and change in the first half of the year?

Brian Kinstlinger: That would suggest almost CAD 9 million in H2 revenue for AI and data science from CAD 4 million and change in the H1 of the year?

Anthony Lam: Sorry-

Speaker #7: The sales cycles. I mean, I guess maybe you can talk about some bookings that get you there already.

Brian Kinstlinger: The sales cycles. I guess maybe you can talk about some bookings that get you there already.

Speaker #5: So Brian, in our first half, so

Anthony Lam: Brian, in our H1,

Brian Kinstlinger: You did CAD 4.6 million.

Speaker #7: 4.6 million dollars.

Speaker #5: That's correct. So we anticipate a that we have a healthy pipeline that has us on track to hit that of the 30% growth rate year over year.

Anthony Lam: That's correct.

Brian Kinstlinger: Right.

Anthony Lam: We anticipate that we have a healthy pipeline that has us on track to hit the 30% growth rate year over year.

Speaker #7: Right. So just to be clear, that's about 8 and a half million dollars, 9 million dollars almost, just doing simple math of 30% on 10 million dollars, right?

Brian Kinstlinger: Right. Just to be clear, that's about CAD 8.5 million, CAD 9 million almost. Just doing simple math of 30% on CAD 10 million, right?

James Lee: Your math is right.

Speaker #4: Your math is right.

Brian Kinstlinger: That's correct.

Speaker #5: That's correct.

Speaker #4: Revenue recognition is a key component of that. So, obviously, there's a bunch of work that's been done in the first half; we haven't been able to recognize revenue until the projects commit to milestones.

James Lee: Revenue recognition is a key component of that. Obviously there's a bunch of work that's been done in the H1. We haven't been able to recognize revenue until the projects meet the milestones in Q3 and Q4, you shouldn't think about it in a straight line. Where we land as a percentage will really determine our revenue recognition. The sales pipeline for our healthcare, health suite software, AI business is on track. The revenue recognition in H1 was behind because of its enterprise nature. We've got plenty of activity in the life sciences business, which again, we hope to recognize in H2.

Speaker #4: In Q3 and Q4. So you shouldn't think that in a straight line. And where we land as a percentage will really determine our revenue recognition.

Speaker #4: So the sales pipeline for our healthcare health software AI business is on track. The revenue recognition in first half was behind because of its enterprise nature.

Speaker #4: And then we've got plenty of activity in the life sciences business, which again, we hope to recognize in second half.

Speaker #7: Okay. Thanks.

Brian Kinstlinger: Okay, thanks.

Speaker #2: Your next question comes from Ferris Yev from TD Cowen. Please go ahead.

Operator: Your next question comes from Firuz Yakhyayev from TD Cowen. Please go ahead.

Firuz Yakhyayev: Good morning. Thank you for taking our questions. My first question is on the multi-province pilot that you've recently completed for SMART Summary and SMART Search. We know you have the presentation coming up in November, but in addition to that, do you see any sales traction with the listed provinces as a result of these trials?

Speaker #7: Good morning. Thank you for taking our questions. My first question is on the multi-province pilot that you've recently completed for Smart Summer and Smart Search.

Speaker #7: Now, we know you have the presentation coming up in November, but in addition to that, do you see any sales traction with the listed provinces as a result of this trial?

James Lee: Excellent question. The reality is those pilots now lead to what we would call the stage 2. We've now done a pilot in those regions, and now we're now looking to deploy it further to go back and get further funding on all three regions. We expect to go live this quarter in another region. To be honest, I think we're going to see quite good activity from that product, late 2026 and into 2027.

Speaker #4: Excellent question. So the reality of those pilots now leads to what we would call the second stage. So we've now done a pilot in those regions.

Speaker #4: And now we're now looking to deploy it further to go back and get further funding on those on all three regions. We expect to go live this quarter in another region.

Speaker #4: And to be honest, I think we're going to see quite good activity from that product late '26 into 2027.

Speaker #7: Thank you. That was a great caller. And follow-up to the previous balance sheet question. So SpaceX lookups are starting to expire. Do you have an expected timeline for monetizing your investment and how soon after are you planning to deploy it on dead extinguishments?

Firuz Yakhyayev: Thank you. That was a great color. A follow-up to the previous balance sheet question. As SpaceX lock-ups are starting to expire, do you have an expected timeline for monetizing your investment? How soon after are you planning to deploy it on debt extinguishments?

James Lee: We'll get notification shortly on our lock-up expiry, because we obviously hold our stock indirectly in a fund. We should be able to update you in the next month or so on that. Our anticipation is that we are not a VC investor, and we will be looking to liquidate as practical and sensibly as we can.

Speaker #4: We'll get notifications shortly on our lockup expiry, because we obviously hold our stock indirectly in a fund. So we should be able to update you in the next month or so on that.

Speaker #4: Our anticipation is that we are not a VC investor, and we will be looking to liquidate as practical and sensibly as we can.

Speaker #7: Great. And on debt extinguishments, were you also planning to improve your balance sheet?

Firuz Yakhyayev: Great. On debt extinguishments, if you were planning to improve your balance sheets as well.

James Lee: If you look at our debt, our debt is a working capital facility sitting within Orion Health. If you think about that can, as an accordion, can go up and down. It may be used to pay down debt, but it'll be a working capital debt facility, not we won't be paying the debt, the facility off.

Speaker #4: If you look at our debt, our debt is a working capital facility sitting with an Orion Healthcare. So if you think about the that can is an accordion can go up and down.

Speaker #4: So it may be used to pay down debt, but it will be a working capital debt facility. Not we won't be paying the debt the facility off.

Speaker #7: Perfect. Thank you very much for the insights.

Firuz Yakhyayev: Perfect. Thank you very much for the insights.

Speaker #2: Your next question comes from Daniel Rosenberg. From Paradigm Capital. Please go ahead.

Operator: Your next question comes from Daniel Rosenberg from Paradigm Capital. Please go ahead.

Speaker #6: Hi, James. Anthony Alex. Thanks for taking my questions. First one comes just on the enterprise licenses and potentials for six-figure type revenues. I was just wondering if you could speak to kind of how it ramps.

Daniel Rosenberg: Hi, James, Anthony, Alex. Thanks for taking my questions. First one comes just on the enterprise licenses and potentials for six-figure type revenues. I was just wondering if you could speak to kind of how it ramps. I know you touched on a bit of the accounting and timing treatment, really to understand perhaps an example of you engage with a client, what that looks like to stand up the solution and how it flows through to revenue. Thanks.

Speaker #6: I know you touched on a bit of the accounting and timing treatment, but really to understand perhaps an example of you engage with a client, what that looks like to stand up the solution and how it flows through to revenue.

Speaker #6: Thanks.

Speaker #7: Yep. Excellent question. Maybe we'll take longer than we got here. But what I would say is every region's different. So the first thing when we ramp up into a customer is there'll be a implementation fee.

James Lee: Yep. Excellent question. Maybe it'll take longer than we'll go through here. What I would say is every region's different. The first thing when we ramp up into a customer is there'll be an implementation fee. That implementation fee requires us to set the environment, whether that's going to be Azure, Google or AWS. What I would say is every region has a different component there. What we're finding is that from signing to launch and bound to book implementation fees is probably taking longer than we expected. While we may have got some started in February to March, we may not be able to recognize revenue until Q3. Based on the setup function, each region's new, once we get through doing it once in each region, it'll be much faster.

Speaker #7: That implementation fee requires us to set the environment, whether that's going to be Azure, Google, or AWS. And what I would say is every region has a different component there.

Speaker #7: What we're finding is that from signing to launch, and then down to book implementation fees, it's probably taken longer than we expected. So, while we may have gotten started in February or March, we may not be able to recognize revenue until Q3.

Speaker #7: Based on the setup function in each region's new. So once we get through doing a once in each region, there'll be much faster. And then the reality is within three to four months of implementation, we're moving into SAS S fees.

James Lee: The reality is within three to four months of implementation, we're moving into SaaS fees. Those SaaS fees will be somewhere between three to four times the implementation fee. It's a different to healthcare systems where this implementation fee, because it's so much more complex, might be one to one. What we find is implementation fees here are smaller and SaaS fees materially larger.

Speaker #7: And so those SAS fees will be somewhere between three to four times the implementation fee. So it's a different to healthcare systems where this implementation fee because it's so much more complex might be one for one.

Speaker #7: What we find is implementation fees here are smaller in SAS fees materially larger.

Daniel Rosenberg: I appreciate that. That adds a lot of color and understanding. I guess in going to market and pursuing these opportunities, I was wondering if you could update us on kinda how you're working with partner channels, if you're going direct. Just what does the sales process look like? Understanding there's a lot of geographies and then customers here, but if you could give us some color there, that'd be helpful. Thank you.

Speaker #6: I appreciate that. That adds a lot of color and understanding. I guess in going to market and pursuing these opportunities, I was wondering if you could update us on kind of how you're working with partner channels, if you're going direct, just what is the sales process look like understanding there's a lot of geographies and then customers here, but if you could give us some color there, it'd be helpful.

Speaker #6: Thank you.

James Lee: Yeah. That might be the most complex question. There are four different channels and 11 different geographies. Broadly, you should think that we partner in life sciences with one of the major five for a data unlock. We would work alongside a life sciences customer and an HIE as a partner network for distribution. You can name a top 10 pharma, take a geography, and then we partner with one life sciences per region and obviously with one healthcare system. Within the SMARTSuite product that we're currently focused on our own direct channel, using our own capacity. Open to going further, but we don't have capacity within our deployment to go much more than what we can do already ourselves.

Speaker #7: Most complex question. So there are four different channels and 11 different geographies. But broadly, you should think that we partner in life sciences with one of the major five for a data unlock.

Speaker #7: So we would work alongside a life sciences customer and an HIE as a partner network for distribution. You can name a top 10 pharma, pick a geography, and then we would be trying to partner with one life sciences company per region and obviously with one healthcare system.

Speaker #7: Within the smart suite product, that we're currently focused on our own direct channel. So using our own capacity open to going further, but we don't have capacity within our deployment to go much more than what we can do already ourselves.

James Lee: In Canada, we obviously partner really well with Well Health as a one Well Health team to take all of the products and Well Health's offerings in a complete united front for our customer base. We work very closely with the Well Health and WELLSTAR within Canada itself. We work with SI partners for large projects. You could name a few like Deloitte, EY, Accenture, for large scale deployments. We haven't really talked about that today because we've been focusing a lot on the AI business, which I understand, as we think about the overall mix, they've been a few million CAD slower, as Anthony talked about. Obviously we're seeing on the flip side, the software division being stronger than that, than we expected the year. We're seeing a lot of opportunity in the Middle East within HIEs, obviously within UK coming back to market.

Speaker #7: In Canada, we obviously partner really well with Well as a one Well team. To take all of the products and Well's offerings in a complete united front for our customer base.

Speaker #7: So we work very, very closely with the Well and Well Start within Canada itself. And then we work with SI partners for large projects you could name a few like Deloitte, EY, Essentia, for large-scale deployments.

Speaker #7: And we haven't really talked about that today because we've been focusing a lot on the AI business, which I understand. As we think about the overall mix, it had been a few million dollars slower, as Anthony talked about.

Speaker #7: But obviously we're seeing on the flip side, the software division being stronger than that. Than we expected the year. We're seeing a lot of opportunity in the Middle East with an HIEs.

Speaker #7: Obviously within the UK coming back to market, US is very busy in the HIE space. So what I would say is that the partner network in those markets is far more important.

James Lee: US is very busy in the HIE space. What I would say is that the partner network in those markets is far more important. They're much bigger dollar value sales, we're no longer talking one or two a year RFPs coming up. We're probably talking one or two per region every six months are coming up now. It's a very active market. These processes are long dated, so don't expect 15 to land by the end of the year. What I would say is that there's a very deep pipe now of HIE business, and the HIE business is great because the first sale is obviously software sale, and the second sale is therefore the AI sale. The AI conversations with our existing customers are going very well. Does that cover your question?

Speaker #7: They're much bigger dollar value sales. And we're no longer talking one or two a year. RFPs coming up. We're probably talking one or two per region every six months are coming up now.

Speaker #7: So it's a very active market. These processes are long dated. So don't expect 15 to land by the end of the year. But what I would say is that there's a very deep pipe now of HIE business.

Speaker #7: And the HIE business is great because the first sale is obviously a software sale. And the second sale is therefore the AI sale. And the AI conversations with our existing customers are going very well.

Speaker #7: Does that cover your question?

Speaker #6: Yeah. That's fantastic color. Lastly for me, you mentioned a number of kind of engines that are driving demand. Clinical data unlocks, smart search, partner ID, consent.

Daniel Rosenberg: Yeah. That's fantastic color. Lastly for me, you mentioned a number of kinda engines that are driving demand, clinical data unlock, SMART Search, partner ID, consent. I was curious how you would kind of rank or I guess, rank with your customers, what gets people most excited? Or is it always this bundled solution that you're talking about in conversations with end customers? I'll pass the line. Thank you.

Speaker #6: I was curious how you would kind of rank or I guess rank with your customers. What gets people most excited? Or is it always kind of this bundled solution that you're talking about in conversations with end customers?

Speaker #6: And then I'll pass the line. Thank you.

Speaker #7: Yeah. So if you think about a customer segment, it's been broken into healthcare systems and life sciences. So life sciences, it's the data unlock.

James Lee: Yeah. If you think about our customer segments being broken into healthcare systems and life sciences. Life sciences, it's the data unlock. It's the ability to partner with a region, to effectively help that region utilize their data. You've seen obviously very, very large contracts around the world with people like Tempus and AstraZeneca and different regions doing those data unlocks. That would be what gets our life sciences customers most excited. Within our Canadian life sciences business, though, WELL Trust. The ability to find patients to get on to clinical trials at the speed at which we can do that, from consent to data, that is a unique database. That has a lot of interest in it currently. The SMARTSuite, SMART Summary, that has the most impact with big healthcare systems with our providers.

Speaker #7: It's the ability to partner with a region to then effectively help that region utilize their data. And you've seen obviously very, very large contracts around the world with people like Tempus and AstraZeneca and different regions doing those data unlocks.

Speaker #7: So that would be what gets our life sciences customers most excited. Within our Canadian life sciences business though, Well Trust, the ability to get to find patients to get onto clinical trials at the speed at which we can do that from consent to data.

Speaker #7: That is a unique database, and so that has a lot of interest in it currently. The Smart Suite, Smart Summary, that has the most impact with big healthcare systems and with our providers.

Speaker #7: Because obviously the key thing they're looking for is efficiency. Within their networks. So yeah, what I would say is that everyone's got different components.

James Lee: Because obviously the key thing they're looking for is efficiency with their networks. Yeah, what I would say is that everyone's got different components. Interestingly, though, while we're all talking about the interesting AI exciting stuff, interoperability, that is such a phenomenal problem in the US. Just the single most basic thing of sharing data along with general record. One of the quotes we had from a customer was even in a closed loop customer base where the customer is theirs, they still only get between 20% or 30% of a patient's data from their own network. HIEs are of high value to actually enable AI in the US. I wouldn't underestimate the value that we're finding just from that, as they would describe it, diamond in the rough. What is a infrastructure type asset is a core component to enable any sort of real AI.

Speaker #7: Interestingly though, while we're all talking about the interesting AI exciting stuff, interoperability and that is such a phenomenal problem in the US. Just like the single most basic thing of sharing data, creating a longitudinal record.

Speaker #7: One of the quotes we had from a customer was even in a closed-loop customer base where they own the customer is theirs. They still only get between 20 or 30% of a patient's data from their own network.

Speaker #7: So, HIEs are of high value to actually enable AI in the U.S., so I wouldn't underestimate the value that we're finding just from that, as they would describe it, diamond in the rough.

Speaker #7: What is infrastructure type asset is a core component to enable any sort of real AI.

Daniel Rosenberg: I might just squeeze one more in, given the answer. It sounds like a ton of opportunity across the board. I'm just curious if you had the resources, or additional resources, whether it be capital or people or just reach in general, where would you put that towards? What would you do if you had the control to implement whatever you wanted in terms of pursuing these opportunities?

Speaker #6: I might just squeeze one more in, given the answer. It sounds like there's a ton of opportunity across the board. I'm just curious, if you had the resources or additional resources—whether it be capital, people, or just reach in general—where would you put that towards?

Speaker #6: What would you do if you had control to implement whatever you wanted in terms of pursuing these opportunities?

Speaker #7: Yeah, it's a great question, right? You sit there in a war room sometimes—how do we scale up when we need to scale up?

James Lee: Yeah. It's a great question, right? You sit there in a war room sometimes. How do we scale up when we need to scale up? As we sit there today, we're very mindful of both margin and growth and getting the right balance because it is very easy to chase 100 different deals and not deliver on any. What I would say is that the data unlock activation is probably where we'd probably put time and energy right now. Why that is though, to be really clear, is because that'll take longer than the other stuff, but it's really, really scalable. With the HIE businesses, that's RFP, they'll land, we'll deploy them, we'll scale up the team to deploy more of those. We can embed AI solutions like SMARTSuite.

Speaker #7: As we sit there today, we are very mindful of both margin and growth and getting the right balance because there's very easy to chase 100 different deals and not deliver on any.

Speaker #7: But what I would say is that the data unlock activation is probably where we'd probably put time, energy right now. And why that is though, to be really clear, is because that'll take longer than the other stuff.

Speaker #7: But it's really, really scalable. With the HIE businesses, that's RFP—then we land them, we'll deploy, and we'll scale up the team to deploy more of those.

Speaker #7: Then we can embed AI solutions like smart suite. But the data unlock, that is not a linear sale. Effectively unlocking some regions, we multi, multi, multi-million dollar contracts.

James Lee: The data unlock, that is not a linear sale, but effectively unlocking some regions will be multi, multi-million dollar contracts. What we'd like to do and what we'll do in time is once we show we can do it, is we'll try all of our regions together rather than tick them off one by one.

Speaker #7: So what we'd like to do and what we'll do in time is once we show we can do it, we'll try all of our regions.

Speaker #7: Together rather than pick them off one by one.

Speaker #6: Great to hear. I'll pass the line. Thanks.

Daniel Rosenberg: Great to hear. I'll pass the line. Thanks.

Speaker #1: The next question comes from Justin Kewood from Stifel. Please go ahead.

Operator: Your next question comes from Justin Keywood from Stifel. Please go ahead.

Speaker #5: All right. Good morning. Thanks for taking my call. Maybe just a follow-up on the capital allocation. Is a share buyback or NCIB part of the strategy?

Justin Keywood: All right. Good morning. Thanks for taking my call. Maybe just a follow-up on the capital allocation. Is a share buyback or NCIB part of the strategy?

Speaker #7: Quick question. I saw that Vital did one today. Look, realistically, we haven't discussed that at the board now. I think we'd always be looking at use of capital and the environment.

James Lee: Good. I saw that, Vital did one today. Look, realistically, we haven't discussed that at the board now. I think we'd always be looking at use of capital in the environment. What I would say is that the liquidity in our stock's not great, so announcing a share buyback, probably the stock price would move and wouldn't even get any back. It's a good thought process and probably something we'll discuss late H2, early H1 next year.

Speaker #7: What I would say is that the liquidity in our stock's not great. So announcing a share buyback probably the stock price would move and wouldn't even get any back.

Speaker #7: But it's a good thought process and probably something we'll discuss late second half, early first half next year.

Speaker #5: Okay. Thank you. And then I'm not sure if I missed it. The timing of the SpaceX disposition, when is that anticipated?

Justin Keywood: Okay. Thank you. I'm not sure if I missed it, the timing of the SpaceX disposition. When is that anticipated?

Speaker #7: We'll get notified by our fund in the next month. As to the timing of our component tree, but effectively the lockup was a year from investment.

James Lee: We'll get notified by our fund in the next month, as to the timing of our componentry. Effectively, the lockup was a year from investment. There should be three tranches between now and February next year.

Speaker #7: So this should be three chances between now and February next year.

Justin Keywood: Just the mechanics of it. It would be a share transfer, and then the shares are freely trading to dispose?

Speaker #5: And then just the mechanics of it, it would be a share transfer and then the shares are freely trading to dispose.

Justin Keywood: Just the mechanics of it. It would be a share transfer, and then the shares are freely trading to dispose?

Speaker #7: That is the current expectation. But I'm saying, for the current expectation, we'll be notified shortly. But theoretically, the stock would be transferred into our brokerage account, and then we would manage the sale ourselves.

James Lee: That is the current expectation. I'm saying the current expectation. We'll be notified shortly, but theoretically, the stock would be transferred into our brokerage account, and then we would manage the sale ourselves.

Speaker #5: Thank you very much.

Justin Keywood: Thank you very much.

Speaker #1: Again, if you would like to ask a question, please press star one on your telephone keypad. Your next question comes from Christopher Pooh from Canaccord.

Operator: Again, if you would like to ask a question, please press star one on your telephone keypad. Your next question comes from Christopher Pu from Canaccord. Please go ahead.

Speaker #1: Please go ahead.

Speaker #8: Hey guys. Yeah. Thanks for taking my question. I'm on the line here for Tanya. I just have a question regarding that Orion Health, kind of a high-level question.

Christopher Pu: Hey, guys. Yeah, thanks for taking my question. I'm on the line here for Tanya. I just have a question regarding the Orion Health, kind of a high-level question. I'm wondering if you can let us know how much integration work is left, and if you can quantify perhaps how much of this remaining integration work is more of a top-line thing versus a cost reduction item.

Speaker #8: I'm wondering if you can let us know how much integration work is left and if you can quantify perhaps how much of this remaining integration work is more of a top-line thing versus like a cost reduction.

Speaker #7: We're talking specifically about Orion Healthcare, yes?

James Lee: We're talking specifically now Orion Health, yes?

Speaker #8: Yeah. For Orion Healthcare.

Christopher Pu: Yeah. For Orion Health.

James Lee: Yeah. No, that's fine. Sorry, just wanted to make sure I got my heads around the question. Realistically, revenue synergies, we are connecting as much as we can today. I don't think there's much more in terms of revenue synergies that we would get by integrating further. What we might find, though, is we get more efficient on those revenue synergies. They go faster by pulling teams close together. The reality is, I would say we've achieved 90% of what we'll achieve in terms of putting the revenue synergy point of view. From a cost synergy point of view, though, there's still plenty of room across the organization over the next year and a bit, both from gross margins and both from net margins. I think realistically, we're only probably a third of the way through that component.

Speaker #7: Yeah. No, that's fine. I'm sorry. Let me make sure I have my hands around the question. So, realistically, revenue synergies—we are connecting as much as we can today.

Speaker #7: I don't think there's much more in terms of revenue synergies that we would get by integrating further what we might find though as we get more efficient on those revenue synergies.

Speaker #7: They go faster by the teams being closer together, but the reality is I would say we've achieved 90% of what we'll achieve in terms of putting the group from a revenue synergy point of view.

Speaker #7: From a cost synergy point of view, though, there's still plenty of room across the organization over the next year and a bit, both from gross margins and from net margins.

Speaker #7: I think realistically, we're only probably a third of the way through that component. What we're talking about in terms of R&D, retiring tech debt, and corporate functions.

James Lee: What we're talking about in terms of R&D, retiring tech debt, corporate functions. We've still got a lot of room to go there, as some of the stuff just takes time. I think we've talked previously about removing some of our tech debt to broaden out gross margins. Both within IntraHealth and Orion Health, those processes take largely a year and a half to complete, but they're meaningful increases to our gross margin profile.

Speaker #7: We've still got a lot of room to go there, as some of this stuff just takes time. I think we've talked previously about removing some of our tech debt to broaden out gross margins.

Speaker #7: For both within Intra-Health and Orion, those processes take largely a year and a half to complete. But they're meaningful increases to a gross margin profile.

Speaker #8: Well, that's great to see some numbers around that. My last question is regarding the customer acquisition cost, because you have a lot of new jurisdictions that are outside of Canada.

Christopher Pu: Well, that's great to see some numbers around that. My last question is regarding the customer acquisition cost, because you have a lot of new jurisdictions that are outside of Canada. I'm wondering how does the CAC compare with your expectations so far?

Speaker #8: I'm wondering how does the CAC compare with your expectations so far?

Speaker #7: I can't actually answer that today because we haven't won a new customer that hasn't been an existing region. So all of our expansion has been in the regions we're currently already in.

James Lee: I can't actually answer that today because we haven't won a new customer that hasn't been in an existing region. All of our expansion has been in the regions we're currently already in. When we move into a new region, we'll be able to quantify that. Currently, we've only really expanded our existing footprint.

Speaker #7: But when we move into a new region, we'll be able to get quantify that. But currently, we've only really expanded our existing footprint.

Speaker #8: Okay. Very great. Thanks for taking my question.

Christopher Pu: Okay. Well, great. Thanks for taking my question.

Speaker #1: There are no further questions. I'll turn the call back over to speakers.

Operator: If there are no further questions, I'll turn the call back over to speakers.

James Lee: Well, thanks for joining us today. It's a really good session. Lots of really good questions. We're excited on the H2 of the year. There's plenty of work still to be done. We feel like we're on the other side of that trough through the transition, and there's still plenty of opportunity both to grow revenue and, as with the last question, margin. Enjoy anyone that's having summer holidays. Thank you for joining us today and good luck for the rest of the day.

Speaker #7: Look, thanks for joining us today. Look, it's a really good session. Lots of really good questions. We're excited on the second half of the year.

Speaker #7: There's plenty of work still to be done. We feel like we're on the other side of the trough through the transition. And so there's still plenty of opportunity both to grow revenue and as we had the last question, get margin.

Speaker #7: So enjoy anyone having a summer holidays. Thank you for joining us today and good luck for the rest of your day.

Operator: Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.

Q2 2026 Healwell Al Inc Earnings Call

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