Allscripts Healthcare Solutions, Inc. Aktie

Greetings, and welcome to the Veradigm update conference call. As a reminder, the call is being recorded. I would now like to turn the call over to Steven Halper, Vice President of Investor Relations. Thank you. You may begin.

Thank you very much. Good morning, and welcome to the Veradigm update conference call. Our speakers today are Don Trigg, Veradigm's Chief Executive Officer; Lee Westerfield, our outgoing Interim Chief Financial Officer; and we are also joined by Christian Greyenbuhl, our incoming CFO.

We will be making a number of forward-looking statements during the presentation and the Q&A part of the call. These statements are based on current expectations and involve a number of risks and uncertainties that could cause our actual results to vary materially from those reflected in the forward-looking statements.

We undertake no obligation to revise these forward-looking statements in light of new information or future events. Please refer to our releases and SEC filings for more information regarding the risk factors that may affect our results.

Financial information presented today for periods that have not yet been filed with the SEC are estimated and unaudited. We will start today's meeting with remarks from Don, a few words from Christian, followed by a financial update from Lee.

With that, I'm going to hand the call over now to Don. Don?

Thank you, Steve. Good morning, everyone. When I stepped into my role last fall, I framed a critical must-do to get current and stay current on our SEC filings. Today marks an important milestone in that journey. After the close on Tuesday, we filed our 10-K for 2023 and 2024. We're clear-eyed about the ongoing work ahead to get current, stay current and ultimately relist on a national exchange.

I want to thank our accounting organization, countless teammates and our current auditor. This Super K was the first joint effort with our team and our current auditor on an SEC financial filing. The Super K for 2023 and 2024 took less time to complete than our previous Super K for 2020, 2021 and 2022. The joint teams are gaining clarity on the collaborative work to be done as we now turn our full attention to parallel work streams on both 2025 and 2026 filings. The 2025 10-K is expected to be our next milestone, which we're driving to complete toward the latter end of 2026.

These efforts are never easy. They require not just time and focus, but also the organizational capacity and collective ability not just to get current, but to also leverage new systems and new processes in order for us to stay current once we file our 2026 10-K. You have our commitment that we will continue to update the financial community on both our filing process and our fundamentals just as we're doing this morning.

Beyond the push to get current and stay current, I want to take a few minutes to comment on our strategic and operational progress during the first 1/3 of 2026. Growth turnarounds are hard. As the Super K frames in part, we're working to reverse a multiyear revenue decline. As I stepped into my role, we started to lay the foundation for our reset, recover, reignite plan to reverse it.

We had a solid first quarter with results above our internal expectations. We saw strong performance in our EMR provider client base, particularly for our revenue cycle solution. We continue to make solid progress with our chart retrieval and gaps-in-care closure solutions in the Payer space, including a signed deal with a large national payer representing our largest contract for the quarter.

And finally, in Life Sciences, our provider client base represents a powerful point of access to Main Street Health, and this unique position helped us close important work with a large pharmaceutical company, focused on point-of-care marketing to drive appropriate GLP-1 adoption.

Beyond revenue growth, our cost efficiency efforts that we accelerated in Q4 continued to show progress in Q1. Meaningful AI tool adoption has reached almost 50% of our workforce, and we believe this will enable what we call an AI-fueled global workforce that we think can allow us to build better products and run Veradigm more profitably in the quarters to come.

While we're pleased with our first quarter performance, we understand that it's only [Audio gap] in the earlier stages of a turnaround. But comebacks have to start somewhere, and we remain confident in our ability to continue to execute on our reset, recover, reignite in the months ahead.

One of the challenges of a stock delisting and leadership uncertainty is that it can cause distraction and cause the company to turn inward. Growth companies operate out in. They understand challenges out in the market and then build solutions to solve them. Earlier this month, we held our annual client conference. We brought together over 250 clients and partners. At the event, we shared the results of a national survey conducted for the first time that found 80% of independent practices say technology is very or extremely important to remain independent. It validates the Veradigm opportunity in front of us.

These providers are counting on us to help them reduce administrative burdens, solve revenue cycle challenges like denial resolution and enable them to be more actively involved in the economics of value based care. We have differentiated solutions to meet those challenges. Over the course of the conference, it was clear that our longtime clients are excited about our product roadmap and they can feel our momentum. As one longtime client said to me, you are building exactly what we need.

Over the last 25 years, I've learned a basic formula. Great people create great products and platforms that create profitable companies. When Tehsin Syed joined us from his role as General Manager of Health AI at Amazon AWS, we both saw the same thing, an opportunity to work directly with providers, health plans and life sciences firms unlock the generational impact of AI for what we call applied intelligence.

Veradigm has an enviable position amid the AI disruption. We're deep in the healthcare vertical, the lion's share of our client base is small practices and we are the HHS ONC certified system of record for providers looking to help patients manage their health and care. The ambition we laid out at our Nashville conference is to evolve from a system of record to a system of work. We used the conference to launch our Health Network Architecture, which is now with early adopter clients and lays that foundation. Health Network Architecture connects clinical, financial and operational workflows and allow us -- allows us to deploy AI capabilities rapidly for impact, not just in the Provider space, but secondary benefits for Payers and Life Sciences as well.

I left our customer summit highly confident that we have a great opportunity to deploy AI capabilities to improve practice performance, strength and retention and cross sell our revenue cycle capabilities. Our base of Provider clients is a very important asset and we plan to further align and grow it in the years to come. We're headed in the right direction in part because of the team that we're putting on the field.

Last week, Christian Greyenbuhl formally joined us, which is super exciting for myself and for the team. Christian comes to Veradigm from his most recent role as CFO of Ministry Brands, which provides over 90,000 faith-based organizations and private sector businesses, SaaS payments and background screening solutions. Previously, Christian was a longtime Finance and Operating Executive at ADP.

The current turnaround push shows its progress to the hard work of several individuals. I want to take a moment to thank Lee Westerfield. Lee was initially asked to tackle a 6-month interim stint. His tour of duty extended for more than 2 years. Thank you, Lee. I want to thank you for the contribution, including the important work that you did on the 2023 and the 2024 10-K filing. Lee's service will continue in a strategic advisory role through March 2027.

Before I turn the call over to Christian, I want to reaffirm my opening message. Today is an important step on our journey to relist Veradigm on a national exchange. But if all we do is relist Veradigm, we will have missed our opportunity. The work we're doing with providers, health plans and life sciences firms can be part of tackling the challenge of health care affordability defining the decade. We have the opportunity to create a company at the forward edge of architecting a new AI-forward health network platform. It's exactly what provider practices, health plans, life sciences firms and most importantly, U.S. health care need.

With that, I want to turn the call over to Christian for some introductory remarks.

Thank you, Don, and good morning, everyone. I'm thrilled to have joined Veradigm at such an exciting and pivotal time in our transformation journey. And I'm especially pleased that the 2023 and 2024 Super K is now filed.

While I've only been at the company for a short while, I thought it helpful to share some first impressions. Drawing from my experiences over the last 25-plus years across various finance roles and as a GM, I found that the success of any transformation hinges on your team, not just your leaders, but everyone. Such a process is iterative, but I believe it's especially important early in my onboarding to listen to and meet with associates across all functions and operations. In doing so, it helps formulate my thinking around the breadth, depth and overall quality of our processes and our ability to shape and reshape them in conjunction with the systems we leverage and the changes we want to make as a company.

Throughout these early discussions, I've been inspired by the passion and the dedication of our associates, not just to each other, to the projects they are working on and the clients and stakeholders that they serve, but also to their broader understanding and appreciation of our efforts to get current and stay current and at a higher level to our reset, recover and reignite plan.

In addition to my time meeting with our associates, I've also spent time with product teams going through product demos, reviewing strategic roadmaps and industry reports, and I've been impressed with the focus on our product investments, which should increase our ability to deliver innovative and reliable solutions to our existing customers and attract new customers.

As I continue to work through my 30, 60 and 90-day onboarding plan, I'm excited about the market opportunities we see ahead of us. As I think through some of the more tactical efforts with the 2023 and 2024 10-Ks now wrapped up, work has already started on the 2025 10-K filing in parallel with our 2026 audit, and we remain focused on the implementation of the critical systems that are necessary to execute on our long-term growth plan and other important functions, including our efforts to get current and stay current.

We have a solid foundation from which to drive our transformation and create sustainable top line revenue growth in a manner that expands profitability and fosters reinvestment. And we look forward to providing another update on our progress later this year in our third quarter.

With that, I'll turn it over to Lee and take this moment to acknowledge his role in facilitating my onboarding for which I'm very grateful.

Well, thank you, Christian. Let me say how pleased I am to hand Don over to you and to continue to serve Veradigm and to help you and Don in that transition. Yesterday, it has been mentioned a few times here, we filed our 2023 and 2024 10-K. The filing itself is a major step forward towards our commitment to get current and stay current with our SEC filings.

This morning, I'll first speak about our financials, then address audit milestones on the road ahead. After that, we will open the line for questions.

Let me reaffirm a clear message to you. Our fundamentals remain sound with a compelling long-term opportunity for profitable growth on the horizon. Capital foundation remains solid, set on a bedrock of positive net cash plus ample liquidity and reserve. And our operations led by Don and the team are charting the course to reset, recover and reignite financial performance on the road ahead.

Now let's look at past history. Veradigm took shape in 2022 when the company sold its hospital and large physician practice division. Revenue since 2022 has remained essentially flat, hovering near $600 million annually. In our Super K filing, we report revenue of $607 million in 2023 adjusted for onetime legal settlements, $594 million in 2024. Both years were essentially flat compared to the $588 million in 2022. More recently, our 2025 estimated range that we put out in our financial filing last night is in a range that remains level with 2022 top line, in other words, has remained essentially flat from 2022 to 2025. As Don mentioned, growth turnarounds are not easy. Since Don's arrival as CEO, we've invested to spur growth. Today, we are in a stronger position to reignite growth in the future.

In the Super K, you will see new useful information. You'll see a breakdown of revenue and gross profit into 3 business segments: Provider, Payer and Life Sciences that address distinct health care end markets. Let me touch on revenue in each segment.

In Provider, by far our largest segment, revenue was $473 million in 2024, excluding legal settlements. 2024 revenue was flat with 2022 and 2023 levels. Looking within Provider, growth occurred within our revenue cycle line of business, offset by declines in FollowMyHealth and PayerPath.

In Payer, revenue of $67 million in 2024 dipped from 2023, but increased from 2022 levels. Payer's business performance was driven by new customer wins and higher volume in our clinical data exchange business line.

And in Life Science, revenue of $54 million in 2024 declined versus 2023 and 2022 levels, primarily due to slowing real-world data sales that was offset partially by stable media revenue. And again, that was past historical revenue trends.

Turning to our historical profitability. Adjusted EBITDA was $94 million in 2024 compared to $132 million in 2023. Margins are 16% and 22%, respectively. The margin decline from 2023 to 2024 reflects lower gross profit margin in each business segment and increased operating expense driven by 2 acquisitions, the purchase of ScienceIO and Koha Health, which each occurred in early 2024, and OpEx related to the investments needed in finance and accounting staff and in IT as those efforts to rebuild the accounting organization modernizing -- and modernizing IT got underway.

Finally, I think it's important that you note that the 2023 and 2024 adjusted EBITDA does exclude a basket of onetime costs, our transaction and other expenses. Transaction and other include the restatement audit, legal matters and the strategic review process, all onetime undertakings that impacted free cash in 2023 and 2024.

Let's look now at more recent history at 2025. 2025, today, we've reaffirmed estimated revenue in the range of $584 million to $589 million and with respect to adjusted EBITDA in 2025, our audit of that year is underway. And what I can say is we're not -- we're in a position at this point to say that profitability in 2025 absorbed additional operating expenses to further the rebuild of our accounting and sales ops functions and to deploy and modernize our IT systems. Those areas of increased OpEx were offset by significant cost reductions that were executed through our competitive fitness program.

With all that said, we expect 2025 adjusted EBITDA margin to be the jumping off point for improving profitability this year and into the future.

So now let's look at what's happening during 2026. We expect, as Don mentioned, that this year will benefit from our strategic clarity and targeted investments in growth and that our profitability in 2026 will be positively impacted by the series of cost actions undertaken both last year and in 2026.

Now let's turn attention to the audit work ahead. We have made progress towards regaining filing currency with the SEC, and we know the steps ahead to get current and stay current. With the completion of our Super K for 2023 and 2024, we now turn our full attention to completing the audits of 2025 in this calendar year and 2026 10-K thereafter. And our auditor continues to be actively engaged with our accounting team.

And as Don and I discussed with you in February, in order to get current and stay current, the milestones ahead are: complete all past due SEC filings, simultaneously complete the remaining IT application go-lives, migrate financial data and most importantly, demonstrate with full assurance that we're able to close and file financial statements with that are accurate and on time. And as Don mentioned a few minutes ago, we expect to file our 2025 10-K again before calendar year-end 2026, which will mark the next important SEC filing milestone.

And now, before we open up the line for your questions, I want to thank all Veradigm employees for your tireless efforts and dedication as we execute our reset, recover, reignite plan.

With that, we'll open the line for questions.

[Operator Instructions] Today's first question is coming from Jeff Garro of Stephens.

Congrats on the progress with the milestone of filing the Super K. And I want to start on the relisting front. You mentioned the concept of parallel work on both the 2025 and quarterly 2026 financials. Kind of how parallel is that work? And how does today's velocity of progress on both fronts compare to the pace of the work on the Super K based on both the infrastructure improvements that you put in place and the complexity of work going forward versus the complexity of this prior restatement?

Shall I start, Don?

Sure.

Jeff, thanks for the question. Of course, this will be Christian's responsibility in the near future, but I would say the following 3 things about the work underway with 2025 and then 2026. A lot of work in an audit process is -- can be done conjunctively, for example, the audit of IT systems, for example, policies and so forth. And that work is underway and in the early stage of any audit. There is, in sequence, audit work that gets done on 2025 that rolls into 2026, but that work and its magnitude is, I would characterize it as -- note it's 2 years worth of material eventually. It is work that is already understood by our auditor in terms of our approach, audit policies, books and records, et cetera. And so the magnitude will be large, but more manageable than the past years.

Yes. The only thing I would just add would be, as I said in my comments, this is the first time that our auditor and our team have worked together on a joint filing. So I think we got a lot of benefit from working through that process with them. I think that will give us now impact as we work through 2025. And the big thing that I'm pushing for, as I've said before, and I will collaborate with Christian on, who has a great background in this space and really brings operating acumen into the business in this area is how do we make sure that the investments we're making in sales force, in workday and our core systems infrastructure, not just help with remediation work, but help us reignite profitable growth for the business. So I'm thinking about high velocity sales activity inside sales force. I'm thinking about hardening our performance management systems inside workday. And I think that has to be a key dimension that we think about and bring to this work so that it's part of how we actually drive forward, reset, recover and reignite on a multiyear basis, Jeff.

I appreciate all those comments. And maybe then to kind of speed ahead to present day and the comments on early signs of progress in first quarter 2026 and performance above plan. I was hoping to a little bit more comments from you guys about what performed well or maybe has room for improvement by segment? And then if we just think about gross bookings and retentions and then the kind of day-to-day execution of implementations and revenue conversions from that front, what were the positives and negatives you saw in the first quarter?

Yes. Great question. Thank you. So one, as I said, we were very pleased with progress in Q1 against our internal expectations and our plan. I think as we think about what's working, and this plays into your comments around retention, I'm very pleased with the work that the team has done to get better and more aligned with about 100 of our most strategic clients that disproportionately drive revenue retention, but also represent share of wallet growth for the business.

One of the things -- you've been covering this space a long time, and I've been in this space a long time. One of the things that is really interesting is the lack of revenue cycle penetration inside our installed base. So this is a great opportunity for us on the Provider side to bring a billing solution to our Practice Fusion clients and to bring a revenue cycle services offer that has exceptional performance against industry benchmark on A/R, A/R over 90, denials, net collections into our installed base and really get more aligned with those providers. And we certainly saw sales traction and performance traction in that space that was important and validating for our conviction around that opportunity.

And then as I said, on the Payer side, there's this interesting shift playing out in that business. We do a lot of advanced risks and submissions work for almost 90 Payer clients. But we have an opportunity as experts in independent provider practice and the leverage of the provider workflow to collaborate with those payers around their strategies or provider network management to tackle MLR cost trend. And so that part of the business around chart retrieval, but now also around gaps-in-care closure performed nicely for us, including a very large national payer relationship that we can build on from here.

And then finally, in the Life Sciences space, again, an area that I've been interested in and focused on dating back to my time at Cerner, our real focus there is, can we take differentiated data assets that come out of real-world practice and can we go effectively target those direct relationships with top 30 pharma. And I think you see that playing out with obviously some tailwind benefits from areas like GLP-1 and GLP-1 management, which obviously is a use case that really nicely suits the practice profile that makes up the business.

So we always want to make more progress. We always want to go faster, but there were some really solid signs of progress around the core growth strategy and growth turnaround that we're trying to drive.

Our next question is coming from Charles Rhyee of TD Cowen.

This is Lucas on for Charles. I wanted to touch on 2025 profitability. I understand that you guys aren't providing too much detail. But given that it's a jump-off point for '26, I wanted to drill down on your comments around increased OpEx offsetting -- or I'm sorry, significant OpEx reductions offsetting increased OpEx to strengthen auditing and financial systems. Should we think about '25 having a similar level of profitability on a margin level from '24? Is that what those comments are expected to imply?

And then for '26, assuming that your comments are calling for an improvement of margin given that we're going to see just improvements from SG&A savings. Can you maybe provide more detail on those 2 aspects?

Sure and thank you very much for the question. Very understandable. What we can say at this point and the reason for not saying more is that 2025, a jumping-off point for EBITDA to improve and grow in the future and see margin expansion from 2025 levels into the future is what we're saying today. The audit of 2025 being underway, saying more while the determinations being made around some particular audit items would be a little bit premature. And so in qualitative terms, we undertook a considerable amount of cost action last year that deflected other areas that were necessary to improve such as the accounting rebuild and modernization of our IT. And those efforts last year and in the early parts of this year led by Don will to be the betterment of EBITDA in the future.

Yes. The only thing I would just add to that would be really building on the comments I made in my first update to shareholders and analysts, which is when I stepped into this role, one of the values that we talked about with teammates was better starts with difference. And we looked with fresh eyes at every investment that we were making in the expense line and really thought through, are we going to see disproportionate return on that invested capital? And so that included things like portfolio review for products that were -- that we had built that were underperforming. That included things like looking at our product partnerships with an eye towards improving the gross margin of the solutions that we're taking to market.

And it really looked at, as I amplified again this morning, thinking about AI-related investment, true global workforce strategies and moving from a holding company to an operating company model in a way that gives us leverage when we build once in Provider to think about secondary revenue opportunities in the Payer and Life Sciences space. So that's all work that we started in Q4. To Lee's point, some of it was for run rate impact into '26, but a lot of it is playing out in Q1, and we expect leverage and momentum around it to continue over the year.

At this time, I'd like to turn the floor back over to management for closing comments.

1.23

I just want to take one quick second as we conclude here to say thank you for everyone that joined us this morning. As I said in my remarks, we had a solid first quarter with results above our internal expectations. We saw strong performance across Payer and Life Sciences as well as in our core Provider business. And we're looking forward to the chance to update you with the next major milestone around get current and stay current, which is our 2025 10-K filing. And until then, thank you very much for being with us and joining us this morning.

Ladies and gentlemen, this concludes today's event. You may disconnect your lines or log off the webcast at this time and enjoy the rest of your day.

Greetings, and welcome to the Veradigm Update Conference Call. [Operator Instructions] as a reminder, this conference is being recorded. I would now like to turn the call over to Jenny Gelinas, Vice President of Investor Relations. Thank you. You may begin.

Thank you very much. Good morning, and welcome to the Veradigm Update Conference Call. Our speakers today are Don Trigg, Veradigm's Chief Executive Officer; and Lee Westerfield, our Interim Chief Officer.

We will be making a number of forward-looking statements during the presentation and Q&A part of the call. These statements are based on current expectations, and involve a number of risks and uncertainties that could cause our actual results to vary materially of those reflected in the forward-looking statements. We undertake no obligation to revise these forward-looking statements in light of new information or future events. Please refer to our releases and SEC filings for more information regarding the risk factors that may affect our results.

All information presented today is estimated and unaudited. We will start today's meeting with remarks from Don, followed by a financial update from Lee. And with that, I'm going to hand the call over to Don.

Thank you, Jenny. Good morning. On my first investor call in October, I committed to advance 3 strategic objectives in my first 100 days. We set our business strategy, recover our market leadership with independent physician practices and reignite profitable growth. As we move through the first quarter, we've made progress on our work to get current and stay current on our SEC filings. Our reset recover reignited plan is fully launched. And my belief that it can deliver clear shareholder value is stronger today than ever. The month of January was a blur filled with internal kickoff to frame our Reset, Recover, Reignite plan, and the jampack calendar of external industry and client meetings.

And while 2026 is still young, we can see the path to forward progress. Both turnarounds are difficult, and they certainly don't happen overnight. But as I said to the team over the last several months, the quality of the start tells you a lot about the strength of the finish. In my first 100 days, we assessed our product portfolio, deciding directionally where we want to play and how to win. We made the decision to discontinue 6 low-revenue products this year. We also chose to allocate additional capital to a set of growth bets that represent both near-term revenue potential and long-term market opportunity.

We believe this active no regret portfolio management is a first step to reignite profitable growth. Second, beyond what we want to deliver in 2026, we also tackled how and where we work. We returned to office in Pune, India in late October and under the leadership of a new Head of Global Operations, we're happy with the talent ramp there. We plan to broaden our revenue cycle services, partner and integrated global R&D function and expand key enterprise functions. An AI fueled global workforce is a key value lever in our growth case, and I believe that the fourth quarter saw a foundational progress.

We've established Pune as 1 of 2 key operating hubs. Raleigh, North Carolina is the other. Growing location clarity allowed us to close 3 facilities in 2025 to commit to close 2 more offices in 2026 and exit our Chicago headquarter location no later than mid 2027.

Third, our leadership team is pushing to leverage what we believe is a generational technology shift around AI. Tehsin Syed joined our team as Chief Product and Technology Officer in November, following a 4-year stint at Amazon AWS, where he was Health AI General Manager. In his first 100 days, he announced enhancements to our Ambient Scribe solution. We launched a new AI-enabled allocation for our revenue cycle services clients. We accelerated AI adoption for product development, leveraging our ScienceIO teammates to drive enterprise-wide impact.

Our R&D organization is moving faster, and Kasten has grown to lead market can accelerate from here. Fourth, we used the fourth quarter to flatten our organizational design and increased decision velocity. Our new Head of HR, Tally Baker led an effort to widen manage our reporting span by over 30%. And in parallel, the senior team made the difficult decision to eliminate 15% of our total workforce in 2025. These decisions are the toughest 1 you make as a leader, and we work very hard to be thoughtful in our approach. Finally, we frame the structure process and systems needed for an entrepreneurial operating system.

In January, we rolled out our enterprise-wide objectives and key results. We drove those measurable goals down to the teammate level with 100% adoption in our new ERP instances that converted January 12 as part of our remediation and Project Atlas work. We're clear eyed across 2,000 teammates on the work to be done and the potential impact we can unlock in U.S. health care if we deliver. Talent is the single most important requirement for our growth turnaround One of our 5 Veradigm values as better starts with different and will succeed, I believe, in the end of our rate of change inside materially exceeds the rate of change in the marketplace.

In October, we conducted an internal engagement survey. We found teammates lacked in understanding the strategic goals and objectives of the business at just 68% and had low confidence in senior leaders to deliver at just 63%. Following the company to kick off in January confidence in our strategic direction is up 16% to 84%, and confidence in the executive team was up 18% to 81%. Internal clarity, alignment and focus on the work to be done is rising, now we need to deliver outcomes that matter in 2026. For all the progress on Reset and recover, the ultimate success measure is can we reignite growth at Veradigm.

The starting point for our growth turnaround is getting more deeply aligned with our independent physician practice clients. If we do that, we can strengthen retention, and we can drive share wallet growth through our revenue cycle solutions. We launched integrated billing for our Practice Fusion clients in November. Our small practice clients are hungry for an integrated billing solution, we can now provide one. In addition, Jonathan Vipperman and team completed 9 revenue cycle services client conversions in Q4, including Pennsylvania-based Sinclair specialty positions and neurosurgical associates.

With a more aligned provider client base, we can offer Payers and Life Sciences differentiated access to independent practices that they want to reach. When providers want to collaborate with Payer and Life Sciences, we make it easy and frictionless to do so. Our Payer business is seeing traction helping plans to collaborate with physician practices to close gaps in care. Our solution displays critical care gaps within the provider's existing EHR workflow with a clear value proposition. Patients get the care they need, providers aren't asked to leave the workflow, unnecessary costs are avoided.

We announced the deal with Virginia-based Ontario Health plans in the fourth quarter for our gaps in care technology reflecting what we believe is a strong market opportunity with large health systems, operating insurance plans. We also completed our channel agreement with Blue Cross and Lee Shield Association making it easier for us to take our payer Insight solutions into the blue segment this year. In December, we signed our first 2 gaps in care closure services deals, building on the momentum of our technology-only solutions. The first deal was a large Blues plan. The second contract was a major national plan with an initial scope focused on the Midwest State. Together, these 2 deals represent more than $5 million in annual contract value. Like health plans, life sciences firms see the value independent physician practices can deliver.

Veradigm can offer differentiated real-world data, leveraging 1 of the largest and most geographically representative ambulatory data sets. We also can provide a platform for digital ads to promote appropriate prescribing and adherence as the provider and patients create the right care plan. In the fourth quarter, the Life Sciences business closed 2 deals with a total contract value greater than $1 million. In addition, we finalized and in recent days, launched a new solution to help life sciences firms leverage patient-reported survey data for clinical and observational research. These fourth quarter outcomes show our potential.

The 2026 is a critical proving ground for our first phase of full year growth changes. 20% of our reps are needed to start the year, sales territories and comp plans were communicated in January at our Reignite kickoff, and our new revenue operations organization has launched. Troy Tesla joined us to lead the Rev Ops award following the 5-year stint as Chief Executive Officer of a customer relations management business and more than a decade of health care IT operating experience with new internal systems rolling out, timing is right to systematize our sales enablement and operations, and we're down the path to do just that.

Finally, I want to update you on our commitment to get current stay current on our SEC filings. In January, we went live on the core components of our new systems infrastructure, which we call Project Atlas. Improved data integrity and contract standardization tied to remediation is 1 key goal. Our internal accounting team and auditor BDO are also moving with the right balance of accuracy and pace to make progress on our SEC filings. Based on the information we have today, we anticipate the next update you will receive from us will be the filing of our 2023, 2024 Super K. Both the Atlas Go Lives and Super K are important milestones on our Get Current, Stay Current plan. Our team is working shoulder to shoulder with BDO. We understand the critical importance of this work, and we are making steady progress.

During the October investor call, I noted every company like Veradigm has chapters. As a long-time health care IT veterans, the Veradigm book is 1 that I've read and studied for a decade. Now the senior team and I have an opportunity to add a set of positive chapters to the story. We think our market opportunity is a large one. The entrepreneurial push of earlier leaders built a client base of independent physician practices that would take years for a start-up to replicate. We have almost 100 health plan clients, and our real-world data offers a differentiated view into Main Street Health. Amid the crisis of health care affordability, data and technology are the single biggest lever to solve it.

2026 will be a determining year for us, Reset, Recover, Reignite will lay the foundation for higher growth. We'll begin to improve gross retention. We'll see tangible steps towards stronger profitability and in the process of delivering these key results will create an entrepreneurial operating system that can reignite sustained long-term growth for the business. The change is challenging and it's exciting. And I'm confident we have a set of leaders with the skill and the will to drive our reset, recover, reignite plan forward. I'm excited to update the investor community on our progress. We reached key milestones in 2026 and with that, I'll turn the call over to Lee.

Thank you, Don. This morning, I will be speaking about our 2025 performance and audit progress. Then conclude by laying out the steps ahead to get Current and Stay Current with our SEC filings. My message today is this, our fundamentals are stable with a clear opportunity for improvement on the horizon. First, revenue remains steady and is geared to reignite. We closed 2025 in line with our expectations. Revenue was approximately flat with 2024. Looking ahead, new solutions attract new customers and improve the revenue and customer retention and expansion, all served to reignite top line performance in 2026 and beyond.

Second, while we're still working to validate our full year 2025 EBITDA performance, we can say to you today that our profitability softened in 2025. Atlas-related IT spending and accounting overhead were the primary contributors to additional expenses in 2025. At the same time, as Don framed in his remarks, we have advanced a series of significant operational challenges and are confident that we will recover our historic profitability and build on it. Finally, our capital base remains strong. Net cash remained positive throughout 2025, and we are capitalized well for the road ahead.

Now let's turn to our financial performance in 2025. Revenue for the full year last year is estimated to have been in the range of $584 million to $589 million, essentially flat, down 1% at the midpoint compared to prior year. Looking at each of our business segments, provider our largest business segment, which generates the majority of our recurring revenue, Provider segment in 2025 is estimated -- we generated revenue in the range of $463 million to $467 million, which is down 2% at the midpoint as compared to the prior year. Drilling down in the Provider, we saw declines in Payerpath clearinghouse revenue cycle services and ERP, which were partially offset by growth in both of our EHR solutions, Practice Fusion and Veradigm EHR.

Payer and Life Science businesses, which enable the differentiated access with providers performed in the following way: Payer and Life Sciences segment revenue for full year 2025 is estimated in the range of $121 million to $122 million, flat at the midpoint as compared to 2024. Going down within Payer, we saw revenue increase from clinical data exchange and gap closure products, while in Life Sciences, revenue flat to down in media and real-world data.

Now moving on to cash and debt. We are appropriately capitalized again. When -- Again, we remain net cash positive. As of year-end 2025, debt stood at $75 million, which consisted solely of our senior secured loan. Cash was $120 million. Now cash decreased by $174 million during 2025. The change in cash stems from several typical and nontypical sources and uses, which I will walk you through. First, nontypical items resulted in net outflows of $204 million of these rose from 4 areas: one, a net outflow for debt financing activities of $159 million, primarily that was the repurchase of the convertible notes in the third quarter offset by the issuance of new senior secured debt in midyear. Two, an outflow for prior acquisitions of $14 million; three, a net inflow from investing of $31 million from the sale of private minority investments. Fourth, an outflow for nontypical transaction and other expense items, which totaled $62 million.

Now these activities, which we've discussed in the past, these include severance, legal fees, professional consulting and accounting fees, again, nontypical. And importantly, looking ahead, the large amount of legal and accounting professional fees of the recent past in 2024 and 2025 are expected to wind down in the near future. Second, about typical activities, typical activities, they generated cash. Net inflows of $30 million in 2025, which arose from 2 areas: one, simply a net inflow from operational activities of $62 million. These activities are typical working capital, interest, taxes, core business activities; two, an outflow of CapEx. CapEx was $32 million, mainly for software development.

Moving on to our share count. As of December 31, 2025, the company had 108.8 million basic shares of common stock outstanding. In addition, there were $11.6 million unvested restricted stock units issued to incentivize employees. Now I want to report on the progress the progress we've made towards regaining current filing status with the SEC and steps ahead to get current and stay current. Work on the audit of 2023 and 2024 continues and is well along its path. We are moving ahead with the right balance of accuracy and pace.

BDO continues to be actively engaged with me and our accounting team has done says shoulder to shoulder. We anticipate, as Don also mentioned, our next update will mark a major event, a filing of our 2023, 2024 annual 10-K of Super K. Modernizing our IT systems is critical and is well underway. The new news is the recent launch of our new ERP which occurred in January, an event that marks a major step forward as we migrate financial data from outmoded systems to modernized IT systems throughout the course of this year. The January event was an important milestone project outs.

In order to Get Current and stay Current, milestones ahead are logically complete all past due SEC filings simultaneously complete the remaining IT application go-lives, migrate financial data and most importantly, and thirdly, demonstrate with full strength that we're able to close and file financial statements with accuracy and on time, consistency you would expect from a publicly listed company. Those are the steps ahead to Get Current and Stay Current.

To wrap up, I want to reiterate that our top line remains stable, consistent with our expectations, geared to recover and reignite. We are net cash positive and maintaining a well-capitalized, strong capital position for the road ahead. And with that, let me open up the line for questions.

[Operator Instructions]. Our first question today comes from Jeffrey Garro of Stephens.

Yes. I'll start off by following up on the filing progress. Certainly, it seems like some important milestones hit there and some good progress and certainly recognize that you I think, seek to avoid a trap of giving specific deadlines. But any further comments on the pacing of the work on the visibility into future milestones? And maybe though, if you could confirm that you do expect to get current and be able to stay current here in calendar 2026, that would be helpful.

Yes, just -- thanks for the question, Jeff. I appreciate it. So I think we're trying to be pretty intentional in terms of laying out the order of operations. We've got to get current, we've got to be have conviction that our systems and process support stay current and then apply to relish shortly thereafter. So that's sort of the sequential dimension of it. And as I said in my remarks, we want to make sure that we're moving not only with the right pace, but the right level of accuracy. So that's the framework one. Two, we absolutely remain focused on getting current in 2026. I think as Lee emphasized and I emphasized, we think there's meaningful progress that's played out.

The systems infrastructure for remediation, January 12 was a meaningful milestone for the business that we think there's upside leverage in, by the way, from an operational performance perspective, and we think the Super K will also be a meaningful milestone. And so our intention is to continue to update folks on progress against Stay Current tied to milestones, and we think the Super K will be the next milestone that we'll be talking to you about and updating around this topic.

I appreciate those comments. And maybe to turn to a different topic. I appreciate that we now have this preliminary '24 and '25 top line results, and we're 45 days into 2026 here. And given kind of where you are in the story, I understand that you're not likely to rush to give formal 2026 guidance. And clearly, you haven't yet. But if you could give some comments on kind of directionally how you see '26 versus '25. And what the biggest swing factors are likely to be in your 2026 top line performance?

Yes. Look, I think it's a great question. One, just on communication around financial performance and guidance the principles we talk about internally are we want a high-performance set of objectives for the business. We want to be transparent around how we're performing against those objectives. But critically, we also want to make sure that the data is accurate. And so that's the 3-part test that we use for how we think about both updating you on retrospective performance, but also setting out objectives for the business as well.

Secondly, I'm really excited about what I see as the growth potential sitting inside the business. And I talked a little bit about it inside the script. I think the independent practice footprint we have is really hungry for technology and data strategies around financial and operational performance. And 1 of the things that attracted me to come to Veradigm is how underpenetrated we are from a revenue cycle perspective. We GA-ed our integrated billing solution less than 2% of our Practice Fusion clients have our integrated billing.

And then if you look at the solution set as a whole, only 5% of our total practice count has revenue cycle. So I think there's huge growth potential associated with just being more effective in terms of how we get aligned with our clients, get aligned with them on operating and financial objectives for the practices and in the process impact -- positively impact retention and drive share of wallet growth around revenue cycle. So I think there's a really strong growth story to be told there and we're in the middle of driving performance against it.

The second thing I would say is in the Payer space, as you know, there's a lot of interest in rethinking their strategies around provider network management. And I think people underappreciate the brand strength that we have around understanding independent practices, understanding what it looks like to provide technology to them that isn't an obstruction to their workflow challenges and what they're trying to deal with. And so I'm super excited about what we're doing around chart retrieval, payer insights where we're providing gaps into our closure capabilities.

And as I said in the script, 2 very large deals around larger gaps in care closure services strategies tied to both a large Blues plan, which is a segment of the market we like and also a large national plan that ultimately could be multistate if we can prove out the impact around the initial scope of the relationship. So I think there's plenty of growth potential in this business and plenty of excitement on my part as I sort of hit the 150-day mark around what we can prove out to our clients and to investors over the course of '26.

Appreciate all those comments, and I appreciate all the detail of 4Q bookings and new business as activity in the script. I was interested and helpful as well. One more follow-up for me, and I'll jump back in the queue. And you started to hit on Sensata, but wanted to ask about the product portfolio refinement. If you could give us any detail on specific products or areas of the markets that you're looking to get out of kind of get, I think you did hit on this, but any more the growth opportunities looking to invest more. And you see that the products that you're exiting are low revenue. In aggregate, you could kind of size those up so we could think about the headwind that might represent as you look to put more energy, effort and dollars behind the more interesting growth opportunity.

Yes. I think one, I wanted you to hear the discipline that Tehsin Syed and I are bringing to looking at everything in the portfolio with fresh eyes. And really thinking about not only the market potential, but the gross margin profile of those products and how they deliver against expectations of shareholders. So that's the first important thing I wanted to do to hear. Secondly, we felt like there was some no-regret decisions that we could make around smaller revenue solutions. And I was fairly intentional in my language there. I said over the course of 2026. We want to obviously work through that in terms of this transition strategies with clients, and that will give us a fuller and more accurate view of what is a relatively small set of solutions on a top line revenue basis.

Part of what we thought was important there was establishing the process with the company around how we're going to think about capital allocation against products. and it gave us the oxygen to still make the kind of progress that we wanted to make around strength and profitability but also make some targeted investments in 6 solution areas that we think our so-called growth bets in the language we use internally that have near-term revenue potential that sit in market areas that we really like.

The next question is from George Hill of Deutsche Bank.

Yes. I guess, my first 1 would be for you is that as we think about the revenue information that you guys provided from '24 through '25, are you able to unpack the moving pieces at all? Like how should we think about I guess, like practice losses or practice churn, pricing versus volume, how much of the revenue is subscription based versus volume based? And that's kind of my way of trying to reverse engineer Jeff's question for how should we be thinking about '26. I mean, kind of like any information you can give us on the KPIs of the business, I think it would be helpful if you have them. .

Certainly, George. I appreciate the question. So I'd unpack it qualitatively for you. And I'll also say that, as Don has mentioned today, our next milestone, the Super K will presumably have a significant amount more financial information to discuss today's strategy and discussions are the emphasis. But to unpack 2025, I would say the following 3 things: number one, our retention improved at the EHR. -- an important shift in the wind. Two, there were no surprises in Practice Fusion's retention, so consistent. Three, puts and takes, I would say, among the first at additional revenue stream areas that we have in the provider business that ultimately netted out to a modest 2% decline as mentioned.

And the important point I would now emphasize is that several of the growth initiatives and retention initiatives that Don outlined have clear potential to modestly reverse and improve the direction of growth within those additional revenue streams. One of the things Don just mentioned is that there is, for example, mid-single-digit penetration of some revenue cycle products. within our base of EHR. There's room to expand that penetration within the base. So that's a signal for the areas of emphasis in our growth. And so those are the 3 things that at this point qualitatively.

Okay. And Don, if I could follow up with a strategic question for you I'll ask you the obligatory thematic AI question, which is I would just love to hear your thinking about the application of AI into the client base. given it's kind of rolling the markets and kind of rolling every software company that exists right now. I guess, I'd love to hear how you think about it dramatically and strategically and where you see the opportunities. .

I love that question. Thanks a ton for that, George. So one, just to emphasize, we see it as a generational technology shift. So 1 of the things that I talked about even before I started was would this be something exciting for Tehsin Syed to jump into and really try to create something differentiated. And as you know, he was in the middle of that work at Amazon AWS and part of the attraction was rather than enabling other clients strategies, what would it look like for us to get in the middle of this and actually put the technology to work and the strategy to work here. So we're both super energized by that. That's a big piece of how we think about the long-term potential of the business.

Secondly, revenue cycles was a really obvious starting point and the solution capability that we launched is a good use case on what we think some of the proximate potential looks like. I love the strategies around some of the clinical use cases, but we think the low-hanging fruit is absolutely in the administrative and revenue cycle areas. And so if you look at what we did with the reporting capabilities, that we generated for our revenue cycle solution client, George. You have a set of clients who are leveraging contractually obligated monthly and quarterly reporting activity we were able to use AI to reduce the manual effort around our client executives to go assemble the data for those clients.

We were able to create better BI and narrative capabilities around how they consume the information for a lot less cognitive load and therefore, better change management adoption. And ultimately, those capabilities end up being ones you can push out to all revenue cycle clients in a way that expands beyond the scope of what you're providing client executive capabilities today. And so we started there with intentionality because that same margin impacting client impacting activity is extensible to the work that we're doing around gaps in care closure in the payer space, and it absolutely can create lift in terms of how we think about both the impact and the margin profile of what we're doing around real-world data.

So we're going to start there in terms of client-facing focus. And then there's a massive internal effort that Tehsin is leading both on technical and nontechnical areas of the business to really beat AI-first and forward leaning or how we think about workforce. And we think that's going to have really large and impactful to the strategy as we play through '26. It's a huge opportunity for us, and we need to lead on it.

The next question is from Charles Rhyee of TD Cowen.

Thanks for all the comments so far. Maybe going back just logistically, if you think about the sequence of events that we're now expecting, Lee, I think you talked about -- Don, you talked about '23 and '24 work for filings. Do those have to come in sequence before '25 can be filed? And obviously, we're already now into '26. Maybe just give me -- give us a little bit better sense on how we should think about the sequence of those things? And then 1 like how far into -- do we have to be current on the beginning of '26 year as well before we are allowed to relist?

And is there -- what's the time gap between that before, let's say, being current on, let's say, first quarter of '26, then you're allowed to sort of apply for relisting.

Sure, Charles. I appreciate the question a lot. I'd say there's a basic logic to the answer to the question you just outlined. So annuals need to occur in sequence. We're undertaking, as you know, the 2023 and 2024 audits in tandem as a Super K, of course, that occurs first before you begins and then executes on the audit and filing of the 2025 10-K. And for periods during -- so that's the sequence, of course, and work and the pace and accuracy I emphasize here is so important because if you think the long game here around being assured that not only we get current, but that we stay current.

The systems as well as the filing dates or mutually critical. So the launch of Atlas, the implementation of systems, the procedures and step-wise functions at closing and preparing for filings are all activities that need to be performed and demonstrated to really solid satisfaction so that we can stand fully assured as a company that we're able to, again, get and crucially stay current. So we'll be forming a lot of internal tests about the performance of our team and demonstrate that full assurance before we consider the declaring that we are current and able to stay current and then relist. That would ensue after the 2025 filing as a matter, of course.

And then -- okay, so the Super K. The way you guys talk about the Super K coming, is it fair to kind of infer that the work there is pretty far along, and it feels like. It sounds like that could be coming I don't want to time per se of time frame on it per se, but it does feel like it's coming nearish kind of soonish. Does '25 work not start -- has work on '25 already started. I guess or does that Super K have to be filed for you guys then to start working on '25? And then obviously, the '26 as well. .

For the Super K, I used to phrase intentionally well along. You're correct. I wouldn't -- I think it's prudent to specify date, but the work is well along with the 2024, 2023 Super K. We'll certainly look forward to making an announcement and then being back with you all when the time is right and the filing is very near. There is work, of course, that 1 we're able to even have begun on the 2025 audit. But I would not want you to take away the impression that, that is a snap of the fingers that occurs almost instantaneously. There will be considerable amount of work together with BDO to demonstrate our accounting and perform to their audit standards before we can file the 2025 10-K, but yes work is well underway.

Okay. And then, obviously, you guys have talked about it, but maybe Lee, and then I have a question for Don. You mentioned, obviously, we've gone to $120 million in cash. You laid out the pieces that kind of takes us from $294 million to $120 million. Any -- can you give us a sense for uses of cash expected in '26? I know you mentioned earlier, costs related to accounting and the restatements, all that, it should drop materially. Can you give us a better sense like how should we think about cash flow from operations and net cash for '26. .

Sure. It's an important question. I'm not going to break new ground on the Q&A on the topic of what we'd really be forward looking on specifics, but what characterizes our balance sheet remains quite strong with net cash positive. I would not anticipate a change in that over the coming 12 months approximately in regard to our net cash position by that, I mean to say, Don is gearing the company to be a unified enterprise with internally generated performance as well as a focus on the ability to choose which products we're emphasizing and perform those growth bets as 1 company.

And so I want to speak about 2026 outlook and the use of cash towards internal functions as well as amplifying margin performance.

Yes. I think the only thing I would say just to amplify on that is there was a historic orientation to the company around being a holding company as opposed to an operating company. And so 1 of the big shifts you heard me articulate in my script is we aren't going to be having a holding company orientation. We're going to actually run and operate the business. with a clear eye towards organic growth and market impact. Two, the areas of emphasis. And this really speaks to the question around portfolio management, is around areas that anchor to the strength of our independent practice footprint.

So we want to drive alignment with those practices. We see a big opportunity around revenue cycle, given how underpenetrated it is inside our base. We see big opportunities around provider network management and helping health plans work through the rethink that's playing out around their strategies there nationally. And then we're looking for targeted and higher-margin opportunities in the life sciences space. You obviously have seen the announcements that we've made around survey activity tethered to our technology, which we call Balama Health.

And we also think there's some interesting opportunities in the digital ad space with a growth margin profile we really like. that we think can be part of how you impact and drive scripting and adherence appropriately tied to that provider-patient relationship. So those are the areas of emphasis on those growth bets that I talked about. And we think all of those things end up having big and important impact on financial performance as we play through '26.

I appreciate that, Don. And maybe 1 question for you then directly and to follow up on George's question. If we think about the moving pieces, maybe just more directly, what has -- what is the current sort of retention rate in the provider business because down 2%, but you assume there's some annual price escalators in contracts plus. Obviously, you're doing well, at least cross-selling rev cycle management, you kind of net that out, it feels like retention is maybe a best 90%, maybe a little bit lower. Just trying to understand where you are there? And sort of what you're targeting? Because it sounds like you've put in a lot of initiatives and to push back towards improving that metric. Just maybe let us know where you are there and how you see that kind of playing out over the next couple of years?

Yes. So one, as I say to the team, we can't have an organic growth strategy when we're seeing churn in our installed base. So the starting point for success around the growth case is deeper and better alignment with our independent practice footprint. As Lee said, we actually saw some nice trajectory last year around how we thought about the license footprint, the number of license. And so I think the independent practice footprint is stable and in good repair, we can do better. And if you were to get into the details of the OKRs that we rolled out to the company over the course of January you would see initiatives across multiple areas.

I want to show up better from a client management perspective, really getting aligned with the business strategies of our clients, particularly large strategic aggregators of physician practices who are multispecialty multistate. So that's a particular emphasis. There's a set of things we can do better nontechnically around things like billing and invoicing. And so we have initiatives that we're playing forward there as well as the set of things that we need to do better from a systems infrastructure perspective.

So there's a whole set of things separate and distinct from the product road maps that Tehsin is advancing that are a big focal point for how we drive gross retention improvement year-over-year. But I think of a solid base that I feel like we can build off from here.

The next question is from Eric Percher of Nephron Research.

I appreciate all the commentary and particularly the nontypical versus typical on cash flow. I want to focus there for a moment. Can you help me on the legal and consulting costs. Was the comment you made that you're beginning to see a wind down or that you're looking towards long down as we progress through the year?

The answer to that question is I'll just speak about it on 2026 as a full year period during the year. The immense amount of activity that was required in 2024, early part of 2025 to ultimately yield to the filing of this restated 2022 with a high mountain of expenses that were nontypical. The 2023 and 2024 combination of audit work is a shorter mountain. And so as you get into 2026, we have to catch up and do 2025's audit as well as the work in the queues in 2026 and additional work for the Project Atlas data migrations and so forth that ultimately are important, very important for our ability to stay correct. All of those activities are less than in the past, work towards the restatement and more recent work on the 2023, 2024 K. So that's what I mean by winding down.

Got it. And then turning to the typical cash flow. When we think about the goals that you have for the product and some of the commentary that we just heard on staying close to the client. Would you view the last year or 2 as a period of investment when it comes to capital expense and what's been allocated? Is there a decline from where we have been? Or have you been constrained on the cash side and there's a desire to expand as the business performs.

You want to answer?

Yes. Look, my view of the business is a little bit of a current state assessment in terms of where we are and how we move forward at an accelerated rate. I think there's plenty of growth potential sitting inside the current portfolio of products. As I said, we're also actively looking at solution areas where we've seen declining or flat revenue and asking hard questions about how we want to think about those assets. So I feel like the capital investment that we have is sufficient today to drive the rate of growth that I want to try to deliver around the business which is something meaningfully better than approximately flat.

Okay. That's helpful. And then the last 1 is we did get a lot of questions on Payer and Life Sciences. Obviously, there has been a lot of tumult in some of the end markets. Do you view the opportunity here as impacted by what has gone on at a macro level? Or do you feel like the opportunities are such that you kind of make your own weather?

Well, I don't think you ever make your own weather. I think the best way to build a business is to think about what's playing out at the macro market level and how you impact it. My view of it is that when I look at the problem set that is challenging these end markets, it creates a significant opportunity for us. So health plans are struggling with cost trend and they're looking to independent physician practices as a big piece of how they go control that cost trend. So that's a big opportunity for us as they rethink their provider network management strategies. So that they're less dependent on large health systems who have consolidated and are high-cost providers in the markets where they're managing member lives.

Similarly, in the Life Sciences space, whether it's pre-approval or post approval, I think our practice footprint is super relevant to how folks want to think about leveraging the provider practice relationship to impact Stage III clinical trial activity, where they have their largest spend area through to approval. I think it also is an area and for us, a very high gross margin area where we can have a structural relationship around targeted advertising that has some potential really significant secular tailwinds as that entire space gets rethought regulatorily over the course of the next number of quarters and years.

So we're absolutely thinking about the macro environment. One of the things that I'm pressing the team on over the last 120-plus days is to not be internally focused exclusively but to focus on the market out in. And so that's a huge opportunity for us as we launch and we get out and start talking to prospects and existing clients in the marketplace.

Listen, I'm going to just wrap up this morning. I want to thank everybody for taking the time to join us on the call. As I said, this is going to be a determining year for Veradigm, Reset, Recover, Reignite. I think we're in a good place in terms of resetting the business strategy. I think the foundational pieces of our strategy to recover both from a Stay Current -- Get Current, Stay Current perspective, but also in terms of our financial performance and long-term growth are now in place and being advanced. And ultimately, I think what we're excited about is the chance to come back to the same group a year from now and start to articulate what it looks like to really reignite growth with this business and drive a higher trajectory, higher impact business forward from here.

So thank you very much. We appreciate your time, and we look forward to speaking to you with the next bit of milestone-based progress around our Get Current, Stay Current strategy. Thank you.

Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. You may disconnect your lines, and have a wonderful day.

Greetings, and welcome to the Veradigm Investor Update Conference Call and Webcast.

[Operator Instructions] As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Jenny Gelinas, Vice President, Investor Relations.

Jenny, please go ahead.

Thank you very much. Good morning, and welcome to the Veradigm Update Conference Call.

Our speakers today are Don Trigg, Veradigm's Chief Executive Officer; and Lee Westerfield, our Interim Chief Financial Officer.

We will be making a number of forward-looking statements during the presentation and Q&A part of the call. These statements are based on current expectations and involve a number of risks and uncertainties that could cause our actual results to vary materially from those reflected in the forward-looking statements. We undertake no obligation to revise these forward-looking statements in light of new information or future events. Please refer to our releases and SEC filings for more information regarding the risk factors that may affect our results. All financial information presented today is estimated and unaudited.

Today's meeting will start with a financial update from Lee, followed by an update from Don. And with that, I'm going to hand the call over to Lee.

Thank you, Jenny. Let me also welcome everyone who has joined our call this morning.

This morning, first, I will provide a financial update, addressing quarterly revenue performance, full year outlook, and the progress we have made with our financial filings and remediation. Then Don will share his thoughts.

Before reviewing our financial performance with you, I'd like to take a moment and talk about our fundamentals and our top priorities for 2025. With all of the accounting remediations and IT implementations, it's easy to lose sight of the fact that Veradigm operates attractive businesses. My message to you continues to be this, our fundamentals are sound.

How so? First, our recurring revenue. Nearly 80% of our revenue is recurring generated from an installed base of EHR and health technology solutions. And looking ahead, new solutions coming to market and initiatives to retain and expand our existing customer base should reignite our future growth.

Second, our operating profitability reflects our mix of software revenue and services. This year, under our competitive fitness program, actions are underway to improve efficiency and contribute to profitability in future years.

Finally, we remain soundly capitalized. We are net cash positive. Our leverage is light, and we have ample cash on hand with additional available liquidity for the road ahead. These are the qualities I see anchoring our fundamentals, a firm foundation to renew Veradigm.

Now turning to our recent financial performance. In summary, there were no surprises. The overall business remains stable. Revenue in the second quarter and year-to-date this year remained essentially flat versus the same periods in the prior year. Top line growth in Q2 was consistent with our expectations for approximately flat growth in 2025, that's both in Q2 and year-to-date.

Let me provide you with more details about revenue. Q2 estimated revenue is in the range of $145 million to $148 million. Revenue in Q2 decreased slightly versus the prior year, down 2% at the midpoint and year-to-date, down 1% at the midpoint. Revenue quality remained high. Recurring revenue was an estimated 79% of total, consistent with 79% in the prior year.

Drilling down further into our business segments, Provider, our largest segment, generates the majority of recurring revenue. Provider revenue in Q2 is estimated in the range of $115 million to $117 million, down 3% at the midpoint from prior year. To add color, decreases in ERP solution and Payerpath clearinghouse were partially offset by increases in both of our EHR products, Practice Fusion and Veradigm EHR.

Meanwhile, in Payer and Life Sciences, we enable future growth by expanding the reach of health data sourced directly in-house and through our partner network. Payer and Life Science revenue in Q2 is estimated in the range of $30 million to $31 million, up a modest 3% at the midpoint with prior year. Payer saw revenue increases in both clinical data exchange and gap closure products, combined with approximately flat performance in Life Science in media and in real-world solutions.

Next, I'll turn to cash. But just before doing so, let me make a comment to you on reporting profit metrics on EBITDA and why we have not provided that key metric of financial performance. Until we file with the SEC, it's my commitment to you to share financial information that meets a high-quality standard based on all known data. The company is underway auditing prior years and some elements, especially those rolling from 2024 into 2025 remain under review. Estimated revenue ranges at this stage meet our high-quality standard to publish to you in a range. Profit metrics, on the other hand, do not yet meet that threshold for public disclosure. I look forward in the future to sharing complete financials with you. In the meantime, today, I'm providing reliable revenue estimates.

Now turning to our cash and our debt. Again, we are appropriately capitalized and remain net cash positive. We have cash in excess of our debt. Subsequent to June 30, our cap structure has been further simplified. But let me say first, as of June 30, 2025, debt on the balance sheet was $283 million, which consisted of $208 million of the principal amount of convertible notes plus $75 million for the relatively new senior secured loan. Cash on the balance sheet as of June 30, 2025 was $350 million, which increased by $78 million from March 31, 2025.

I will walk you through 4 major sources and uses of cash that sum up to the $78 million change in cash during the second quarter. One, a net inflow from the new debt financing of $72 million, which consists of the $75 million in principal, less $3 million for original issue discount; two, a net inflow from investing activity of $23 million, which mainly consists of the sale of a private minority investment; three, an outflow for CapEx of $7 million, mainly for software development; fourth and finally, a net outflow for operating activities totaling $10 million.

Now that figure covers a broad array of items. So let me drill down into the net outflow for operating activities a bit further. Ordinary items, such as working capital changes, tax, net interest netted to an inflow of $7 million. Offsetting that net inflow were outflows for nontypical transaction and other expenses. These totaled an outflow of $17 million for transaction and other expenses. And those transaction and other expenses include several items, I should name, severance, legal fees, professional consulting, accounting fees for the restatement of 2022's fiscal year. In short, typical inflows for net working capital and other items partially offset nontypical transaction and other outflows.

Now I'll speak about our pro forma net cash. And by pro forma here, I mean a pro forma for the subsequent repayment of convertible notes that took place after June 30. In 2 steps, we repaid substantially all of our notes. Step 1 occurred in July, and we used $180 million of cash on hand to repurchase $164 million of face value plus $16 million of repurchase premium and accrued interest on the put date July 1. Step 2 in September, we used $50 million for a voluntary repurchase of $44 million of face value plus $6 million of repurchase premium and accrued interest. And that latest repurchase was announced just Monday.

So now where do we stand? For debt, as of September 30, last night, debt on the balance sheet is $75 million, substantially all of which is our senior secured term loan, which we entered into last June with Francisco Partners. On a pro forma basis, cash as of June 30 would have been $121 million had the repurchase of the notes occurred on June 30. So in short, net cash pro forma as of June 30, 2025 after the repayment of the convertible notes would have been a positive $46 million of net cash.

Moving on now to share count. I'll provide you with an updated count. As of Monday, September 29, the company had 108.9 million basic shares of common stock outstanding. And in addition to basic shares, there are also equity grants to employees. There are 10.6 million unvested restricted stock units issued to incentivized employees.

Turning now to our financial outlook. Today, I'm reaffirming our outlook for revenue in 2025 to remain approximately flat versus 2024. And I'm also reaffirming that we expect to remain net cash positive throughout 2025.

Now I want to update you on the progress we've made toward regaining current filing status with the SEC. Just as I discussed with you in June, BDO over the past several months has been actively engaged with me and our accounting team working toward the annual audits for both fiscal years 2023 and 2024. That work is well underway. The team has made good progress. Now just as a reminder, we filed the restated 2022 10-K back in March 18 of this year. Now we're working on the '23 and '24 audits. Once we complete those, we will turn our attention promptly to completing -- working on and completing the 2025 10-K. That's the sequence.

Also, as I stated on our call in June, we have material weaknesses to remediate. Work continues to progress on the design and the execution of new controls towards remediation. So today, I also reaffirm with you that we anticipate becoming current in our SEC financial reporting sometime during 2026 and also that we plan to subsequently relist our common stock.

To wrap up, I want to reiterate our top line remains stable. We are performing consistent with our expectations. We remain net cash positive and maintain a strong capital position for our road ahead.

Now it's my pleasure to welcome Don Trigg, our new CEO. And just as a matter of background, I thought you'd be interested. As many of you will know, Don brings over 20 years' of leadership expertise in health care technology, proven record, driving innovation and growth in the industry. Most recently, Don was the CEO of apree health. That company delivers advanced primary care solutions through digital tools and empowers independent practices with data and technology. And apree demonstrated the real importance of high-quality provider practices and the critical role data and technology can play in supporting those customers.

Prior to his role at apree, Don worked at Cerner, a familiar name, a $5 billion revenue health care IT services leader, most recently serving as its President. In this role, Don held responsibility for the full breadth of Cerner's business groups, which included Cerner's foundational businesses, its electronic medical records and its revenue cycle units and also Cerner's strategic growth businesses, its life science and data units.

Now I'll pass the call over to you, Don. Thank you.

Thank you, Lee. Good morning. At the 30-day mark as CEO, I not only am excited to be with you this morning, but I'm excited to be at Veradigm. Every company has chapters. As a health care IT veteran, the Veradigm book is one that I've read and studied for decades. The entrepreneurial push from earlier leaders built a national provider client base of independent physician practices. These clients are core to our business today. Well in advance of other electronic medical record companies, Veradigm saw the promise of data to break down administrative friction between providers and payers as well as help pharmaceutical companies accelerate new drug discovery.

Today, we have 100 health plan clients and one of the largest ambulatory data sets for pharmaceutical research. All the major Veradigm markets are ones that I've built or scaled businesses in over the last 2 decades. At Cerner, we not only were a major supplier of EMR and revenue cycle solutions, but also had large strategic growth businesses around provider network management and real-world evidence. At apree health, national and regional health plans were our core customers for digital navigation solutions, clinical advocacy services and advanced primary care.

As I talked to the Board this summer, I became increasingly convinced about the Veradigm opportunity. We have a large national provider and payer base that would take years for a start-up to replicate. We have a strategic data asset that offers a differentiated view into Main Street Health. These end markets have real challenges. Data and technology are the single biggest lever to solve them.

Like any first 30-day sprint, the weeks since my September start have been filled with clients, partners and teammates. It's been great to jump in. From conversations in the market to internal town halls to small group deep dives, I've had the opportunity to dig into the state of the business, review product road maps, assess key operational deliverables and begin to build a cadence with the team. Unsurprisingly, we have a set of challenges. We also have a set of clear advantages. And in the balance, I leave the first month with even greater conviction about the Veradigm opportunity ahead.

Our near-term focus is straightforward: improve profitability, reignite growth and become current with our SEC filings. It's our must-do list and the work to advance it is underway. We're going to have increased discipline around how we invest capital, maximizing the return on every dollar spent. We're assessing the functional areas of the business. We're broadening our global workforce strategy to include our Q3 build-out of our operating footprint in Pune, India. And we're reviewing our end-to-end product portfolio through the twin lenses of growth and profitability. I'm challenging leaders to act like owners, and we're making solid progress as a team.

Second, on the growth front, the business update this morning offered a solid date-driven process to look at first half performance, review our second half forecast and assess the go-to-market capabilities of our 3 business units. In our Provider business, our revenue cycle strategy is showing modest signs of momentum.

In Q2, we signed a 3-year deal in the Southeast for our practice management and full revenue cycle services with an annual contract value of $2.7 million. A Midwest Specialty Group saw the benefits of our revenue cycle expertise and signed a 60-month deal for full revenue cycle services. The sales and client teams both described real revenue cycle traction, and it's a major focus to close their year. Given the sales and pipeline momentum, we're focusing a portion of our internal AI capacity on revenue cycle efficiencies. Our goal is to reduce the time required to provide business intelligence and reporting to our clients. The result will be better, more accurate client reporting that requires fewer Veradigm hours to deliver.

Beyond the provider space, the payer business has been pushing to broaden its work with health plans beyond its early footholds around interoperability, data exchange and analytics. Gaps in care closure is a major pain point for health plans and a major focus for the team. We now have 10,000 practices and over 35,000 providers that have deployed our gap in care closure called Veradigm Payer Insights. Beyond the technology, we also offer an end-to-end gaps in care closure solution called CORE, leveraging our expertise around practice operations and provider workflows. There's a solid sales pipeline for both solutions, and we're focused on a strong close to the year.

Finally, in our Life Sciences business, Veradigm offers one of the largest and most geographically representative ambulatory patient data sets for pharmaceutical research. Our data reflects the U.S. population free from regional bias. It's an unmatched view into Main Street Health. You can see the power of the Veradigm capabilities and recent collaboration with the American College of Cardiology. Their campaign driving urgency and LDL screening sought to encourage providers to help improve screenings from so-called bad cholesterol that can lead to heart disease and stroke. The Veradigm network increased the reach of the initiative by 30,000 providers.

Our third and final near-term must do beyond improved profitability and reigniting growth is to get current and stay current on our SEC financial reporting. In the months ahead, we look forward to sharing continued progress on our SEC filings. We also will convert our new operational systems infrastructure, which we call Project Atlas. I've met with the internal leaders at the center of both work streams. They understand the importance of the work and are moving with a good balance of operational urgency and financial accuracy to deliver it. We appreciate those efforts. Improve profitability, reignite growth, get current and stay current. It is our must-do list and the work to advance it is underway.

The coming 30-day window is an important one. We begin to formulate our 2026 plan, we're going to have increased discipline around how we invest capital. We're going to concentrate our growth bets and delivering on them, and we're going to harden our financial systems and reporting and relist our common stock in 2026. One of the things that I've said to the team over the last 4 weeks is better starts with different. Change is hard, and it's exciting. I could not be more excited to be at the company and helping write this next chapter for Veradigm.

With that, let me open the line for questions.

[Operator Instructions] Our first question today is coming from Jeff Garro from Stephens.

Don, great to speak with you, again. I want to start with -- I'll start on the relisting time line. I appreciate the reiteration of some of the comments there and that there's a sequence to it. Any further color you can give us on what is the next step we can look for and an expectation around timing of that next step? And maybe alternatively, from last time we spoke, any kind of obstacles that have come off there? Or anything that has gone maybe a little bit smoother than planned that make you feel better about where the time line looks from here.

First of all, good to hear your voice. Happy to answer. The steps to relist and the timing. So we've outlined really no new information, but reiterated what we said previously, which is that we intend to regain current filing status. I'm just reaffirming these points, regaining current filing status during 2026 and thereafter relist the stock. Between now and then, the events that will take place, they go in sequence. We'll file our 2023 and our 2024 10-K. That's a super K. We'll then work on our 2025 and file our 2025 10-K. That will include the quarters. We'll then work on quarters up until the point when we're current, and then we'll be current during 2026.

You're looking for dates, I respect that a lot. The work that we're doing with our auditor and internally to implement our ERP systems are all really important elements of that time line and work towards relisting and towards regaining current filing status. And they have a natural rhythm that they'll undertake. And if I say -- were to say more, I'd really be imposing kind of artificial time line against what really is the auditor's progress and our own work internally on those important initiatives, again, filing the case and implementing our ERP.

Yes. The only thing I would just add on that from a company level perspective would be it's a great opportunity for us. We are relooking and reimplementing our core systems infrastructure as a company. So it's a great chance for us to look at structure, process and systems around how we run the business. And to really stress test how we want to think about the dollars that we're allocating around that space, but also how we think about the performance of the business itself.

I also think the process of relisting gives us a chance, much like an S-1 and an IPO to really think about what it looks like to frame up the longer-term vision for the company and how we want to think about that on a multiyear basis. And so I think the team is organizing around not just the remediations, which are critical and important, but also thinking about where is the strategic leverage that we can find in the work. And I think there's a couple of things that are going to make us better both at the vision and strategy level and at the operating level as we play through this process over the course of the next several months.

I appreciate that color, and we'll use it as a segue to ask a broader, more strategic question to that. Curious what you came across in your diligence before you took this position. You said you studied the company for decades, but the Veradigm today isn't what the Allscripts business was a decade ago, just as the portfolio has changed, and the company has navigated the more recent challenges. So curious as you decided to take on this position, what you saw, and I know it's only 30 days in, but you presumably had a chance to meet with a lot of people internally and maybe some customers as well. And given that there's less investor-facing interaction over the last several months and years. But the business has gone on. So if you could give your take on Veradigm's reputation in the marketplace from what you've seen so far, too, that would be helpful.

Yes, for sure. Like you said, early days in terms of stepping into post, but certainly had a number of market conversations prior to my start and since I've arrived. And the first thing I would say is this anchor client base is one that is really hungry for better capabilities to help them deal with challenges around practice operations and in particular, as I talked about in the script, what they need to get done from a financial and revenue cycle perspective. And so I emerged from my conversations feeling like there was a real opportunity for us to add more strategic and operational value with our client base around the technologies and solutions that we were providing.

I've spent the better part of the last couple of years really focused on the provider practice space at apree and have a lot of conviction and depth of thinking around what it looks like to help providers organize around building their businesses and delivering what's required clinically, operationally and financially to do so. So I think there's a huge opportunity for us to show up and have a bigger impact on the practice side.

Secondly, while some of the headline coverage around Veradigm's work in the data space has anchored to Life Sciences over the last number of years, I was excited to find the work and activity that was taking place around provider-payer connectivity. And again, having spent time in the payer end market, particularly the regional Blues over the last 8 to 12 quarters, their level of focus on provider network and provider network management strategies, and I think that's a place where Veradigm has a lot of competency, a lot of brand equity and a lot of solution capability where we can show up and add significant value as national and regional plans start to think more aggressively and invest more aggressively in their provider network management strategies.

So those 2 things, in particular, were exciting to me as I talked with Lou Silverman, our Chair, and the larger Board around the opportunity. And then finally, as you know, from my time at Cerner, we made some large investments, including the Kantar acquisition around real-world evidence and the data space. I still think there are opportunities there. I'm digging into that piece of the business to really understand what's it look like for us to take that business and meaningfully grow it in a way that's relevant to how we think about the business on a 1 quarter and full year basis. But there's a lot here. And I think once you get beyond some of the noise around the audit and reporting activity and the relisting, I think people are going to get excited about the strategic potential embedded in the business.

[Operator Instructions] We have reached the end of our question-and-answer session. I turn the floor back over for any further or closing comments.

Yes. Let me just close out the call by saying thank you very much for folks for listening in and for the framing and the question that was provided.

I think we're excited to continue to make progress around the business as we look out to '26. Again, as I said in my comments, a push to improve profitability, really reignite the growth story, as I described. And then as Lee nicely framed, make progress against the relisting process as we relist the stock in '26.

So thanks so much for being here. We appreciate your participation, and we look forward to speaking with you next time.

Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time, and have a wonderful day. We thank you for your participation today.