Operator: Good afternoon, ladies and gentlemen, and welcome to the WELL Health Technologies Corp. Q3 2026 Conference Call and Webcast. This call is being recorded on Monday, 9th November 2026. I would now like to turn the conference over to Pardeep Sangha. Please go ahead.
Pardeep Sangha: Thank you, operator, and welcome everyone to WELL Health's Fiscal Q3 Financial Results Conference Call for the period ended 30th September 2026. I trust that everyone has received a copy of our financial results press release that was issued earlier today. Portions of today's call, other than historical performance, include statements of forward-looking information within the meaning of applicable securities laws, including future-oriented financial information and financial outlook information. These forward-looking statements involve known and unknown risks, uncertainties, assumptions, and other factors, many of which are outside of WELL's control, that may cause actual results, performance, or achievement of WELL to differ materially from the anticipated results, performance, or achievements implied by such forward-looking statements. These factors are further outlined in today's press release and in our management discussion and analysis.
Pardeep Sangha: We provide forward-looking statements solely for the purpose of providing information about management's current expectations and plans relating to the future. We do not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in our expectations or any change in events, conditions, assumptions, or circumstances on which any such statement is based, except if it is required by law. We may use terms such as adjusted gross profit, adjusted gross margin, adjusted EBITDA, adjusted EBITDA margin, adjusted EBITDA attributable to shareholder, adjusted net income, adjusted free cash flow, and adjusted free cash flow attributable to shareholder on this conference call, all of which are non-GAAP and non-IFRS measures. For more information on how we define these terms, please refer to the definitions set out in today's press release and in our management discussion and analysis.
Pardeep Sangha: The company believes that adjusted EBITDA is a meaningful financial metric as it measures cash generated from operations, which the company can use to fund working capital requirements, service future interest and principal debt payments, fund future growth initiatives. Adjusted EBITDA should not be construed as an alternative to net income or loss determined in accordance with IFRS. Joining me on the call today are Hamed Shahbazi, chairman and CEO, and Evelyn Sutherland, the company's CFO. With that, let me turn the call over to Mr. Hamed Shahbazi, chairman and CEO of WELL Health Technologies.
Hamed Shahbazi: Thank you, Pardeep, and good day, everyone. We appreciate everyone for joining us. Before we get into the quarter, I would like to take a moment to give a very warm welcome to Evelyn Sutherland, who joined WELL as our Chief Financial Officer on 21 September and is joining us today for her first earnings call. Evelyn brings more than 20 years of senior financial leadership experience across public and private companies. Most recently, she was the CFO of Staples Canada, with prior CFO roles at Enercare, KEYreit, and United Purchasing Group of Canada. Over her career, she has overseen financial reporting, financing, treasury, investor engagement, and capital allocation, and has completed more than 50 acquisitions and divestitures. Evelyn is also no stranger to WELL. She served on the WELLSTAR board for over the past year and helped guide WELLSTAR through its go-public process.
Hamed Shahbazi: She stepped into the role with direct knowledge of our strategy, governance, and culture. Welcome, Evelyn. Now, let us turn to the highlights of the quarter. Q3 was defined by continued execution on our key strategic priorities. We are pleased to have delivered 20% growth in normalized adjusted EBITDA on a year-over-year basis, and we continue to focus heavily on growing our Canadian platform, unlocking value from within the WELL group of companies, and strengthening our balance sheet. More specifically, there are a few highlights we would like to spotlight today. One, WELL Canadian Clinics achieved a CAD 100 million in annualized adjusted EBITDA run rate milestone. We set a target for our Canadian clinics business on its own to reach this run rate by the end of 2026, and we have achieved it one quarter ahead of schedule. Two, WELLSTAR completed its standalone listing on the TSX Venture Exchange.
Hamed Shahbazi: Upon listing, approximately CAD 155 million worth of WELLSTAR redeemable preferred shares converted into WELLSTAR common equity, removing the liability from WELL's consolidated balance sheet. We will say more on this later in the call. Three, we completed our inaugural CAD 150 million senior unsecured bond notes offering. The notes are due in 2031, extending our debt maturity profile, and the proceeds of the notes offering were used to repay our convertible debentures. Four, on 22 October, the Competition Bureau issued a no-action letter, concluding its review of our acquisition of a controlling interest in HEALWELL AI. We cooperated with the bureau throughout the process and appreciate its engagement. Turning to our outlook, we are updating our 2026 guidance. We now expect revenue of approximately CAD 1.58 billion, which was on the lower end of our guidance range.
Hamed Shahbazi: This primarily reflects the timing of M&A, as well as a deliberate moderation in acquisition activity during the H2 of the year as our teams focused on integrating the significant acquisitions completed earlier this year, including OID and UnionMD. Importantly, this does not change our profitability outlook. We remain confident in delivering adjusted EBITDA firmly within the range of CAD 185 million to CAD 195 million, which we increased last quarter. Now to the quarter itself. Before I walk through the numbers, a brief note on comparability. Q3 is our first quarter with no Circle Medical-related revenue deferral impacts, so our reported and normalized results for the current quarter are now the same. The difference in growth rates comes entirely from the prior year period, which included CAD 17.6 million of Circle Medical net deferral impact. With that context, our Q3 financial highlights are as follows.
Hamed Shahbazi: Revenue was CAD 407.4 million, up 12% year-over-year, and up 17% on a normalized basis. Adjusted EBITDA was CAD 50.9 million, down 15% year-over-year on a reported basis, but up 20% on a normalized basis, again, excluding those deferred revenues. Adjusted EBITDA attributable to WELL shareholders was CAD 34.8 million, down 19% on a reported basis, but up 13% on a normalized basis. Adjusted gross profit was CAD 177.8 million, up 7% year-over-year, or up 20% on a normalized basis. Adjusted gross margin was 43.7%, down 180 basis points on a reported basis, but up 100 basis points on a normalized basis. The reported decline reflects the prior year deferral recognition, which carried almost no associated cost, and therefore inflated last year's margin.
Hamed Shahbazi: On a normalized basis, margin expansion continues to be driven by the shift in revenue mix towards higher margin businesses, including WELLSTAR, diagnostics, and executive and longevity health. Adjusted net income was CAD 27.3 million, down 33% on a reported basis, or down 15% on a normalized basis. The normalized decline primarily reflects a one-time gain on disposal in the prior year period, along with legal and other costs. Evelyn will walk through the financials in more detail later in the call. One key takeaway. On a normalized basis, adjusted EBITDA grew faster than revenue, reflecting the continued shift in our revenue mix towards higher margin businesses. With the deferral impacts now fully behind us, our reported results will reflect the underlying performance of the business going forward. Now turning to our operational metrics.
Hamed Shahbazi: This slide excludes HEALWELL and WELLSTAR, since both are publicly listed companies and will speak to their own metrics. The operational metrics shown on this slide are related to our clinical businesses in Canada and the United States. The CAD 100 million in annualized adjusted EBITDA run rate achieved in Canadian clinics is a direct result of strength of these underlying operating metrics. In Canada, WELL's clinical network now includes more than 3,400 providers, including more than 1,500 physicians. Patient visits in Canada reached 1.3 million in the quarter, up 20% year-over-year, with 6% organic growth, which includes 1.9% same clinic and 4.1% growth due to absorptions. Annualized, this represents 5.1 million patient visits in Canada alone, not counting asynchronous digital interactions. As at the end of the quarter, we operated across 179 physical facilities in Canada.
Hamed Shahbazi: A single facility can house multiple clinics, each offering a distinct healthcare service. I will come back to this when I discuss our clinical count. In the US, our clinical network included more than 1,500 providers, including more than 500 physicians. US patient services were approximately 665,000, up 1% quarter-over-quarter, or 4% on an organic basis. CRH continues to serve 152 ambulatory surgery centers and GI clinics. Combined across the US and Canada, WELL has almost 5,000 providers delivering over 8 million annual patient visits, not including asynchronous interactions. As we have done now for a few quarters, we would like to continue to profile metrics that speak to WELL's positive impact on Canadian healthcare. There are four examples of this from the current quarter. First, patients continue to tell us they value our tech-enabled approach to care.
Hamed Shahbazi: In Q1, sorry, Q3, WELL clinics achieved a Net Promoter Score of 84, compared to an industry average of 34. Second, WELLSTAR processed more than 520,000 eConsult referrals in the quarter, each one connecting a patient to specialist care more quickly and with less administrative burden for providers. Third, HEALWELL screened more than 62,000 patient records for disease detection at WELL clinics in Q3, helping our clinicians identify patients who may benefit from earlier intervention. Fourth, in partnership with HEALWELL, we surpassed the 100,000 WELLTRUST consent milestone in Q3. As at 31 October, we have now collected more than 120,000 WELLTRUST consents. Note that WELLTRUST gives patients a consent-first way to participate in research and data-driven care. WELL's vision is to be the operating system underpinning outpatient healthcare at scale for a more modern Canadian healthcare system.
Hamed Shahbazi: Last quarter, I introduced OneWELL, which is the integrated offering across the WELL group of companies. The OneWELL network in Canada consists of over 300 clinics and more than 1,500 physicians, delivering 5.6 million annualized visits, including the country's largest diagnostic group at over 85 locations. We are the only integrated platform in the country that combines care delivery at scale, the technology to run and continuously improve that delivery, and an intelligence layer that turns the resulting data back into better care and better tools for providers. Put simply, clinics that deliver care, technology that runs it, and AI that makes it smarter. It is WELLSTAR's technology running intake, scheduling, clinical decision support with human always in the loop, billing, and security for those providers, and it is HEALWELL's clinical AI identifying patients and supporting health systems with data interoperability solutions.
Hamed Shahbazi: This integrated stack allows provincial health systems to work with one partner across the entire continuum of care, not a patchwork of point solutions. We are the only ones in the country that we know of who can provide this impressive ensemble of capabilities in one group. Turning now to our public sector opportunity. Across the country, provincial governments are focused on a common set of priorities, which are to improve access to timely care, attach more than 6.5 million Canadians without a family doctor to primary care, reduce wait times for specialist referral and consultation, and lower system costs through digital tools. These priorities map directly to the structural pressures we outlined last quarter, and we believe OneWELL is built for this moment. Our approach is gaining traction.
Hamed Shahbazi: We are now actively engaged at the federal and with a number of provincial health authorities pursuing opportunities that represent well over CAD 100 million in contract value. To be clear, these are pipeline opportunities under active pursuit, not contracted revenue. Public sector procurement timelines and outcomes are inherently uncertain, and we will update investors as these opportunities progress. We believe OneWELL is well-positioned for three reasons. First, we combine care and technology. Through our clinical network, which includes the largest physician network in the country, our solutions are proven in our own clinics before they are deployed across other health systems. Second, we are Canadian and sovereign. Patient data stays in Canada, which is an increasingly important consideration for provincial health authorities and governments. Third, our platform is interoperable and modular.
Hamed Shahbazi: It scales from a single clinic to an entire province in alignment with Bill S-5, the Connected Care for Canadians Act, and with the Pan-Canadian Interoperability Roadmap. Together, these strengths position WELL as a long-term partner to provincial health systems. Turning now to our capital structure. In July, WELL completed its inaugural senior unsecured notes offering CAD 150 million of 6.875% notes maturing in 2031, ranking equally with our other senior unsecured debt. The rationale was simple: optimize our capital structure ahead of a known maturity. We had CAD 70 million of convertible debentures coming due at the end of the year, and we now have repaid them with the proceeds from the bond offering. The balance will be used for general corporate purposes. The result is a simpler balance sheet, a maturity profile extended to 2031, and greater flexibility to keep supporting our growth in Canada.
Hamed Shahbazi: I want to highlight what this offering represents. Relatively few Canadian growth companies can access the senior unsecured bond market, and the fact that the offering was oversubscribed reflects their confidence in the quality and durability of our cash flows. It gives WELL a new source of capital we can return to as we grow. The WELLSTAR listing is the second major step we took this year to strengthen WELL's capital structure. As I mentioned earlier, WELLSTAR began trading on the TSX Venture Exchange on 1 October under the symbol WSTR. The most immediate impact is the delevering of our balance sheet. Approximately CAD 155 million of WELLSTAR redeemable preferred shares converted into WELLSTAR subordinate voting shares on listing, removing that liability from WELL's consolidated balance sheet. Taken together with the bond offering, these two transactions have meaningfully simplified our capital structure and improved our financial flexibility.
Hamed Shahbazi: The listing also unlocks value by establishing a public market value for WELLSTAR based on its recent share price. WELLSTAR has a market capitalization of approximately CAD 469 million, and WELL remains its majority long-term controlling shareholder. WELLSTAR itself is well-capitalized with CAD 93 million of cash and no debt as of 30 September. WELLSTAR also continues to experience impressive growth. Revenue was up 33% year-over-year in Q3, and annual recurring revenue reached CAD 83.7 million, up 27% year-over-year. Now let's turn our attention to WELL Canadian Clinics, which includes both multidisciplinary medical clinics, including primary and specialty care clinics, as well as diagnostic imaging clinics. As I mentioned at the top of the call, this business has reached a CAD 100 million milestone in annualized adjusted EBITDA run rate one quarter ahead of our year-end target. This business has been a consistent compounder.
Hamed Shahbazi: Since 2021, Canadian Clinics revenue has grown at a 47% compound annual growth rate and adjusted EBITDA at a 44% CAGR through a combination of accretive acquisitions, organic growth, and the continued execution of our clinic transformation program. Before I speak to our clinic count, I want to flag a change in how we report it. Beginning this quarter, we have updated our definition of a clinic and restated historical clinic counts on the same basis, so the figures you see on this slide are comparable across periods. Under the updated definition, a clinic is a distinct healthcare service defined by its brand, business, or P&L, care team, or EMR. So one single physical facility may house multiple clinics. For example, one location may operate a primary care clinic alongside a diagnostic or specialty clinic, and each is counted separately.
Hamed Shahbazi: On this basis, as of 30 September, WELL operated 302 clinics across 179 physical facilities, compared to 128 clinics at the start of 2022. WELL affiliate clinics are not included in this count. Now, let's look at the record Q3 performance of our Canadian clinics, which is really the engine behind everything I've described so far. Canadian clinic revenue increased 49% to CAD 164.9 million in the quarter, and importantly, organic growth from same-clinic sales growth was 12%. We are seeing sustained higher levels of organic growth in this business, driven by provider productivity, the mix shift towards diagnostic and procedural care, and the clinic transformation program. Adjusted EBITDA grew even faster, up 82% to CAD 25.7 million, which is roughly CAD 100 million on an annualized basis and is the milestone I referenced earlier. Adjusted EBITDA margin was 15.6%, up approximately 280 basis points from a year ago.
Hamed Shahbazi: That expansion reflects the mix shift towards higher-margin services and the operating leverage we get from running a scaled network. I want to pause on this because it is the clearest evidence of our capital allocation strategy working. Canadian clinics is where we have been directing our capital, and it is delivering revenue growth, organic growth, and margin expansion all at the same time. This is why it remains our primary destination for incremental capital. Turning to productivity across our Canadian clinics network, this slide compares the third quarter of each of the past three years. As a reminder, a patient visit is a completed encounter with a billable provider, in-person or virtual, and excludes eConsult or asynchronous interactions. Patient visits in our Canadian clinic network totaled 1.29 million in Q3, up 20% from 1.08 million, and up from 780,000 two years ago.
Hamed Shahbazi: Billable providers reached 2,400, up 17% from a year ago, and up from 1,769 in Q3 2024. Patient visits per billable provider rose to approximately 534, up 3% from approximately 520 a year ago, and 18% from approximately 441 two years ago. Over the past two years, visits have consistently grown faster than our provider count, which means that each WELL provider is seeing more patients. AI scribing, digital intake, and our broader clinical transformation program remain the key drivers, giving our providers more time with patients and less time on administration. Growth in visits per provider moderated to 3% this quarter, which is largely a function of mix. The acquisitions we completed in H1 added a large number of billable providers to the base mid-year, and the visit profile of a newly acquired diagnostic or specialty provider differs from that of an established primary care provider.
Hamed Shahbazi: Within our more mature clinics, productivity continued to improve. Now, turning to Canadian clinic M&A. This quarter, we are presenting activity on a year-to-date basis because after a very busy H1, Q3 was a deliberately quieter quarter, as we focused our teams on integrating the businesses we had already acquired, most notably OID and UnionMD, two of the larger and more strategic acquisitions in our history. Getting those integrations right is critical to delivering the returns we expect from them. Our year-to-date activity is well ahead of last year. Year-to-date in 2026, we have completed seven transactions, adding 27 clinics and approximately CAD 102 million in annual revenue and 203 providers. That compares to 12 transactions in the same period of 2025, which added 19 clinics and approximately CAD 67 million in annual revenue and 198 providers.
Hamed Shahbazi: In other words, we have added more than 50% more annual revenue this year through fewer, larger transactions with nearly the same number of providers. That reflects the more selective approach to capital allocation we discussed last quarter, with an emphasis on scale and higher-margin areas such as diagnostics and procedural health. Our pipeline of Canadian clinic opportunities currently stands at CAD 390 million in total revenue across more than 20 targets engaged, representing over 100 clinics. This includes deals under LOI and in the pre-LOI stage, but excludes the WELLSTAR and HEALWELL pipelines. With a strengthened balance sheet and the OID and Union integrations well underway, we are well-positioned to resume a more normalized pace of acquisitions, complemented by a steady diet of bolt-on acquisitions while remaining disciplined and focused on higher-margin opportunities.
Hamed Shahbazi: Next, an update on the strategic alternatives processes for our US care delivery assets, CRH Medical, Wisp, and Circle Medical. These processes are meaningfully further along than we last spoke. In September, we described a broad field of interested parties. We are now pleased to report that two of the three processes have progressed to a more advanced stage with focused counterparties, and we are working towards definitive outcomes. We will not speak to specific parties, structures, terms, or timing until there is something binding to announce, and when there is, we will disclose it properly. I would offer one more comment on how we are approaching this. Finding the right partner and certainty of execution for these businesses matters in addition to the right commercial arrangements. Our decision-making is multi-pronged in nature here. Also, the purpose has not changed.
Hamed Shahbazi: It is to unlock capital, simplify the company, and concentrate our focus and resources on Canada, where our clinics business is delivering the results we discussed earlier. Turning briefly to how these businesses performed in the quarter, we will start with Wisp. Wisp generated revenue of CAD 29 million in Q3 compared to CAD 30.3 million in Q3 last year. Adjusted EBITDA was CAD 3.2 million, up approximately 146% from CAD 1.3 million a year ago, making Q3 Wisp's strongest quarter of the year on an adjusted EBITDA basis, and overall, the strongest EBITDA performance in years. That reflects the focus on margins and cost management that Wisp's leadership put in place earlier this year. Circle Medical generated revenue of CAD 25.2 million compared to CAD 42 million in Q3 last year. The prior year period included CAD 17.6 million of revenue deferral impact.
Hamed Shahbazi: On a normalized basis, revenue grew by 3%, and adjusted EBITDA was CAD 2.2 million compared to CAD 4.8 million a year ago on a normalized basis, reflecting increased expenses to support the company's team, including compliance, as well as increased marketing costs. CRH and Provider Staffing generated combined revenue of CAD 126 million, flat year-over-year, with growth in anesthesia offset by lower Provider Staffing revenue. Adjusted EBITDA was CAD 23.7 million for the quarter, up 4.5%. With that, I will turn the call over to Evelyn to discuss the Q3 financial results. Evelyn.
Evelyn Sutherland: Thank you, Hamed, and good afternoon, everyone. I am pleased to be joining WELL at this important stage in the company's development. Over the past several weeks, I have spent time with our teams and operating businesses, and I have gained an appreciation for the scale of the platform and the opportunities that lie ahead. I look forward to working with Hamed and the broader team and getting to know many of you in the coming months. With that, let me turn to our third quarter financial results. Let us start by turning to slide 17, where you can see the bridge from Q3 2025 revenue to our current quarter results. WELL reported revenue of CAD 407.4 million in Q3 2026 compared to CAD 364.6 million in the same quarter last year, representing a reported growth of 12%.
Evelyn Sutherland: However, last year's revenue included the CAD 17.6 million related to the Circle Medical revenue deferrals. Excluding that amount, our normalized Q3 2025 revenue was actually CAD 347 million. When we compare this year's revenue of CAD 407.4 million to last year's normalized revenue of CAD 347 million, we achieved growth of CAD 60.4 million, or 17%, which consists of CAD 54.5 million of growth from WELL Canadian Clinics and CAD 5.9 million of growth from the remainder of our businesses. This really highlights our focus on the WELL Canadian Clinics as the main driver of growth for the company. Importantly, there was no Circle Medical revenue deferral impact in Q3 2026. This means our reported and normalized revenues are now the same at CAD 407.4 million. Turning now to slide 18, we have a similar bridge for adjusted EBITDA.
Evelyn Sutherland: WELL reported adjusted EBITDA of CAD 50.9 million in Q3 2026 compared to CAD 59.9 million in the same quarter last year, representing a reported decline of 15%. However, as we discussed in the previous slide, last year's results included the CAD 17.6 million related to the Circle Medical revenue deferrals. If you exclude that impact, our normalized Q3 2025 adjusted EBITDA was approximately CAD 42.3 million. When we compare this year's adjusted EBITDA of CAD 50.9 million to last year's normalized adjusted EBITDA of CAD 42.3 million, we achieved a net growth of approximately CAD 8.6 million, or 20%. As you can see on the bridge, WELL Canadian Clinics was a key contributor to this growth, adding CAD 11.6 million to adjusted EBITDA, which partially offset the adjusted EBITDA loss from corporate headquarter costs and other business units.
Evelyn Sutherland: The strength of the WELL Canadian Clinics' adjusted EBITDA reflects the contributions from acquisitions, including OID and UnionMD, and the continued shift towards higher-margin services. Importantly, there was no Circle Medical deferral impact in Q3 2026, so our reported and normalized adjusted EBITDA are now aligned at CAD 50.9 million. The key takeaway is that on a normalized basis, adjusted EBITDA grew faster than revenue, reflecting the continued evolution of our business mix towards higher-margin operations. Turning now to slide 19, you can see the bridge from our reported net loss to adjusted net income for the quarter. WELL reported a net loss of CAD 135.5 million in Q3 2026 compared to adjusted net income of CAD 27.3 million. The significant difference between these two measures reflects the number of accounting change charges recorded during the quarter, including non-cash impairments and transaction-related accounting associated with WELLSTAR.
Evelyn Sutherland: I would like to highlight two of the more significant areas. First are impairment charges. As part of our annual impairment assessment completed as at 30 September, we recognized impairment charges totaling approximately CAD 67.5 million, and that includes a one-time CAD 39.8 million impairment related to HEALWELL. These impairment charges are non-cash and do not impact our operating cash flow for the quarter. I think it is important to provide some context around HEALWELL, particularly given the size of the charge. When WELL obtained control of HEALWELL back in April 2025, accounting standards required us to revalue our existing investment based on HEALWELL's share price at that time. This was at CAD 1.47 per share. This resulted in a significant increase in the accounting value attributed to our investment and contributed to the intangible assets and goodwill recognized on our balance sheet.
Evelyn Sutherland: The CAD 39.8 million impairment recorded this quarter reflects a reduction in that goodwill. However, even after recognizing this charge, the value attributed to our investment remains measurably above our original investment cost. We also assessed and recorded impairment charges for the carrying values of CYBERWELL and BioPharma Services Inc., or BPSI, as a component of WELL Research, as part of our annual impairment review. In each of the latter two cases, the charge reflects a deliberate change in the strategic direction of the businesses. Going forward, WELL Research will be more focused on our higher-margin site management organization, or SMO, and less on lower-margin contract research organization, or CRO, operations. The SMO business is a small, profitable business today, and it is where we will be allocating more of our resources with the objective of activating multiple WELL clinic locations across Canada as clinical research sites.
Evelyn Sutherland: This is part of the WELL Research that most directly leverages our clinic network and our WELLTRUST consent platform. For CYBERWELL, the business has historically been dominated by one-time revenues from security hardware, much of which it was inherited from the Source 44 acquisition, together with its episodic revenues from engagements such as threat risk assessments. Hardware revenues have declined significantly, as that reseller model has run its course, and that decline is what prompted the impairment and the change in direction. The business is now focused on recurring revenue data protection platform, which is a smaller revenue base today, but is more durable and has a higher margin. In both cases, we believe these transitions are the right ones for the long-term orientation of these businesses, and we have brought in new leadership to support them.
Evelyn Sutherland: We also recorded an impairment on Adracare, a virtual care technology business serving allied health providers that we acquired during the pandemic that has not reached profitability. Adracare was not included in WELLSTAR at the time of the listing, given WELLSTAR's focus on physician-facing technology, and subsequent to quarter end, we completed the sale of the business on 1 November. Exiting Adracare removes a source of operating loss and is consistent with our broader effort to simplify the portfolio and focus resources on our strategic priorities. Second, the WELLSTAR transaction-related accounting. During the quarter, we recognized accounting charges associated with WELLSTAR's reverse takeover transaction, including the listing expense and interest accretion and remeasurement expense on its redeemable preferred shares. These charges contributed significantly to our reported net loss, but do not reflect the underlying operating performance of WELLSTAR.
Evelyn Sutherland: The transaction completed during the quarter, with WELLSTAR commencing public trading on 1 October. After adjusting for these and other items shown in the bridge, WELL generated adjusted net income of CAD 27.3 million, or adjusted EPS of CAD 0.11 for the quarter. Turning to slide 20, we move from earnings to cash flow. This slide bridges our adjusted EBITDA of CAD 50.9 million to adjusted free cash flow of CAD 25.6 million, and ultimately to operating adjusted free cash flow attributable to shareholders of CAD 13.3 million, which is comparable to CAD 15.1 million in the prior year. While our underlying adjusted EBITDA increased by 20% after normalizing for the prior year's Circle Medical deferral, that improvement did not fully translate into higher free cash flow for this quarter. There were three principal factors.
Evelyn Sutherland: First, we continued investing capital in upgrading our WELL Canadian Clinics portfolio, supporting the long-term growth and profitability of these operations. Second, we incurred higher cash tax payments during the quarter, partly reflecting the impact of acquisitions completed over the past year. But also, we are encouraged by the recent federal budget proposals regarding the ability to transfer tax losses between wholly owned Canadian corporations. While these proposals are still subject to further development, they could provide additional opportunities to simplify our tax structure and reduce cash taxes across our Canadian operations. Third, we had higher interest payments reflecting our upsized credit line utilized for strategic investments to upgrade our clinical portfolio with acquisitions like ECC, OID, and UnionMD. The bond offering Hamed described carries an interest cost, but it gives us fixed rate, longer dated financing, and greater certainty around our borrowing costs.
Evelyn Sutherland: Looking ahead, improving cash conversion remains a very important priority. We are focused on disciplined capital investment, managing our financing costs, simplifying and increasing automation in our back office functions, and translating more of our earnings into free cash flow attributable to WELL shareholders. Overall, I believe WELL is well-positioned for the next phase of growth. We have a solid capital structure and a strong foundation of established businesses and significant opportunities ahead of us. With that, I will turn the call back to Hamed for our outlook.
Hamed Shahbazi: Thanks, Evelyn. We expect the company's strong operational performance to continue for the remainder of 2026 and into 2027, with management laser-focused on optimizing operations for organic growth and profitability. There are four key catalysts to watch for. First, our updated 2026 guidance, revenue approximately CAD 1.58 billion, represents 16% normalized growth from 2025, excluding Circle Medical and CRH Medical Corporation-related one-time events from both fiscal year 2026 and 2025. Adjusted EBITDA of CAD 185 million to CAD 195 million represents normalized growth of 13% to 19%. Note that guidance reflects only acquisitions announced to date, and as of 30 September 2026, we have recognized all of the CAD 17.6 million in Circle Medical deferrals contemplated in that guidance. Second, last quarter, we set a goal for WELL Canada, as defined to include WELL Canadian Clinics and WELLSTAR to reach CAD 1 billion in revenue run rate by the end of 2028.
Hamed Shahbazi: Now that WELLSTAR is public, we have updated nomenclature here and reaffirmed this goal. Third, excluding the Circle Medical deferrals, we expect to continue our multi-year trend of delivering better than 10% annual growth in adjusted EBITDA, inclusive of acquisitions and organic growth, and excluding any divestitures. Fourth, we intend to establish OneWELL as a partner to provincial and federal health systems and to begin converting the public sector pipeline we described earlier. We remain fully committed to disciplined capital allocation with our Canadian clinic program as the primary destination for incremental capital. That focus is the central rationale behind our ongoing evaluation of the strategic alternatives for our US care delivery assets. Before we close, a word on the impairments. The largest relating to HEALWELL is an accounting outcome of the value we were required to assign when we took control last year.
Hamed Shahbazi: As Evelyn explained, we remain ahead of our original investment. It is worth putting that in cash terms, our total cash outlay to build our equity position in HEALWELL was approximately CAD 13.9 million, with the balance of our stake coming from vending Intrahealth into HEALWELL two years ago in exchange for shares. Today, we own approximately 97 million HEALWELL shares, which at current prices are worth roughly CAD 64.2 million. So while the accounting value has come down, the position itself remains comfortably ahead of the cash and in-kind value we put in. The remainder of these impairments reflect the accounting impact of our strategic decision to exit non-core operations and reposition CYBERWELL and WELL Research towards higher margin recurring revenue businesses.
Hamed Shahbazi: To close, Q3 delivered several milestones of which I think the most noteworthy were our WELL Canadian Clinics business reaching CAD 100 million in annualized adjusted EBITDA run rate milestone ahead of our end-of-year target, reflecting 49% in revenue growth and 82% in EBITDA growth on a year-over-year basis. WELLSTAR completing its standalone listing, removing approximately CAD 155 million of preferred share liabilities from our balance sheet. With our inaugural bond offering, we extended our maturity profile and repaid our convertible debentures. Subsequent to the quarter, the Competition Bureau's no-action letter brought its review of our HEALWELL acquisition to a close. Together, these achievements give us a stronger, simpler balance sheet with a clear focus on growing our Canadian business. That is why we remain confident in delivering on our adjusted EBITDA guidance for 2026.
Hamed Shahbazi: I want to close by thanking our board of directors, our leadership teams across all our operating subsidiaries, including the teams at WELLSTAR and HEALWELL, and above all, a big thanks to our healthcare practitioners and frontline workers who make a difference in the lives of our patients every day. Thank you also to our shareholders, investors, and the analysts that provide coverage for our continued support and encouragement. Operator, we will now be open to questions.
Operator: Thank you. Ladies and gentlemen, we will now conduct the question-and-answer session. We will take a moment to gather questions. Your first question comes from the line of Robert Goff at Ventum. Your line is now open.
Robert Goff: Thank you very much, and congratulations on the clinics' performance. It is very good to see.
Hamed Shahbazi: Thanks, Rob. Appreciate that.
Robert Goff: With respect to the clinics, can you perhaps dive a little bit deeper into the pipeline of the 20 targets and CAD 390 million in revenues? Can you give us a sense for absorption? Are they concentrated? Are they likely to be competitive situations?
Hamed Shahbazi: Yeah. Thanks, Rob. I would say that the mix hasn't changed much since we've taken a very deliberate view that we want to focus on higher margin opportunities, particularly diagnostics and even some of our private longevity and executive health. I would say there's a good mix between all the different areas that we focus on, but there was a time when we were very much focused on primary care and absorption. So, there definitely are absorptions that we're tracking, but I'd say very much a deliberate focus to wanting to engage more in some of those higher margin areas you've seen us play.
Robert Goff: It was encouraging to hear you say earlier in the call that the executive and longevity were having a positive impact on margins, so they are gaining scale and higher margins?
Hamed Shahbazi: Yes, absolutely. I would say that our executive and longevity business is now starting to become a real contributor to the growth and results that you are starting to see, even though we do not break out the specific segments. At some point, I think we can give a little bit more financial information around that. But I would say it is definitely a growing and double-digit contributor to the medical clinic kind of segment overall.
Robert Goff: Very good. Thank you.
Operator: Thank you. Your next question comes from the line of Michael Freeman at Raymond James. Your line is now open.
Michael Freeman: Hi. Thanks very much for the question, and congratulations on these results. Evelyn, welcome to the call. I wanted to ask a question on Canadian clinics, obviously the star of the show this quarter. I wanted to ask about the figures of looking at same-clinic sales grew 12% versus the 6% organic patient visit growth. I did see some discussion in the filings of some reimbursement changes, and I wonder if you could basically square these differences in same-clinic sales versus organic patient visit growth.
Hamed Shahbazi: Yeah. No, for sure, Michael. Thank you for the question. I think, yes, we did have some retro reimbursement that contributed in the quarter, and we do have some of these kind of impacts from time to time. Note that the organic growth was still quite elevated, even if you take the retro out. I think we were essentially somewhere in kind of the just shy of 10% same-clinic sales growth overall in clinics. So, it was still quite a strong performance.
Michael Freeman: Yeah, that's great. The strength is clear. Now that you have WELL Canadian Clinics achieving CAD 100 million in annualized adjusted EBITDA ahead of schedule, where should we look? What are the greatest opportunities for further margin expansion in 2027, just given how strong the levels are now?
Hamed Shahbazi: We believe that margin expansion can continue to happen as we leverage our clinic transformation program. Our team has not finished deploying all of their latest opportunities to modernize, digitize, and improve, and now it's really kind of AI-enabling our physicians. WELLSTAR and HEALWELL, particularly WELLSTAR's provider-facing technologies, are ones that we are very much collaborating on and deploying. So, I would say that we expect that margin expansion from the clinic transformation program to continue steadily over time. I would also say that our deliberate focus in terms of mix shift and some of that strong organic growth that you heard earlier is coming from our diagnostics business.
Hamed Shahbazi: When we make acquisitions, this even happened before we bought the MyHealth platform years ago, we noticed that the team was quite adept, quite strong at being able to drive significant organic growth immediately after an acquisition because of all the opportunities that they saw when they acquired the clinics. So, that's something that we've continued to see. So, I think that organic growth will sort of oscillate a little bit based on our M&A because of opportunities for acceleration of revenue that come from that portfolio. So, overall, this is a big goal of ours. The other thing I will say is, as the SMO, Evelyn talked about focus on SMO as part of WELL Research.
Hamed Shahbazi: I mean, that's a small business today, but looking forward years, we really expect that as we start to carry out site management activities from a clinical trial perspective, first of all, that's great for providers. Providers are looking for opportunities to get deeper within our network and have more opportunities to also grow and also financially benefit. But having this clinic infrastructure and the provider base that we have, this is a very nice high-margin opportunity and really allows us to kind of pharma-activate our clinical network. And we believe that that can add hundreds of basis points overall to our clinical framework over time.
Michael Freeman: Just as a quick follow-on to that, I guess, what sort of margins should we expect from the SMO activity?
Hamed Shahbazi: Well, again, it's a very small business today, so we're really kind of talking about the future. But SMO businesses tend to be really kind of in excess of 20% operating margins. That's our goal with that business, and can be even higher than that, and so in terms of sort of being over 25%, 30%, et cetera. And so, I think it'll take some time to deploy, get the right kind of infrastructure in place. But, look, our long-term goal overall with clinics and research altogether is to exceed 20% operating margins for the entire network, and that would include some of your lower-margin, kind of more plain vanilla medical clinics as well. So, lots of strategies and focus on driving margins higher over time.
Michael Freeman: Okay. Thank you very much, Hamed. I'll pass the line.
Operator: Thank you. Your next question comes from the line of David Kwan at TD Cowen. Your line is now open.
David Kwan: Hi, guys. Just wondering on the guidance, if you take a look at the revenue guidance, it seems to imply that revenue might be kind of flat to maybe slightly down versus Q3 in Q4, in what I think has typically been a seasonally stronger quarter. So, wondering how much of that is coming, or how much of it is related to kind of the US businesses, because there was some reference to some potential weakness, I guess, in Q4.
Hamed Shahbazi: Yeah. So, David, it is a good question. Really, what we are referring to here is, and even if you look kind of where we are at today and kind of extending based on our regular pattern of revenues, we are still expecting a strong performance from CRH Anesthesia. It is really the staffing. We had sort of two staffing businesses. One of them is called Radar, you may remember. Another one is Harmony. Harmony is continuing its strong double-digit growth performance. Radar had a tougher year with some churn this year. So, really, that is what is dragging down some of our revenue. So, it is nothing to do with Canada, and it is nothing to do with our core anesthesia operations, which had a fantastic year. So, that is really kind of most of what is driving some of that lower revenue.
Hamed Shahbazi: As we sort of mentioned, we expect adjusted EBITDA, where we increased guidance last year, to continue to be really strong in our range.
David Kwan: That is helpful. Thanks, Hamed. Then just one more question, just as it relates to WELLSTAR. So, when you look at their revenue, roughly, I think, mid-single digits is coming from WELL. So, can you talk about what you are doing to push increasing adoption of WELLSTAR's solutions within your clinic base?
Hamed Shahbazi: Yes. Lovely question. This is a big topic of conversation because we are very excited about the innovation at WELLSTAR. WELLSTAR, I think, is creating a really fantastic platform. The industry is really starting to move from point solutions, like using an AI scribe is nice, but really, the future is characterized by a continuous platform and workflows that work well together, not just these point solutions. WELLSTAR's Nexus platform does that. So, we have fairly robust plans to adopt Nexus in an entirety. Of course, we do not use the WELL EMR in all our locations, and that is impossible given that we are an acquirer, and we do acquire clinics that do not use WELL's EMR. But increasingly, our focus is to, again, leverage some of those same clinical transformation features at those other EMRs as well, and where possible, move some of them over.
Hamed Shahbazi: So, that is definitely part of our playbook, and where we can, we want to leverage WELLSTAR. So, we would expect to see WELL growing as a customer, which is kind of the punchline.
David Kwan: Yeah, I guess, how long do you think it could take for your contribution to WELLSTAR's revenue to get into the double digits? Like, how quickly are you kind of pushing this out into your clinic base?
Hamed Shahbazi: I mean, I think I am not sure about double digits because they are also growing outside of WELL. I think that we will, on an absolute basis, continue to grow as a customer. But WELLSTAR is also really doing well with the provincial health authorities. Their solutions are becoming really sought after clear across the country. We expect that they will continue to generate momentum outside of our network. I think that even maintaining our current share of their revenues will require us to grow pretty significantly, on an absolute basis, which we will be doing.
David Kwan: That's great. Thanks.
Operator: Thank you. Your next question comes from the line of Justin Keywood at Stifel. Your line is now open.
Justin Keywood: Good afternoon. Thanks for taking my call. There was a mention of the Canadian federal budget in the opening remarks. We understand that there is a new deduction mechanism on medical equipment. This includes X-ray, ultrasound machines, but it sounds like it could extend to a wide range of CapEx for Canadian physician clinics. My question is if there is a way to quantify this impact as far as tax savings or on the returns for the WELL Canadian Clinics segment, unless it is too early to assess.
Hamed Shahbazi: Yeah. Thanks, Justin. Maybe Evelyn, I will ask you to chime in on this one.
Evelyn Sutherland: Yeah. I am happy to chime into it. I think, Justin, per your suggestion, I think it is a little bit too early to comment on it just because the details are not out yet. But the minute they are, we are happy to provide an update on this front.
Justin Keywood: Great. This would be, I assume, most applicable to MyHealth and the diagnostic segment?
Evelyn Sutherland: It would be, but it would, again, I think the devil is in the details, and we have to wait for those details to come out.
Justin Keywood: Understood. I look forward to the details. Thank you.
Evelyn Sutherland: No problem.
Hamed Shahbazi: Justin, as Evelyn noted in our script presentation, there are also some very interesting tax proposals which could be quite impactful. We share the enthusiasm of the federal budget with you. We will keep you guys posted.
Operator: Thank you. Your next question comes from the line of Tania Armstrong-Whitworth from Canaccord Genuity. Your line is now open. Tania, your line is now open. If your line is on mute, you need to unmute, please.
Tania Armstrong-Whitworth: Apologies. Hi, guys. Evelyn, welcome. My first question is for you. I believe you called out cash conversion as a priority in your remarks. I saw that adjusted free cash flow to shareholders, I think, was around CAD 13.3 million versus CAD 15.1 million last year, and that is despite that 20% normalized EBITDA growth. I am just wondering, how should we think about normalized CapEx, cash interest, and cash taxes heading into 2027?
Evelyn Sutherland: It is a great question. We continue to kind of probably invest in the same manner that we have been investing in the past. I think I am kind of reticent to give you a bit of guidance because there may be changes afoot in the business. From the Canadian clinic standpoint, I would probably suggest that we are going to be investing to the same limit that we have been investing historically. I do not know if, Hamed, you want to add to that?
Hamed Shahbazi: No, I think you said it well. It is looking good.
Tania Armstrong-Whitworth: Okay. If I may, just one follow-up. On the more than CAD 100 million public sector pipeline, what is the expected timing of first awards? When OneWELL does win, how do revenue and margins split between WELL, WELLSTAR, and HEALWELL?
Hamed Shahbazi: That is a great question. Look, we have now built out a public sector team under Dr. Andrew Bond, and that team is a shared resource, so it is being funded in part by not just WELL Health, but also its subsidiaries like WELLSTAR. There are charge-out methodologies and intercompany arrangements there. So, let's say it is an RFP or a situation where it has multiple components, and that is the whole idea of OneWELL, is that a public sector opportunity very much could have componentry related with WELL Health clinics, WELLSTAR, and/or HEALWELL all in one engagement. We would remove the complexity of that in terms of the public sector side and have them deal with one group, and then we will take care of the complexity and abstract the kind of all the charge-outs and project management elements behind that.
Hamed Shahbazi: Candidly, we think that that will be very useful for the public sector groups. So, that is how we would approach it.
Tania Armstrong-Whitworth: Okay.
Hamed Shahbazi: I will just note that the folks at WELLSTAR and HEALWELL will continue to engage their own deals with public sector, so not every engagement with public sector will go in this way. It is just where we have kind of more of an integrated and cohesive approach, we will do so. That goes for WELL Clinics. WELL Clinics also has capabilities where it would engage public sector directly without HEALWELL and WELLSTAR. So, it is a pretty dynamic environment.
Tania Armstrong-Whitworth: Of course. Okay, that is helpful. Thank you.
Operator: Thank you. There are no further questions at this time. I would now like to turn the call back over to Hamed Shahbazi for closing comments.
Hamed Shahbazi: Thank you very much, operator, and thank you very much, everyone, for attending our call today. Thanks to Evelyn for joining us on our first call. It has been great to have her on board. We look forward very much to a very strong year-end and to see you all in March of 2027 to review our full-year results together. Thanks, and if we do not speak, have a wonderful holiday.
Operator: Thank you. This does conclude today's conference call. We thank you for attending and ask you please disconnect your lines.
