Claritev Aktie

Good morning, everyone. Jon Swope, Managing Director, Head of Healthcare Technology at Morgan Stanley. Delighted to have you in the room. And importantly, I'm delighted to have Travis Dalton and Doug Garis up here on stage with Claritev. So thanks, guys, for coming.

Great, yes. Thanks, Jon.

Beautiful day in New York, and we appreciate everyone that's participating in the Morgan Stanley Global Healthcare Conference.

Figure we kick things off with an easy question, which is give us a little bit of a thumbnail sketch of what Claritev is today and what you've seen over the 2 years now that you've been at the company.

Yes. Thanks, Jon. Appreciate it. Hey, everybody, I'm Travis, CEO. I took over in March of '24. It's been an interesting ride. I just -- look, health care is an interesting spot. I've been in it for 27 years now or so. It seems simple. You have plan design, you're an employee, you pick, you enroll, you get service, claim is produced and payments made, right? Seemingly a simple thing to do. Lots of problems inside of that, right? So massive amount of complexity. There's cost issues, there's fraud, waste, and abuse. There's lack of transparency in pricing. There's regulatory complexity that's pretty monstrous. And so there's a tremendous amount of churn inside of that process.

But on the macro of things, I think it's -- our view is that we see costs remaining elevated in health care, what a revelation that is. But we think costs will continue to remain elevated. Employers are going to be under a lot of pressure over time. Utilization likely to be stable, but yet shifting venues of care. So, care is largely shifting in many ways outside of what you call the 4 walls into urgent cares, ASCs, behavioral health, at home, different venues of care. Self-funded plans likely to be steady with unemployment remaining relatively steady and regulatory complexity high. Now what do we do? So, painting the picture of that kind of environment, the words I'm going to use are not the words most people use to describe us, but I think it's what we actually do.

So we provide access to care. We do that with a 1.4 million provider network. So employers and employees are covered by our network in a predictable way with access to care. We provide protection to employees and consumers of care with our out-of-network solutions, including the work we do with NSA. We provide efficiency in an inefficient situation I described through Payment &Revenue Integrity with fraud, waste, and abuse solutions and capabilities that we detect those things. And then ultimately, we bring back insightful insights into pricing and other transparency so decisions can get made in a reasonable way.

And so at the core, everything the company does is actually aimed at the endpoint of health care, which is the consumer and the employee. It's not always framed that way or it hasn't been because the channels you have to sell through in health care obscure the endpoint of actually the recipient of the product or service. And so that's how we view what we do. And every day, we get out and think about that endpoint and the needs of that. And so really bringing insights to an opaque market is important in that consumer protection. And we work across the continuum. We've got 50 million or so members that use some form of our service. So we've got a pretty scaled operation. But fundamentally, at the core, that's what we do, affordability, transparency and access.

Makes sense. And for decades, you've been embedded in the fabric of the ecosystem as a core infrastructure layer. Given that, could you expand a bit on your Vision 2030? And certainly, it's been great to see what I think you've described as '26 is the way up, leading into the way forward in '27, where are you? And what's on the near-term road map on that vision?

Yes. As I said, I joined in March of '24 and the company had been 4 or 5 years of declining revenues. A lot of people said, why did you take this job? I actually viewed a wildly underutilized asset -- set of assets that I thought weren't just to serve 1 single vertical, which would be the payer market that could be used across other vertical markets. And so horizontal assets across multiple vertical markets. And so to get to a place where we could really accelerate growth, which we're starting to do, we've had 5 quarters of growth in a row now year-over-year. We had to have a plan. And so the plan was let's embark on what I would say was a multiyear journey. And I like to name things. I think narratives work. I think stories are important. I think employees get behind stories.

And so we came up with this idea of a Vision 2030, but really, it was 2024 was the foundation year for us, and we called it The Foundation. So, getting our systems in place, getting better insights into the business and the forecasting tools, recruiting a world-class management team and restructuring a pile of debt for a multiyear basis to give us a little bit of time. So that was foundational. '25, we called The Turn. We said we're going to turn the company. We're going to start that turn. That was really predicated on building new markets. So '25 was focused on -- we launched an international business, the TPA business, services businesses. We moved into the public sector vertical and direct-to-provider. So we signed a large deal last year with one of the largest health systems in the U.S. direct.

Those weren't things the company was associated with prior. So opening up those new markets were important for us in "The Turn." We actually returned to growth last year, which was, I would say, at least 18 months sooner than I thought we might. So I was pleased with the execution. And then this year, we called The Way Up, which is aggressive execution of that plan, which includes a massive technology modernization that we started in '24. And so we embarked on a transformation plan in '24 to improve all -- modernize all of our technology, create a data mesh where we could use data and information to go forward.

So if you add all that up, foundation is there. We started to make "The Turn" and build momentum. This year, we've returned to growth. And we think we're really well positioned against those tailwinds of health care that I just mentioned, but we think we're -- I don't think, I know we're well positioned relevant to an AI future. We're using AI today. We've got over 30 agents in use. We've got -- we're performing really well in NSA in certain areas against our competition. And it's because we've got data and knowledge and people to do that. And so if you add all that up again, the reasons to believe are many.

We're -- we said earlier in the year that we had a stretch goal of $100 million of sales. I think we'll achieve that by the end of this quarter. And so we are selling and the strategy is showing up and working. Doug can go into some of the financial elements, but returning to free cash flow and really moving forward in new markets, new logos, et cetera. So we're pleased with our progress, but it's been done in a structured way. It's not luck, right? Vision, strategy, plan, execution. Very simple.

Showed up a bit with hair on fire situation and the foundation is there. I do want to unpack some of those metrics. But quickly before I do, you've called Claritev the billion-dollar, 60% EBITDA margin company no one's heard of, and you've been a big proponent of getting the brand out there, both for investors, but just as importantly and probably more importantly, with clients and the ecosystem. How do you think about brand and that importance?

Yes. That's a good question. Look, the first thing that I think about every day is actually not the brand, it's our clients. So if you -- there's a problem to solve and you have a relevant answer alternatives to that problem, that's a good basis to start from. And we have real products that work really well. So you look at all the narrative that's been around the company that I inherited in some ways or showed up right when I started. The narrative is pretty different than what the company actually does. And it's clear that we do something real and meaningful in health care because the company has turned and grown inside of a difficult macro narrative. And so I think that that's the most important thing is that we care about our clients and we deliver value.

Secondly, brand -- there is an element of brand that matters. I mean what people think and how you're perceived matters, it matters to investors. The story matters. All of that is relevant. And I think, look, when I used the words earlier, I think there was a big mistake. Let's put it like this, the company was not positioned the way that I think it should have been in terms of talking the best-kept secret in health care, there are no secrets in health care. So, my -- the first thing I said when I came here was we're going to be about radical transparency, not secrets, right? So, just shifting the mindset and then embarking on a brand program where we relaunched the company in an earned way, not just with new colors, was important. And then ultimately, the words matter.

And like I said, access, transparency, cost and protection, that's actually what we do. But we get picked at for one thing, which is the out-of-network business. And a lot of people are just pissed that we do that. Okay. Well, I think it's the right thing to do. And so you look -- I use a simple example. I mean, yes, you look at out of narrative and everyone can relate -- out-of-network, everyone can relate to this. You're on vacation with your family, child gets a splinter, you take them down to a venue of care, you get the splinter removed. You think that's a couple of hundred dollar item. You fast forward, you realize, oh, that was out-of-network, the claim comes through, that claim's for $10,000. We catch that. And we go, hey, that doesn't look right.

We evaluate that against publicly available data sources. We work with the employer that has parameters on what they're willing to accept or not, and we negotiate that with the provider into what would be a reasonable outcome. That's a real example. We actually do that. I don't impute motive. I don't impute that someone did that on purpose or not. It could have been a bad coding. It could have been improperly submitted. It doesn't matter. What matters is you get to the right place ultimately. And when you're talking about billions and billions of claims a year, you're going to have things like that, that are anomalies or inefficient in that system. And so largely, what we do is deal with examples like that all the time. And when you put it into a simple term, I'm yet to meet anyone at a dinner party or otherwise, who doesn't say, well, that sounds like a pretty good thing to do. That's actually what we do. And with NSA, that's a government-mandated program that we support.

So push on that instead of just being upset, what are you going to do about it? You already do, whether -- No Surprises Act or related in some ways, IDR, where the industry is going and your core role. Talk a bit more about how the NSA, but also important growth driver, IDR, is helping how you're playing in that.

For sure. It's a big part of what we do. It's a big part of our growth areas. And it's not just at the national level. I mean State Surprise Bill is also something that's not talked about a lot, but we do very well in that. And so to me, being able to be productive in that area has to do with the total of who we are and what we do. We have a lot of smart people that know how health care works. We've got a lot of data and information, and we've applied our priorities to that space. And so you add that up, and we've performed on average, about 8 points better than anybody else relevant to the outcomes that we get.

The key thing about that's, I think, somewhat misunderstood about the NSA or IDR process is that there's a lot of steps that happen before you get to an IDRE. So the first thing is, is that an eligible claim? We can evaluate that quickly. The second thing is, can that go to the network? Yes or no. The third thing is, can we negotiate that? Yes or no. The fourth thing is, is there a QPA that you could attach to that. And then the last step of that is the IDR process. And so the vast majority of that really gets handled in an appropriate way prior to going to IDR. That said, there's a very real thing that happens there. And we think we're doing -- we do well there, but providers win a lot more than payers do. And so I do think there's still work to be done to improve performance, and we think we can do that, but it's a critical component of health care right now, and there's a lot of narrative around it.

On those steps, what makes you unique with respect to your connectivity, data moat, et cetera, that has led you to be the #1 provider in IDR?

Yes, a couple of things. Like I said, we've got decades of smart people who actually know how things work. We built a network over 30 years, so we know how networks work. We have embarked on the technology modernization that I mentioned, which allows us to understand the data set that we have. We've applied -- we've been using machine learning for a long time, not just for the last 5 minutes. But we've also really focused our AI projects and approach to that process. And so I think what has helped us is we're -- the company -- one of the reasons I came, I like the size of the company relevant to being able to do some things. We can put some wood behind the arrow, but we also can pivot pretty quickly. And so we were able to adapt quickly to NSA, put wood behind the arrow, make real investments and execute solutions quickly. We didn't get mired in a lot of internal structural challenges and priority problems. And so just quick prioritization, focus, great people and appropriate use of technology.

It is showing up in the growth. You mentioned earlier, ACV this year, and congrats on a strong Q2 (sic) [ H1 ] at $74 million, well ahead of your $100 million target. What's driving that? How is it tracking? How do you think about the sustainability and durability of growth, particularly in ACV from new solutions, new customers, new areas?

Yes. Let me do a couple of sentences on that. I'm actually going to let Doug talk. He loves to talk. So the great news in my mind is bookings are an important leading indicator for: One, the value demand; two, are you listening to your clients; and three, growth over time. And so as I said, we showed up early in the year at our Investor Day. I think last year, we were -- what did we do in ACV bookings? $67 million? $67 million. We said early in the year, hey, I think we can do $100 million of bookings this year. And as I noted, I think we'll achieve that by the end of this quarter. So we're significantly ahead.

Why is that happening? We've just -- we've got more at-bats. I mean, when I came here, we had four, I think, commissioned sellers in the entire company. That's probably not enough. And so we created an entire go-to-market structure. We've opened up new markets as I mentioned. So we won business in the public sector with the World Trade Center Network deal. We won business in the provider -- direct-to-provider market with large systems and logos. We've won some business in international, so that's growing. So you add all that up, and that is making us more robust and more diverse relevant to what the company has done in the past, which is just a payer focus. Now make no mistake, that's still an important channel for us, right? I mean it's critical, and we're growing. But I'd say it's that diversity of market approach, some new product and solution, but it's really how we've attacked it. And we've made some new things relevant to that and the value is showing up. So Doug, I don't know if you want to.

Yes, that's great. I mean the segmentation has been critical, right? And so we announced in Q2 on the $74 million of bookings and the north of $100 million that we're going to do this year, about 1/3 of it was going to come from the TPA space. We didn't have a segment leader in the TPA space when we entered the year. And when you look at not only the segmentation process maturity, I mean, it's -- it's a little bit unique that we give funnel and pipeline information on earnings calls, but we think it's important to show that not only is the segmentation working, our process maturity is working. And then finally, opening up new markets and getting new at-bats has been critical for us to start to diversify our revenue base.

So when you look at it about 4 years ago, our top 10 clients were about 80% of our revenue. We like to have large clients that we also have booked some pretty nice business with our large clients. But over time, opening up new markets and new channels allows us to diversify the business, which our investors obviously are concerned about. And then when you look at the ACV and the ACV conversion, about 75% of our bookings are within our current installed base. And so getting to -- we're going to return to $1 billion of revenue this year, first time we've done that in 4 years. We get questions all the time relative to a large installed base and whether or not there's white space within the current installed base. And so TPA market is a market we've gone after aggressively.

There's still plenty of white space in the payer side of the business, which is most of our revenue. And then when you kind of put that against our product road map, our innovation strategy, we have north of $300 million in our sales pipeline. Our win rates on our installed base are between 30% to 40%. And then about half of our funnel is net new logos. And we've closed 30 net new logos over the last 1.5 years. Over time, we would expect maybe the trend of net new versus our installed base to be more equal, but we have seen a really nice attribution this year and specifically over the last 6 quarters with very high win rates and average ticket price increasing on our installed base, which is really nice to see.

Pulling the thread on that a bit. We're mid-September, October benefits enrollment season is coming. We've seen and we know the headlines that we feel it, I'm sure as a CFO, you feel it, of employers, medical cost trend highest in 2 decades, and that isn't abating soon. As you think about TPA, employer, where -- and the growth there looking ahead to '27, what are the quick, easy things that you engage on beyond the fact that, hey, your cost trend is high, we can help. Where do you help? Where do you get the conversation started with TPAs and employers?

Yes. So two pieces specifically. We have a business called Vistara, which is a reference-based pricing health plan. This is a wonderful product for TPAs to sell to medium-sized employers who by all accounts are getting the most amount of inflation. And so we've started to see articles eclipse 10% for health care inflation for self-funded plans. So we have a great alternative product for medium-sized companies in kind of the 500 to 5,000 employee range. And then we also have a product called benefits or BenInsights, which helps when you look at plan design, helps employers, brokers and TPAs make the right decision against their health insurance against all the alternatives.

And so we use our data science, our software to evaluate an enormous amount of claims data for employers to make sure that they're buying the right type of health insurance relative to their claims population. And so those 2 businesses are newer acquired businesses. But when you look at the benefit cycle coming up, we've put tools in the hands of TPAs and brokers to work with employers that they can make a much more informed choice. And the final thing I would say is CFOs and CEOs are now having the conversation and getting much more involved in the health and benefit plan design process. We use our BenInsights product on ourselves, and we've been able to keep inflation at bay because we like to eat our own dog food. First time we ran BenInsights, we saved a few million dollars on our health plan spend. We've been able to keep our own health plan costs relatively flat, certainly under the level of inflation that we've seen, but it's about giving TPAs, brokers and employers access to their information so they can make great decisions.

Switching gears on the transform -- yes, picking more of the transformation and the way forward. In terms of transformation, a lot of the focus early on was cost and infrastructure, changing your ERP. Where is that? How much more is left to do from a cost and operational infrastructure transformation before then next question, getting to the revenue.

Yes. So our plan is a multiyear plan. Travis mentioned, we kind of launched it at the very end of 2024 when we migrated most of our workloads into Oracle Cloud Infrastructure. So that lift and shift started really at the end of '24 through '25. And then we're rewriting about 400 applications to take advantage of all of the tools and technology on top of modern scaled infrastructure. We expect that investment largely to conclude by 2028. And we're going to spend about $140 million to $150 million of net incremental money to fulfill that transformation. And look, we expect to take 10% to 15% of our cost structure out. And so I know we're already a fairly high-margin business, but we're going to address CapEx, OpEx.

When you look at our current kind of R&D as a percentage of revenue in the mid-teens. We expect that to go down to 10% to 12%, and we expect to continue to deliver value to our clients by investing in technology, so whether it's NSA or our network or Payment &Revenue Integrity solutions, we're able to develop and deliver much faster. And the final point is, we have our Chief Digital Officer in the room with us. I mean we wrote -- in Q1, we wrote 53% of our code using AI. That's going to be between 60% to 80% by the end of the year. And so all of these things were very purposeful investments that we could take full advantage of where the future is going. And we really like our position. And importantly, we really like when we started because we're now, to use a baseball analogy, through the bottom of the fifth inning, and we're in the home stretch here to get our tech transformation done.

Well, Travis, you spent much of your career at a software company. This as much as anything, is a data and analytics company. As we were walking on stage, saw the press release of Ben Letham being added to board, AI genius. So great to have an AI genius around. As you think about that announcement, digital strategy, how should we think about that as part of the next steps in the transformation of the business?

Yes. Yes, we did announce Ben this morning, which was cool. So brilliant mind, humble person. Will add a lot to the company and what we do. So two elements to that. One is, first, I would say, not just thinking about the company, but we're thinking about our Board and strategically the talent and skills that we have. So it's transforming the Board while we transform the organization as well at the same time. So it's a holistic approach to cultural change for the company and how we think and what we do. We felt like Ben had a lot of insights. He's active -- he's participating. He has a real day job every day in this arena. He works at Meta. And he's in the fight, if you will, right? So we thought that was needed.

In terms of AI in general, I'll talk more in general, I'll talk more specifically. We're -- we haven't come up and made a lot of grand proclamations about it. We didn't come out and say we're going to lay off half our people or anything. We've come out and said we're going to do meaningful things that add value to our clients and use the available technology. AI is one of those tools that we will absolutely use and we are using. What I would say relevant to the company, I'm a 100% believe that there will be big winners and big losers over the next 5 years. And I think we're well positioned to be a winner. I think that's starting to show up in our growth over this last year period, while a lot of this has played out in the markets. But you look at what are the key ingredients we've got. We have one-to-one data relationships with large clients, publicly available data. We've got trust, and we have workflow and access. And so you combine that with smart people, you have the harness to actually productively use AI.

And so just throwing the words around is one thing, but prioritizing what you're going to do is the most important thing. So structurally, is the company in a position to make good decisions, high priorities and focus? Those are the kind of things I've been thinking about. And so I like that we're prioritizing the work we do. I like that our data is in a place that it's usable. And I like that we're -- we have the abilities to do that. So our position is very good, and we're adding real value associated to that. One other thing I'll say is that I said earlier, the company is big enough to be scalable and productive, but small enough to make changes. We've reorganized and realigned them last year where we've actually gone away from a product organization to what I would call a much flatter, leaner pod-based organization.

So this idea that we're just going to build products, jam products into markets, I mean there's always new products out there, but generative solutions are actually going to be the future. You can make something in a week that used to take 6 months to get the requirement, do the code, test the thing. How you line up to the market is going to be really crucial. And so we've taken our product management teams and we've embedded them into our GM structure. And we've taken our product owners and we've embedded them into the technology engineering function and move away from a vertical product organization that, in my mind, creates a lot of friction inside of a fast-moving situation. So structural alignment, prioritization, those are the things I don't think people talk about enough, like, you can use the tools. We all use them on our freaking laptop. But are you structurally aligned to make good decisions to get real value?

And the last thing I would pose is just a more provocative question for us. I know that we're going to use the available capabilities to add real value and drive growth and value for our clients. But I really think the world is shaping up where narrow spaces with tons of volume and structured data are going to have high value in a data world, and we're in one of those. We see billions and billions of claims a year. And you look at that and you think, hey, if we map -- we will map our ontologies, we will create knowledge graphs. And when we do that, we will create language models that we can train on. Why wouldn't others train on that? Why wouldn't the frontier models look to consume what we have to offer in our building? They should and they will.

And so we're not banking our future on that idea, but you can bet that we're going to go do that. And if you -- that's another reason to believe beyond just the P&L is we think that there's a real future in that data future beyond what we do as a consumable, not just us using it for our own purposes. That would be a massive unlock.

Compelling opportunity. You're uniquely situated, get it. Before we wrap up, and we could spend another 30 minutes on that, I'm sure. It would be -- I'll certainly be paying attention to some of the milestones along the way. We talk a lot about the P&L. You guys -- in the 2 years you've been around at the company, you've done a lot of debt conferences, credit conferences. We're delighted to have you at an equity one. Doug, talk to us about the balance sheet and the flexibility that you have or don't have to execute on the growth initiatives and otherwise.

Yes. So Travis and I, when we got here first few quarters, we had to reset expectations. We went to our capital holders and asked for time. Said, 'Hey, we think we have some really good assets here.' Structurally, we need to make an investment, right? We're making $150 million tech investment. We needed to change the way we did business. We aligned the go-to-market function with segments and general managers who run vertical P&Ls. And we also had to invest in all the tools to run a large public company. So we had to do all those 3 things at once. So our credit holders gave us more time. And so when you look at kind of our capital structure, it's still limited, right? So most of our excess cash flow, which we'll have a little bit, the amount of excess cash flow has all gone to investing in the business because we feel really good about the return on capital for the assets.

As our business continues to perform, starts to look a little bit more exciting. And when we put out our Investor Day financials, the delevering will be modest this year and next year. But really, as this business gets delevered, free cash flow really starts to open up. And so at the midpoint of '28, we're generating $75 million of free cash flow, mid-single digits on revenue, free cash flow yield, still doesn't look very exciting. Once our tech transformation is complete, this business starts spitting off pretty significant excess free cash flow. And as the business improves, we're going to opportunistically look for ways to address the capital structure. But our 1st, 2nd, and 3rd priorities have been focused on making sure we have a healthy business.

So whenever there is a window to do something more strategically, we're ready. And so I think we -- we've done a good job, our management team of staying kind of game ready as the seasons change. But right now, the capital structure is set. Our first debt maturity is a revolver, which comes due at the end of '29, followed by our senior notes that come due at the end of 2030 and our third-out notes in 2031. So we have a few years to make sure we get the business growing. Our kind of financial algorithm is Rule of 70. We are north of 60% EBITDA margin. And then revenue growth has been the number one focus with the investments and the tech transformation. So capital structure is still constrained, but the business performance gives us almost a dollar-for-dollar credit in terms of what we could do to start to really free up the capital structure in the future.

Helpful. As we close, Travis -- looking ahead to '27, I'm not going to push for guidance, but what are 3 business milestones that are important to you that we should be paying attention to for '27?

Yes. I think as we talked about it, bookings growth, no doubt about it, continued revenue growth, the obvious ones, new client acquisition, so new logos, we've been announcing that as we go forward. So those are, I think, critical things for us as we push forward. Those are obvious ones, but they're real things. And if you -- we say around our shop, judge us on our actions, not just our words. And we're keeping our promises, and we're growing the business. And I think you can expect to continue to see that from us as we go forward. So...

Travis, Doug, thank you both so much for your time and being here at the conference.

Thank you.

Thank you, Jon.

Ladies and gentlemen, welcome to the Claritif Corporation's second quarter 2026 earnings conference call. you All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, just press star followed by the number one on your telephone keypad. And if you would like to withdraw your question, press star one again. limit to one question and one follow-up also please note that this call is being recorded I'd like to turn the call over to Todd Friedman, head of investment relations. Todd, you may begin.

Thank you, Mark. Good morning, everyone, and welcome to Clarida's second quarter 2026 earnings call. Joining me today are Travis Dalton, President and Chief Executive Officer, and Doug Garris, Chief Financial Officer. During our call, we will refer to the supplemental slide deck that's available in the investors portion of our website, along with the second quarter 2026 earnings press release that we issued earlier this week. Our remarks and responses to questions today will include forward-looking statements. These forward-looking statements represent management's beliefs and expectations only as of the date of this call. Actual results may differ materially from these forward-looking statements due to a number of risks. A summary of these risks can be found on the second page of the Supplemental Slide Deck in a more complete description in our annual report form 10-K and 10-Q and other documents that we follow the SEC.

We also refer to several non-GAAP measures which we believe provide investors with a more complete understanding of Clarida's underlying operating results. An explanation of these non-GAAP measures and the reconciliations to their comparable GAAP measures can be found in the earnings pressure relief and in the supplemental slide deck. And with that, I would now like to thank you.

I'll turn the call over to Travis. Good morning. Thank you for joining us. We're pleased to announce another strong quarter for Clarity and continued progress on our turnaround journey. what your record says you are and our results demonstrate that our strategy is working, our execution is strengthening, growth is returning, and we are building forward momentum across the business. The hard work and discipline over the last two years of laying the foundation of Clarity and Alignment Focus resulted in the term last year, which has positioned us to take advantage of the opportunities in front of us. At our investor day in March, we introduced 2026 as the year of the way up, which is a return to sustainable growth in our multi-year transformation. The first half of the year has demonstrated that our strategy of driving horizontal solutions into vertical markets is working. In addition to focusing on our core client solutions and attacking new markets, we're building leaders and a culture of growth at the company.

I'm most proud of the way our people have embraced change and new opportunities to impact healthcare. We also have made thoughtful and smart investments in our technology, platforms, data architecture, and talent over the last two years. Our technology modernization positions us to quickly adapt and harness the power of new tools and technology like AI to bring more value to clients. much faster. The organizations that have the knowledge and align structurally to unleash the potential of AI will be winners going forward. Our greatest asset is the knowledge and industry acumen we possess versus the competition. On today's call, I'll cover our strong second quarter results, the macro healthcare environment that demonstrates the challenges we are so good at tackling for consumers of health care, the continued progress and potential we see in AI. Let me begin with our Q2 performance, which exceeded our expectations on nearly every key metric.

For revenue and adjusted EBITDA, both came in above plan. We had another great bookings quarter, exceeding $70 million ACV for the first half of 2026, and well on our way to achieve our $100 million full-year stretch target. important we're still seeing larger deal sizes broader contribution from our entire sales team improving win rates and healthy and growing pipeline. Doug will give some color on the conversion cycle from booking to revenue, but this quarter's business performance validates the foundation against the multi-year financial goals that we outlined at our investor day. I do want to highlight one area that we stressed on our first quarter earnings call, where we have ramped up our focus and brought in new leadership, and that's the third party administrator or TPA business. The TPA vertical represented our largest contributor, second quarter bookings, with several seven-figure deals. Among them was MarPi, which selected our payment and revenue integrity solutions for both prepay and postpay claims. We also expanded adoption of our network and advanced code editing solutions across across the TPA market.

Equally important is the breadth of our momentum with wind spanning large national TPAs, regional mid-market organizations, and technology-focused players. Our new segment leader, Dallas Grip, has provided immediate energy to the business, and we expect this segment to contribute roughly 30% of our total new bookings this year, second only to our payer segment. We also see an expanded opportunity in Medicare Advantage. We recently signed a high six-figure ATV deal and new logo in the quarter to build an MA network. While not a significant revenue driver for us today, we believe it represents a meaningful long-term growth opportunity as plans increasingly seek solutions that improve payment accuracy, optimize networks, identify high-cost trends, and enhance provider performance. This is an example of the diversification strategy we set in motion over the past two years, and we're beginning to see it translate into the broader, more durable growth profile. Taken together, our bookings' momentum and revenue growth reinforce our confidence in the long-term strategy. focus on our core solutions and faster innovation with our existing clients, Expand aggressively across new vertical markets with those solutions. create new capabilities for launch that fit the cost reduction and transparency demand of the market.

This strategy is starting to yield sustainable growth momentum that will allow us the financial flexibility to invest, drive down our debt leverage over time, improve our financial operating leverage and unlock free cash flow to maximize long-term value. Next, I'd like to highlight several macro trends that continue in healthcare and make our mission of affordability and transparency so important. First, medical cost trends continue to rise, with medical inflation running between 8% and 10% annually. well above overall economic growth. Healthcare spending almost 20% of US GDP, creating significant pressure on employers, the government, and consumers. that exist that help solve that problem, whether it's our network providing access to predictable care, transparency solutions, bringing insights, PRI solutions to happen waste for claims intelligence driving cost savings. we put, we make healthcare more affordable for consumers. Self-funded plan enrollment remains stable and out-of-network claim volumes have remained in the mid-7% range over the last five years. Utilization is stable, but mix is shifting to higher cost areas such as emergency care, behavioral health, and specialty facilities, creating a durable demand environment for our network. integrity and no surprises act solutions. And third, the regulatory complexity persists with NSA IDR changes and reduced federal funding for several programs.

These changes and challenges can only be met by nimble, scale, technology-enabled companies like Claritech. Portability and transparency remain central priorities for the federal government, aligning closely with our four capabilities and strategies. Let me highlight the area where government intervention is most measurable. 2022 introduction of the No Surprises Act and the independent dispute resolution process. The recently finalized IDR rules increase the operational compliance requirements for both both payers and providers. As those requirements grow, our scale, technology, and expertise become even more valuable. No company has demonstrated a greater ability to manage NSA claims at scale and clarity. Our arbitration outcomes continue to outperform the industry by approximately 8 percentage points, and we're seeing existing clients consolidate more of their NSA workflow onto our platform.

The same dynamics are driving demand across our payment and revenue integrity portfolio. As healthcare organizations face increasing pressure to reduce costs, identify fraud, waste, and abuse, and improve payment accuracy, our solutions become increasingly strategic. We're proud that Everscrute recently recognized Clarity as a leader in payment integrity, and wins like the Marfi engagement underscore a growing momentum we continue to see across this portfolio. Finally, let me turn to AI. We view artificial intelligence as an accelerator of both growth and operating leverage in an area where Clarity has built a meaningful competitive advantage. is only as valuable as the quality of the data behind it, the harness engineering engaged, the workflows it improves, and the trust it serves place in its recommendations. Those are areas where Claritib stands apart. Our multi-year digital transformation positioned us well before AI became today's headline. organized data, modern cloud-based workflow, and deep domain expertise that allows us to deploy AI responsibly and at scale.

Today, we're already using AI across numerous models and production use cases to improve efficiency, accelerate decision making, and deliver better outcomes for our clients. We have AI initiatives across all solutions and business functions, but I'll focus today on a few IDR examples where the need and the impact to be seen immediately. If you listen to recent health care earnings calls or read any of the current articles related to NSA, you know that the system is being overwhelmed with volume that drives unnecessary administrative costs and delay. Payers, on behalf of employers, often have only a narrow window to validate claims, identify missing information, and screen out ineligible submissions. Our analysis indicates nearly half all IDR submissions are ineligible, highlighting a significant opportunity to use AI to improve efficiency and accelerate our client's ability to respond quickly. This is where Clarity's combination of skill, data, and AI makes a meaningful difference. Over the past six months, we've launched AI-powered capabilities that automate provider data validation and ineligibility assessments. improving both speed and accuracy.

We're also automating case creation for resubmission and enhancing predictive models that optimize pre-arbitration strategy. Together, these types of innovations reduce operating costs, improve outcomes, and resolve disputes earlier in the process, which is good for both parties. Finally, we operate in a highly competitive environment with large and growing challenges facing our clients. The need for more healthcare affordability and transparency has never been greater. Our strategy is delivering results and we have the people, technology, data, and client capitalize on the opportunities to deliver right now and in the future.

Before we do that, let me turn the call over to Doug. Thank you, Travis, and good morning, everyone. In Q2, we outperformed virtually all of our internal financial metrics for revenue, adjusted EBITDA, cash flow, and bookings or ACV. As Travis indicated in his opening remarks, we are executing against the key objectives necessary and we are on track to deliver or exceed the multiyear financial targets we at our March 26th investor day. We are encouraged by our first half results and the momentum we are carrying into the back half of the year. Total revenue in the quarter was $257.5 million, up 6.6% year-over-year. This marks the fifth straight quarter of year-over-year revenue growth and was our highest revenue quarter in 15 quarters back to Q3 of 22.

Growth in Q2 came primarily from our largest business, where we saw noted performance in the claims intelligence service line. within our NSA business. Claims intelligence was up close to 14% in Q2, and our total P-SAVE revenue of $220 million was at its highest level in nearly four years. Additionally, our network and payment and revenue integrity service lines performed at or slightly above internal expectations in the court. Network revenues would have been positive year-over-year if you exclude the $5.4 million of one-time revenue from Q2 last year. On a comparable basis, excluding the one-time revenue from last year, our total growth in Q2 is nearly 9%. Q2 adjusted EBITDA was $155.8 million, our strongest performance in 13 quarters on an absolute dollar basis, and represented 60.5% of revenue. Margin was in line with our expectations for the quarter.

I'd like to take a moment to note the strength of our cash flow metrics this quarter because they were meaningful. We generated $93 million of operating cash flow up 51% first prior year, 89.5 million of unlevered free cash flow up 24% first prior year, and we generated 54.6 million of levered free cash flow up 24% first prior year. free cash flow up 49% versus prior year. With respect to lever free cash flow, this was our highest quarterly performance in 15 quarters. We also did a great job of managing working capital and proved the pacing of our working capital cash conversion metrics, DPO and DSO by greater than five days. As a reminder, since the debt refinancing transaction concluded in January 25, we expect few Q1 and Q3 to be cash consumption quarters, and Q2 to Q4 to be cash generation quarters in the near to mid-term. Our strong Q2 cash flow performance gives us confidence to invest with the elevated pace of investment required to fund our multi-year transformation and to support our growth initiatives. Our diversification strategy continues to be supported by strong sales momentum, highlighted by another record booking score.

Travis provided some stats about strong bookings. With 30 million of ACV booked in Q2, we have already surpassed the 67 million we booked for the full year in 25. We plan on achieving the 100 million bookings aspiration we announced earlier this year. Our first half 26 bookings were up 150% and we exited June with greater than $300 million of active pipeline, up 50% on a comparable basis, with greater than three times coverage. As we have said before, bookings are not linear, but given improvements to our processes and insights into our pipeline, we feel highly confident in our ability to deliver at least 50% ACV bookings growth for the full year. In Q2, bookings reflected a balanced mix of expansion between existing clients and new client acquisition. Cross-sell and up-sell activity accounted for approximately 75% of bookings, while 25% came from five net new client logos, which included several from the provider and public sector verticals.

A few additional highlights on Q2 Booking's performance. Pipeline growth remains exceptionally strong alongside continued improvements in lead qualification and sales execution. So far in 26, we closed 16 deals with greater than one million of ACV, up 25% versus last year. Through the first half of the year, our average deal size has grown more than 300% on an absolute dollar basis. Beyond deal size, most of our other key sales metrics continue to trend favorably. Sales cycle times from lead gen to deal close continue to shorten, and our win rates continue to improve. Our momentum is building. Our performance this quarter is reflective of the aggressive sales strategy and realignment to segments we announced at the end of last year.

In our supplemental deck, you'll find on our website, you'll see a shift in some of our claims and charges trends. Q2 claims volume grew 11% sequentially and 3% versus prior year, reversing recent trends. There are two primary drivers here that speak about the diversification of our business and why we balance these metrics instead of relying on just one. First, we have now largely lapped the residual impact of a single client issue from several years ago, whose volumes declined increasingly over the last few years. Future quarters starting in Q3 will make for a better comparison to the run rate of our core business as we go forward. Second and more notable, we saw a significant increase in the volume of NSA claims we process, driven by a recent client win. Because NSA claims typically cover a broader set of services, gross NSA claims volume stepped up meaningfully while total charges per claim and revenue per claim moved lower sequentially.

This is simply a product mid-shift, not pricing nor margin pressure. Total P-Save revenue dollars grew 8% sequentially and 10% in the quarter versus prior year, and the net dollar contribution is clearly accretive. While we do not give a guide to claims volumes, we note that this mixed dynamic could persist in the second half, which could keep volumes elevated and revenue per claim averages closer to our Q2 exit rate in the near future. Turning to guidance, on the strength of Q2, we are raising our revenue guide two full percentage points to a new range of $1 billion to $1.02 billion, reflecting 4% to 6% growth, and marking a return to greater than $1 billion of annual revenue, which we last eclipsed in 2022. As you review your second half model, I'll note Q2 included a small amount of volume-based revenue that was originally modeled in Q1. Therefore, for the quarterly revenue cadence, we suggest modeling Q3 revenue flat sequentially, largely consistent with current analyst models. We are raising our full-year adjusted EBITDA guide to 610 to 620. million with margins of approximately 61%.

As we stated last quarter, we will continue to invest increasingly in sales, marketing, and operations to support the growth in ACV. New bookings take on average two to four quarters to convert to revenue and then another four quarters to achieve fully annualized revenue contribution, which means we will continue to invest now for new and expansion revenue drivers that largely begin contributing to our top and bottom line growth of 27 and 28. We are not changing our guidance for total capital spent at $160 to $170 million in 26. We are raising our free cash flow guide by $5 million to a new range of $5 to $15 million in 26. 26 we expect to deliver substantial operating, unlevered and levered free cash flow growth with adjusted cash conversion normalized into pre-25 levels of greater than 50% by the end of this year. Finally, we remain committed to our capital allocation plan on a multi-year basis. We plan to primarily invest in our business to drive organic growth and drive absolute dollar earnings and free cash flow yield. All of this aligns with our guiding principles to diversify and accelerate, expanding our solutions, verticals, and channels to drive growth. also deleveraging and de-risking our business to enhance cash flow and operating agility.

With that, I'll turn the call back over to Travis for some final remarks before taking your questions. Thanks Doug. I've got one quick closing comment and then we'll open the line to questions. Our leadership team is fully formed and it's finding its rhythm. Transforming a 45-year-old business is not a small task, but the momentum and clarity is real and you can feel it every day. Change is a constant and continuous force and we're building the organization to adapt. Our strategy is working. Our alignment internally has allowed us to focus on the our clients, and we're executing with greater speed and discipline as we attack new areas to ensure long-term, sustainable growth. I also want to give a quick shout out to Ryan Fox on his recent victory at the Open Championship.

When we relaunched our brand last year, we made a decision to align ourselves with brand ambassadors who do more than wear our logo. They represent the values we aspire to as a company. Brian is not just an amazing golfer, he's a tremendous human being. All of us at ClareTep would not have been prouder to support him and hear him along the way. It was a cool moment to watch him sink that last worry b*** and see the clarity of his name.

With that, I'll turn to the operator for questions. Thanks. We will now begin the question and answer session. If you would like to ask a question at this time, just press star followed by the number one on your telephone keypad. And if you would like to withdraw your question, press star one again. And please limit to one question and one follow-up. Thank you. And your first question comes from the line of Daniel Grosslight with Citi. Daniel, please go ahead.

Hi guys, thanks for taking the question. Congrats on reaching what seems to be a nice inflection point. I know it was a lot of hard work to get here. I wanted to focus on the nice improvement in PSAB volume you saw this quarter. I know you noted it was largely driven by NSA claim growth. I'm wondering How much of that in 2Q, just getting through the system, and how much is more structural? I'm trying to think through the volume dynamic in the back half of this year.

Yes, thank you, Daniel. Thanks for the kudos and happy to take that one. So when you look at our first half volume, we modeled low single digit volume on the whole year. We think there was approximately maybe 45 to 60 million of savings that kind of slipped into Q2, which is a a few million of revenue. We're actually highly encouraged by the volume environment heading into the second half of the year. As the new pronouncements of NSA come about, it's going to be really hard to tell by me taking a little bit more of a modest view of volumes and our base modeling for the second half. Some of the structural changes changes to NSA actually have us very well positioned. But we basically modeled a low single-digit volume decline on the full year.

If you look at the sequential progression of volume, we think the Q2 exit rates are a pretty fair baseline for us heading throughout the year.

Got it, okay. As a follow up, more of a math question. If I hold 3Q revenue, relative to 2Q and I plug in kind of the midpoint of guidance for the whole year. That implies a step down from 3Q to 4Q of about seven-ish million dollars. Is that just conservatism in the guide and you really expect to be kind of closer to the high end of revenue guide, the revenue guide, or even above it. I'm just trying to square, you know, why should we see.

a sequential step down in 4Q implied by the guide? Yes, now that's a great question. So what I would say is we're managing between the base and the high end of the range. If you look at the base case, that implies a 2H of about 508 million of total revenue, which year over year is up 3% sequentially is up 1%. So if you kind of take the base of 1.01 on the year, between the base and the high end of the range, you kind of have a sequential step up of 1 to 3%, and then a year-over-year progression of about 3 to 5%. again, largely dependent on claims volume and kind of flow through the P-SAVE business. But we tend to plan the business a little bit more conservatively so we can manage free cash flow. But that's how I would think about your model for Q3 and Q4 exit rate.

Got it. Thank you. Your next question comes from the line of Richard Close with Canaccord Genuity. Richard, please go ahead.

Excuse me. Yes, thanks for the question. Congratulations on the performance here. Doug, I think you mentioned this a little bit in your prepared remarks, but can you just remind us? on new booking wins, like just the time to implement and trigger revenue recognition. Has there been any changes there? Just trying to, uh, you know, plan out when these new wins come online.

Yep. No, that's a great question. Thanks. And thanks for the question. So our average booking, when we have a new booking, it takes anywhere from about two to four quarters to turn into the first dollar of revenue. And then it takes about four quarters for the revenue to annualize. So our ACB bookings metric is not as good as the ACB bookings metric. and different to like a software ARR metric. It operates in principle the same. We had a larger NSA win earlier in the year that took about a quarter and a half to turn on, which is why we had a little bit of overperformance in Q2.

But on the round, when you look at our claims intelligence business, and especially our payment revenue intelligence, integrity business, those tend to be closer to two to maybe three quarters. Whereas, for instance, we had a large public sector win with the World Trade Center in the federal space, which takes anywhere from three to four quarters to turn into first dollar of revenue. But two to four quarters is kind of our midpoint of how we plan for business. ACV to revenue conversion. And if you recall in the annual guide that we provided, we had about a 6% to 7% step up in revenue ACV to revenue conversion at the beginning of the year. I think it's fair that we probably are seeing a point higher of revenue conversion this year, which is preempting our beaten race heading into the second half of the year.

Okay, that's helpful. And then just on the digital transformation. You know, maybe an update there. Is it, you know, going as expected? Are you able to accelerate it at all? Just any thoughts in terms of how that's tracking?.

Yes, Richard, this is Travis. Yes, we're, look, I think we, as I said in my opening remarks, we're I think we made a smart decision two years ago to start that transformation program, to start aggressively modernizing the company. The point I would make is that we had investments to make in core systems, we had investments to make in digital transformation, and we had investments to make for growth. And I think the team's done, frankly, a tremendous job of what I call threading the needle, of bringing the company up to modern standards and then investing in our growth thesis. by opening new markets, talent, people. Our digital transformation remains on track. It remains core and central to the company. We've been able to move most of our applications to cloud-based environments. And what was underpinning a lot of the digital work we were doing was really around data architecture and infrastructure.

So... I think it's positioned us really well, not just to run the company in its current form, but also to take full advantage of AI models and capability for progressing technologies. So I would say we're very pleased with the progress teams executing, and we're starting to see that. real value from those models that are emerging. Yes, and I would just say AI has been a focal point, obviously, for a lot of organizations. Our digital transformation enables us to be a winner in AI. We have dozens of use cases and models in place. And look, I mean, last quarter, I think we said it, more than half of our code now is generated by AI. And I think the expectation is going forward as we fully modernize our over 400 applications, we'll have approximately the same number of humans doing four to eight times more work.

And so we're pretty well positioned in our digital transformation. I always joke around with our chief digital officer. going to go faster, but I think we're well on track to our multi-year transformation in the last update that we gave at Investor Day in March.

Okay, thank you. Your next question comes from the line of Stan Bernstein with Wells Fargo. Stan, please go ahead.

Good morning. Thanks for taking my questions. Maybe first on bookings. Obviously, you know, you've today executed against most of the bulk that you anticipated. There's maybe 26 million remaining. Do you see a path to get to over 100 million here? And how have bookings been converting into revenue versus your expectations at the start of the year?.

Yes, thanks, Dan. So we are going to deliver an access of 100 million of bookings this year. So we've delivered 74 million of bookings through the first half of the year. So we're already ahead of our pace from last year. And what I had said earlier is is I think we got about an additional point of ACV to revenue conversion on a larger win we had in the NSA space that has been progressing well, a very large payer win that we had earlier in the year that's turned on at or maybe a little bit ahead of schedule. So I think part of the uptick in our guide is attributable to the ACV conversion, but on average the two to four quarters for ACV ramp is still a very good paradigm.

Got it. And then, you know, maybe it's a little bit early to start talking about 2027, but as you look at your sales pipeline, do you see any differences in the mix of opportunities versus what you've executed against in 2026? Thank you.

Yes, so we felt comfortable coming out and giving a little bit more color into our actual funnel. So we have north of $300 million of active pipeline, and about a third of that is within our new verticals. And so some of them, especially the public sector, are a little bit longer lead time. But just like the World Trade Center, it's business we would have never bid on before. So our realignment under our Chief Growth Officer, two segments, was really smart. And then our pipeline and funnel and our bookings progression has been pretty steady at 70 to 75% of upsell and cross-sell. So this notion that there's not growth in our core business is simply not true.

When you look at our payer space, about 80% of our revenue, our TPA space is a little less than 20, there is significant white space left to go. And we're actively hitting the market, especially in the TPA space, thinking about pricing and packaging, strategically. We want to be the single vendor to a lot of large customers. We've seen great progress and momentum thinking about our sales motion differently, but we did close five new logos. We have 11 this year. We did 30 last year. It's goodness all around, but we're keeping the core business the focus because that's where most of our uplift in scale is going to come from over the next few years. I don't know if you've got anything to add.

Yes, I would just add a little tiny bit of color commentary to that. I mean, I think Doug hit it, but our strategy we set out really a couple of years ago that we're executing is to put together vertical market strategies against products that could work across those without massive customization or investments needed. for each vertical market. So that's been something we've been focused on. We're now getting to it, and we're starting to execute against that. So it's not just calling on the same customers over and over. You know, we expanded aggressively in the TPA market. We think MA represents a real advantage for us as we, or opportunity. we build out our sales apparatus this quarter was great we had to we had to we have PPA deals, we have two public sector deals, we have two services deals, and we, international continues to be a business that we think is could yield results for us.

So the totality of it is healthier. I think it will take time for us in those new markets for it to become a significant portion of our ongoing revenue performance, but I'm very, very happy with what looks like early returns and durability of the business.

Appreciate the call. Thank you. Your next question comes from the line of Jason Casorla with Guggenheim. Jason, please go ahead.

Great, thanks, and good morning and congrats on the quarter. Maybe just on the NSA revenue upside, can you help a little bit in terms of the mix of drivers? It sounds like it was predominantly from the win earlier this year, but I'm just curious if you're seeing that funnel widen, just given the backdrop. And then maybe following up on that, like, can help in terms of how to think about the puts and takes for NSA moving forward in that business? Like, do you think that this year could be a tough comp for you or, you know, how sticky is this NSA revenue in your view? Just any thoughts there would be great.

Yes, thanks for the question, Jason. So the uptick in NSA is primarily due to one point. And it's not just NSA, it's Surprise Bill. Surprise Bill both includes the NSA as well as State Surprise Bill, which is a very, there's 27 different versions of State Surprise Bill, which is yet another reason why we continue to be the market leader. We actually recently published a report on our performance on our website and we can share those details and follow ups. We're performing eight points better than the next closest compare. I think we're the fourth largest provider aside from folks who do it in source.

And so we really like our position NSA. The recent final rulings and the rollout of those, it will be interesting to see how volume unfolds in the second half. I think we probably need a quarter or two to see whether there's a material volume uptake. But just as a point of clarification, the cost per dispute went from $115 to 15. We think that we're well positioned with our large clients who rely on us and we think not just the surprise build product, which is now our second largest category, our second largest offering. We have the full end-to-end set of solutions and keep in mind, greater than 85% to 90% of the time when we get a surprise bill claim, it doesn't go through the IDR process. So everything funnels in through our network.

Oftentimes, we're able to get to an immediate clearing price that's acceptable. And then we go through a prepay and postpay negotiation process, all of these individually total I think are a net positive for the business but it's when kind of final um when the final I would say implementation of the rules happen in q3 and q4 um I think it probably bodes net positive for us from a volume perspective but I think we're waiting to wait to see some of that volume.

comes around the back half of the year. Got it. Okay, thanks. Very helpful. And then maybe just wanted to ask about the AI initiatives that are identifying more savings per claim. I guess, curious, is there a way to help, you know, sort of quantify how incremental those savings are developing against sort of like your normal blocking and tackling and then maybe you know a way to frame what the remaining savings opportunity that looks like like are you in any two or three of this kind of AI related savings potential just any thoughts around that would be helpful thanks yes.

So at our investor day, we had we announced our pro-pricer product, which is identified over a billion dollars of additional savings so that the uplift from us using AI to make our stuff work better is real. And it's baked into it's baked into our the way that existing R&D we put into the business with respect to kind of additional savings. Some of this stuff is competitive. We probably wouldn't give further insight, but I will tell you that historically, we spent about 12 to 14% of our capital on R&D. About half of that was historically devoted to making our stuff work better. We've been investing in AI for a very long time, but notable last year was ProPricer, which was an AI-based initiative to identify and deliver more savings, which I think we came out and said it's worth about a billion dollars in our core business of savings.

Okay, thank you. Again if you would like to ask a question, just press star followed by the number one on your telephone keypad. And our next question comes from the line of Jessica Tasson with Piper Sandler. Jessica, please go ahead.

Hi, guys. Thank you very much for taking the question and congrats on the results. I'm wondering if you can just help us understand the variance versus consensus across each of your three revenue segments, so just drivers and any comments. Network, it looks like, was a $2.7 million beat. Analytics, $12.6 million beat. And then payments, $2.6 million missed. Appreciate the comments on.

on flat sequential revenue in 3Q, but just helpful if you could provide detail on the performance versus consensus kind of across each of those three revenue lines. Thanks. Yes, sure. Thanks, Jess. And thanks for the question. So on payment revenue integrity, the missed is timing. We still expect that business to be up versus prior year. The network we mentioned in the preparer does network and payment revenue integrity perform in line with our expectations? And if we need to go a little bit further in detail in the post call, we can. Network's going to be down high single digits this year because we have approximately 18 and a half million of one-time revenue from last year. Our claims intelligence obviously being up roughly 14% with the highlight, and that's where our data, eyesight, financial negotiation, and NSA products land.

And part of the beat this quarter and the raise in the full year is due to the performance in NSA. I would expect the trend in claims intelligence to continue. And just as a quick highlight to the first half of the year. we broke approximately 25 million of ACV in the payment revenue integrity space. So when we announced several of the large deals, including the MARPAI deals, these are all in deals that a majority of the revenue is associated with payment revenue integrity. It was very nice to be included in the leader category in the recent Everest report. finding great success in selling our payment revenue integrity solutions both pre and post pay as a bundled offering so the medium to long-term prospects of the payment revenue integrity business especially with payers focused on fraud waste and abuse is a specific area of investment and growth for us in the medium the long term, but we do expect the payment revenue integrity business to be a growth business this year when we snap the chalk on the full year.

Thank you. That's so helpful. So, just one quick clarification, 25 of the 37 million ACV booked was payment and REV integrity. And then my follow-up question is just, can you maybe discuss of your top three customers, how many use Clarity for IDR help? And then just, you know, you mentioned eligibility determinations, but I guess, what is Clarity doing in that process? from the time the out-of-network service is rendered, and would appreciate just any color on kind of the suite of products that address the NSA and the IDR process. Thank you.

Yes, great. So several of our top 10 customers use our services explicitly. And as I mentioned, we are the largest independent provider of Surprise Bill and NSA outside of the large pay-per-view. the payers and carriers to do the services themselves. We think we do it much better, and the recent pub data from CMS confirms that. So most often when we get an NSA claim and it comes to our MPI core database, we can resolve the claim with our host of solutions, whether it's a network rate, which we have 1.4 million, We have a financial negotiation team of hundreds of folks who have decades of relationships with providers. And then we're often able to assign value to the QPA process so that the disputes do not go to the IDR process. When a dispute does go to the IDR process, which is a fraction of the time, that's where our win rates stand apart. they're exceptional, but this is the value of the service that several of our large customers rely on us. It's better, faster, cheaper, more economical, and the most important point is it gives the best outcome for employers and consumers of healthcare, which is our core strategy with transparency and affordability.

Thank you. There is no further question at this time. I will now turn the call back over to the company for closing remarks.

Yes, thanks everybody for your time. We appreciate it. Like we said, we're pleased with our results and the positive momentum. And thanks for your time.

this concludes today's conference call you may now disconnect.

This live transcript is auto-generated without human intervention or review.

[Call has ended.]

Everyone, thanks for joining. We have with us Todd Friedman, Vice President of Investor Relations; and Doug Garis, Chief Financial Officer of Claritev. First and foremost, I just want to thank you guys for joining us.

But more importantly, and I know we were just talking, but I thought it would be helpful. You've been with the company nearly 2 years now, Travis has been on 2 years. Puts and takes, your thoughts, puts and takes before we kind of get into some of the discussions around verticals and opportunities and so forth.

Yes, great. Thanks for the question and a great conference this week. When I think about the puts and takes, the significant opportunity we have to positively impact health care with 3,000 dedicated associates was an extremely pleasant surprise coming in, especially having worked at kind of larger organizations most recently. We have an incredible base of people who are dedicated with clarity, alignment, focus and purpose and man alive, we set a foundation year in '24. We build 2025 the turn and expectations now have reached a fever pitch.

And so the management team, our team is executing our associates are dedicated to the mission, but it's just that we keep telling our team, it just gets harder. And so it's on a day-to-day basis, it's been a grind, but that's what we signed up to do and we're having a great time.

And to that end, maybe in summary, taking a step back, can you talk about the durability of the core business? And you've talked about how you stabilized the top 10 clients. One client, which we've talked about, I think you said organically up 10% or 11%. Can you talk about that just as in from a core competency perspective.

Yes. I think maybe one of the more underappreciated aspects of coming into the organization was how sticky our core business is. When we refinanced the company, it was without fully understanding but kind of betting on the future of being able to sell into an already mature and penetrated customer base. And so when I think about the opportunity for us to continue to grow the business, we say Claritev, all of our business is our growth business. Our core business is a growth business. When we look at Q1, our claims intelligence business, our largest core business was up 8.4% year-over-year. And so we like the prospects of each of our lines of business, our service lines between claims intelligence. We think the out-of-network market is stable on a dollar perspective. Our network business is our crown jewel, and it's a very strategic asset that we're going to more aggressively pursue the TPA space with.

And then finally, our payment and revenue integrity, I think, from a medium- to long-term perspective, we see significant compounding growth in products like our claims advanced code editing where we're catching on a prepayment basis issues on claims on a second pass. And so all 3 of those businesses are core to what we do and the medium- to long-term prospects for those businesses are good too.

Okay. Great. And more -- in your Investor Day, you shared about big 2030 Vision and so forth. Can you -- maybe I'm putting two thoughts together here. But at the end of the day, can you talk about some of those verticals that have emerged and then tie it to how you're thinking about that as we roll out pushing towards 2030 and generating cash flow .

That's a great question. So I think the main thing will be the main thing. So the payer and TPA space is the majority of our revenue, and PSAV is 85-ish-percent of our business. We expect it to be approximately 2/3 of our business in those markets are where we're actually winning white space and even net new logos. And so the core business affects to the payer and TPA space. We like the prospects and the opportunities. When you think about providers, we recently signed a top 3 health system. The provider opportunity is not just a U.S. opportunity. It's a global opportunity. And so we're looking at ways to get more sticky with new market verticals. We started with a couple of pilot clients.

So we have two large clients, one in the UAE and then one in the U.S., and it's a perfect ventricle for us to learn and build additional case studies to more broadly serve the provider markets. We would expect meaningful revenue contribution as those mature. And then finally, when we think about the public sector, our core products fit very well state, local and federal agency bids like the World Trade Center business that we won. We expect, again, these to augment and help us elevate our growth story in the medium to long term, where we're managing against ultimately our Rule of 70 financial algorithm through the 2030 time frame.

Okay. And as far as the goals you had laid out revenue goals kind of the $1.1 billion in '28 and $1.3 billion guide by '30.

Yes. So at least $1.1 billion of revenue through 2028 that $675 million of EBITDA and then at least $1.3 billion on at least $800 million of EBITDA by 2030. The important thing to note is our business gets a little bit more growth in scale, it starts to spin out free cash flow. And so the investments that we purposely made over the last year and change that we'll continue to make in our technology modernization efforts, we think make our business much more capital efficient over time. And when you look at kind of the midpoint '28, it's kind of like a mid-single-digit levered free cash flow yield. When we get to 2030, we're spinning out a couple of hundred million dollars a year of levered free cash flow, and it's a mid-teen free cash flow yield, which is a very attractive business.

Okay. Okay. Great. And to that end, can you speak to just the ACV? And obviously, you had some pretty -- I would argue maybe aggressive goals this year, but track seem to be tracking well against those goals.

Our CEO has set a very aggressive target for our sales team and our team delivered in Q1. So when I look at our Q4 exiting 2025, we had a $23.1 million bookings quarter. It was our largest bookings quarter we turned around and delivered $44.1 million bookings. The important thing to highlight is that the mix of what is organic, so what we're selling into the current installed base versus what's net new is about a 70-30 mix.

And when you look at the last 5 or 6 quarters, we've added 36 net new logos. And so the market is mature, yes, our ability to penetrate these markets and build substantial funnel and pipeline coverage is something that as we're talking to both new and existing investors, we think the message on ACV bookings and the conversion of revenue against our financial algorithm is something we'll continue to provide additional color as we go forward.

And you're saying that transition is 6 to 12 months?

About 6 to 12 months depending on the type of booking correct.

And within those opportunities, how much does the public market, the World Trade Center contract, how much of an opportunity is that kind of a one-off. Because that's clearly the unique vertical from what we've seen.

Yes. So that deal was in partnership with GDIT. They were the prime on the bid from the CDC and that business alone was about a $5 million ACV booking for us. And so we are the primary network for World Trade Center first responders and survivors. I think it's about 130,000 or 140,000 members. That business was sold as a PEPM business. And that is our core business. That is our primary network.

Our network business is about a $200 million business. And as state, local and federal opportunities come up, whether they're in claims intelligence, whether they're in our network or payment revenue integrity or in some of our new technology domains, you have to kind of build a funnel, plant a flag and start to show progress. And I think Q1 was meaningful progress in both the provider space and public sector. We expect to continue to chase sizable opportunities like that in the future.

How would you weigh those? So is the provider opportunity better opportunity in the public opportunity? Is that a fair price? .

Yes. I think it's probably early to tell. So as we're kind of finalizing our provider strategy, which we'll share it at some point in the future, the public sector opportunities from my past life, if you won one big deal and it was like a multibillion-dollar deal. And so I think in large, I wouldn't be surprised if they were ratable I think, longer term, a stable recurring revenue provider business is a really great space for us to be in because we're trying to embed to be a critical piece of technology infrastructure within the health care ecosystem, which is an important role that we play today, and we're looking to continue to expand.

And to that end, can you speak to your pipeline? I know you talked about a little bit earlier today about the pipelines. And I'm curious how having followed the company for quite some time. There was -- obviously, it was a core organic business, but the kind of the vertical element of this, the growth opportunity here is unique to the story, quite frankly. And I'm wondering how you position yourself from a sales infrastructure and how you're -- what you're seeing relative to what your original expectations? .

Yes. So that's a great question. So over the last 18 months, we've hired a new Chief Growth Officer. I think we hired her a few months after I joined Tiffani Misencik, she's built an incredible segment leadership team. So when you look at our payer TPA our provider, our public sector and then we have an international leader as well, we have end-to-end client management from new logo acquisition all the way through client success. And that kind of vertical alignment was new to the Claritev story. And when you kind of take a step back, we've been trying to simplify the way we talk about the business. When we roll out a bed every year, our gross revenue retention is 93% to 95%.

Having a technology backbone, that is a really good, sticky business. I think for us on the pipeline, the organic opportunities, we've created almost 2.5 to 3x as much funnel. So when you look at our coverage now, we put a $100 million bookings target out there, $80 million to $100 million. I know that I know I can acquire that funnel because I have a few hundred million dollars of pipeline. You win 25% to 40% of your deals and the math actually becomes pretty easy over time.

And to that end, how does -- another question I guess, can you speak to like AI, I mean, kind of jump around a little. AI is always the question in the landscape of the discussion. How does -- can you speak to your value proposition? What your relationship with your clients, what -- I guess, does that landscape, does it create -- is it a concern about penetration of AI? And does that -- does your client relation your value proposition able to offset that.

Yes. That's great question. And it evolves every day, but I think we covered this a little bit at Investor Day. And what we would say is it starts with trust. We have deep client relationships over multiple decades, and we have a near perfect say-do ratio. We have large customers who trust us, and we've embedded these relationships over the course of multiple decades. Two is we have data rights and data access to large organizations that is a high hurdle when you're dealing with confidential and private information with PHI and PII. You can't just go into a large organization and get access to all their data. And so that's kind of point number two.

And then point number 3 is we are embedded inside of the workflows with highly customizable applications and that when you put those three things together, our customers trust us, we have data rights and we're embedded inside of workflows with massive customizations. The value proposition, we think, is an offensive opportunity from because, as for instance, we generated 53% of our code to make our products work better using AI in Q1. And so we're thinking about AI in terms of practical use cases, how do we better serve our clients and when you think about the amount of unlevered free cash flow, we deliver, it allows us to invest in those things that are going to meaningfully drive positive revenue positive client retention or in some cases, help us take cost out of the business.

And to that end, what are you hearing from? What are your clients saying to you like what they -- in terms of how they want to facilitate that transition.

Yes. I would point to a product like our NSA product, right? We are the market leader, we think in NSA. We are looking at automating the NSA process further to make it a much better experience for our clients through a service cloud through real-time insights and analytics. And of course, by continuing to enjoy a pretty substantial win rate versus our competition. And so I think the proof is when we do business reviews with our large clients, we'll bring our Chief AI Officer, we'll bring software engineers, we'll bring our technology organization. We'll even bring members of the leadership team, and we'll very clearly explain what the strategy is and how it benefits our clients and I think NSA is a fantastic example for us.

And the clients will come to you and be looking for a solution around NSA if that's part of your you bring that value proposition.

Yes, absolutely. And I think the big psychological change for us, maybe relating back to the puts and takes, we are a product and technology organization, and we have a published road map. So now I can go on a quarterly basis, I can go to my customers and say, "Hey, do you know in Q3 of '26, I'm releasing this thing for NSA and we should be planning for it". So when you think about activating a sales motion, building a funnel and then connecting to that product technology and innovation investment, it's a much better and much more organic conversation with our client because they trust us, and we have dedicated relationships and sales reps devoted to them.

Thank you Doug. Thank you for joining us.

Good morning, and welcome to the Claritev Corporation First Quarter 2026 Earnings Conference Call. I am Frans, and I'll be the operator assisting you today. [Operator Instructions] Thank you.

I would now like to turn the call over to Todd Friedman, Vice President of Investor Relations. Please go ahead.

Thank you, operator. Good morning, everyone, and welcome to Claritev's First Quarter 2026 Earnings Call. Joining me today are Travis Dalton, President and Chief Executive Officer; and Doug Garis, our Chief Financial Officer.

During our call, we will refer to the supplemental slide deck that's available on the Investors portion of our website, along with the first quarter 2026 earnings press release issued earlier this morning. Our remarks and responses to questions today include forward-looking statements. These forward-looking statements represent management's beliefs and expectations only as of the date of this call. Actual results may differ materially from these forward-looking statements due to a number of risks. A summary of these risks can be found on the second page of the supplemental slide deck and a more complete description in our annual report on Form 10-K and other documents we file with the SEC.

We will also be referring to several non-GAAP measures, which we believe provide investors with a more complete understanding of Claritev's underlying operating results. An explanation of these non-GAAP measures and reconciliations to the comparable GAAP measures can be found in the earnings press release and in the supplemental slide deck.

With that, I would now like to turn the call over to Travis.

Good morning, and thank you for joining us. It was great to see so many of you at our Investor Day in March. We appreciate the feedback you provided and look forward to keeping that dialogue going throughout the year. There were a number of themes that we highlighted in New York, but I want to reiterate a few of those that we'll cover on the call today.

First and foremost, we're entering this year with confidence, confidence in our business, in our strategy and the durability of the foundation that we built. This was a strong quarter that reflects not just performance but progress. Second, at the heart of that confidence is our competitive position, one that is grounded in our long-standing client relationships, scaled data ecosystem, deep domain expertise and increasingly, our differentiated application of AI. In a market where accuracy, trust and outcomes matter, those advantages are not easily replicated. And third, we've expanded our markets and our offerings to connect all phases of the health care life cycle. That expansion has been critical to diversifying our revenue streams and in doing so, building a foundation for quality earnings driven by sustainable long-term growth.

At the heart of that effort is the reinvigorated growth and strengthening of our core, which is most evident in our outstanding Q1 results. We believe strongly that Claritev's growth originates from those core offerings and gives us the foundation and time to execute against our growth and expansion initiatives. I'm going to touch on each of these themes in my remarks and explain why they are driving record bookings, organic growth and expanding market presence.

First, I'll touch on the financials and results. This marks another quarter of consistent growth with both revenue and EBITDA ahead of our expectations, demonstrating that our strategy is not only sound but executable with focus. Our growth team had a strong start to the year, closing more than $40 million in annual contract value bookings in Q1 and showing diversity and momentum across our portfolio. Doug will touch on the ACV later, but we saw strength across the portfolio with wins in our core, particularly in our MSA business with providers and in the public sector. Importantly, our pipeline continues to grow, and our close rates have remained strong, giving me great confidence in our $80 million to $100 million ACV sales target for this year, which will represent a 20% to 50% increase over last year's sales results.

At our Investor Day in March, we announced that we had signed an agreement with GDIT to provide a custom network for the World Trade Center Health Program. This is an exciting moment for Claritev as it represents two important evolutions in the business. One, it is leveraging one of our core solutions to serve a new market, the public sector. We see a number of opportunities in this vertical and hope to share more good news as the year progresses. And two, it demonstrates our capacity to create new partner relationships with a shared goal of making health care more affordable and accessible to those who need it the most.

Another bit of news we see at Investor Day was our signing of a top 5 health system, one that operates more than 700 total facilities, including hospitals, ambulatory surgery centers and outpatient centers and sites of care. This is an exciting addition for Claritev that fortifies our position in our provider vertical. We look forward to sharing more about this exciting relationship in the future. But I'd note that this relationship came about directly as a result of our acquisition of OPCG in the fourth quarter, which is the cornerstone of our newly launched services offering --

next, let me discuss our strong position in the market, bolstered by industry trends moving in our favor. There is a clear focus on driving affordability across the health care ecosystem. We know from our experience that the best way to achieve that objective is through transparency, where we have been a leader for many years with a long-tenured client relationships and results [indiscernible] We're seeing a clear industry shift. Platform consolidation is accelerating and clients are moving toward fewer, more integrated partners with scale data and end-to-end capability. This trend plays directly to our strengths. Our unified data architecture driven by our digital transformation and network strategy position us well to lead in this environment.

AI is another powerful tailwind, but it's not a rising tide that lifts all boats equally. In regulated high-stakes industries like health care, AI disproportionately benefits incumbents with trusted data, compliance expertise and established relationships. That's where we operate, and that's where we deliver value. There's also a tremendous benefit to how we run our own business. Last quarter, when we reviewed the code output of the engineering teams that are fully leveraging AI coding tools, we have found that we are nearly doubling coding capacity of those teams without any increase in headcount. We are building a foundation for scalable, profitable, sustainable growth.

The operating leverage we are seeing from the widespread adoption of AI tools is an important lever in achieving our long-term objectives. If you think about our formula for success, it's straightforward. Data rights combined with a scalable workflow embedded platform anchored in trust and amplified by AI. Let me give you a few concrete examples.

Within our claims intelligence solutions, we get tens of thousands of claims every month that don't have a provider ID. When that happens, the claim can't be processed through the standard workflow because it's highly manual process. Our team built a provider contact agent that achieves research level accuracy, appends the provider contact ID, reduces process time by more than half and saved more than 2,000 hours of processing time at a fraction of cost.

Another area that gets a lot of attention is the IDR process, the high-volume workload heavy process with which you are familiar. Using AI, we have automated the invoice extraction and reconciliation process for accounts payable IDR in workflows. We're now handling thousands of invoices each day, automating 100% of the daily processing in less than an hour, achieving nearly 100% accuracy and uptime. For our clients, this is a level of execution that builds trust. For Claritev, it freed up resources to higher-value work while eliminating late fees and accelerating collections. These are just a few examples with many more projects currently in progress, yielding growth potential and savings. Our investments in technology, data architecture and AI are deliberate and disciplined, strengthening our market position and are beginning to generate meaningful high-value -- high-impact value.

We have AI teams working across all our solutions to deliver more value and performance to our clients and integrating deeply into our own operations, including sales and finance to build scale and efficiency.

Our strategy is working. We're executing with a combination of horizontal capabilities like our network, payment and revenue integrity, data platform and analytics and deep vertical expertise across key health care markets. Our recent wins with the World Trade Center and the top 5 health system demonstrate our direction and allow us to scale efficiently while remaining highly relevant to our core clients. Furthermore, we see a significant opportunity to expand our presence widely within the TPA market. This is another strategic client base where our existing solutions can deliver immediate tangible value to improve the health care experience for millions of consumers.

To this end, we added a key industry leader late in 2025 to drive our TPA market forward. Dallas Scrip is a highly regarded industry veteran joining Claritev after nearly 20 years in the industry, including his most recent role where he was President and COO of the TPA that was focused on using AI throughout the TPA client life cycle. We're already seeing faster pipeline growth under his leadership and are excited by his energy and vision for this market. Looking ahead, our priorities remain clear. We're focused on driving organic growth, continuing to invest in the business and scaling our platform to capture the opportunities in front of us. At the same time, we remain committed to deleveraging over time.

I'll repeat what I said at our Investor Day. We are operating against Vision 2030, not Vision 20 minutes. Strength in our core business, key wins in our expansion areas, strategic operating investments and world-class team are the foundation for driving Claritev along the path we outlined at Investor Day for our short, mid- and long-term targets. This is a business built to last, built to grow and built to deliver the long-term cash flow and deleveraging that will ultimately drive major shareholder value.

With that, I'll turn it over to Doug to walk through the financials in more detail.

Great. Thank you, Travis, and good morning, everyone. It was great to see many of you at the Investor Day in New York. The event we held in March at the NYSE is our first full Investor Day in nearly 2 years, and it was a great opportunity for everyone to hear from our talented leadership team, some of our key partners and importantly, some of our best clients. The story is getting simpler, sharper and is starting to resonate in the public markets. At the event, we spoke about the diversification of our business that is driving our momentum. We also tethered our presentation to the health care life cycle and how our comprehensive suite of solutions play an important role in helping us deliver affordability and transparency in health care, all the way from benefit plan design to a claims payment.

We strongly feel that we have one of the most unique and impactful set of assets across the health care technology ecosystem, and we're excited to share our progress because our first quarter results were yet another reason to believe that our strategy is working. In Q1, we outperformed our internal expectations for revenue, adjusted EBITDA and ACV. As Travis indicated in his opening remarks, we are running our business with a multiyear view in mind, and we're very pleased with the early pace and progress to begin 2026. Total revenue in the quarter was $244.7 million, up 5.8% year-over-year. Growth in Q1 came from both our core business and expansion areas. In particular, we saw a solid outperformance in our flagship reference-based pricing solution Data iSight within claims intelligence service line, which in total was up 8.4% in the quarter. Additionally, our network and payment revenue integrity service lines performed at or slightly above internal expectations in the quarter.

Our growth in Q1 was strong. And keep in mind, we had about $2 million of onetime revenue benefit in our P&C business last year, which falls into the network service line. Adjusted EBITDA was $146.9 million for the quarter, up 3.4% year-over-year at a 60% margin. We generated $36.8 million of unlevered free cash flow, up 181% or $23.7 million and had a use of $92.5 million of free cash flow lower by $23.6 million in the quarter.

Recall, since the debt refinancing transaction concluded in January of last year, we expect Q1 and Q3 to be cash consumption quarters and Q2 and Q4 to be cash-generating quarters in the near to midterm. Q1 notably also included a more fulsome and now fully annualized Q1 cash interest payment schedule from the refinancing last year. Modest working capital increases and normalization of the cash interest payment schedule on our debt largely drove the increase in -- use in cash in the quarter versus last year.

Our diversification strategy continues to be supported by strong sales momentum, highlighted by another record bookings quarter. We outlined an aggressive bookings growth target of $80 million to $100 million in ACV at Investor Day, representing 20% to 50% growth. With $44.1 million of bookings in Q1, we are well on track to achieve this aspiration. Importantly, Q1 bookings reflected the underlying strategy we presented at Investor Day with a balanced mix of expansion with existing clients and new client acquisition. Cross-sell and upsell activity accounted for 73% of bookings, while 27% came from net new clients.

A few additional highlights on Q1 bookings performance. Pipeline growth remained strong, increasing 70% year-over-year alongside continuous improvements in lead qualification and sales execution. We closed 19 deals over $100,000 ACV and 9 deals over $1 million ACV, representing a 350% increase in 7-figure deals this past quarter. Beyond the large deals, virtually all of our key sales metrics were favorable. Our average deal size has more than doubled, sales cycle times from lead gen to deal close are materially compressing and our win rates continue to improve.

We exited Q1 with a substantial pipeline, providing strong visibility into future bookings. We also noted significant ACV bookings from our new provider and public sector markets. We believe continued transparency into bookings and ACV to revenue conversion metrics will serve as an important leading indicator towards our 2028 top line revenue target exceeding $1.1 billion and broader Vision 2030 financial glide path. In our supplemental deck, you'll find on our website, you'll see the continuing trend in our PSAV revenue where modest volume declines in Q1 were more than offset by favorable trends in rate mix and augmented by our ability to leverage AI and innovation to identify and deliver more savings in the claims we analyze.

The key takeaway is that our PSAV business is an increasingly mixed and acuity-driven model where growth is not necessarily driven by more claims, rather it's driven by more complex, higher cost claims, which is where our solutions perform exceedingly well. We will continue to provide additional details on a quarterly basis as we track rate mix and volume changes to our PSAV business.

Turning to guidance. We are raising the bottom end of our guide range by -- revenue guide range by $5 million with a new range of $985 million to $1 billion. Reviewing the current analyst models, we are comfortable with adding Q1 revenue outperformance to your existing models within the revised guidance range. Remember when building your models that the second, third and fourth quarters of '25 each had approximately $5.4 million of onetime revenue that was recognized at 100% adjusted EBITDA margin, which will impact the year-over-year comparisons for the balance of the year.

With a quarterly revenue cadence due to the revenue outperformance in Q1 and the $5 million headwind from last year, we expect Q2 revenue to be relatively flat sequentially, largely consistent with current analyst models. Then as revenue from new ACV ramps, we expect our growth rate to increase to between 3% to 5% for the second half of the year, adding up to the full year guide. We have included a summary in the supplemental deck to help bridge the major revenue drivers this year. It provides more color on how you should model gross revenue retention, expansion, ACV conversion to get to our full year revenue guide range.

We are maintaining full year adjusted EBITDA guidance of $605 million to $615 million with margins of 61% to 62%. When normalizing for the impact of the $18 million in onetime P&C revenue and EBITDA contribution last year, our guidance implies 3.5% to 5% adjusted EBITDA growth -- dollar growth on a like-for-like basis.

As we previously stated, we're going to continue to invest while running our business with prudence, balancing positive cash flow and earnings with investments required for future growth. This is especially true as it relates to ramping up sales and operations to support the growth in ACV. New bookings take on average 6 to 12 months to convert to revenue, which means we are investing in '26 for those new and expansion revenue drivers that are largely -- that largely begin contributing to our top line in '27.

With our recent sales momentum, I would expect us to continue to seek attractive options to bolster our go-to-market posture. For example, Travis mentioned our increased focus on the TPA market. We see significant upside in this vertical. We have also demonstrated success with investments in AI and automation as detailed earlier. Finally, the launch of our services business has already helped us gain a foothold in both the provider and public sector markets. We left our '26 guidance for total capital and free cash flow unchanged with capital at $160 million to $170 million and positive free cash flow. In '26, we expect to deliver operating and unlevered free cash flow growth with adjusted cash conversion normalizing to pre-2025 levels by the end of the year. All of this aligns with our guiding principle to diversify and accelerate, expanding our solutions, verticals and channels to drive growth while also delevering and derisking our business to enhance cash flow and operating agility.

With that, I'll turn it back over to Travis for some final remarks before taking your questions.

Thanks, Doug. I'll just close with a few closing thoughts and reiterate some of my earlier points. We entered '26 with confidence in our business. The foundation is laid and our strategy is working. Our priorities for the business remain clear, continued growth and investment in our core, diversification of our revenue base with new market verticals and delevering the business over time. We are executing the way up with clarity alignment focus, continuing to improve how we operate, grow and deliver for our clients, which collectively will strengthen the durability of the business over time. Finally, I want to thank our 3,000 Claritev associates who have made this journey possible for their continued dedication and commitment to our clients.

With that, I'll turn the call over to the operator for questions.

[Operator Instructions] And your first question comes from the line of Jason Cassorla with Guggenheim.

Maybe just on the margin side, obviously, strong top line and EBITDA outperformance in the quarter. You've got investments that are earmarked as you ramp up your ACV. But maybe can you just help with the puts and takes in terms of margins in the quarter, how those investments balance against the stronger rate and mix falling to the bottom line? Maybe if you accelerated any of those investment spend early in the year that may have burdened margins near term, but maybe perhaps allowing for a better setup in the second half of the year as the ACV contribution ramps. Any help there on the margin side would be helpful.

Jason, thanks for your question. This is Doug. Yes. So I think we indicated in Q4, we had really started investing. And when you look at kind of the run rate and annualized OpEx of the business, it was adjusted EBITDA expenses were approximately $385 million. So part of the investment that we started delivering to help deliver the ACV growth. We really started making those investments in Q4. I think we were pleasantly surprised by the continued improvements to the mix. And I think with respect to our internal targets, we slightly outperformed both revenue and EBITDA. So we actually have a pretty tight guide range on EBITDA this year as we thread the needle. I would expect the rate of investment to be ratable quarter-to-quarter, maybe say for $1 million to $2 million here or there. And as our ACV starts to really convert to revenue and pick up in the second half of the year, I would expect us to keep stable, if not slightly improving margins in the back half.

Got it. Okay. That's helpful. And then maybe as my follow-up, obviously, encouraging to see the strong top line growth this quarter. Can you discuss what you're seeing in terms of utilization broadly? I know there's been a weaker respiratory system, some weather events impacted volumes across providers broadly, but I'm not sure if you're seeing that, but maybe if you could just -- any color on the utilization environment and then maybe a little bit deeper on some of the rate and mix benefits that you're seeing currently would be helpful.

Yes, sure. So I'll take that. So if you look at Slide 10 and 11 on our supplemental deck, it gives some color on kind of the rate mix and volume dynamics of our business. I think the continuous trend, and we covered this a little bit at Investor Day in the outpatient setting for the higher acuity claims. We saw, I would say, maybe a little bit less volume than we would have expected, but strong performance on a savings, identified savings and revenue and savings per claim. It was really some of the mix that I would say, has compounded over the last 5 quarters in the outpatient setting from an inpatient facility perspective, we saw a little bit higher ER in room and board. Don't know if that's impacted by weather per se. It was a little bit better than we had internally modeled. But really, when you look at kind of the last 5 quarters on Slide 11, that continuous pacing and trend of the higher acuity areas, especially in the outpatient setting is about where 80% of our identified savings and revenue play. We've seen consistent elevated trends in those higher acuity areas, including behavioral health. Nothing in the quarter kind of indicated that there was an aberration or disruption to underlying volumes due to events like weather.

And your next question comes from the line of Jessica Tassan with Piper Sandler.

So I'm curious on a few things. If you could first maybe give us a sense of the mix of services bookings within your $80 million to $100 million bookings target? And then just how do the margins look on that -- on those services, bookings maybe contract launch and then over the course of the contract lifespan? And how would you expect the margins to progress?

Jess, I'll take a stab at that and maybe Travis wants to give any color he can. So when we look at Q1 of our $44 million, the provider and public sector contributed about 20% of the bookings. So these were kind of flagship wins that we announced at Investor Day. We had indicated too, and I think maybe you had asked the question at Investor Day what the margin profile of services is. We expect it to be roughly kind of half the core business as we ramp and scale. When I look at the full year, the $80 million to $100 million, we expect growth from these areas and especially services to be meaningful. But the total mix of bookings is still going to be around, I'd say, probably 20-ish percent of our total number at the midpoint. These investments are critically important to us, which is why we announced the additional $20 million to $25 million of investment this year. We see significant opportunity in the provider and public sector markets. The midpoint of those bookings will be about 20% of our total, and we expect margins to be roughly half of our core business. I don't know if you have anything.

Yes. I'll just add a couple of things. So one is with the health system that we signed, we view that as very strategic. I mean we'll be providing managed services for their EMR, which is a new service line of business for us. So we've got the people, we've got the talent. We have acquired OPCG in order to create those relationships. So we'll also be deeply embedded in their workflow, complex problems trying to solve. And even more so, a few things are important. One is it's a high level of recurrence in some of these opportunities we have on recurring revenue services. You get some immediate revenue benefit and an opportunity like that and you start it quickly. So we're not having to constantly just wait for the revenue flow, which is so seasonal and cyclical in some of our core business. It also gives us the opportunity to pull through, again, horizontal vertical, stop talking about it and I won't, but we can pull through our horizontal products into those organizations we're working with on a services basis to help them with efficiency. So products like [ completely ] our transparency products. So it's not a pure services play. To me, it's advisory, strategic and thoughtful as it relates to the ability to pull through more products with high-margin profiles to manage the entirety of our margin view over time.

Got it. That's helpful. And then I guess just my follow-up. So we had one of our MAOs kind of talk about these changes to concurrent reviews in the 2026 MA final rule. And so I'm just curious, I think these are mostly in-network. But I guess, do you guys have exposure to like retrospective reviews in '25 that are essentially less frequent in 2026? And just any comments on whether changes to inpatient determinations within the 2026 MA final rule has any impact on your claims volume, the 8% year-over-year PSAV claims volume decline?

Thanks, Jess. Limited impact. We think MA could be an opportunity kind of mid and long term for us. But as it relates to the kind of quarterly progression, limited if close to 0 volume impact from that -- quarter-to-quarter.

[Operator Instructions] Our next question comes from the line of Stan Berenshteyn with Wells Fargo.

First, on ACV, you're already halfway there on your ACV goals for the year. Just wondering, how is your visibility into your remaining go get? Do you expect any changes in the mix of upsell versus new logos? Just any color you can add there would be helpful.

Great. Thanks for the question, Stan. So I'll take the first half. So I think the 70-30 approximate split, we actually covered that was our mix on upsell, cross-sell versus net new logos on the $67.3 million of bookings that we landed in '25. That trend has been pretty consistent. I think the most compelling piece of that is we have a ton of white space within the payer and TPA segment. And so we are expanding our products and solutions to new markets, including provider, public sector, international. We think these are great long-term areas for growth and diversification. But make no mistake, our core business is still most of where the bookings are occurring. And I think the Q1 bookings number was anchored by a lot of large deals actually. I think we had 9 deals over $1 million ACV. Last year, we had [ 108 ] deals over $100,000 ACV. The funnel we have in the funnel efficiency is multi9 figures. So we feel very confident with the $80 million to $100 million on the full year. Quarter-to-quarter, there might be some seasonality and trending, but I would expect us to continue to deliver strong bookings growth for the foreseeable future.

I'll just add one comment, Stan. This is Travis. We had 30 new logos last year and 6 new logos in the first quarter. So we're focusing on the core and what we said we see significant white space, Doug just reiterated that. But we're also really focused on creating more diverse, sustainable growth over time, and that starts with new clients. We have a lot more telemetry into our business as it relates to our forecast, our processes, our win and close rates, the data of which we operate. And we have significantly more coverage -- pipeline coverage to quota than we had 2 years ago, almost 4.8x, which is a significant number, and I think it was closer to 1.5x. And so more pipeline, more coverage, better visibility. And the last thing I'll say is we have the confidence to invest in the business because we can see the top line. And so you're confident enough to make decisions like we made in Q4 this year, and we're confident in our margin profile for the year because we have good visibility to our top line growth and revenue conversion. So that's a great leading indicator for us, and we have clear visibility and confidence in our numbers for the year.

Appreciate that helpful. As my follow-up, just wanted to ask on Medicare Advantage. Obviously, there's some rate pressure forcing payers to be a bit more mindful with admin savings and things like that. Are you seeing that translate into increased demand for payment integrity solutions? Is that driving some more intensity with the payers? Just wanted to get some color on that as well.

Thanks, Stan. Yes, absolutely. When you look at our PRI business, had nice growth last year. We expect a similar growth rate this year. If you look at, I would say, maybe 25% to 1/3 of the opportunities are in payment revenue integrity. We have one of the most comprehensive set of solutions from prepaid payment revenue integrity and claims editing all the way through postpay. We feel very bullish on the prospects of that business medium to long term and a good portion of our funnel is in the payment revenue integrity space.

Thank you. I'm not showing any further questions in the queue. I will now turn back over to management for closing remarks.

Thank you. This is Travis. Let me just close by saying thank you for your time and attention today. Thanks for the questions and the interest in the company. And as noted, we feel like we're in a good place, and we're confident in our year. Look forward to talking to you again here soon. Thank you.

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.

I'm Todd Freeman, I run Investor Relations here at Claritev. Really appreciate everyone making here for the Investor Day today. We're going to do a couple of things here at the beginning, just kind of quick logistics, the usual disclaimers and safe harbor and then we'll get rolling with the agenda.

So of course, for everyone on the webcast, thank you for joining us. We're going to run through a pretty full agenda here today that will go until about 5:00. We'll save questions to the end because we've got some time at the very end for all of our executive leadership and the speakers to come back on stage to talk and answer some questions. So if you can hold the questions until then, that would be great. First, of course, today, we're going to make some forward-looking statements. There are, of course, always subject to risks and uncertainties, and so we direct you to our SEC filings, our 10-K, our earnings release for any disclaimers as well as talking about non-GAAP items. And so you can also find the reconciliations to those measures in our filings. And so please take a moment to look at those if you need to.

A couple of things we're quick about today. First of all, thank you to the NYC. Thank you all for coming here. It's a great location. Really appreciate everyone showing up. I've been here for about 5 months now. And I'll say that when I joined the company, I think I saw a lot of the same things that existed that a lot of the other leadership team has said. They just saw this company that was really serving the health or ecosystem in a way that had a much larger opportunity to make an impact on how health care experience in this country. And so I was really, really impressed by the team when I came here. But one of the things that I've noticed here and we've talked about the business itself, is that, well, as we talk to investors, I think there's not this wonderful understanding about how our products or solutions actually impact the entire health care life cycle, everything from when someone is looking for insurance all the way through to paying it. And so today, what we're going to do is spend some time walking you through that life cycle, walking you through our products and how we actually address all parts of that life cycle. And then ultimately, we'll close with a discussion about AI and our financials. And so I'd like to kick off first with the video that kind of talks about that life cycle and we'll kind of set the stage for the day. So if we can roll that video, please.

[Presentation]

So that's what we're going to talk about today. We're going to walk you through that life cycle and bring to you the agenda that walks you through the different solutions we sell, our customer base and ultimately how that feeds our business model. So we've got a pretty full agenda. We're going to keep things moving along pretty quickly here. We'll kick it off with Travis, our CEO, to talk about our vision and how we execute against that vision. Then we're going to walk through step by step from the left side, from the employers looking for insurance for their employees, to the provider world, eventually a claim gets created and talk about our core solutions and then ultimately talk about the payment cycle. We'll then wrap with a discussion about AI, and then Doug will wrap it up at the very end to talk about how that all feeds our business model.

We got a great set of speakers. We've got a number of people here from Claritev, both across the executive team and going a little deeper as well. And then I'm most excited here that we've got a bunch of customers and partners here as well. So I thought we would be a good chance to give you the opportunity to hear from some of our customers and hear how they think about Claritev in the market in general. So to start, I'm going to bring up our President and CEO, Travis Dalton, to get it started.

Thank you. Appreciate it. Welcome, everybody. Thanks for being here. That video seemed pretty simple, right? Does anyone had a health care experience that actually worked like that? Health care is pretty misaligned. We operate across that continuum. We're going to talk about that today. I actually think that there's a moment coming where things do start to be more simple. You've got a situation where you have technology and AI, data and interoperability have been the thing over the last decade. And I think there's a moment where providers and payers start to align, and you'll hear from them today. So we have one provider client. We have a payer here. At the end of the day, I think they want the same thing. Providers want quality, cost and a right price and payers want to manage risk and a fair reimbursement. Those 2 things can live together. We actually believe that.

Anyway, good afternoon. I'm Travis. Thanks for being here. Todd, thank you for setting this up and all you've done. We appreciate you. I told Todd after our investor calls like if this doesn't go well, say goodbye to tide. All right. So he is totally redeeming himself today so far, so far. So this -- but this is a big day for us. And obviously, I started 2 years ago here, and they've been kind of gearing up for this, looking forward to it for some time. So we're happy to be here.

Getting the content, but people time to time, ask me, how are you doing? I'm doing freaking great. I'm doing great. I mean, we've got great clients. We've got a team that you're going to meet today, which is 1 of the exciting things for me as you get to see the team. and we've got purpose. And if you put those 3 things together and you execute long enough, good things happen. So for me, I get super motivated every day to work with a great team on stuff that matters. And that's kind of why I came here. And so we've got a fulsome agenda, as Todd mentioned, I'm going to jump right in, and we'll push forward. So our purpose is simple. The words are simple. It's not always easy to achieve. But we will be laser-focused on transparency, affordability and access, had access because of our network, which I think is unique to us in many ways. Really, this idea of reducing friction, I think, is part of what we do today, but it's a big part of the future of how we see the company evolving over time, and you'll hear about that today as well.

And we'll make decisions, and we will allocate capital against the clarity of our purpose, which should be simple. And so the reason you have purpose and you have clarity is because every day, there's -- the micro decisions get made every day across our 3,000 people. If they know what they're deciding against mentally, they make a good one. That's why we spent time on clarity as the first part of the company's formation when I got here, clarity alignment the focus. So our purpose is going to be simple, to quote the great movie Office Space. What would you say you do around here? This is what we do around here, right? So we serve an incredible set of clients over 700 payers, 100,000 employer and plan sponsors, 1.4 million providers, over 60 hospitals directly now in patient care settings, and 60 million plan members. Our solutions are focused around our network. So many of you are familiar. We think that's a unique asset to us, and you're going to hear more about that today from Jerry. Really focus on access and cost. So our network, we're investing in our network. We think we can -- it's more malleable. We think we can curate networks. So I'm going to talk a little more about that in a minute. Claims intelligence, fair reimbursement, bringing an insight to what is an otherwise pretty opaque situation in health care, particularly out of network. And so we're known for that. We're going to continue to do that.

We're investing heavily in surprise bill. You'll hear about how we're using AI today inside of our surprise billing solution, our NSA solutions. Payment revenue integrity. So I was really glad to see the demo set up over here and a lot of folks around it, but that is a massive area of growth, I think, looking at fraud waste abuse and inefficiency. So I'm not even imputing motive, it's just a lot of inefficiency in the coding world and how that works. And then finally, data and analytics, so bringing pricing transparency, prediction models, managing risk, this idea of looking at high-cost claimants and how do you handle that? So our friends from Kinetic Health are here today to talk about how employers are managing cost using this kind of data. And so that's a lot of what we do.

The other thing I'll say, and for me, it's all growth, all growth. So I'm not going to say [indiscernible] the network is going to do all freaking growth. So I came here. So it's not just 1 area we expect to grow. We expect to grow every single area of our business across all these segments as we go forward, and I'll talk about how we intend to do that. And so that's what we do, you'll hear a whole lot more about that from the team.

Look, our journey, I said this, those of you that heard on the call, we set out with a Vision 2030 journey and that idea, not Vision 20 minutes, not vision this quarter, not vision tomorrow. I know that's important. Short-term results matter, intermediate plans matter, but a long-term view. You've got to think big to grow big. And so we're thinking like that, and we're thinking bigger. And we're executing against this. And we came and said, "Look, we're going to lay a foundation for the company." And so I'll talk about what we did there. We branded last year the turn, which was kind of a bold thing to do at the time. I said the words before I was sure it was going to happen, speak it into existence. But I felt like we had good plan, enough execution, enough smart people to figure out, and we're figuring it out, returning to growth more quickly than I had expected, frankly. We're calling this year the way up. So it's a growth year for us. And the way forward is really around innovation and technology and expanding our client base. So this is our journey. The team, my team knows, I use it all the time, say-do ratio has to be 1:1. You say you got to do it, and we're committed to keeping our promises. And so I think it's important to make sure all of you know that as people that are interested in the company, you have a financial interest, some of you have maybe put some of your personal credibility on the line for us. That's not lost on us. trust me when I tell you this. I feel a debt of gratitude for that, but I also feel responsibility, right? And so we are we will keep our promises. In '24, we started the company. We not started, but I joined. We set out to create client focus. We have 30 KPIs that we use inside the company. That is my report card to the Board. All of our associates know that.

We restructured our debt. You see familiar friendly faces in the room. I'm sure that, that was a blast for all of us. I think we finished that at 1 on like the 24th, January -- December 31, something like that, we got it done. That was a big deal for us. There are a lot of things we could have done, but for me joining, that was a big moment and going to the Board and saying, "Look, here's what I want to do. out to run this company for growth over a period of time." I don't want to take other alternatives that might have been easier at the time, but we thought it was the best thing to do is keep our promises and commitments to our debt holders who I think we owed commitments to. And so we restructured our debt to go forward to make sure that we were doing that.

Launched our plan for 2030. We'll talk about it, and then we refreshed the leadership team. So that was an important year for us. In '25, we rebranded the company not to put new paint on there, but we earn the right to rebrand because we're executing against a technology refresh. We launched new markets. So last year, we reported out $67 million in new bookings. That's new ACV bookings for us, which was a great year. We moved to Oracle Cloud. At the time, that also was part of our strategy was not just new market expansion that was positioning for a tech-forward future. That's important, particularly in an AI world, right? So that investment we made in '24 is starting to pay off for us as we look at our present and future.

We renewed our top 10 clients. This is not a melting ice cube cone. It is not. Then asked that for a long time. We are going to grow the company, and we're going to talk about that today, I'm going to give you clear examples. And we returned to revenue growth right? I think we exited 6.7% year-over-year growth in Q4. Is that right, Doug? Keep me honest? Close enough. Close enough for the CEO, he'll clean it up later. But we returned to growth. That was a good sign. It's a good sign and as we go forward. So 26, we've branded as the way up. So we're forecasting single-digit growth. This is -- I can announce today, which is an exciting announcement for us. We actually, in the last 2 weeks, have signed 1 of the top 5 largest health systems in the U.S. to a multiyear managed services agreement. So we will be providing Tier 2 support for the EMR and their clinical systems, in addition to opportunities to sell through all of our products and services across the entirety of that health system. And this is well over 500 points of care, well over. And I'm not going to say the name yet, but I'm going to announce that we're firmly in that business. So that puts us significantly ahead.

We start -- you'll hear from 1 of our great clients today who is our pioneer client, the Carlinville. We're now moving upstream into much larger venues, which was our plan all along and making it real. Keeping a promise. I said that the day I got here. We're going to do that, and we did it.

I also can announce that we were selected -- I mentioned we had some government news to announce. So in the government vertical, we were just selected with our partners from GDIT to be the network for the World Trade Center. So we're going to create a national network for first responders as part of this opportunity that was awarded with our partner from GDIT. This is a huge win for us. This is something, again, horizontal products, vertical markets. We would not have bid that in the past, but we did it because we started looking across new vertical markets with existing products. And it turns out our network is highly expansive, and we're able to curate it in a meaningful way, which was very attractive as you look at the way that the movements have been demographically for first responders over a long period of time. So we can create that network. That's another big win for us early this year that's come.

We've had -- we expect growth in new logos. And then I've -- our Chief Growth Officer is here. I'm not resetting our guide today, I'm not doing that. Todd, make sure you heard that, Todd. What I am saying is we've challenged our team to do $100 million in sales. So I'm expecting the team to do $100 million in sales. That's what we're going to quote them against, that's what they're going to get paid against. That is our goal for our team is to deliver that. And so as I think of all that, I look at it, and I think we're delivering our promises, and we know how to sell around here.

So where I came out of it did for 20 years, and it's starting to show up, which is a good indicator for our future going forward. So we listen, we saw problems and we sell.

All right. So this is -- this says vision but vision, vision has really become strategy, has become reality because we're executing against it. And when I step back, 3 things jump out. One, we're laser focused on our clients, which we said; two, we're going to be technology-driven investing in technology, not just Oracle, but other technologies. You'll hear from our Chief Digital Officer. And we're going to be product led. So we're making more stuff. We're making more products. You'll see our road map today. Again, there was no road map when I came. I asked for it on my second day here and it did not exist. We have one now. When you have road maps, you can tell clients what's coming, they can budget for it, plan for it, you can sell more stuff. And so the idea of creating product-driven road maps, listening to your clients, yields better results over time across multiple verticals. That's how the company is going to grow.

And really, I would tell you, we're doing it from the bottom up. There are a lot of choices that could have been made. But ultimately, the choice that we made at the senior leader and Board level was we're going to build the company for growth over a long period of time. So we're investing in our technology infrastructure, Oracle Cloud, but also development tools. We're investing in our data platform. So the ability to structure data and use that data in a meaningful way against AI tools and capabilities embedded in workflow, more clearly defining our products. And as I mentioned, we're launching managed services business this year. We think that gives us a massive opportunity for client acquisition to pull through all of our products that we think have benefits, and there's a big need for that in the market. And so we're going to be aggressively pursuing that. And then as we've said before, we've talked about horizontal products and vertical markets. And I've highlighted a few today, but we had -- I would just tell you it's working. We had 30 new logos last year. And so as you look at that, we had 4 international clients that we signed, 16 payer and TPA clients, 6 providers, 1 government agency, 2 employers and 2 supplemental. These are net new clients. So we're 10% to 12% less reliant on our top 10 than we were 18 months ago. That's significant for us.

So that allows us to diversify the business, allows us to withstand some things beyond our control. It allows us to grow in a more robust way, and it positions the company for success over a long period of time. We're a more robust and healthier by far than we were in 2024. And so that's a good thing for us. And I've mentioned some of the specifics. I won't necessarily cover them again, other than to say we think that some of those things I've announced are really a good indication for us as we go forward, that our strategy is working. And so we'll continue to focus on that in a material way.

Okay. So kind of 1 more slide, and then I want you to hear from some clients. We're very confident that we're well positioned for the future, very confident. Confidence is one thing, proving it in reality are another. And I'm -- I think that there are going to be 3 things that are going to matter. All these things you see on the screen are true. We have a network at scale. Not too many people can compete with that. We had the largest PPO in the country. We also can curate it now with products and advancements we've made, which you'll hear about today. We do have high provider acceptance. So we have low abrasion in our services across our portfolio. We're very good at regulatory and responding quickly to regulatory change. We have depth of client relationships. We also have proprietary data. And so we have thousands and thousands of embedded business rules inside of individual solutions for clients. And when you think about an AI future, which I'm sure we'll talk about more, which Fernando is our Chief AI Officer, will come up in a little bit. Data rights, workflow and trust are going to be the 3 things that I think separate winners from losers. And data rights are negotiated with clients and in health care because it's PHI and PII, data rights become the moat because the data is to be used for client-specific use. That's how we use it individually. That's different than I'm trying to how you acquire toothpaste is different and happening in health care for years and years.

You see the data becomes the advantage and the ability to use it because you have the relationship and the data rights agreement on how you would use that is important in health care. We're embedded in the workflow. So as I mentioned, we have proprietary rules. We have IP that's not easily recreated by anyone, including our clients. And we have high value because we have workflow embeddedness. And then ultimately, we have trust. There's a belief that we'll be responsible because we've been responsible with our clients over many decades. And so as you look at those 3 factors, our view, and I think it's going to play out in the market and it gets starting to, in some ways, it's early, is that platforms just point solutions will be winners in an AI future, that data rights are going to be the moat and that AI will accelerate product development. And so as we think about that, we view the winning formula as platform plus proprietary data, plus embedded AI equals winning. And that's us. That's largely us in the area that we serve. And so we're not just -- we're not fearful of the AI revolution. We're actually here for it. And we have a team that's using it today. We've been using it. We have real examples. We're driving real value and real automation inside of the business.

So we think it bodes well for us both on the top line growth, but also in terms of operating leverage over time as we advance the company.

And so why Claritev? We think we have a competitive advantage. And we have to go prove that out. But I do believe it's starting to show up in sales backlog growth and forward-looking metrics, and we'll talk more about that today.

Okay. So that was the wind up. I think I'm more or less on time. But what's most important, I think, is that you'll hear from, not just from us, but you hear from some of our clients. And so what I wanted to do was bring up one of our clients. So I'm going to welcome Mike Feeney to come up. He has been an employee benefit space for some 25 years, founded Trace Health in 2021. So I have a high respect for the founder story, which is great. Also, tech forward, very much so. And then I'd say, focus on underserved communities in some ways, which is a real message, which is on purpose for us considering our relationship with National Rural Health and some of the work we're doing. So Thanks, Mike. Welcome.

Well, you can sit down, we'll sit down here and do a Johnny Carson style or whatever it is, dating myself. But thanks for being here. Why don't you just tell the group a little bit about yourself.

Yes. No, I appreciate it. Thank you for being here. thanks for having you here. So Trace Health. Sorry, I lost a clip. There we go. Trace Health is a bunch of things. And I'll start by saying who we serve. We serve a lot of variable hour employees, underinsured, small- to medium-sized businesses, all in the level-funded, self-funded arena. We are a payer in our core. So we're a TPA, a third-party administrator. We're also an MGU. What that means is we're a managing general underwriter, we control and manage the risk associated with all of our plans. What ties that all together for us is proprietary technology. In order to deliver a good product quickly to a variable hour employee, maybe it's a driver, maybe it's a restaurant worker, whoever that might be, and have them understand their benefits quickly and be able to access it is very important to us, which is why partnering with someone like Claritev is very important to us. They have the same vision to serve those communities and with a tech forward approach.

Yes. And you kind of hit on it, but I mentioned our focus on affordability, transparency, access cost. How are you all using some of our solutions? And how are you thinking about that?

Yes. And I took some notes because you you brought up things that I forgot I was -- we were using with Claritev. So mainly, our big piece that we started with Claritev was networks. You mentioned the vast network they have One of the interesting things for Trace was we were able to tap into their API to utilize their network search. I think we might have been the first one to do it. I'm not sure if anybody else is. But basically, it allowed that small group, that small employer, that variable hour employee to go on our app and quickly search a provider, find a provider, get quality of care scores, cost transparency, all those things, we're able to incorporate using an API through Claritev.

Claims intelligence. We use BenInsights, Claims analytics, very important for us as an MGU, managing small group health plans that are self-funded, very volatile. Very important for us to know what the risk associated with those plans will be. Reference-based pricing, which I think is a very fast-growing market, specifically in the smaller groups. So reference-based pricing as well as the repricing. You mentioned NSA, the amount of network services. We -- and I'll steal 1 of your lines, we like to go vertical. So when we have a good partner, we try to use as much services as possible and especially if they're tech forward friendly, which obviously Claritev is. So all those services we provide are necessary in our marketplace. We move very quick. We add a lot of really small groups every month, and they have to be able to move very quickly as far as getting benefits, getting ID cards, finding providers understanding when a claim is being paid, understanding what an EOB is, all those things. And with our connectivity through Claritev, we be able to access that.

Yes. I think you guys are using Vistara, and you're using BenInsights, which is great to see the use. The more use we get, the more we listen, the more use cases we find. And so we think that data analytics product actually is very important for us going forward. The other thing you mentioned was APIs. I didn't talk about it, but that was another reason that we set out on a technology vision was because we actually thought we could produce APIs off of that. and become a platform versus simply a point solution, right? And so this idea of being a platform really hinges in some ways off your ability to serve up APIs and other data. It's also another competitive moat and frankly, it attacks our competition. because not all of them are doing the same thing and some of what they offer are just commodities in my mind. And so we think that, that has multiple parts to the strategy is using those APIs -. So I'm glad to hear you using them. And that you remember you're using. So that's good. Look, we talked about -- I talked about some challenges. I didn't spend a lot of time on the macro health dynamics. But maybe you're living it every day. You're seeing it. What are -- how do you feel about some of the challenges you're facing? What are some of the bigger ones? And what do you need to be successful?

Yes, as a payer, specifically in the market we serve, technology is the only way I believe that you can successfully move forward in that marketplace and scale. AI on the top of the list. The ability to -- if you know the landscape of health care, insurance companies, TPAs, it's a variable degree of technology, right? Some are good, some aren't. That's no knocking anyone else. Claritev, I think, has been the best and are still getting better. And that's crucial for a member to know their benefits, to be able to access their benefits, to be able to understand why claims are being paid, why claims are being denied, how to find a provider. All of those things, specifically in the world we live in with rising cost of health care and specifically in the Space almond, which is small group health care, technology is the best way to educate and to inform and specifically, again, as being an MGU with managing risk, very important that we know what's going on within our groups and within our population.

Yes. And how are you -- just kind of one other question for you and I'll let you add anything you want after that, but how are you thinking about AI? Are you getting approached by like lots of point solutions. We didn't really rehearse this, but are you seeing just a bombardment of that? Or is it kind of hard to figure out what the landscape looks like?

It's become more and more -- when we go to these events like Asia, there's just a lot of people walking around, trying to position their AI tools. for us where we see it -- what we've done so far versus where we're going. For now, we've done -- doing a little bit of customer service, so provider calls. Provider calls typically go into the TPA. They sit in queue, and there's a call center waiting to answer or respond. A lot of those questions can be answered very quickly rather online or just some data insight from the AI tool. So we're starting to incorporate that. We also have an AI widget internally that helps us know our book of business from a membership level and claims perspective. And then where we want to go is we want to be able to have analytics that will help us to understand the risk, it will help make decisions. It will help at renewals. It will help have members understand how their benefits are being used or what prescriptions to get. So there is a whole way to expand into the AA market, and being in front of it and the insurance is going to be foremost.

Yes, absolutely. I mean we see opportunities in our call center, we see opportunities in financial negotiations, IDR, those are all areas that are, I think, really well set up to use AI to get better insights. And so our team will talk about that a little bit more. And I have a huge respect. I mean we could have -- we had quite a few clients that wanted to participate with us today. We actually asked Trace to come up because of the entrepreneurial journey, I have a lot of respect for that, but also you guys are thinking because you're new to the market, you're serving, there's a level of creativity, right? And so it's highly beneficial to us to work with creative partners that are challenging our tech forward posture. And so that's why I really was happy for Mike to come, which I appreciate you being here. Is there anything else you want to add? And if not, we'll move on to the next phase.

I would just say I've -- as a founder, we've gone to -- we've spoken to a lot of companies similar to Claritev. To us, there's no one else that has been more forward thinking as far as what we're trying to do from a technology perspective. And I think it's really important because as most of you know, the space has always been behind. And I think we're collectively moving it forward in a space that's usually underserved or don't understand this benefits as much as they should. And there's a -- now that we're able to deliver it through these tools, I think it's important.

Okay. Yes, I appreciate it, Mike. And Mike, you bootstrapped it I don't know if you're looking for investors, but there's a whole bunch sitting right here. So Mike is here, if you want to talk to Mike.

I left my carpet there.

All right. way, I appreciate it. Thank you so much for coming in. Glad you made it. Thank you.

Thanks, everyone.

Okay. So all right. So just to reorient it back. So to the video, you talked about claims life cycle, when to start with payer that's thinking about technology in a unique way. We hear about employer next, and then we'll have provider come up as well. So I'm trying to orient you back to where we started, which is that life cycle of a claim and think about where we fit inside of that continuum over and over. So with that, I'm going to call Sean up, Sean Crandall, who's our GM SVP of Claims Intelligence. And I always tell people, if you want someone who knows some stuff, Sean knows some stuff, man. He was probably the #1 resource for me when I joined the company in terms of educating me on a lot of things. So I encourage you to find him on a break or otherwise because he's wildly knowledgeable in the area. And all around, great guys. So Thanks, Jon. Appreciate it.

Hello, everybody. How are you Good. All right. Again, Travis, thank you. Sean Grandell, I head up our claims Intelligence Solutions. We heard a couple of themes in the last presentation, really around some things I want you to think about, like complexity of care. And you've heard risk, okay? These employers and payers are really trying to manage risk and how do they do that, okay? Again, the traditional model is you have a broker consultant that's working with the payer, okay? And an employer. So what tools can they use. And again, the HR team, you'll hear from some HR representation right after this, is that HR team has limited resources, okay? What tools, what technologies can they use to look at cost, risk? What are they offering their benefit plan? So I will walk through one of our staple solutions within our data and analytics solution line, which has been insights, okay? And then I'll walk through our partnership with Kinetic, and then we'll really talk about realizing the value of an insight. Because I can tell you about an insight, but I need somebody to take action on it that actually translates into value, okay?

So with that being said, let's take a look and dive a little bit further into what type of issues employers are facing today. When we're really looking at it, there's a number of different things that employers are faced with, with very limited resources internally. Imagine trying to consolidate different data sources, which is health care spend, Rx spend, admin fees, et cetera, all onto a consolidated platform. That's a very difficult thing to do. A lot of times, our HR people are having to work with their brokers and consultants kind of retrospectively to say costs have already happened. They are going to be happening, okay? How do you get ahead of that and manage a little bit more proactively, and I'll touch on that in the base -- in a minute.

One of the other things that they're dealing with is, as Travis and Mike talked about earlier is point solutions. What point solutions are the right ones for the people that I have, okay? And how does that fit within my actual benefit plan design. So really looking at a solution that starts with an employer making a decision about their benefits, okay? The last is -- I really talked about is the complexity of the ecosystem as an employer, and you're going to hear from the employer lens of this as well is, am I being a fiduciary, okay? Am I making the right decisions for my employees? And do I have the right vendors in play?

So again, going back to risk and cost, 6.5% an annual increase year-over-year is a tough pill to swallow, okay? That's tough for not only the CFO, but it's a tough thing for employees as well. So how do we provide solutions that basically bend that cost curve, okay? And the first fundamental thing we really have to get and we work with employers on is the difference between being reactive versus proactive. So instead of 6 weeks before renewal, let's put a bunch of reports together. And let's see if we can cobble together something that decreases our renewal rate, okay? This cycle and with BenInsights that we'll talk about, it has to be a continual ecosystem where it's engaging really around the 5% of the population that account for a vast majority of the spend. How do I engage those people before things happen to make a material impact? And you'll hear real examples of that, okay?

Again, the other things that when you're proactive, you can really match cost to quality. So how do I proactively engage to make sure Sean goes to the facility that fits what's the risk profile is within [indiscernible]. And so we'll talk about that momentarily. But again, being proactive translates to actual value, okay? So if I can get ahead of something that 6.5% goes a lot lower, okay? So highlights just -- I love the view of -- the way that we look at this is, is truly a partnership between the talent team, our finance team to really analyze employer data across the organization, again, to really reduce the spend, how do I gauge, how do we make a better benefit package for my employees to use through a consolidated platform, okay?

A few key things as well as we will continually try to get this -- so somebody is not just accessing another system in another -- we want to seamlessly integrate this into the employer experience through various HCM platforms as well. And last, but not least, the advisory aspect of it. Like our platform, BenInsights, generates insights and engagement tools, okay, that somebody can take action on. And when they do, that shows back up on the platform. So it's that continual evolution of the actual platform that makes it so value-added, okay?

So with that being said, I'd like to bring Sarah up here from -- Sarah Michaels from Kinetic Health. And Sarah is a practicing nurse as well as the Chief Clinical Officer of Kinetic Health. And Sarah is a partner of ours. And when I talked about actually getting value and realizing value, our partners are the ones that are helping us do that for our employers. So Sarah, can you kind of give a brief outcome -- or overview of Kinetic Health, what you do and really how we've interacted with the insights and the tools that we have?

Yes. And 1 honor is to be here presenting as a partner today. We ourselves have been clients of Claritev for the past 10 years. Really, the company was created as a result of BenInsights and the insights we were able to gather. Kinetic Health exists to enable benefits, employer benefit strategy. We want to help enhance benefits. And we do that because we use the data analytics tools and we pair that with the clinical lens to transform health care risk management as it exists today. Think of us as a team of clinical consultants for nurses, pharmacists, dietitians, registered licensed clinical social workers, the list goes on, but we are versed in the benefit space using our clinical insights to actually figure out how do you manage risk at the individual member level, and we do that by using the data insights to identify who's going to be an ongoing risk to the plan as well as who is at risk to being a large cost claimants.

RAN did a really good study, and that's actually where Kinetic grew from. RAN found that for every $1 employer groups for investing in wellness programs. They only got $0.50 back on that dollar. But for every dollar they invested in health programs, they saw a $3.80 return on that investment. What does that mean? It means that for too long, we use the 2 words interchangeably, health and wellness are actually 2 completely different concepts. Wellness is lifestyle management. Who has a condition to -- or who -- lifestyle management is how can I prevent something down the line? Tobacco cessation is probably the most well known in the employer health space. We used to incentivize tobacco cessation programs, but the problem is that requires a workforce to stay consistent for 20-plus years in order to see your ROI on that dollar, whereas health is who has a condition today, think about cancer, think about a high-cost medication. And if you actually pair yourself alongside that member and you actively manage those claims, the concept is quite simple. You improve lives. And as a result, you decreased the cost of health care as a whole.

That's why we've really created this partnership, which is use the data to create those actionable insights to actually change the trajectory of a claim.

So Sarah, let's talk a little bit about how would be your model? And what is the missing link that you want to get across to employers as you're talking with them compared to the traditional models that are out there today?

So [indiscernible] groups, we don't have a data problem. In fact, you guys know that data is everywhere, especially in the world we live in today. What I love is now we have a tool that combines all of it to create those easy insights. We're looking at medical claims, pharmacy claims, clinic data, even any sort of payroll data that we have that we can get into one singular platform to create those easy insights for us. What you had just shared a little bit ago, I want to extremely highlight. 5% of members are making up greater than 50% of health care risk. I'll go one step further, and I say it's usually only a handful of individuals who are making up 50% or greater of overall claims spend. Think about a self-funded employer and what that means for a group. We're talking 5 people might be truly driving all of their claims costs.

I had a group last week where it was one individual who was spending over 75% of the total planned spends. And when we looked at the data, for a while, we said it's not a data problem, it's a decision-making problem. What are we doing? Are we just taking reports and being reactive to those reports? Are we saying, "Hey, where can I actually intervene to change that trajectory of the claim?" And so Kinetic Health really does just that. We want to work not just with the tool, but directly with the plan members because the best claim is the claim that we can actually avoid we want to be in front of that. We want to work also with those carriers to be able to say what prior auths exist today. What case notes do you guys have to say what the trajectory of this member's care looks like? And we can't just rely on the patient alone to change the trajectory of their claim. We have to actually work directly also with those providers to say, "Hey, if we realize there's a discrepancy, what can we do about the discrepancy to start decreasing cost of care?

So one of the things that's great about this as well is, again, BenInsights is also available through the Oracle Fusion HCM ecosystem, really getting that direct feed of data to employers. So the future view it's hard for employers to access data, okay? Getting that consolidated view on the same platform that their HCM system is, it brings together the latency of data and puts it right in the hands of the employers. So Sarah, can you walk through a couple of case examples, maybe let's start on the medical side, of really take insight and form it into action and real-time value for that employer?

Sure. This is actually one of my favorite examples because if you read on the screen, this was a group that was only 75 employee lives. We're not talking large scale. We don't need to go to Fortune 500 companies. We can go all the way down to these small groups and really make a huge impact on their claims. This was a group that was running exceptionally high. But when you looked at the claims data within the platform, we saw that there were only 5 individuals that were driving nearly $1 million of the total plan spend. As a result, what does the insurance carrier want to do. They wanted to laser or add excess risk to those and the amount of nearly $1 million.

Now the power of using the data analytics platform, it's given me a complete clinical picture of what's going on within those individual members. We can pull up all 5 people, and we can look down to a Band-Aid level. We can see exactly when the diagnosis had occurred by looking at when the scans were done. We can look at how many rounds of treatment have already been done. And we can use our clinical insight to actually judge what the future spend is going to be on the clinical insight we're able to gain. When we did just that, we also work directly with the carriers. We got those additional case nodes. We found that for the majority of these individuals, they were actually already in remission. We found that for others, they simply needed a maintenance medication. What the power of all that data allows us to do is negotiate directly for that employer group. We were able to remove all of that excess risk replacement with only a $250,000 aggregate and specific deductible. And for that 75 life group, they were able to save over $700,000. That is a very real example of how you can leverage the data, you're managing it on a monthly basis, but more importantly, you're bringing power to your employer groups when it comes time to go into your renewal by presenting all of the facts.

So a great example of actual fixed costs, but there's so many other applications that this could be used for really identifying low quality of care with high complexity, high complexity of care, low quality. So there's so many different like use cases for the data. And when you pair data with clinicians that take action and delivers meaningful savings. So this is not just on the medical side. Do you have any other examples like really on the pharma side that could also talk to?

So you guys know these costs are rising every single year. oftentimes trend is expected to exceed double digits now in the pharmacy increase alone. That is because not just pharmacy spend, it's actually those hidden medical drugs that are being infused on the medical side. And so that's why groups often come to me and be like, we don't have a drug problem. You actually do because if your pharmacy costs are low, chances are, your highest costs are actually hitting on the medical side. That's why it's so important to have a tool that you can actually go into the data to figure out what are those medical J-code drugs that are running on your medical side. This was a perfect example of the work we do on that monthly basis. The key is a monthly basis. As the tool is getting loaded from the carriers, you want to be analyzing it every single month. So we identify the first month that hits rather than waiting until the full 12 months of the plan you have hit. This is obviously going to help reduce overall risk.

Well, for this specific client, they had a dependent on a very rare medication for a rare form of dwarfism. This medication was being infused at $55,000 per week. It was going to be ongoing for the entire life of this dependent. So as long as this member was on the plan, this claim was going to be on the plan. We were able to use the insights that you probably saw demoed here today to figure out the acquisition cost of that drug was actually $11,000. That markup was coming from the provider directly. Now this seems like a crazy scenario, but the reality is we see 400%, 500% markup every single day. This is real. It's why eyes need to be in the data to figure out, again, how can we intervene at that specific individual level. When we did just that, we were able to go back. We did not want to take the member of this medication. And in fact, we didn't even want to change the place of service. This child had been going to their provider for several years, but we needed to work knowing this data directly with the carrier, get a phone call directly with the provider to say, "Hey, we know the acquisition cost is close to $11,000. How can we negotiate this to keep the member getting the same care from your facility? So they actually met us at the $11,000 acquisition level, charge a simple markup for the actual administration of the medication, so they still made money at the facility level, but we were able to save this group $44,000 per week, which equated to over $2 million of planned savings every single year.

That is the power of using the tool, taking the analytics and actually doing something with it.

Thank you, Sarah. So I just want to recap. We have the BenInsights platform just drives insights to our end users and now having partnerships available for our employers to solve some of the issues that we talked about, really drive sustainable value. And again, that -- like the annual increases that employers are faced with, if we can take that and really reduce the cost of care, and I'm going to bring up Douglas Garis and Carol Letter now and to really give another example of a real life use case of BenInsights. Thank you, Sarah.

Hi, everyone. How are you doing? All right. So I think we've joked around before and say, we have to eat our own dog food. And our case study is really talking about how we use our bed insights tool and ourselves, which we think is an incredible platform and something that we're excited to talk about relative to our experience. So I'm not going to beat this to death, but it's no surprise that health care costs are out of control for employers. What people realize through the evolution of plan design and health insurance acquisition, the employer is the one that is responsible for most of the care with respect to employees signing up for health care. For a CFO, health care costs are my second largest P&L item only behind what I pay my W-2 wages. So if I think about it, my per employee per year expense, and most companies is anywhere from maybe $6,000 to $12,000, no exception here at Claritev. So you look at this envelope of increasing price I'm left with a very tough and dare I say, abrasive conversation with Carol. And...

I would say it's abrasive.

It's fantastic now. But I think traditionally, what we're trying to convey with our BenInsights platform is the conversation, we think should be different. So as we go into a planning year and as we go through our benefit design process on the windshield is once in more than a decade health care inflation, and that is not easing up anytime soon. So there's 2 perspectives here. There's the mean Grumpy CFO who says, "I got rising cost, I need to manage my P&L. I need to manage margin." And then also on top of looking for cost avoidance, I'm also managing my fiduciary responsibilities, right? We're a public company. We have a whole lot of things that we have to make sure that our plan design appropriately captures thinking about ERISA. But at the end of the day, we have one ultimate end goal, and this is where I'm going to turn it over to Carol and speak about our experience with BenInsights because we do have 1 shared goal. I promise you.

We do. I mean I will say that I have been in this space for 25 years, and I -- this is the first time I've actually shared stage with my CFO because of this shared goal that health care and health investment is huge. It's a huge part of my job, and it's a huge part of Doug's job. But when we really started looking at our platform and leveraging our own platform, we said, wait a minute, we both had the same shared goal, which is how do we maximize the benefit for our employees but also maximize the benefit for our company as well from the economics. And so Doug, yes, he's a dollars and cents person, and I really look at it from the workforce. So how am I attracting, how am I retaining, how am I engaging a workforce through health care, right?

You have to be competitive, you have to differentiate yourself in the marketplace and health care and what you're offering your employees, we call them associates is meaningful. And so after I've been doing this for about 25 years or so over that period of time, I started looking at my health care investments, what I call a true value. So that's T-R-U-E. So first, talent. Is my health plan or is it really attracting, retaining talent, return on investment? Is there a meaningful value that I'm getting from those dollars that I'm spending? Understanding, is there an actual understanding of how our employees can leverage their benefits and engagement? Our employees seeing value? Is this where they are meeting their needs on the home front, how they're looking at their cost?

And before BenInsights, that was really a kind of a hope dream that I had saying, okay, this is what I'm hoping to get out of it, but I often didn't, right? I looked at it once a year in a really compressed time frame. I'm getting all of this data at once. And at the same time, I'm having to make decisions about how I'm going to spend in the upcoming year. It's not a really great dynamic. And so like many employers, we're facing rising costs, right? Every year, you just kind of get it set and forget it, okay, it's going to go up. I know it's going to go up. Okay. Well, what do you do about it? Okay, I could either -- we could either just absorb the cost from a company perspective, which is many do. Many companies also share that cost with employees, which is a hard message, right? Having done this for over 25 years, going to the employees that I support and saying, yet again, costs are going up. there were years saying costs are going up and the benefits are going down. That is a tough message. And when you've got a lot of internal chat boards and things like that, it was also hard to kind of get the feedback that I was getting. But when we started using BenInsights, what we did is we took 3 years of claims data. And we said, okay, what can we learn from this? What can we learn from our own data? How are our own employees the benefits that we're providing. And we got a ton of transparency that really was transformational.

And on the next slide, we'll go over what our achievements were, but for the first time and again, over 25 years, I know exactly where those cost drivers are. What's really impacting, who it's impacting, why is it impacting? And so I've got the transparency piece. But most importantly, I now have the clarity piece and say, hey, what do I do about it? How can I be really targeted and really focused to make smarter decisions about these health care dollars that we're spending. And when I really started looking at the tool and taking a step back, saying, "I've got clinical data that sordid a great job talking to us about financial and workforce, I've got the trifecta of all this information that now, in a predictive targeted way, Doug and I can partner and say, "All right, what do we do? How do we best leverage these dollars, again, for our associates, our employees and also from a financial perspective of the company?

All right. So what did we hear, Doug, do you want to start. drumroll, please, drumroll, please.

We saved over $1,200 per employee on our health plan in 2025. without sacrificing benefits in a year where most on a like-for-like basis where most employers actually passed pretty significant inflation on to their associates.

That's right? And so we're going to start off. This is a big number, and we do want this to be up here because this is absolutely what we've experienced over the last 3 years, and not many employers can say that. And what we're able to pass on to our associates, I think, is even is even the larger accomplishment. So there's really 3 main impacts that we saw. First was financial, right? So we've got the $4 million in total benefits spend. We also did not pass any sort of employee contribution increases on to our associates. I can tell you saying that to a crowd of 3,000 people, it was a lot easier than saying, "Hey, benefits are going down, costs are going up. And that's just the way it is, right? It's happening everywhere else. You can read any kind of news article about it. But that's not the communication, that's not the engagement that I'm having with associates at Claritev.

So the first was the financial impact. The second was around utilization of care. So utilization of our benefits. And the third was a stronger connection with what are the values of our workforce, what our workforce was valuing in terms of what they were looking for in benefits. And so as we looked at the data and we became very, very specific and focused on what we're finding, and as we apply different strategies and mitigation approaches, we lowered our ER visits by 12%. We adjusted our primary care physician and specialist co-pays. We amended deductibles and out-of-pocket maximums. We added 2 more pharmacy deductibles. And we also negotiated more favorable carrier contracts and increased our stop loss retention, and that was really, really big. And I did not have the information, frankly, the confidence before BenInsights to go back to our carrier and saying, "Hey, that's not good enough. And it started this negotiation, me being in a much more proactive often substance than a defensive stance that, as I said, I had been in really in 25 years prior to.

So this is how the utilization of care, how we really made improvements. The last piece was around our workforce and having a stronger connection to the values of our workforce. And so I mentioned that we've got clinical data. We've got financial data and workforce. And so that's where the Oracle Fusion comes in. And so we have this platform connected in with my employee landscape data, all of those employees send this information. I'm able to see real time. So I don't just use BenInsights once a year. I use it on an ongoing basis to hold myself accountable what's working, what's not, where do I need to make a change? But the other interesting part is most companies do annual employee surveys, maybe do it a couple of times a year. We do. And 1 of the questions is, what would you like to see more of? We get lots of feedback. But 1 of the areas we get feedback is from a benefits, "Hey, I'd like to see more in X. I'd like to see more and Y. This is what's meaningful for me. So before BenInsights, those were just words on a page. And I would do my best, again, I was limited, mirroring that with the clinical information of how people are actually consuming benefits, I was able to truly see clearly what we needed to be able to offer to our employees to have that stronger connection engagement. We added more support for MSK. We added more support for women's health. Our company is made up of 63% women. We added more support for mental health. We saw a big increase with individuals that still have their children on plans, and we're seeing a big spike in needs for mental health.

We also have a stronger partnership with [indiscernible] and a variety of other solutions that they're able to offer our associates, and that's directly coming from not only what we saw people, how they are consuming our health care, but what they were saying in various surveys. All of that led to a much stronger improved employee experience. We have very, very high survey results from Great Places to Work and in part because we listen. We're taking all the various data inputs that we have, and we're looking to make more informed, more targeted decisions on what we think is best for our associates. And again, because it's such a great number, we do want to -- we're going to end on, again, the $4 million in savings. But linking back to the employee -- or to the health care life cycle, so it doesn't stop with plan design, employees become patients. And I'd like to bring Jigar Patel, who is our Chief Medical and Product Officer, who's going to share with you how we support providers through our process and also the delivery of care. Jigar?

So good afternoon. Thanks for coming. My name is Jigar Patel. I am a physician. I have the unusual distinction of having 2 very disparate titles, Chief Medical Officer and Chief Product Officer. So why did I come to Claritev. It's been about 11 months. And I came for 2 main reasons. One, I get to blend my history of medical science and product experience in working in technology for the last 18 years. That's pretty unique. And to listen to the vision before I came was, we want to shift left. We want to think about providers as a part of the continuum and enhance our services in that space. And then be a technology-enabled product-focused company. So it was a golden opportunity for me to use a lot of different things I have in my background and have an impact at Claritev and in health care in general.

I have, for the last 18 years, focused on scaling and how do I think about improving more lives than I would as a pathologist. The lab I ran was part of before I joined Cerner at the time, we ran about 5 million tests a year. And that probably covered about 100,000 people. When you talk about then moving to a Cerner and then an Oracle, you're talking about your scope getting even larger. Now you think about claims that cover the United States and the scope is even larger. So it's very gratifying to me to think about our products affecting health care at a different level and a different scale than I've seen before.

In review, we've talked about plan design with Mike and Trace Health. How do you help someone pick a plan, then the enrollment and the understanding of the benefits with Carol Doug, Sarah and Sean. And now I'm going to focus on that provider lens. What do we think about, how do we provide care, and how do you provide the economics for that care? My entire career, I've always heard no margin, no mission. So providers also have to make a margin so they can provide care for persons, and that's very important. It's a core of a lot of why people become nurses and physicians and therapists of all kind.

So with that, the challenges in health care are many. This is not a surprise. It's been the headline for a long time, was exacerbated by COVID, of course. Professional shortages. Labor and operating costs are continuing to go up and there're professional shortages across the board, go from primary care to nursing to therapists, you name the field from a medical profession perspective, and there is a shortage. Talk about the volume of data I would contend. The health care data is perhaps the most complicated set of data that's available out there from a clinical perspective, not even thinking about claims and the payments and the other things that we've talked about also.

And that's why people go to school for many years to understand those things and aggregate that data over time. It's vast and rich and the opportunity to marry that to the economic side is there are plenty of opportunities there, and we want to go in that direction.

The complexity of the administrative burden of health care is also wildly above and beyond, one of the most regulated industries out there. And in my career -- for the first time in my career in the last 2 years, more physicians are employed by hospitals than not. When I came out of training, you were expected to go join a big group, hang a shingle and become a small business. that is less and less true because in part for the complexity. So physicians are looking to take a paycheck home now, they don't want to run a small business. They want to take care of people and getting rid of the complexity from a contracting and how do I get paid and keep my business open has become less and less important to those providers.

The big headline for the last 10 years has been also consolidation of health care providers. We're seeing a lot of them move together. You're also seeing new entrants in the fields, the Amazons, the Optums and they're taking on providers to provide services and also think about how do they capture a market that is ripe for the things they feel they have expertise in as well. Behind all of that is the complexity of health care itself. Medically, technologically pharmaceutically. It's pharmaceutically. Those are all increasing at rates that are very, very different than when I was in training. Not a day goes by when somebody says, "Hey, have you heard of this drug or what does this procedure mean? They're all brand new over time. And part of what you learn in medicines, you have to continue to learn because it is ever evolving. And the technology is pushing us there. That technology also and the ability to take care of people in a lower acuity place has made the people that do get admitted to hospitals, very, very high acuity. So that is very different than it has been in the past. There used to be an era where if you had a baby and you went into the hospital, give you there 5, 7 days, and that was fine. That's not it anymore, right? For those of you that had a kid or you're in and out, right? That's the goal.

So it's the utilization of that very expensive space that people are trying to maximize. So all of these things are influence the provider market and those are cost pressures that they have to consider. So how do we help or how can we help them understand their space better. Over here, we were showing 1 of our transparency tools. We're showing the sister to the one I'm talking about here. And basically, we have taken the 5 billion public records that were required to be published by payers and providers, and taking that 500 billion records and created a solution that provides transparency into negotiated rates across the United States. Why you can say anybody can do that? When you look at the data itself, it is quite complex. And also, there is a lot of variability in its completeness. So we've used our knowledge as a company in health care economics to make sense of those 500 billion records. When you do that, you can actually start to understand in any given region for any number of payers and any number of providers, what does health care cost for any given thing. So that might be, I'm going to have an elective total knee arthroplasty. I'm going to have my knee replaced. That we can tell you down to the MSA and even to the ZIP code what does that cost in those providers in that area. What is the contracted rate for that service? So that's really important.

The goal for that legislation was to have all the people in the world know what it exactly cost to take care of and do anything that they would pay for from a health care perspective. The nature of the data being as large as and as complex is that hasn't happened without a translation like use of complete view. So we cleaned that data. We give you confidence scores on how good that data is. There are gaps in the data from a locality perspective. Some people are more prone to provide accurate data than less. So we have to do that. the trick from a product perspective is to make it actionable or make it informative in a way where everyone can understand what that is. That is to give you a simulator like you see on the screen here. If we adjust our rates in our facility to be comparable to our peers in the area, what's our revenue opportunity if we go into that negotiation with a better understanding of where we stand from a market perspective.

Sometimes you're going to win, you're going to win, you're below and there's opportunity for those rates to go up in comparison to your peers. Sometimes you're going to lose, sometimes your rates are higher. And that actually is probably -- you just won't mention that one. You'll keep taking that one. So how do you give people that right information so they feel more confident? And we're going to have a couple of our partners from Carlin Villare hospital come. And they're going to tell you about what do they have to do in the past to do this? And my favorite story of listening to Brian, and I'm going to spoil it now we'll have them expand on it is, he has been guilty of picking up the phone, calling down the street and asking what would I -- if I want to have this procedure done, what would you charge me? That is an unusual world when a CEO, CFO, someone in the hospital has to understand where they stand in the market, they have to go secret shop their competitors.

So with all of that, we can start to then give intelligence into an opportunity for better reimbursement potentially for the services and appropriate reimbursement. So with that, that complete view analytics gives you an understanding of where you stand in the market from a where am I negotiated in the payers that are there? How do I compare it to Medicare, all those sorts of things. It also gives you insight into where is my market leakage? And could I have a service line opportunity to keep health care local for me? So if you think about rural America in particular, every day, there's a decision whether or not we bring that service here or we have to ship at 50 miles down the road to a major medical center. So is there opportunity to understand that and have a strategic investment in those areas. It could be as simple as colonoscopy services. And so if you bring those in region, you keep people closer to home and you provide something that's valuable service that can be beneficial to the provider organization, but then also to the patients. We talked about simulation, understanding where you're standing if you increase a little bit here, a little bit there, decrease a little bit here. What does that look like from a next negotiation with the next payer? The complexity of these contracts is, they are very complex, but you can go in with a better understanding of where you stand and have the data there to say, I don't think this one is fair, this one is fair, etc. And then that financial viability. When you have the understanding of where can I potentially have a better stance on the market, I can actually get to better information about where I stand with getting paid for those services and getting paid appropriately.

Travis mentioned the top 5 health system that we've signed in America that we'll be announcing, hopefully shortly. But we had to justify and think about why is this important? And why is this good for Claritev? We're going to be doing technology management services. Many us have a history in that space supporting electronic health records. Well, that's getting close to the data. I talked about the complexity of that data and then how do you use that data in concert with claims data. that can be new and powerful. So this gives us an opportunity to work with providers with large data sets and see how we can marry those 2 things that are often not pushed together. So we will do the implementation applications and management of those things from a technology perspective, but work with them on new ideas around was that data good for from an economics and care perspective. We've heard from a number of folks on BenInsights in health care, in particular, one of the largest concerns for any CEO running a hospital is the health of their workforce. And that is a hard environment to be in. It's a stressful environment to be in. So BenInsights has an immediate lift to them as well as employers. We want to make sure that those professionals that are out there stay healthy, well and come to work and take care of people. And so they have to be well themselves.

We talk extensively about complete view and price transparency and how you gain insights and how do you push those things to provide understanding of where you are in the market, leakage, service line opportunities, grow your business kind of conversations. And then finally, coding accuracy. We have a long experience as a company in providing accurate coding. And it can be applied evenly on any side of the fence. Coding is coding. They're objective rules and that you can understand. If you get a better code, you can get a better clean claim. And you get more clean claims, that's less people touching those and actually bringing down your cost, your administrative burden in your organization. And then venturing in with some partnerships over the years here into clinical documentation improvement. Nothing happens like in most things, unless you've written it down, and it's very clear, and you will prevent other people coming back and say, "Hey, I need you to prove this thing? Or what's the substantiation for this thing if your documentation is better as well.

So with that, I have the pleasure of bringing up Mr. Brian Burnside and Jay Hodges. Brian is the CEO of our [indiscernible] Hospital in Illinois. And Jay is the Chief Financial Officer there as well, if you gentlemen want to come over this direction or wherever you want to and they're going to talk about their story, Carlin Villari Hospital and how they've worked with Claritev to go from having less information to having more information now. So take it over to you, Brian.

Thank you, Dr. [indiscernible]. And just to clarify, it was always my wife who called a competitor to find out about the MRI [indiscernible]. I'm pleased to introduce Jay Haas Jay is our long-term CFO, and really excited to have him with us today. And we'll have a lot of conversation about what Claritev has meant to our organization. Let me start just by saying something really simple. Our hospital is in the middle of a corn field, okay? Before you throw a lot of shade on that though, let me tell you why that's important because we are also a sophisticated health care organization that's looking toward the future. of the rural transformation in health care. And I was really pleased to hear Travis to describe us as a pioneer organization in terms of partnering with curative because we believe that what we've accomplished with Claritev's guidance in our organization, certainly scalable. And certainly, you can see that with their most recent announcement of the systems in the country.

So we're really excited about what's happening in Central Illinois. We're halfway between St. Louis and Springfield. And if you know much about Illinois, you know that, that is not a growing suburb of Houston, okay? I mean it's a modest era that -- and that has about a population of about 40,000 people. But there's our hospital. And the story of our hospital over the last 5 years that I've been the CEO, there I've been a hospital CEO for 20 years overall, but for the last 5 years, I've served at [indiscernible] Area Hospital. And my board, my Chief of Staff, Dr. Lawson, other members of our medical staff and our employees, believe it or not, believe that there is a rural transformation in health care that's coming. There's a portion of the One Big Beautiful Bill Act that has the rural health care transformation program in it. we're being told to transform. We're being told in rural America to take a claim of our position in the care continuum, and that's what we've been doing in [indiscernible]. So you can that we set out over the last number of years to say, how can we create a model for a rural health care system of the future. How can we take a small independent hospital and say, boy, this organization is having some successes in terms of culture, in terms of service to the community in terms of value added to employers and say, boy, that might not be a bad approach for other rural hospitals across the country.

So my favorite word is momentum. What we needed to do is create some momentum as an organization. We were pretty stagnant and stable for a period of time. But organizationally, we generated some momentum. We put primary care at the center of our strategy. And ultimately, that's something that rural health care does really, really well is primary care. But we augmented our primary care with nearly every specialist support physician that a rural community would need at any time during the course of the month. So we have general surgery, GI, orthopedics, allergy, ENT, pulmonary, behavioral health, podiatry, wound care, cardiology, urology, a vascular surgeon, ER and hospital team, neurology, rheumatology, ophthalmology, nephrology, oncology, gynecology and pain management, all serving our small rural community. They're not there every single day, but that fractional use of physician services is certainly what our community needs. And that has allowed us to say, you know what, we can create a comprehensive rural health system for our community. And we've set out to do that.

We heard earlier that talk about the importance of employee culture. [indiscernible] Area Hospital has a top 5% culture in the hospital industry, according to press gaining. And not only do we have a fair amount of just great fun with our teammates, we also really invested in their benefit structure, which became a strong competitive advantage for our organization in retaining nurses and techs. In fact, our hospital turnover is 12% compared to an industry average of 20%. So you see why I'm kind of sharing with you the rural resurgence, the rural transformation is an important issue for this country. And while many rural hospitals are struggling and it is a challenge, there is opportunity there as well.

And so this is an -- this is what has happened over the last 15 years. This is from our audited financial statements. Again, we're not a huge organization. I'm standing on Wall Street. We're not a huge organization. But over the period of 2010 to 2020, you could see modest growth in net patient services revenue, $15 million to $25 million. Over the last 5 years since I've been there, and Jay and I have been working together and we've been working with Claritev, our net patient services revenue has grown from $25 million to today, we're operating a $57 million net patient services budget. So net patient services revenue is not what we're charging. That's not what we're charging our payers, it's what we're getting paid. It's what it is receipts for actual services rendered to our community. We've been able, through data supplied by Claritev, to help better align our services with the services that our community needed, and we've been able to work towards pricing those services at appropriate levels for our market.

So ultimately, here we are an independent rural hospital, not in a growing suburb of Houston that has been able to provide greater services to our community by using the data that's available to us.

So long story short, I met Travis when we were at a National Rural Health Care Association Conference in Kansas City. And Claritev is a sponsor of the National Rural Healthcare Association. And as I heard Travis talk about his vision and talk about the importance of data, I mean I just got so excited in the room because I'm a data guy, right? And I represent, I believe, the future of health care leadership. And I thought, "Man, what do I not have as a small independent rural hospital? I don't have the resources to do this type of big data dive. Let me see if I can find a partner who knows something about data science." And boy, what Jay and I learned during the first little bit of that time was really that, that was just a wonderful decision.

The amount of information that we received about services in our market that we were capable of providing, but needed to do a little bit of development on was quite astonishing. The number of cases that we learned that we weren't on par with other competitors in our area in terms of our charging, that was also some findings that had real dollar opportunities for us. So Claritev helped us to identify $50 million in market leakage that we weren't touching at that period of time and also identify some other opportunities for us within, again, our reimbursement rates.

So my message to you all today is from the perspective of an admittedly rural hospital in the middle of a corn field, there are hospitals like us out there that are thinking about what the future of rural health care can look like. And the idea isn't that it's all just doom and gloom. If you use the data, I like to call the data our superpower. If you use the data, if you lean into the data and you have a better understanding of what your market is doing, you don't have to guess as a rural hospital CEO and that can help you make better use of the resources that you have in providing care to your local community.

So we've been thrilled with using both the complete view package. We're getting some information out of the BenInsights package to some degree, and it has really been foundational in our work to evolve our organization. So just happy to share that story with you, and I wanted to give you that perspective. We believe that as a pioneer in the Claritev provider space, we think that this type of thing is scalable, and you can see that with the larger contract that they just closed. Thank you for your time.

Thank you, Brian. We've got a couple of questions here that we're going to post to Jay and Brian because getting to why this is valuable to them is really important. So what first stood out about the approach to Claritev takes compared to traditional solutions? I'm sure as the CEO, as a CFO, you have somebody in your office every week trying to pitch something that will help you run your organization better. What was different in this instance?

As I mentioned, we met at the National Rule Healthcare Association, and it was the absolute use of true big data. This was the first time that I had really seen an organization present to me about the use of the big claims data and processing it that way. A lot of different demographic studies and assumptions that other consultants would have made in the past, but this was all based on true claims data that was occurring within my community and within my region. So I would argue that that's been 1 big piece of it.

The second big piece of it, once we began working with Claritev was, I mean, the depth of the professionalism, right? I mean again, I mentioned that we're a smaller hospital sophisticated, we are sophisticated, but we just don't have the same resources that an organization like Claritev does. And so to be able to pair our level of sophistication with their level of professionalism and data science, I think, has been a winning approach.

Yes. I often will talk about organizations I visit that don't have huge analytic departments. And I'm pretty sure [indiscernible] Hospital doesn't have that. Jay, how do the new insights change the way your teams made decisions? I mean, Sarah talked about decision-making with the data is the key here. How was it transformed at [indiscernible] Hospital after working with Claritev?

Well, let's go back to the data, right? So as a small rule hospital CFO, we were begging for this kind of data for years. You would never have it, you'd want to go to your payer and so we think you're underpaying us. You had nothing to go on, right? So now we have hard actionable data that we can now go back to Blue Cross or Cigna, Aetna, whoever and using the complete view data, right, we can show that, hey, you were underpaying us for these service lines, these procedures, these diagnoses. We actually have something concrete to go for.

Then also kind of separately on a -- we can use the data to look at denials, right? So we knew for years, the payers have been denying us for whatever reasons, right? So now we can see why, how much and what we can do about it. So we take the data, we can do something about it.

Right. Yes, it's fascinating to me, going as growing up as a provider, I never had any of those data. And as I worked to join Claritev, it was fascinating to me to see the variability in that data.

I think that the way we're viewing this, too, is we're not viewing this as a negotiation leverage type of thing. I think we're saying this is a great level setting for both sides of the equation, right? Payers want to pay what needs to be done to provide services to a community. We want to be able to do the same type of thing. And I think that just the idea of having a level set is a great place for both sides to be in.

That's a great point. Thank you for that. So looking ahead, either of you can answer, or both of you, what excites you most about the data-driven health care and then the role that AI will play in it because it's everywhere, and it's going to get to rural America, too?

Sure. Well, I think we're both kind of tag team this. But I believe that, again, the data allows you to really match the services that you're providing or the services your community needs the services that you're able to provide. So if you need to develop some of your nurses to have higher skills, if you need to do something along those lines, recruit a particular type of physician, doing that with the data is crucial. So I think that's probably my first thought is the data takes all the guess work out of rural health care leadership.

Yes. And then from the AI perspective, we're certainly moving more and more closer to being early adopters. We have not -- haven't been on the bleeding edge for sure, but we certainly see the role that it plays, especially in revenue cycle management, again, pre auths, denials, coding, et cetera. So we've already begun autonomous coding projects, et cetera. So we're really excited about the AI side right of it.

Yes. I think the I tell folks all the time that AI is going to help us get above water a little bit, and then we can start to do new things from a care perspective. So I want to thank all of you for listening to us. I'm going to bring Todd back. Thank you, Brian. Thank you, Jay, for joining us and talk telling the [indiscernible] story. Thank you. SP1 And I'm going to give it back to Todd, who's going to take the break here.

I've been -- I think my first Investor Day was 1992, and this is the first time I can ever say we're ahead of schedule. So we're going to be a little different than we've got on the schedule here. We'll take a break at about 3:00. There is such a good traffic before the demos, we're going to the demo stations turn on again. And we'll come back at 3:00 here to keep the day going. So far today, we've covered that first half of that life cycle that we showed you kind of from looking for insurance to looking for care. When we come back from the break, we're going to go to the core of our business, the heart, how a claim gets created after care happens, and there's a point of what happens when the claim is created and what do we do for that all the way through to the payment. So we'll take a break now, and we'll be back in 30 minutes.

[Break]

Rather than describe from an operations perspective, the details of our solutions, I thought I'd describe them in terms of the benefit they provide to our clients and why we think they are differentiated on a value basis that is enduring. So I run the operations organization for Claritev. We've got about 1,800 associates that deliver the services and solutions to all of our clients. We maintain a very tight alignment with our Chief Growth Officer, Tiffany Masencik, who is here today. listening to our clients to not only modernize the solutions that we have, but bring new things to market as well as we seek to expand not only into new logos to offer our current clients more things.

So as part of being the Operations Officer, along with the 4 general managers that run each of the portfolios at our organization, we're responsible for delivering services with -- that meet our quality standards and the timeliness of our clients. that are top of class in terms of unit cost and top of class in terms of benefit to our clients, and therefore, revenue and revenue growth declarative. So we also want to minimize the error rate in the operations, everything that we do. 1% error means, all things being equal, we've got about 18 people working on not their highest and best use. You get it wrong by 10% that's 180 people. So we look at that, right? And a lot of engineers, a lot of people with industrial systems engineering degrees in the organization, a lot of health care executives or people with backgrounds in health care in the organization, that the principles you're Todd and school are kind of basic principles and higher order principles. So there's a tendency among people with engineering training to optimize things that should no longer exist, right? So we look at the way that we do things, the way we deliver each of our services make sure that our processes, our procedures, our methodologies and our technology are the best that they can be and then optimize them for lowest unit cost and the highest benefit to the client, and therefore, how is revenue to Claritev.

So we'll go to the next chart, right? So we've got some statistics here, kind of put all of that in perspective, right? I'm going to talk about 4 things and kind of run through these 6 statistics on our business. I'm going to talk about our core lines of service and kind of give an example of why each one of them is value differentiated in the marketplace to our clients, and why they help us win and grow.

I'm going to talk about our solutions and innovation pipeline that is aligned with our current set of solutions and products to keep them modern, to keep them competitive, keep the maximum benefit for existing clients and new ones and talk about a number of new innovative solutions that we're going to bring to the market this year that are aligned, not only with our annual operating plan and budgeted for, but also with our long-term vision, which we call Vision 2030, now Vision 2031. And then finally talk to you about our latest innovation in our network business, which is our oldest business, called Novero.

So starting at the top left, right? So we talk about 750 plus payers, so we've got deep and long-lasting relationships with. The reason that matters is there's a lot of complexity to contracting with payers and the providers, and we do both, right? So what that has done is give us the insights to shape the data sets that we use, the algorithms that we use to make each operating part of our business the most effective and efficient that they can be. And that is not something that you flip a switch or use AI to replicate. That is our 40-plus year, 45-year history of being in this business and optimizing and learning and adapting along the way.

30 million claims processed each month. Point of that stat on this chart is to show you that we operate a business that is at scale, and we'll continue to scale for the growth that we foresee in our Vision now 2031, without increasing the operating cost of that growth linearly. $25 billion of savings identified, right? So we send back a claim that's been repriced, recoded or applied against our network, it's a recommended price that ultimately is either accepted on its face or it isn't. And so we look at that, we look at how we -- for each of our different services and solutions, we look at what's the maximum number of claims that came in the front door of the shop, are we maximizing the percentage of claims that we can actually do something with? And are we suggesting a market clearing or fair market price that has a high acceptance rate? That's 2 reasons to limit patient abrasion and to limit the manual after work or after math that happens if it's not accepted.

And so for data Data iSight, our -- we've improved materially the percentage of claims that we're able to actually operate on. And our acceptance rate varies by month depending upon of the claims and the mix of the providers that are originating those claims, but somewhere between 96% and north of 98% acceptance rate on first pass. That means we've optimized that to a point where there's right. So we look at every single service and solution we offer in just that same light. Processed about $180 billion worth of bill charges. And related to those savings, right? That means we saved the average patient about $900 on the versus bill charges. So we're delivering benefit to our clients, and we look at maximizing that value every single day, can we find a higher or lower -- higher discount or lower clearing price for each of these claims depending upon type of service, which provider, where in the country.

Bottom left, the 1.4 million providers that we've got on our PHDS network, it's a number we talk about a lot, but I want to put it in context on the next chart when I talk about what the value of that really is, and I'll go back to the example that Travis used in his opening remarks, talk about the World Trade Center program. And then finally, 86 million code combinations, right? So this kind of goes to our Payment & Revenue Integrity business, where we've got a number of prepay postpay and then Revenue Integrity solutions that are designed on different code and combinations of code to look for fraud, work for waste look for reviews. And I'll give an example of where we've differentiated ourselves with a major national client of ours based upon the quality of the data that we use to create the algorithms that we use and the efficiency and the savings that we get for our clients, right?

So on the network, Travis mentioned the World Trade Center program. It is a government program that was procured out of the center for Medicare and Medicaid services, specifically the CDC. It started as a network rate here in New York City and the surrounding area for people with very specific respiratory and other elements, as you can imagine, a result of the 9/11 attack. And those people have migrated around the country. So it's now a nationwide program. Well, that was differentiator #1 for us because we've got the [ 1.4 million ] that we talk about a lot. But a key part of the evaluation criteria, the government always has a very rigid process and RFP proposal negotiations and ultimately an award. And I'll talk about that award in a second. But what we did as a part of that, sometimes the government not only exchange documents with you or RFP proposal questions, answers, but give you a chance to come before them and do an oral presentation on your solution, which we did in this case. And so I will tell you, I've been through a number of those in my career, have probably done 50, 80, 100 government contracts over my career. This one went went as smoothly as any, if not the smoothest of all of them.

And what we did, we show the mapping of our existing network to the people and their particular elements across the country and where we had gaps. We showed them the contracting process and methodology that we use to fill those gaps to meet the adequacy requirement of the network. And we can do it faster and faster and faster than I think anybody else and we distinguish ourselves on that basis and also on our price. We delivered a value price. So to unseat an incumbent in a government contract generally is a pretty heavy lift. The incumbent protested the award and the procedure for that as you go in front of you write a brief, essentially like a mini court case, but it's adjudicated by the General Accountability Office. And what they do is look at the way the agency structure the RFP, was the scope clear, were the evaluation criteria clear, was -- were they applied fairly or equally to all the bidders? And I would say out of maybe or 50 protests that I've lived through in my past lives, generally, the remedial action is, hey, CDC, go back and -- government agency, go back and look at this, looks like you require it wasn't clear, evaluation criteria wasn't clear or you didn't apply the valuation criteria fairly or equally.

In this case, the GAO denied the claim. It's essentially summary judgment, you're done. And it was because we had distinguished our network, our solution, our approach to managing the network and our price by such an amount they absolutely denied the case. So that goes to the value of the network.

On claims intelligence, that business, Data iSight, reference-based pricing, it also includes our No Surprises Act Solution, all of which report to John Crane, who you'll hear from again here in a minute. But just based upon the most recent public use file data that published by CMS, our success rate is 7 percentage points better than some of the competitors you might think of when you think of Claritev for NSA work and all domains across all providers, all people who are providing NSA services include a lot of the national companies. And why is that? Well, if you buy NSA services from us in a kind of what we call our complete solution, we have -- we try to price that claim against our network, and again, leveraging those 1.4 million providers, and the claims get cleared there.

We've got prepayment negotiations that we -- again, we've got algorithms curated by data that we've accumulated over the years, try to settle those claims before they go to postpay, and then we've got a postpaid negotiation solution, similar data set, algorithm, try to settle the claim quickly. But now that there's been about 3-plus years of public data by CMS about the success rates at the IDR phase, which is the last phase, which is like a mini arbitration, essentially what it is. There are 15 companies that do that. And overall, the providers prevail about 8 times out of 10. Well, they all know that now. And so what we find is a greater percentage of NSA claims are being pushed to the IDR phase, which is more people intensive, but what we've done there is, and you'll hear about this from, I think, Michael later on, we use AI and other automation to write better briefs for the IDR to substantiate the market clearing price that we think is a fair price for that informed by past practice, right? So the fact that we've been in this business so long, we're able to arrive at a market clearing price that distinguishes our service by 7 percentage points against everyone else. That's value differentiation for NSA. It also allows us to scale that business without scaling the cost of providing it linearly.

And finally, in our Payment & Revenue Integrity portfolio, and you're going to hear from Brad Ross, who's the General Manager for that part of our business, a number of things that I would point out, one of our large clients has their own in-house capability. And so we really like we think we can add value to that part of your company, save money. And so we got data from them that had already been through their algorithms, and we found hundreds of millions of dollars of incremental savings from either fraudulent coding, upcoding, miscoding, so broad waste abuse, and then combinations of codes, the use of override codes. Again, developed over years and years and years of being in the business. And that's a highly automated capability we call ACE, the automated code editor.

For complicated claims, complex medical procedures, we've got a small team of clinicians and physicians to look at those claims, but we enable them with the same kind of technology to make them more productive so they can handle more claims and be more productive and keep our cost and servicing those lower.

And then finally, in Payment & Revenue Integrity, I'll tell you, you've all seen in the news all the fraud waste and abuse that's going on in Medicaid in particular, but also Medicare. But it's ramping across commercial health care as well, in the news nearly every single day. Our team, using ACE, detected a targeted attack on one of our payers where they were essentially ordering a very expensive DNA test that had nothing to do with the ultimate reason for care. And they got so brazed and they kind of tested the waters. It was targeted at this one payer in one city. And then they shared -- it was clear they were sharing the patient list. And so the claims started coming in from multiple cities and we detected that, saved our clients millions of dollars of fraudulent claims.

So I would tell you across all of these 3 core areas of our business, we have intellectual property, past performance and AI-enabled capabilities that give us a lasting competitive differentiation in the marketplace.

Product road map, right? So this isn't just a patriotic looking blue, white and red chart. It really is a set of priorities that my general managers and myself, along with Dr. Patel, and Tiffany [indiscernible] and Michael Kim and his AI team have decided these are the priorities that deliver maximum value to our current clients. Those are the ones you see the 30-plus in red. And then 18 new things that we're going to bring that either complement or fill another gap in the marketplace. And you can kind of see we organize them by portfolio. And this is -- or supported in our annual operating plan and aligned with our long-term vision to maximize the probability of growth that's characterized there. So you'll hear some -- I won't go into too many details, but I'll just say every one of these things, our team is really good at delivering on time, on scope and on budget. And so each one of these things has been mapped into our annual operating plan across the 4 organizations that I mentioned to make sure that we not only achieve what we think those -- the value of those products what we do so on time and maintain our competitive advantage versus everyone else in the marketplace.

And then finally, PHCS Novera, right? So having a nationwide network is great. But depending upon who you are, whether you're a local TPA, a regional TPA, a national payer, anything -- any of those 3 or anything in between, you may not care as much about a national network. You may care more about a regional one or a local one, statewide one and then to use out-of-network in which we can also cover with our claims intelligence business for everything else. And so what this does is it looks -- again, based upon proprietary data that we have, we looked at the top 50 metropolitan statistical areas and identified areas of practice and areas of focus, so geographic focus and practice focus to optimize for each of our segments, right? And so we go to market by segment, again, led and aligned with Tiffany's team and [indiscernible]. And we've identified millions of incremental lives. It will not be a cannibalization of the clients that are already using our network service, but offer growth that has dramatically accelerated 5-year outlook for our network business.

And so this is enabled by another AI tool that we use to build and tailor those networks quickly. Used to take weeks, if not months, depending upon the complexity, both in terms of practice area specialties and geography down to minutes, right? And so this is an innovation that we're bringing to the market this year, and we've already launched 3 markets, and we'll continue to launch in a prioritized fashion, again, aligned with selling to TPAs, selling to brokers, selling to other payers, consumers of our network services.

And that's my last chart. And so I'm going to turn it over to Sean. Again, he runs our claims intelligence business to talk about some exciting innovations that are happening inside of his portfolio. Sean?

Thank you. Hello again. Great to be here again. So again, I run our claims intelligence solution line. It includes everything from our reference-based pricing to surprise bill services. our Vistara product, et cetera. So I want to talk to you today about just the work repricing. And you heard earlier in the earlier discussions, Brian Burnside from Carlinville, pricing is a lever to create affordability, okay? You heard Brian say, "I have a charge amount. And I have something that actually gets repriced and finally paid." So our solution lines, a lot of our reference-based pricing solutions, but it also can be looked at from a network standpoint. So if you look at our core area, our core areas, again, is out of network care, okay? So if we look at repricing functions from out-of-network care, we really are in all aspects of the member's journey, okay? And out of network really comes in 2 different forms. The first form is where the member had no choice, okay? And you also -- you'll hear surprise bill services. This is a regulation, no surprises at that governs how bills are handled when there is an issue with an ER doc, or if there's a participating provider that is rendering or a participating in hospital with a nonpar physician at a power hospital. So these are all things that covers. So Claritev solutions and our repricing efforts have functionality when the member had no choice.

Really the second form is what I'll call discretionary care to where I, as a member, chose to get services out of network. And so we've really built our solution set, whether it's the actual network itself or our negotiators that are calling on behalf of that payer and member to really reduce the cost of care. And then we also have our Data iSight or reference-based pricing solutions as well. And you've heard earlier, we operate off of an annual operating plan, where we are investing in our core areas. And we're also enhancing those areas as well. What else can we bring to this situation and this process to add additional value within the ecosystem, okay? So our journey has really taken us -- but if you take a step back and we look at what really happens behind the scenes is we get a claim from a payer, okay? That payer sends us a claim, it's out of network. So it's usually, on average, the rate has stayed consistent really the last since about 2021 at about 7% of paid dollars, okay?

When we get that claim, again, going back to the employer portion I talked to you about, decisions on how out of network care are rendered are chosen by the employer and the broker together. So I, as a retailer, will choose a certain way I can handle out of network care. Or if I'm a bank, I will choose this way. So it's really governed at that employer level on how out-of-network care is handled, okay?

So again, we get that claim. And we have interactions, and we see over 100,000 different group IDs. So if everybody goes home after this, pulls out their ID card, that group ID, we see over 100,000 plan sponsor IDs a year, okay? And those are all decisions that are being made on that employer level, okay? So once we get that and somebody is actually using a solution base that has a reference base, what actually happens, okay? So we have configurations and we saw earlier, all the different rules that are involved with how a claim could flow through the system, but Claritev has been around for 45 years. We have been in the forefront, leading different reference-based solutions. I can tell you 20 years ago, it was charge-based methodologies like our [indiscernible] product, okay? We've seen Medicare trends going to people pricing against Medicare. But again, we've also created other products that look at what people are actually paying in the market or what is a cost and then add margin to that and use that as the vehicle for delivery. But we're also evolving. Being on the forefront, we would -- we want to innovate as well to reach additional market, additional clients, et cetera.

So we've created a pilot product already, really around transparency data. Now I know a lot of you -- there is a lot of activity over on the plan optics area. How can we use $400 billion records as a blueprint for a pricing product so that employer, if they selected, hey, I want to use price transparency data, which is that no surprises, that's what the legislation was intended on is to get that data out there. I've been doing this a while. I never thought we would see a complete blueprint of every managed care agreement. Different bid.

Now the thing with it is, is the perception of the market, okay? There is a view of the payer and there's a view of the hospital, okay, of what the actual rates are. And the great thing about what you heard from the demonstrations is our right in the investment that we've made in that data itself. I'm going to tell you right now when it comes out of the payer or it comes out of a hospital, there's a lot of interpretation, okay? And you'll hear Fernando you'll hear the team, we have a right to win in this space, okay? We have strong infrastructure technology led by Michael Kim as well as 45 years of experience in pricing this kind of data. I was having a sidebar conversation is think of a deal that was done between a payer and a provider that was done 20 years ago, okay? You have to fit that in CMS' format today. That's a tough thing to do. Things have changed over the last 20 years. But having that context, and that understanding of contracts and taking that and applying it to the existing infrastructure that we have in place is our right to win, okay? With that being said, it's an exciting future for our area. We're innovating and continually investing in our core, and Brad is going to take us through some of the investments that we're making in the PI space.

Thanks, Sean. Brad Ross, revenue integrity product vertical. And I've been here for a cup of coffee, but I have been in payment revenue integrity for a very long time. And what I'll tell you is the way that clariti approaches our solutions here, it's generating a new energy that I haven't seen anywhere else. And a lot of that is driven by our core solutions that Sean talked about, the network that Jerry talked about and others. Combining that, we're not just focused on generating additional savings, we're focused on reducing abrasion and partnering with our clients in those networks. So it really is different. I really believe we have the opportunity to do something transformational and disrupt with the traditional payment and revenue integrity vendors are doing.

So in Payment & Revenue Integrity, we've provided care to a member. The claim has been submitted, which is very complex. And as the claim starts to go through the life cycle, that billing process has 2 interjection points. It's pre and post payment. So in the prepayment space, we are looking to identify savings before the claim is paid, post payment, after payment of going through more complex claims where real time was not a potential. But when those 2 work in concert, we reduce the opportunity for improper payments for our payers as well as providing fair and accurate payment to those providers.

So not all these issues that we identify are fraud. They are usually simple mistakes. But as they continue to go left unchecked, that increases the burden and the administrative waste in the system. So in our prepayment phase, you'll see there we have 3 solutions, 1 that we'll be launching very in the near term, but our advanced code editing or a solution really works in concert with our technology and algorithms and applying an expert review component to find additional savings that your traditional technology-focused primary editors do not find today. And that's the combination of both those aspects of bringing technology and experts together to really deliver that value.

Our itemized bill review, which focuses on inpatient or outpatient claims that are paid percent of charge, we identified savings for our clients on 98% of the claims that we review. So we're selecting claims that have the most higher likely for an opportunity for an overpayment to really deliver value for those clients.

As we look beyond, we'll be launching, as I said, DRG. So continue to expand our solution set here as the industry moves left up into the payment stream. We want to be further upstream, delivering a comprehensive solution set because our clients demand it, right? They're looking for more opportunities to reduce waste, abuse in the system. And we'll talk a little bit more about what is DRG or diagnostic-related group on here in a minute.

So in the post payment space, these active after a claim has been paid. One of the -- we have our coordination of benefits in our subrogation business that really will work to identify other payers or third parties that are liable for payment. So our advanced technology identifies and weeds out low opportunity claims or cases so that teams can focus on the most high probability opportunities to remove waste in the system. And then we'll have our data mining solution. It's a very comprehensive solution based on many years of experience, which really dials in on adjudication issues, contract compliance issues. And we're not just going and taking back those dollars from the providers and working with our payers, but we're also trying to prevent leakage with our -- and working closely with our payers and providers to fix maybe an adjudication issue, whatever it may be. And as Jerry alluded to earlier, when you stack all these up together, we're continually finding dollars, whether it's behind the internal processes of the payers that they have in place due to the complexity of the payment life cycle or other vendors that they may have operating in their Payment & Revenue Integrity stack.

And then for the year last year, so these solutions combined generated almost $2 billion in medical cost savings identified for our clients. And as we look to the future, we're going to be looking at expanding our solution set to, like I said, DRG and diagnostic-related grouping. You may ask, what is DRG. So DRG is a payment methodology for inpatient claims. It uses patient demographics, diagnoses, procedures to come up with a payment methodology that is simplified. Unfortunately, that does not mean that coding and billing practices are simplified. So these claims are just as subject to improper payments, mistakes, adjudication is used and whatnot.

So they require an expert review. So what will happen is we'll receive the claim as we do today. It will run through our analytics we will then select the claim and flag it for review. And this review is a little bit different because we'll be requesting the medical record directly from the provider. Once that medical record is received, it'll actually go across our clinical team, which is made up of physicians, coders, nurses that will go and compare the medical record to the actual claim. And then findings are sent to the payer where there is potential overpayments as well as education to the provider, right?

So at the end of the day, -- our mission is to provide transparency and fair payment. So we provide additional information to the provider that can inform them of the decisions that were made and why their coding and billing practices were changed. So this will be the foundation for expanding our ACE platform. ACE has operated at scale. So we're going to continue to expand that as a complex claim platform in the pre-pay space. And we'll continue to look to add new solutions to it. in the years to come as the health care landscape evolves.

So just kind of building on that. So why now? I think you've heard across the board, we've talked about our network, if we run payment [ enter ] on our network, and I think it's clear to call out that savings we've generated is not just on out-of-network claims as both on out-of-network and in-network so as well as our network. So if it's not good for our network, we don't want to run it. We will not run it on your network for our clients. And I think that really speaks volume to the relationships and trust we've built along with the foundation of the technology and scale that we run at.

So we will be launching this shortly. Can't wait. It's a really exciting opportunity, not only for our clients but also the team at the end of the day. I'd like to -- we've talked about -- sorry about that, but we've talked about selecting the right plan, finding the right provider. And then after the claims [indiscernible] happens, but there's still one more aspect the life cycle that is a challenge for the health care life cycle, and that is making sure that payments are made fairly and timely.

And I'd like to introduce our Chief Strategy Officer, Will Mintz.

All right. Thank you, Brad. Hello, everyone. I'm Will the Chief Strategy Officer at Claritev and I'm joined today by Tom Dean, the CEO of ECHO Payments. And as you've heard through the day, Claritev has solutions for every point in the health care life cycle as we defined it. The final point being payments. And given our deep client relationships with over 700 payers, 45-plus years of experience in claims, 1.4 million provider network. And now as you've recently heard, moving solidly into provider services. We truly have an end-to-end solution or end-to-end offering for our clients.

And for payments, this final point in the cycle we've chosen to go to market through our partner, ECHO. So Tom today is going to walk you through a little bit about who ECHO is talk about how ECHO solutions add value to our clients, talk about the differentiation of ECHO and their solutions in the marketplace.

So with that, Tom?

Okay. So today's portion of the presentation will be made in the spirit of March Madness by the point guard and the power forward. But -- so just a little bit about ECHO and again, what we do, our [ horror ] solution that we offer is we help health care payers pay health care providers. We have a lot of other solutions, but that's our core solution. We're a 30-year-old company, privately held. And some of our claims to fame we service over its 450 payers today. We distribute $220 billion worth of payments.

That figure is when I say we distribute, what I mean is that when a payer is going to pay a provider, the first thing we do is go get money from the payer, and we're involved in those dollars are tracked and cleared on accounts that we control. So that's much different than some of our competitors, which if they put any kind of piece of paper called a check, and they happened to mail it. they count those as billions of dollars of payments that they make.

So that's not ECHO. ECHO is actually involved in every dollar clears against an account that we control. We have the two things that probably are most distinguished. ECHO are in the left-hand corner in the right-hand corner, upper corner of this slide. The first one is that we have over -- for every one of our payers, we have over 90% digital adoption of payments. That leads the industry. And there's many reasons for that. One is that we have more digital payment modalities or types than anybody else.

For instance, we distribute to over 60,000 providers. We have a network that distributes digital checks. We also look into block boxes digitally rather than printing and mailing the payment to the lockbox to things that are unique about it. And then in the upper right-hand corner, it's very important that you properly incent new providers. That might be some sort of joint venture that creates another provider, anytime there's a new provider entity, what we have to do is figure out how would they prefer to receive a digital payment.

And we have, through a series of methodologies. We have 83% of the time within the first year seeing a provider, we can create a digital payment to that provider. If you look at what's important to the industry and what I decided to do is just give you an example of a case study. So this is a primarily Medicaid payer that also has other lines of business. And this particular payer has about 2 million members that they serve. They have -- they have a number of challenges that they that are important to them. So when we came to this payer, they said, first of all, we've had a plateau in our acceptance of digital payments.

So it's about 75%, a little bit less. We also have three major adjudication systems, but we have a common staff that services members out of those three systems. So we have a challenge because we want to answer questions that our members might have and/or that providers in our network might have, and we can't do that today because each system has its own process for getting that information.

And then finally, they had -- so in the health care space, if a payer pays a provider over $600, they have to send a 1099 to that provider and the government. And the IRS is not very -- doesn't have a sense of humor if you don't get the provider's name and address and everything else, correct, and they find people for that. And it does take quite a staff and particularly in this payer's case because they had multiple adjudication systems they had to try to figure out across the three adjudication systems as an example, did our payments exceed $600.

What we did was we were able to implement our -- and we are the only vendor in the marketplace that also does comprehensive 1099 processing. So that was just another thing that, that provider needed. So again, if you look at the next slide, we were north of 90% in all the categories of digital adoption after implementing this particular payer, which was the main goal that they had there's differences in terms of electronic remittances versus payments and all that kind of stuff, but not to get too technical, we achieved north of 90% in all those categories.

One of the reasons we were able to do that is that in the provider world, many times one provider has multiple business offices the data business office. So imagine on a hospital, but I have several clinics also in my health network, right? You may have a different business office for your clinical payments [ senior ] hospital payments. That's just an example. Emergency department might use. A billing company even though the rest of the hospital prices is their payments in-house. So we have over 1.6 million different provider locations billing locations, and we know what the profile that's what they will accept in terms of digital payments for every one of those.

So then we also are able to -- because of our platform, we have an Omnibus accounting platform, which just means that we have a way regardless of the type of payment that we make regardless of where that payment came from, what adjudication system, a payer paid from we're able to have a unified view across that whole spectrum and someone will be able to say, you funded the payment you sent the payment. This is the dispensation of any payment regardless of the payment modality. So again, makes us unique.

And then we [ kind ] of took care of all their 1099 processing, they don't have any issues with that any longer. So why the Claritev of relationship is important to ECHO. ECHO has a direct sales force, but most of our customers are obtained and service in some way through partnerships. We have very few partners, and those partners have to be significant and bring something to the picture. The best way I could -- I can sort of demonstrate that on a slide is to say, you've heard many, many people talk about all the great things that Claritev does and the claims reimbursement cycle. And so I won't go through those again.

But suffice it to say, at the end of the process, the payer adjudicates a claim and then has to actually move the money associated with that, right? It means it goes out of the payers account and winds up in providers account somehow. And that's where ECHO takes over. So what we feel is if we've got a partnership with Claritev, we have to breed when it comes to the claims imbursement cycle up to and through the adjudication process, combined with best of breed when it comes to actually not only paying the provider, but helping the provider bill and collect from their patient.

So we have a complete -- we covered the complete spectrum. And we think there's incredible opportunity for us to share information, to further automate processes and all that kind of stuff. So addition to the fact that this was a very comprehensive and nature relationship. We also partner with Claritev because we believe that they've made the same kind of investment commitment to technology that we have and so the opportunity to collaborate and further work on new solutions for the marketplace is very important to us.

And I'll just add that the partnership selection process was pretty robust for ECHO going through a full build by borrow partner. And we took a viewpoint of how do we future-proof this end of the business. And so we've been talking about competitive moats, being the infrastructure as ECHO is and delivering the payment to the provider and being that deep client relations -- that we have such deep client relationships at Claritev, that foundation really helps us truly future-proof all the different types of future-focused payment modalities, all kind of starting with this partnership here with ECHO to give us that closed loop and the end process.

So with that, just to kind of recap a little bit about what you've heard today. Claritev is bringing transparency across the life cycle for health care. You heard earlier that you're leveraging our BenInsights product, providing the transparency to employers to plan sponsors to beneficiaries as they select design and optimize their benefits, moving forward into adjacent spaces, in health care, such as our provider businesses, to really leverage our transparency tooling to help with service line optimization and planning.

And finally -- or not finally, our core business, where we -- as you heard, Jerry, we're making substantial investments in our core around our claims processing, our claims optimization business. And then as Tom and I just discussed, completing that end-to-end loop across the health care life cycle with what we'd like to feel -- what we feel is a very differentiated and very sticky payments offering.

So I'm going to invite Michael Kim, our Chief Digital Officer; and Fernando Schwartz, our Chief AI Officer up here to talk to you a little bit more in depth about the AI that -- how we're using AI and how we're leveraging it throughout our entire offering. So with that.

Thank you very much. You know a company like ours is serious about technology when they allow a nerd like me up in the stage. I'm accompanied today with by Michael, our Chief Digital Officer. And my name is Fernando Schwartz, Claritev's Chief AI Officer; and I'll tell you a little bit about myself, my background.

Before joining Claritev, a long time ago, I was in academia. I'm a former math professor turned into industry. After leaving academia, I went into online advertisement for some time and then into health care working on a few startups in health care. And more recently, I was the Global Head of Data Science at Merck in the Commercial division. And after that, prior to joining Claritev a year ago, I was leading AI at ADP, the HR and benefits company.

So we're here today to tell you about what are we up to with AI at Claritev? And I know that it's my favorite topic and probably a really hot topic for the for the space as well. So I'd like to start first to tell you a little bit about the vision, where are we going with AI here. And the vision is clear. The vision is to position us as a global leader in technology innovation. And we're going to achieve that by becoming what's called AI-native. This is a clear vision that we have. And when we think about that vision, we're thinking about three areas where we want to explore and use this technology.

On the one hand side, we want to talk about transformative products. That is to say, think about applying AI into the products that we have to make them stickier, more powerful, ultimately generate revenues to the organization. That's one pillar that we're looking at. So thinking about how do we use this technology to optimize our operations. And so you have to think about like generating internal efficiencies, and there's quite a bit of room there for us to become more efficient using AI.

Last but not least, I would say that becoming AI-native means that we are now -- we have the ability to become really innovative and try new things quickly, as you all have seen this technology really announce for that. A little bit of bragging rights for the organization. I would say, first, late last year, KPMG and Oracle had a Hackathon around agentic AI, which was attended by companies like DocuSign and other like tech firms. We won this hackathon, the team that we have in place.

We currently have over 50 AI models in production, and we're going to be releasing a couple of dozen more this year. And last but not least, a really important topic for us has to do with responsible AI. And in that space, we were co-signatories and co-authors of responsible AI framework that was put out there by one of the leading national AI coalitions in health care. So we're taking responsibility quite seriously internally. We formed some cross-functional teams with legal and other partners internally to really make sure that we're doing this in a responsible way.

So how do we realize this vision of being AI-native and really at the forefront of technology. We're thinking about -- so I'll give some sense around three areas we are working on. First, you got to have the right infrastructure to be able to do AI at scale like we are intending to do. And for that, we foster a deep partnership with Oracle. We are using their services and their high-performance cloud infrastructure to be able to build scalable systems that are going to help us operate where we want to

go. At the same time, we've partnered with open AI to power our generative AI offerings and our agentic workflows. We also have a partnership with [ Entropic ] in the Middle East region. Last is our focus on what we're calling core, which is our Claritev operational reasoning engine. This is something that I particularly quite fond of. Maybe I'm going to quote my nerdiness there. But if you think about it, in health care, there is little to no room for error. Generally speaking, in regulated environments, you want to use technology and you want to avoid mistakes.

But when you think of GenAI, that GenAI in itself is a technology that is prone, I mean, ever more or less to committing some errors. So how do you combat that? That's a technology that we're building about reasoning. It's called automated reasoning. And this technology allows you to provide with the checks and balances to the generative piece that's out there. So we believe that this is going to be a huge differentiator for our technology out there.

I will go into a couple of examples of how we are applying AI today. Just to give you a sense of where we're at, and then I'll pass it on to Michael to wrap up this section. So first, I want to talk about a tool that we have, a product that we have out there that is called Pro Pricer. This tool has been around for a couple -- for a year plus. And what Pro Pricer does is that it maximizes savings with the minimum number of appeals for our clients when they're looking out of network claims.

So you can imagine that, that gives flexibility to our clients and really eliminates the complexity of the decision-making process in semi real time when you're processing claims, again, to maximize savings and minimize the number of appeals for someone with the math background, that sounds pretty [ man ]. All right. And then I'll also give you like a small sense of what our Surprise Bill Services does and how do we use AI there. Many of you -- I'm sure all of you are familiar with the -- No Surprises Act, which was put out there by the government somewhat recently. The No Surprises Act allows for some kind of -- some form of negotiation litigation, if you like, of the between payers and providers.

It established a framework by which claims can be argumented and so having the behavioral analysis at hand, which we have built into this product really allows us to really model the willingness of payer providers coming into those negotiations to try to avoid excessive charges and whatnot. And so there's a behavioral piece to that. And we also have now a generative piece, which is tied to what we call deep research which allows us to basically enhance the defensible and well-informed arguments that are needed to provide these negotiations to empower these negotiations. So we feel really good about this tool. Actually, the data puts us at 7 percentage points more effective than anything else out there in the market with this tool that we have. Now granted, it's still pretty challenging environment, but we are 7 percentage points higher than anybody else out there with this tool.

So with that said, I'll pass it on to Michael to continue the conversation. Thanks.

Thanks so much, Fernando. As Fernando indicated, my name is Michael Kim and I'm the Chief Digital Officer and have been for the past 11 years at the company. So I'm one of the legacy guys that are still around. And I'm here because I've seen an amazing transformation over the past 2 years under Travis' leadership.

As one the analysts wrote, it's -- it's not your grandfather's multiplan. It's been amazing to see the evolution. And I think you saw it today in some of the presentations. That's not what we were 2 years ago. I'm here because I believe in the mission of the company. I'm here because I believe with the right team. And I'm here because I believe we're going to deliver our strategy, Vision 2030 and that by so doing, that we are having a material positive impact on the health care industry. And so I'm super excited to play a real small role in making that happen. And so that's why I'm still here and excited about being part of multiplan.

So the two questions that I'm going to focus on over the -- and Todd gave me the go ahead, I can run a little bit long because these were the same questions that I got asked over the break and actually before we got started. And so these are the two common questions that are asked.

The first question is, is AI overhyped, right? And then that's quickly followed paradoxically by the question will AI or an AI company, displace or make obsolete Claritev? So those are the two questions. And I got those same questions actually before we started. So I just have two slides. I'm going to run a little bit long. It's going to -- originally, I had 5 minutes, but I want to address those two questions, right?

So to answer the first question. I want to anchor it based on the road map slide that you saw that Jerry presented earlier. When you think about the hype around AI, there are really two parts of that. There's the AI scientists and the work that they're doing. And that's the examples that Fernando gave. The AI models, whether it's machine learning, predictive, whether it's agentic AI, that's what AI scientists are working on. But the other part is a software engineering part, right? So can you use AI to accelerate the software engineering, right? We've embraced both of those elements. So this road map here is a really ambitious, aggressive set of product capabilities that we want to build out over the course of the next year.

Now add on top of that, the digital modernization effort that's going on. Add on top of that and Travis throughout a big number, $100 million ACV target, right? That translates into more clients being signed, which translates into a lot more technology work because we have to implement those clients right? And then on top of that, we still have a set of -- we have to make the doughnuts every day. There's a core set of systems that we want to continue to enhance, maintain. That's a ton of work. when you look at those four buckets.

Fortunately, from a couple of years ago on the software engineering side, we started embracing AI, right? We have OpenAI, get-up Copilot. We're testing Anthropic, Cloud. And so we've been actively embracing AI to accelerate our software development process, right? And we're seeing a 20% or 30% productivity lift from adopting that -- that's one of the reasons we feel good about our ability to deliver this product road map. The reason and those that have the huge hype around AI saying, why isn't it not 90% or 100%.

Why aren't the coding agents? And the reason is Travis had it in his first slide, one of his earlier slides. It's because the hundreds of thousands of custom rules and code that are reflected into our system. Like if you use prompt engineering and say, "Hey, build me this code. That's a generic code. Unfortunately or fortunately, for us, our clients said, "That's great, but there's 20 exceptions to that. right? I wanted to do this instead of that, I wanted to do this and so that requires a lot of interaction with our clients and customization, which is a moat for us and that's why the lift in productivity is not 90%, but it's humans in the loop that actually take the generic model and then need to customize it based on all of these exceptions that are created, right? So on the software engineering side, we feel really good that AI is having a substantial substantive impact on software engineering.

And then the second part, which is what the AI scientists are doing, we feel and Fernando covered a couple of cases where it is really transforming the value that we're delivering to our clients and the way the products work, and so when I take a step back and say, is AI overhyped say Yes, there's probably a little bit of hyperbole. But when I think about Claritev, do I think AI is going to be transformational the answer is an absolute resounding yes, both from what the AI scientists are doing in terms of how that changes our products how that changes our business operations processes to make it more efficient and more effective.

It changes product development efforts, and it also changes the way we are engineering our software. So I absolutely believe that AI is transformational from Claritev's perspective. So if it's transformational -- sorry, the one additional note I will say about AI is Fernando talked about being an AI-native company. right? So the way we think about AI is not a bunch of PhDs and geeks like Fernando in a corner developing elegant AI models. We think about it as integrated into everything that we do, right? We think about it as part of our strategy. We think about it in our products. We think about it in software engineering and this page here, and I've highlighted all of the AI deliverables as a part of our product road map. It's integrated into everything that we do. So that's what we mean by a AI-native company. It's not a bunch of academics in the corner. It's embedded into everything that we do. All right.

So the second part is, if it is transformational, why couldn't an AI or an AI company replace what you're doing, displace you or make you obsolete. And the answer to that question, I think, is we don't believe that that's a threat to us. We believe that's an opportunity for us. We think it's an opportunity for us because -- and the examples that we selected were good examples of why we think it's an opportunity and not a threat.

Like think about an AI company or a new entrant trying to replicate Pro Pricer or what we do with surprise bill services. and the massive hill that they would have to take to accomplish that, right? For Pro Pricer, it looks at all of our products, our network product, negotiation product, reference-based pricing, and we optimize the workflow and what we think is going to have the deepest savings at the lowest appeal rate, right?

A new entrant doesn't have a network like we have a network of 1.4 million providers under contract. Again, AI company can't replicate that. right? And that's a critical part of the values that we're delivering, right? When you have a network, there's no appeals, right? That's a massive moat. Another part of that is, we have deep, trusted relationships with our clients and they're willing to sense their claims. I can tell you, having worked with a lot of our clients, it's really hard to sign a contract and get them to send you their PHI, right, and do business with you. And the 700 payer relationships we have, they're sending us the claims today. That embedded workflow is a massive moat that we have today, right?

So we have deep trusted relationships both with payers and we have writers under contract. We're embedded in their workflow. We have data and so Travis talked about the data that we have that we use that they've sent and we have 45 years of that. We have 200 billion claims. We have $500 billion records that we import every month around price transparency. There's a massive amount of data that we have. Some of it's proprietary, some of it's public, but we've integrated all of that, and that gives us an awful lot of insights and intellectual property that we have, right. That's a massive moat.

And so when I think about the opportunity versus threat, like we love AI companies big and small. Big ones would be the front. They're called Frontier Labs. Fernando has been educating me. That would be open AI, right? That would be all of the large LLM providers. That will be Google Gemini, that would be Anthropic Cloud that would be Elon Musk's xAI having crack, that would be Me-LLaMA. Those are large language models. Those will be the big companies, and then there's start-up companies, right? We love all of them. Like we have this moat we're happy to partner with anyone, like we use LLM tools.

They're happy to part with us, and we've met with the executive teams of some of those companies. We're happy to plug and work with start-ups that want to plug themselves into our chassis in our workflow, right? If they have a point solution that delivers value for our clients, and we don't have that. We're happy to partner with them, right? So when we think about AI and will they replace. The first comment I said is 20% to 30% productivity gain, they can't completely replace us. Maybe 10 years from now, they could, but I don't think over the course of the next 5 years, that's anywhere within the realm of possibility, right?

So the proof point was all of these companies are approaching us to partner with us to plug themselves into our workflow and our client relationships. So we feel really, really good about our competitive advantage. All right. First and foremost, as I said, to kind of wrap up, is AI transformational? Absolutely. We think it's driving transformation products. We feel like it's driving transformation and how efficient and effective our processes are? Reflected in -- both Jerry and Travis had 7 percentage points on a tier than anyone else in the IDR place. And driving our innovation and product development efforts and our software development processes as well. So we 100% think it's transformational.

And the second part is like AI, AI companies like, we feel great about that that's an opportunity for us, not a threat. We're incredibly paranoid. And so we continue to monitor the situation closely to see what's happening. But today, with the current state of health care and the complexity that it has and all the customization that's required and the experience that we have, we think it's a mass opportunity and a moat for us, not a threat today.

And so with that said, I'll be happy to take any additional questions on AI strategy at the end of the day in the Q&A. But I want to bring up our closure, our CFO, Doug Garis. He's going to share how everything you heard today kind of comes together, create durable profitable business and financial value. So he's going to wrap up for the day. Thank you.

All right. The closer. The good news is we save the math for last. I think a lot of you are excited to hear our update on the business. and how we're thinking about the future. I have a lot of content, and I will note that we are still ahead of the schedule, which is fantastic. I also do want to say, again, big thank you to Todd and the team. I think this has been an incredible day so far.

We're humbled to be on the floor of the NYSE and to be with you all. I know a lot of folks had some challenges getting here, including some of our partners. And so we're internally grateful for that. So I'm going to cover a few things today. First, our guiding principles, why we felt like now is the time to accelerate investment plan for growth. I'm going to talk about the drivers of our business at a macro level. I'm going to spend a minute or 2 talking about ACV and bookings. It's a new metric we introduced this year. We spent a lot of time today talking about that.

I'm going to talk about our Vision 2030 operating leverage. Why we're doing the tech modernization and why we think the time is now, why the investment has a great economic return. I'm going to briefly hit 2026 [ glance ] just because we are coming out of our guide over the last few weeks. And then finally, I'm going to drumroll end on our Vision 2030 model, which includes a midpoint of '28 with actual figures and then our exit rate for Vision 2030.

Okay. So we're going to continue to kill folks with the journey because the journey is as important as the mission. And so when I look at 2025, to me as a CFO, the three most important ingredients of the [indiscernible] were the completion of the debt refinancing to reset our capital structure to provide us a few additional years of runway and an attractive cost of capital. The ability for us and the commencement of our tech modernization with a successful completion of the lift and shift to OCI.

And then finally, stabilizing our core business so that our investors and folks have belief that we can turn this company into a long-term growth engine. And then when we think about 2026, there's been a lot of sports analogies today. We are playing offense. And so when we look at the deep road map, the elevated level of investment, each one of these is informed by a client, informed by a product road map, interrogated by a leadership team, supported by strong financials and business cases and then armed with a sales organization that can actually prove that they can sell things.

And so the pronouncement from Travis this morning about $100 million internal aspiration is strong double-digit growth on strong double-digit growth. And then finally, with respect to going on offense, it's in go-to-market, product technology and innovation. We think we will continue to be the market leader in certain categories, and we're going to continue to double down and invest in those categories.

All right. So when I think about our [ guidance ] principles let's start with our addressable market. Previously, if you look at the first bubble, our core addressable market is a very large market. right? It is a $16 billion market within a multi-trillion dollar industry because only a fraction of a time does a claim go out of network. We've made our business out of building a curated network with robust reference-based pricing and analytics and enforced by payment revenue integrity solutions to catch boohoos on claims as they go through the adjudication and payment life cycle.

When you look at the next three bubbles, over the last year and change, more than doubled or addressable markets from $16 billion to over $35 billion. And when you look at the next bubble on payer and provider analytics, we acquired a company in 2023 that was formerly known as BST that has now become data and analytics. And you've heard from multiple customers and partners today, how they're using our products to deliver economic value to them. When you look at that market, just that market alone is equally as big as our core market and from prior lives, that market is growing mid- to high single digits and even in some aspects, double digits. That is where we have our data assets. And we strongly feel that we have the right to play and win in those markets.

And then finally, when you look at alternative employment networks, we acquired a business a few years ago, formerly known as HST, now rebranded as Vistara which is a reference base plan reference-based pricing health plan in a box, that brokers, TPAs and folks who are looking down market to provide value in par for smaller employee populations.

And then finally, in our international business, we launched our international business in May of last year. That business is now generating revenue. We expect the revenue to increase. We've signed four clients and we have an international team now based in Dubai, that is dozens of folks and growing. And so moving on to our addressable markets. The pie has grown and our investment to surround the pie is what is informed by our capital allocation.

So simply put, we're here to diversify our business, and we can only do that by accelerating growth and becoming less reliant on a few large customers to underwrite our capital structure. So if we do that over time, we delever and derisk the business. But priorities, 1, 2, 3, 4, 5 are investing in our Vision 2030 plan. That is our tech modernization, the alignment of general managers with bag sellers and segment leaders and a shared service and set of tools and processes to make sure that we have the highest probability of running a strong growth internationally focused company.

We're going to continue to focus on debt pay down. There is no mistake. We are in a highly levered situation, but we did put a renewed focus on M&A within the envelope of our capital structure, and we completed a small tuck-in acquisition of a company, OPCG, that was a catalyst for us to land a top five provider system, which we announced this morning.

Okay. So now let's go to the drivers and the macro. There's three basic macro drivers that affect our percentage of savings are our [ PSA ] business, which is about 85% of our revenue. First one is out of network volume and I have details on each one of these that I'll walk through. But out of network volume has been stable at approximately 7% of all health care claims over the last 5 years. We expect that trend to continue. That's what we've modeled in our Vision 2030 plan.

Second is claims mix. We've talked about this consistently over the last year, and we have some evidence to support that care is moving outside of the four walls of the acute care hospital moving into rural, moving into higher acuity specialty areas. And we think that is a tailwind for our business.

And then finally, regulatory and policy changes impact client budgets and how they're spending money. If you look at our response to some of the significant legislation changes that have happened over the last few years. There was some hysteria that out-of-network would go away. And when you look at a product like NSA, when NSA was passed in 2022, NSA and Surprise Bill is now our third largest product category within our largest segment, claims intelligence.

Okay. So now clicking into out of network. There's a couple of key important points. We sampled [ Meredith ] data going from 2020 to 2024. And what happened in that 5-year period. There was a global pandemic, there is a major regulatory change with NSA, and there was a recovery from a hyperinflationary environment as a result of the pandemic. If you look at the out-of-network claims from a sample from a pretty large sample close to $500 billion of claims over a multiyear period, you can see the non-network provider line was stable between 7% to 7.7%. So we think this market is mature. We think this market is here to stay.

And then moving on to Specialty Products, something that, again, we've messaged is care is moving outside of the four walls of the hospital and into outpatient settings. When we look at our top 10 specialty practice areas, takes up over 80% of our identified savings. And importantly, it makes over 90% of our claims volume.

And then finally, payer networks are mature, right? Don't let the data speak for itself, but out-of-network exposure and payer organizations do their best to limit in narrow networks. There's a few reasons beyond the 7% that a claim might go out of network. We look at provider behavior. We look at certain specialty areas and then just proverbial access and care gaps that happen in things like rural settings, which we talked about a little before. All of that underwrites what we believe to be a stable and consistent market over the last 5 years and through our model period over the coming 5 years.

All right. Moving into our savings and savings by specialty. So the top two pie charts represent the 80% of identified savings. This is provider and facilities outpatient with the key categories. And the bottom left is inpatient, which is 20% of our savings and about 10% of our claims. And then the graph on the bottom right shows the highest acuity special areas in which you can see if you stack weight the exit price to 100 from Q4 of 2024 and look at the next year, some of our highest volume categories between surgery, behavioral health, emergency medicine and pathology have anywhere from 5% to 15% core inflation in the charges. So that is critically important to understand because the movement of care to where our savings perform the best has inflation layered on top of it in some of these categories, which have increased as a percentage of our total claims are increasing at a high market rate.

This graph on the bottom right shows health care inflation. Okay. So now thinking about the buildup on how the increase in inflation and charges and the increase of specialty categories that we perform well, hooks to our revenue or percentage of save revenue, which is most of our revenue. First, our claims volume on an absolute basis from Q4 of '24 to Q4 of '25 was down 11%. That absolute claim volume decline was largely precipitated by one client, but if I strip that client out, the client that in-sourced some volume, claims would have been modestly down still, okay? So start off that with the kind of baseline.

Now approach the inflation from charges that I covered on the bottom right of the last slot. Charges per clean up 11% from Q4 to Q4. Turns out our products work pretty well, and we had favorable mix. We're able to identify additional value based on a base level of inflation in those specialty categories that drove our increase in identified savings and the mix improvement. And we spent a whole lot of time today talking about things like Pro Pricer, like auto flow like NSA and [ prevents ], we spend a little bit of time and effort making our products work better. We have hundreds of thousands of rules and when you look at our revenue per claim on an absolute dollar basis from Q4 '24 to Q4 of 25, our revenue per claim was up $10 per claim, north of 66% against a comp of 56%. So again, when we look at the future, these trends are important to capture and have on to. But this is a walk of what happened in our business in our business over the last 12 months.

Okay. Final point on regulatory and policy. We're in a highly regulated industry, and we have had a flurry of recent activity, right? I would say the most significant activity between one big beautiful bill, the ACA subsidy of rural health transformation in the last 15 years. And so transparency is no longer optional, especially among state and federal agencies who are clamoring for savings because their budgets are constrained.

And so when you think about our strategy being on the focus on affordability and transparency, it has a center of gravity with our customers as well as a center of gravity with policymakers. And so we believe strongly in affordability and transparency and we're prepared for any subsequent and future regulatory changes, but that is the reality of being in a highly regulated business.

Okay. Moving on to ACV and Bookings. I'm going to brag for a minute and our Chief Growth Officer, Tiffani Misencik is in here, but humungous [indiscernible] to the team for building a sales organization and creating a double-digit path growth to bookings. But let's just look at the numbers. Our go-to-market success in '25 was not an accident. We made purposeful investments to align segment leadership with bag sellers client success. And the result of that was a $67.3 million bookings year that, keep in mind, takes 2 to 4 quarters to turn into revenue with a $23 million booking quarter in Q4 and on the year, we closed 650 opportunities with 30 net new logos.

On top of that, we closed 108 deals over $100,000 of ACV and that rate of larger deals closed was up 30% against 2024. Our average deal size was up 50%. And importantly, our average deal cycle improved by 30%. So we started giving indications of building a sales funnel. Sales funnel throughout the course of the year from Q1 to Q4 exit, created an additional 150% funnel off the base. We now enjoy a multi 9-figure funnel with an invested in sales organization that can help us deliver our aspirational target that we covered this morning.

The final point I would make here is the pie chart, 70% to the upsell cross-sell on the organic growth, over 70% of our $67 million of bookings came from our current installed base. It was selling new things to our current customers. You heard Trace Health has bought virtually everything from us, all the way to organic growth within -- within our core account base. And then importantly, 30% of our bookings came from net new clients. And so we like the diversification here. When you see the proof points of a horizontal product, vertical market strategy, aligned with segment leadership, general managers to deliver be this is probably the most important slide to say our strategy is working.

All right. So on to operating leverage. So we teased this at our investor roundtable last year. We got some questions from investors, why are you investing so much money? Why aren't you delivering free cash flow faster? And what does the lift and shift to Oracle and rewriting all of your applications mean. So 2/3 of our time and effort on our transformation is devoted to the tech modernization. The big milestone was the lift and shift ahead of schedule to OCI, which enables us to take advantage of all of the future tools and technology that Oracle is going to develop.

But if you think about it, cloud-native modern platform, unified data architecture set up to scale globally and enable us to capture all of the innovation that's going to happen in the incoming years with the extension of AI. We expect to be largely complete with our tech modernization in calendar '28, and I'll cover that in the financials in a few seconds.

On top of that, we expect an approximately 30% to 35% economic return from the incremental investment that we're making. This is important because if you think about why we would invest a dollar of capital and what would the expected return, our internal expectations are if a project doesn't deliver or an investment doesn't deliver roughly our unlevered free cash flow return, I would rather pay down debt than invest in the project. So we have a pretty large investment that unlocks growth, unlocks new markets and has a pretty good and pretty attractive financial return.

And then the other areas I would just highlight on business realignment and business process optimization as a large public company and as esters, you should just expect us to do these things. So aligning a general manager organization to segment leaders and our go-to-market function is just what big companies do. And so we're going to operate like a big company, and we're going to focus on building the internal tools, systems and processes to address the future but those two elements are part of our transformation as well.

And now when I think about clicking down into our technology transformation, I mentioned that we did the lift shift which we completed on OCI. We do have some onetime CapEx that shifts to OpEx and that bakes into our run rate this year, but I thought it helpful to provide kind of three flavors of ice cream for you today. First is our Pre-Transformation level of investment and what we are spending our time and effort from a software capitalization perspective. So we historically have said and I looked at even our last Investor Day that we did in 2023, we said we spent roughly half the time running our business capital half the time on growth.

Well, over the last few years, our revenues declined. So we took a circumspect look at what we spent our time and effort with respect to growth capital to reposition. But if you look at the capital intensity, it's about 11% to 14% of revenue. Mid-Transformation, we do expect a slightly elevated capital as a percentage of total revenue. And if you look importantly, pull a lot less time on run capital, that is the benefit of scale at the lift and shift to Oracle, right? We're not running data centers anymore. Michael and his team don't have to buy hardware, software, manage the overhead of data center assets.

And importantly, if you look at the rest of the pie chart, 70% of the time on transform and grow. Post-Transformation, so we expect the transformation to be complete in approximately 28 post transformation is where we really get scale and capital efficiency. We're still going to spend a little bit of time thinking about transformation as we should. But we think we're going to nestle into about 1/3 or so of our time on run cost. And most of our time on a refined list of growth objectives, but the most important thing to realize it's on a much more capital-efficient foot work. And if you look at the 10% to 12% capital as a percentage of revenue, that is probably in line, maybe slightly less than Pre-Transformation, but it's working on the right things with a map against either product innovation or something that a client has indicated to us that they want us to deliver.

Okay. So a few -- we talked about these at length, but a few of the digital transformation examples in action. So you make an investment decision as a company, what are you looking for? Well, I mean, they're looking to take revenue up cost down or improve client satisfaction and retention. So if we look at the investments to deliver revenue growth, we talked about insights today, we also talked about the data platform.

So right now, we have a marketplace with several APIs that partners can hook into our data infrastructure where data is accessible and available. That is fundamentally a different revenue model than a PC-based payer services company. As a technology platform, we're going to continue to invest in those areas because there is there is revenue potential there. And especially with BenInsights, we heard a lot today about new customer acquisition and the go-to-market through Oracle. From a cost reduction, think about the lift and shift OCI and the capital efficiency you get from getting out of running a data center. And I think about our NSA products, right? We had mentioned that auto flow, which is the middle top box and the improvements we made afford us the opportunity to enjoy a 7% competitive advantage against our nearest competitor on a much higher volume set.

And then finally, turning insights into action. The NSA insights on the bottom right is the first cloud-native data API that gives real-time self-service to our customers which makes us a whole lot -- that better execution makes us a whole lot stickier with our customers improves client retention, eventually, we believe, improves better revenue.

Okay. I'm going to hit on '26 guidance really quick. We had just covered this, but the baseline kind of three points here. Revenue growth, EBITDA growth, return to positive free cash flow with an elevated investment profile. And so when I look at the revenue walk, we ended '25 at $9.65 of revenue is approximately 4% growth year-over-year. We did commercially sign a onetime commercial agreement with a large P&C customer. So I would step down my revenue base by 2%. My gross revenue retention is an indication of how much of our core business and our total business we retain before any sales activity happens.

So what we're saying is in any given year, and this year, what we've modeled is $0.93 to $0.95 on every current customer dollar before you apply market factors, before you apply ACV from incremental bookings, we're counting on delivering. It's a combination of expectations around modest volume and kind of all the other net churn and attrition because we are in a competitive environment. We expect to retain $0.93 to $0.95 on every dollar. That is an incredibly sticky business.

We then applied 4% to 5% market factors. We are counting on improved mix. We talked about the increases from the elevated acuity levels, and we talked about health care inflation playing out. But we have a baseline assumption of market factors and mix helping us 4% to 5%. So if you're walking left to right, we expect our base business, our total business to be approximately flat before we add new things that we've sold. And on a raw dollar basis, our guide is 2% to 4% growth. If you exclude the onetime revenue from the property and casualty business not repeating, it's a mid-single-digit growth business, which aligns well to the bookings that we delivered that will eventually convert to revenue.

Okay. So now moving on to our revenue mix summary. So we wanted to provide a couple of points of view. on what is composed within our revenue. So the graph on the left shows our revenue type as a percent of total revenue. We indexed to 2022 because it was the last time we were greater than $1 billion of revenue. And again, the guide range implies us returning in that range this year. But as you can see, when I look at PSAV revenue as a percentage of total revenue in '22, it was over 90% of our revenue, and we exited '25 with PSAV revenue being approximately 84% of revenue.

A couple of important points there. Our PSAV business is a great business. It is a high-margin business, and we expect it to be a big part of our business going forward through our Vision 2030 plan. However, when we talk about derisking our business and diversifying the business, we're looking at other ways to deliver durable revenue growth. And we've announced several -- in the last several earnings calls, several large enterprise deals that behave like recurring revenue businesses. We're going to continue to look for ways to diversify our revenue stream. But this is an important point that diversification will mean PSAV remains still a good part of our revenue, but I would expect this trend to continue to decline over time.

The graph on the right, Travis had mentioned it, but when you look at our client density as a percentage of our total revenue, one of the fears is what happens if one customer does X or Y. The point of building a diversified business is you have a lot of customers who do business with you. We acquire a lot more customers. And when you look over that same period, we're about 10% less reliant on our top 10 customers. So in 2022, our top 10 customers were nearly 80% of our revenue. We exited '25 and our top 10 customers were under 68% of our revenue. Again, thinking about diversification, thinking about horizontal products to vertical markets, activating new logos. The plan is to continue to chip away at both of these so we can build a more diversified and scaled business over time.

All right. Moving on to the 2030 model. So now taking a look at our business from the foundational year to the turn. We've done a whole lot of work, and we've invested a whole lot of time and effort over the last 2 years to get our business fit for growth. when we look at '26 on the surface, it doesn't look like a really exciting year, right? Hey, you guys grew 4% last year. That's great.

You're calling a 2% to 4% number at kind of flat to down margins. What I would say is '26 for us is an execution year. We're purposely investing between $20 million to $25 million in our go-to-market functions to deliver strong double-digit bookings growth. And what we're doing is building a company that has a durable and growing foundation that eventually scales against our investment period through Vision 2030.

Now on to growth and profitability. If you take the midpoint of the guide and apply that to '28, we expect '28 to be at least $1.1 billion of revenue on at least $675 million of EBITDA, which implies a business that grows 4% to 6% at low 60s EBITDA margin. Why is that important? We have a steady core where we renewed our large customers. We're booking new revenue, which over time, when you look at the ACV to bookings lag to revenue, takes about 2 to 4 quarters. And so we think we start to really get momentum into '27 and through '28, but still on a more steady growth plane. And at the midpoint, still pretty pleased with a mid-single-digit growth with good EBITDA contribution.

Now taking that forward Vision 2030, we expect growth to accelerate. And I think the key point is the financial aspiration we laid out last March when we had our Investor Summit was we had the aspiration to become a Rule of 70 company, which is actually pretty rare. And what a Rule of 70 company means is that when you add revenue growth plus EBITDA margin, it sum total 70. If you look at the midpoint of our guide and the exit rate for 2030, that's exactly what this implies.

What it also implies is a business that delivers at least $1.3 billion of revenue on at least $800 million of EBITDA. I would also note that we expect our technology modernization to largely be complete in 2028 and the impact and efficiencies that we get from operating leverage start to really take hold from '28, '29 and -- excuse me, in 2030.

All right. Now moving on to free cash flow. So we talked about returning to positive free cash flow this year. And the midpoint of our '28 guide is at least $75 million of levered free cash flow at less than 7x leverage. Again, '28 will have a small piece of investment as we complete our tech modernization, but you're starting to see what looks like a business that generates excess free cash flow. And when I look at our 2028 milestone and I look at our free cash flow yield, it's about a 6% to 7% free cash flow yield as a percentage of revenue.

From 2028 to 2030, however, once tech modernization is done, once the compounding effect of our ACV and new bookings turns into revenue, and once the capital efficiency of the business from our tech modernization completes, we look at a business that is about 5x levered that generates approximately $225 million or more of levered free cash flow. And when I look at the free cash flow yield on this business from '28 to 2030 improves approximately 3x to the mid-teens.

Okay. And so I'll leave you with this before I hand it back to Travis. We get asked often about what's our target operating model. So we thought it helpful to provide to our investors and analyst community. When I look at our gross margin, so taking our revenue minus our cost of goods sold, we expect to run a gross margin in the mid- to high 70s, which is at the top end of a common technology company. Technology companies run gross margins historically anywhere from 60% to 85%. We're expecting to run gross margin in the mid- to high 70s.

When I look at R&D, we will have a small component of R&D that's non-capitalized. And then when I look at sales and marketing and G&A, so SG&A, we expect that to be about 11% to 13% of our revenue with a higher index towards sales and marketing as we get more scale leverage in G&A as a result of some of the investments. But again, when we look at the kind of midpoint in the implied guide, it is an EBITDA margin business that supports a 7% to 9% growth business that gets us to the sum total of a Rule of 70 company.

All right. With that, I'm going to hand it over to Travis, and I think we have plenty of time for Q&A, and I'm sure you guys have questions.

Okay. Thanks, Doug. Appreciate it. CFOs don't usually get a round of applause. Enjoy that soak that in, Doug. So a couple of things, and then we will take some questions, my favorite part of the day. One is I got to commend you all, your ability to focus is immense. I've been sitting here watching. It is a focus group, perked up quite a bit. And Todd keeps his job. So where's Todd? We successfully got through. Thank you, Todd, for that. I appreciate it. We were all rooting for you. You've done it -- really, it's been a really good day.

Okay. So this is a lot of information. I'll just take 2 minutes and sum it up. So some key takeaways beyond, obviously, the financial picture that Doug showed where hopefully, we're starting to give you more detail, more information, decode the business so you can model it. That's our goal. But we're going to laser focus on our clients. You got to meet some great people. So you haven't had a chance to see this full management team, so you got that today.

And as I say, for me, as a CEO, purpose actually matters a lot because I need people to get motivated every day to do the things that you just described there. It's not easy. We have purpose because we have purpose, we show up with enthusiasm. We are executing. So we're on a journey. We talked about that earlier. We're focused on it, and we're generating results. And so the results are starting to come. No doubt about it. And we work across the life cycle. And so I know we -- sometimes we talk about things in snippets because we have short amounts of time to discuss them.

But today was useful because we're able to see where we interact across the entirety of the life cycle from payer to RCM all the way to provider. That's important. We're growing. So pipeline growth, you've seen material growth in our pipeline, our sales pipeline. Our bookings are coming. They're starting to come, and we're growing. And revenue is starting to come from that. We're getting, I think, more there I say, elegant in our ability to predict revenue conversion. We keep working on that.

We know it's super important to all of you in the room. And we'll be investing for growth, but we're also investing for operating leverage. So we expect those 2 things to come together in a meaningful way for us over the course of this journey in the near future, not in the way distant future. And there's enough proof points in reality there that's showing up. So we wake up every day kind of angry because we're -- we think we're wildly undervalued. We don't think we're getting the credit for what we've done since I've been here anyway.

And so we're going to continue to try to prove ourselves every day to continue to earn your trust as you think about the many things you could do in terms of your investment thesis and the way you're evaluating your company. Really quickly, this is -- I think my first few months here, I actually put this up and so this is what we're going to become and very early in the journey. And we're demonstrating success on every single one of these. So we've upgraded the management team materially. We've added hundreds of new clients when you look at our recent closures and our new markets.

Our goal is durable, sustainable growth, not simply going back to the same well consistently day after day. We want to create a durable, sustainable business that has a variety of customers and clients that we can withstand ups and downs based on market dynamics and still grow and deliver our results. So we're diversifying the business. We like our position with products. We like our position with AI. And we've got rigor and discipline in the business from the work that Jerry has done, where we think we can get more value while we reduce operating costs over time.

And so you really put all that together, the piece that we have to unlock the full potential of the shareholder value is around the capital structure. We know that. And as Doug said, I tell the team, look, you can assume there's one way out and it's through. One way out and it's through. And through is organic growth. So we're going to grow the business. And so our assumption is we're going to delever the business over time, and we're going to do it with precision with smart investments and keeping our promises to those of you that invest in the company.

And so I'll close it there and say I think we have time for a few questions, but we're very happy with the progression that we're making against what we want to become. And we know that it's starting to show up in results and it's starting to show up with people in the room because when I first started here, all I did is go to leverage finance conferences.

Are we going to talk to investors, like no one cares about you. I was literally what I was told over and over. Well, a few people care about us. So you're in the room. So we're making progress because we're becoming relevant, and we're going to continue to do that and focus on that. And so thank you for your time. I'm going to -- we'll just open for questions. So I know that -- I told the team like this is not going to be one of those conferences where everyone is like want to go home, there are going to be questions.

All right. So we'll just jump in. Todd, do you want to...

Hopefully, the audio -- there we go. If you have a question, just make sure you got the mic. So we start on that side of the room.

Good. I'm going to cheat. I'm going to ask 2. So just some maybe clarification. You guys spent a good amount of time on BenInsights and CompleteVue. So could you just remind us the revenue models for those segments? And then any sense of revenue contribution would be helpful in terms of putting those in order?

And then second question would be, what would you need to see that would change your capital deployment focus on the organic opportunities? I am not naive. I got the stress on that. But are there certain areas, certain things that could happen where you would emphasize debt paydown or even strategic M&A on the other side?

Yes. So maybe let me I'll just use this. Is this line? Okay. So maybe let me start with that. And so start with the second question first, and then maybe I'll kick it over to Jerry and team to talk about BenInsights. Taking a look at an investment like our tech modernization is obviously a big investment. It's a multiyear investment. When we look at the strategic opportunities that provides, it starts with if you're going to invest in dollars, is going to provide an attractive return, we think a 30% to 35% economic return, which is a barometer for unlevered free cash flow is where we would draw the watermark to say, does it make sense to accelerate debt paydown?

I think with our tech modernization, there's both an offense and a defensive component, which is why it was fundamental for us to start with the investment with Oracle and our tech modernization this year, right? It's to unlock all the future revenue potential, and we provided a base case. We expect to grow the business, and I think the tech modernization was fundamental. As we look at the future, the expectation when we start delivering excess free cash flow is to use significant proceeds to delever the company.

So when you look at us arriving on an approximately 5x levered company by 2030 and generating a couple of hundred million of free cash flow a year, the expectation is a good use of those proceeds are to help accelerate delevering. And when you think about it, that to us is a prudent use of capital in the medium to long term. The big investment and the focus on the tech modernization, we think was both an offensive and defensive measure. And we simply needed to do the investment, and we're really happy about the prospects of it.

And then on BenInsights, we don't give out specific and the data and analytics business is reported within Claims Intelligence from our segment reporting. We don't give out specific details. That's something we might share in the future. The business is still relatively small. But in terms of the revenue, maybe you could just speak about kind of clients and the revenue model.

Thanks, Doug. So what has now been Insights was one of the capabilities we purchased by way of BST in 2023. And we spent a good bit of our investment time modernizing that and getting it to a maturity level where we've sold it to a number of clients, right? So it really -- it begins with plan design, right? And it pairs well with all of the other products and solutions that we offer from ACE coding the claims correctly, you can apply our network to it.

But in terms of the stand-alone BI Insights revenue model for -- I think that was your essence of your question, we're -- ultimately, we will sell it as a service inside of human capital management systems. So it becomes kind of the TurboTax for health care plan design, broadly available to large and small businesses across the country, but also a tool that enables TPAs and other payers to provide that service better than what's out there in the marketplace today for more than a couple of handfuls of clients where we've gone in and done an assessment on a payer's book of business.

Generally, depending upon how good they are and how long they've been at it, we find between 5% and 20% incremental benefit to the employer, right? And so we've licensed that as a software as a service, along with a PSV component for upside given the variability that can happen during any plan year.

Stan Berenshteyn, Wells Fargo. I guess 2 questions. First, maybe a follow-up on Benefit Insights. It seems like it's a pretty crowded field. There's a lot of services in that area. I guess how do you stand out? How do you displace existing vendors that are already in the space?

Yes. So maybe I'll take the first shot at that. So when you look at the delivery mechanism, managing your plan spend is not a technical problem, it's a behavior problem. And so if you look at the distribution of how analytics are sold today, that distribution is carried through brokers and consultants. And so the big aha that we had as we started unpacking what was the BST and BenInsights was the delivery mechanism through human capital is where all of the other employee information is.

And so replatforming BenInsights to be able to be sold as an enterprise piece of technology, to Carol's point earlier, allows a benefits professional to assess her or his employee population on a daily basis. We think that is a buying behavior that we're aspiring to change with partners like Oracle -- but primarily, it's been a distribution problem on how benefits and savings programs have been sold through brokers and consultants.

Yes. I think I'll just add a comment. I mean, the -- I'm not sure there's a lot of -- that I would call highly truly competitive for a lot of what we can actually do. I do think there's a lot of commodities out there that offer data. So here's some transparency data, here's some information, basically taking the MRF files and other publicly available means and putting them together in something. The real value is in the insights, which is what Tara talked about with Kinetiq earlier, the way Kinetiq uses it and actually takes that insight and turns it into meaningful cost takeout relative to, say, drugs. For the single patient example, which is $2.4 million.

So I actually think there's a service wrapper for this that distinguishes the business, which is how we'll get more sell-through, which is why I was very enthusiastic about signing a large health system because the next thing we're going to do is we're going to pull through our products like BenInsights with consulting attached. And so that has been the single most vexing problem since I've got here in my mind is getting full value for that business. When everyone you talk to immediately sees the value, they're like, everyone should just buy that. We had the discussion on break with someone, right?

But it's hard to get it through the channel of health care. The channel of health care is broker, TPA, consultant and other, which is inside of a fixed PEPM they're not moving off that PEPM. So you need to either be inside of that and displace someone or you got to find a path, a different path, which is why I like vertical markets because we have multiple paths. We're going to try a direct-to-employer path through HCM. We're going to try a TPA-based path. We're going to try a broker-based path, and we're going to try a direct to provider path along a managed service offering. So I think we have to attack the problem from multiple angles to get full value from the analytics business versus just a pure productized thing that you just fire into a market. And I think that's going to be a differentiator for us.

Okay. And maybe just a quick follow-up on AI. So you obviously, you have a lot of focus there. A lot of the last mile delivery of the services that you do, it seems like negotiation requires on actual headcount. Do you see AI potentially displacing or maybe driving efficiencies in that area where you can maybe leverage AI there?

Maybe Michael and pass it to Jerry.

Yes. The answer to that question is absolutely yes. So a lot of the work that we have is as we're modernizing, we're actually building agentic AI, generative AI to automate a lot of the manual tasks that require human decision-making. So yes, there's a definite plan, and that is part of what we're planning on doing.

I just want to add on side that, that project that won the hackathon was the last mile for sites. We won that hackathon with KPMG and Oracle.

So one example of that, Stan, was -- and Jerry talked a little bit about this, the surprise bill services, IDR, very manually intensive. So something that took 3 weeks to put together is an hour now, generating IDR briefs, which is the argument that's used. Part of it is predictive modeling on what's effective. Part of it is generative AI where human being doesn't actually have to spend days writing a brief that it's done by it. So absolutely. It's little things, but it's a much broader context that we have.

Yes. And then I think you asked about our negotiators, right? So financial negotiation our negotiators in that part of our business and clinical. We do a lot of hiring in that -- in those areas. But if you look at kind of the average productivity in terms of revenue generation, the benefit they get for clients, it's a pretty wide distribution. As you come up the learning curve, as you get to form relationships with the providers and the other constituents, the other counterparties.

We've used the tools to not only improve the capacity of each person to process more claims and cases per day, but to get a higher benefit per claim and getting people up that learning curve faster, we get a lot of benefit, fewer headcount, better results for our clients and better revenue for Claritev.

We have about 5 minutes left. So disaster, we're going to kind of keep it going rapid fire here for our team as well.

Great. This is Jason Cassorla at Guggenheim. Just a quick clarification to start. The new top 5 health system, is that part of the $80 million to $100 million of ACV or separate or incremental? And then maybe just a question on CompleteVue. You've discussed a bit earlier on the price transparency that's helped pricing disconnects. But an interesting point you flagged is the volume discovery side of the equation, like leveraging CompleteVue for reducing leakage or using data to underwrite new service lines. Could you maybe just talk about how CompleteVue can help bring down the total cost of care for an individual despite perhaps maybe rising prices as you have that discussion?

So the answer to the first question is yes. And we'll probably give some more details on the next earnings call since it's just officially signed. But the answer to the first question is yes. And then who do you want to take the CompleteVue question? Maybe, Sean?

Yes. To answer your question around like lowering the cost of care, I want to refer back to Brian and what Brian was talking about. Brian is in a rural market, okay? And his price points are lower, okay, than somebody actually going into an urban market. So by him opening up new additional lines, he's capturing that volume at a lower price point. So it's beneficial for both payers and providers. So Brian is raising his net revenue, keeping things local as well as he's helping the overall cost structure as well. Does that help?

Jess Tassan with Piper Sandler. It's been super helpful. I wanted to just come back to the top 5 health system win. Can you just describe what is the managed services offering? How is it build? What segment does it sit in? And then I guess, just how does the margin profile of that managed services offering compare to your existing business? And should we kind of expect CompleteVue to ramp through managed services lynchpin or foothold type deals in the future?

Yes. So maybe I'll answer the latter part of that first. So we'll give those details on the Q1 earnings call, and we'll walk through the segmentation and the model. The managed service business is not going to be like Data Insights or a PSAV business. We think about the total package of selling through managed services with other offerings to arrive at an attractive margin business in total. But we would expect the business to probably be half as profitable as our core business. is our first client.

So for us, the learning is incredible as anything. But I think when you look at the story around surrounding with other technology and solutions, we would expect that relationship to grow. And when you look at the total client, we would expect the margin to be north of what the managed services agreement would explicitly denote.

Yes. And I'll just step into the -- what is it? Look, there's a massive, I would say, need for capability insights for health systems and hospitals that have EMRs and other systems that can't maximize the use clinically, let alone procedurally with other pricing tools. And so since the day I got here, I've been fielding calls about stepping into that. And we've been actually fending it off wanting to make sure that it was on strategy, on brand for us, we could get to the attractive margin profile that we wanted, and we had other products that we could pull through massive client acquisition if you're able to sell it over and over and over and over.

And so what we don't intend to be is a managed services company. What we do intend is to acquire clients and pull through our products associated. So example would be we will not be providing a Level 1 help desk and doing password resets. I not going to be doing that. But what we will do is look at complex clinical workflows helping them understand how to maximize the use of the technology they have.

And oh, by the way, let me just go out in every region you have, which is every state for this particular client. I'm happy to go do a pricing study for you. I'm happy to go do a competitive analysis for you. I'm happy to show you Ben insights and how that works and where we think we can find value for the drugs that you're using and the prices that you're paying for those. So I view it as a material opportunity in the provider segment in order to use the totality of our tools, but also some of the expertise that, one, we have here because we've hired folks how to do this.

But two, we also acquired -- that's why we did that tuck-in, frankly. because it was an ability to get this client in an adjacency and use some of our existing products. That's how we're thinking about it.

We have time for one last one here, Daniel.

Thanks for all the detail Daniel Grosslight with Citi. I guess I want to focus a little bit on the '26 guide or the building blocks to the '26 guide and then bridge that to the longer-term projections. And really want to focus on the gross retention being down 5% to 6%. If we back out the large client attrition from last year, Doug, I think you mentioned it was kind of flattish from a volume perspective. So why are we seeing kind of this decline in the gross revenue retention if, in fact, we are seeing that -- and then as we bridge to '28 and 2030 and beyond, can you help us think through those building blocks, gross revenue retention, mix shift, ACV and inorganic growth as we get to that high single-digit growth rate?

Sure. So what we attempted to do was simplify the components of our revenue. And the reality is before you apply any net incremental bookings, so before sales activity, we try to walk the components of kind of a base volume environment that was slightly down last year and walk that against how we've modeled for kind of the base business, including all churn and attrition, which, like I said, a low to mid-90s retention is actually a fairly good thing. But we do have -- we do have clients that attrit, right, small clients. We operate down segment, our Vistara business, for instance, you're rebidding a lot of small deals and resigning a lot of small deals.

So I would think about it in terms of we're planning low single-digit volume decline that is being offset by continued favorable price and mix. And again, I think I would refer back to the specialty categories. We would expect that to continue. And then really, when you layer in the revenue conversion from the new bookings in ACV, we think the second half of the year is especially where our stronger bookings at the end of last year start to compound to revenue. So when you look at the exit rate of this business, its it's comfortably at the top end of the guide. And then thinking about the components of gross and net revenue retention going forward, we would -- we didn't provide explicit details through '28 and 2030.

But the trend is, and especially if you think about another strong double-digit bookings growth year, as we continue to grow our bookings, and we said -- Travis set a target for $100 million. But if you just take kind of a strong double-digit growth number and compound that over time, the next 2 to 3 years, we stabilize the core business. We have a compounding growth business. That's how we go from kind of a mid-single-digit growth midpoint to a high single-digit growth exit from '28 to 2030.

But we wouldn't expect -- when you look at kind of gross and net revenue retention, we've taken a modest and moderate view of base volumes with basically price and health care inflation and mix offsetting those. and then the growth rate from the new bookings to really start to compound '28, '29 and 2030.

Yes. And I'll just add one thing to that. I mean we're trying to give you the best visibility we can to model something that we don't fully control. And we don't control what happens on the other side of the employer group where they go. I mean they switch between all the time. So we don't have total control over whether they use Cigna, Elevance, United, et cetera. So there's always movement on the other side of that, that isn't even always a reflection of our capability or service. It's just simply groups move between payers.

So there's some natural movement there that creates some level of attrition for us on the client base. But my experience, that's an extremely high number. I mean we were -- we thought we were doing incredibly well at like 88% in prior lives. So we'll take this all day, but we have to sell -- I'm not solely a salesperson until I have to sell. we need to sell our way into growth against that number now that we're able to peg it to a percentage based on our historical averages.

We're out of time. I want to say thank you to everybody. To go us 4 hours, your day, 5 hours is a great commitment, and we really do appreciate it. Thanks to everyone on the webcast for listening in. I'm going to turn it back to Travis here for some just final remarks, just to say goodbye in a moment. But I appreciate you all coming, and we look forward to your follow-ups and talking to you soon.

Yes. I don't have anything to add other than send us your questions, send us your feedback. What do we do well, we not do well, what did we do well. We'll listen, and we appreciate it. Thanks for your time.

Greetings, and welcome to the Nephron Research Q&A with Claritev. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Josh Raskin of Nephron Research. Thank you, Josh. You may begin.

I appreciate everyone dialing in this morning, super excited to host the Claritev team. We've got the whole team here. We've got Travis Dalton, the CEO; Doug Garis, the CFO; and Jerry Hogge, the COO, as well. I'm going to turn it over to Todd Friedman, who coordinates the Investor Relations, for a little bit of a safe harbor. And then we're going to go through some Q&A as we get through there. I think we're going to try and clear up some lingering questions post the quarter. And hopefully, everyone finds this super helpful.

So with that, I'll turn it over to Todd.

Thanks, Josh. I want to first say thank you to you and to Nephron for allowing us to webcast this call today so that we can make it available to all of our analysts and investors. It's much appreciated. A really quick safe harbor statement, and then we'll get into it.

Our remarks and responses to today's questions include forward-looking statements. These forward-looking statements represent management's beliefs and expectations only as of the date of this call. The actual results may differ materially from these forward-looking statements due to a number of risks. A summary of these risks can be found in our annual report on Form 10-K and other documents that we file with the SEC. We'll also be referring to several non-GAAP measures which we believe provide investors with a more complete understanding of Claritev's underlying operating results. An explanation of these non-GAAP measures and reconciliations to their comparable GAAP measures can be found in our February 23, 2026 earnings press release on our website and our SEC filings.

And so with that, I'd like to turn the call over to Travis for some opening remarks.

Yes. Thanks, Todd. Yes, thanks for your time today. Also, I'll second. Thank you, Josh, for hosting. And let me just say things to those who are on the call. We appreciate your interest in the company. And your time is valuable, so thank you.

I'm going to be really concise here. I'm going to take 3 to 5 minutes. We're actually having the call today, so that's good. We had some difficulties on our last call. So there were just a few points I think we wanted to make. And we've been fielding a lot of feedback, a lot of questions. And we're hearing you, and we're listening.

So I'll just say that we remain realistic and very optimistic about the company and our future. As we said on our call, we're focused on growth and execution in '26. And the business is in a much healthier place than it was, I would say, at least from my arrival in early '24. I think our strategy is working. So we've laid a foundation for success. We worked through what we call The Turn last year. And you're always evolving, but that was an important year for us to prove if we could return to growth and open up new markets. We were able to do that. And then we're focused on The Way Forward, which is healthy, sustainable growth.

Look, I'm encouraged. We had 6.7% growth in Q4, record bookings in '25. We're forecasting a strong double-digit bookings growth year. We had 10 new logos in Q4 alone, and our pipeline is up 167% on the sales pipeline. You look at all that, and that bodes well for the future of the company.

And it also says our products are relevant in the market. And so we've called a growth year, as promised. And we have -- we've heard you, and we have plans to manage margin and EBITDA as we go forward. And we know we can do that. And I have total confidence in the team to make good, sound financial decisions against those metrics.

A couple of more quick comments, and I want to get to the questions. Look, we're well positioned against the need for macro health care, cost transparency, the move out of the 4 walls of health care into specialty areas. Our network, our payment revenue integrity and claims intelligence all map to those needs.

And then the other point I'll make -- and Michael can go much deeper on it, I'm sure there's a question about it is -- we don't think we're a survivor in the AI revolution. We think we're a winner. We have data rights, workflow and trust. We have those 3 things together, and you've got something really relevant to work with in the environment. And so it's not a moat, but an advantage for us. We're using it today with IDR, claims, risk, sales leads and evaluation of those, predictive, generative and agentic. And so I also think as a key point is that we're a nice conduit to overlay other partners and other sources of AI intelligence on top of our infrastructure. And that's a good thing because health care ultimately becomes the winner.

So I'll close my remarks by just saying our priorities are clear: organic growth and delevering our business. We said that. We've been consistent on that. We're going to continue to work to achieve it. And we've got an Investor Day coming up here next week. We're very excited for that. We've got a couple, I think, material announcements to make, and we're looking forward to that. And we had our sales kick off this year with 100 of our top leaders. And it was very enthusiastic, and the momentum -- we're going to start to build momentum.

So with that, let me turn it back to Josh. And we're happy to work through the questions, and we're looking forward to it. Thank you.

Yes, that's perfect, Travis. That's short but comprehensive, and I think I want to hit on a whole bunch of things that you talked about. Maybe we just start with that confidence that you talked about and maybe you could give us a little bit more meat on the bone around the confidence that you have as that growth starts to accelerate back in the second half of 2026? And maybe just some data points there to help us frame that?

Yes. You bet, Josh. So I'll start, and then Doug may have a follow. But from my perspective, a couple of things. One is, it's -- we have better telemetry into our business, right? We have worked hard on putting people, process systems in place so that we can see what's happening in the business, see where our opportunities are and target those opportunities. That's kind of the hard work of building something that can grow.

And so when I talk about our sales growth, it's not just like we got more people out there shucking deals. It's like you're more focused on the business, you know what your critical priorities are and you're allocating your capital in the right way. And so we have better telemetry, and it's showing up. We did $67 million in ACV last year, which was growth. We're very excited for the year we have. We're selling across all vertical markets. So we put more emphasis last year on TPAs, brokers, our government and international businesses. And we're starting to see progress in those areas.

And so when we've secured our top 10 clients, which we're also able to do, but we're selling around that into new vertical markets with pipeline growth, with increased sales. That bodes well for the future of the company. And we'll also become less reliant solely on those top 5 to 7 clients for growth. And so being 12% to 15% less reliant on 5 clients is a good thing for us over time.

And -- so I would just say it's been team, pipeline, vertical launch and progress. And I think we're making progress against all those vectors and starting to show up in the data. And Doug, you may want to comment on that?

Yes. I would just add a final point on the $67 million of ACV. If you look at where it was coming from, 70% of that was upsell, cross-sell and organic growth within the installed base. So we've had some pretty impressive wins within the current installed base. And then finally, 30% of it was net new, which is a result of our new market strategy and the new logo acquisitions.

So when you look at what we've said historically as we've introduced ACV as a metric, it takes anywhere from maybe 2 to 4 quarters for the ACV to convert to revenue. And we'll start to see a material increase here as we build into the second half of the year as bookings are very strong, a record bookings quarter in Q4 of $23 million converts to revenue towards the end of this year and into '27.

And then, look, I mean, we're highly optimistic about a sales force that is dedicated and quota-carrying sales folks going after an internal target of strong double-digit growth on ACV. So we're pleased with the progress of the business. And I think as we continue to refine our messaging going forward, ACV is a very important barometer for us for growth.

That's great. That's great. Travis, you also mentioned in the preamble that the -- you saw AI -- Claritev as a winner, not a survivor. It's actually a winner from this. Maybe, can we just talk a little bit more broadly about how AI affects the competitive landscape for your businesses?

Yes. So I'm going to let Michael take that. He's our Chief Digital Officer. Michael, if you want to jump in?

Sure, Travis. Thanks so much for the question, Josh. From a competitive landscape, I feel really good about Claritev's overall position. And the 3 points I'd make about this are first is, AI is not new to us. We're about 7 years into our AI journey, and AI is used quite prevalently across all of our products and workflow.

Second, we have a world-class team, and we are partnering with best-in-class companies and best-in-class tools like Oracle and OpenAI. And third -- and this is a point that Travis had made before when he talked about we have the data, we have the workflow and we have trust of our clients. It gives us an opportunity to deliver value using AI.

And the one example that I will give about a proof point that shows us competitive advantage is the incredible success that we had with our AI investments around the tool capability called Pro Pricer. In our earnings call, we talked a little bit about how we had revenue growth on flat claim volume. And one of the drivers of this trend is Pro Pricer. It's an AI-based claims workflow optimization engine. And that delivered close to $20 million in incremental revenues with the same number of claims because we optimize the results of the savings for our clients. And so there's an awful lot of proof points. And so as a result of this, I feel really good about our competitive position and the use of AI.

And when I look at the landscape, I think of large LLMs. Well, we think of them as partners and tools that we leverage. And then Travis talked about new entrants and start-ups. Well, they want to connect with us because we're actually in the workflow today and we have the data that they want to plug into.

Now having said all of that, like we're very paranoid about AI in the competitive landscape. And we're constantly looking for potential risks and opportunities to disrupt ourselves or get additional benefits. But I will say it's incredibly difficult because of the competitive moat that we have. And we'll get more into this on Investor Day later this month.

Yes. That's great, Michael. I appreciate that. Maybe just to double click a little bit more on that competitive moat that you're talking about. Maybe just give us a little bit more color. So is it the embedded in the workflow, sort of that process side of things? Is it we actually have all of the data that -- that these, as you call them, new entrants and startups have? And then kind of what stops one of your large customers from saying, hey, why don't we try one of these new start-ups and just sort of these pure AI solutions that you see out there?

What you said was accurate, Josh. It's all of the above. Proprietary data, custom business processes. Additionally, the client relationships that we have, the embedded workflow, the products that we have and the network of 1.4 million provider contracts that we have, all of that creates a very difficult moat to cross.

And I think the best example of this competitive moat is surprise bill services for our No Surprises Act business that we have. Which today has best-in-class results by a wide margin, and that's driven by AI. And the reason it's successful -- as an example -- and the reason it's a competitive moat is we have 700 client relationships that's giving us the claims data -- that's giving us the claims today. Right? So we're already in the workflow. And that claim that they're giving us, AI couldn't replace those client relationships. You can't -- AI generates the code, but you have to develop the integration with those client relationships.

And the first product that's a part of that is our network, which has 1.4 million providers under contract. And again, AI can replace that. But the other parts of the AI that we're using to leverage these products and these relationships is that generates a ton of data. We have 20 billion claims. We know provider behavior. We know pricing. We have transparency engines. And all of that allows us to develop AI models that predict provider behavior, that generate better arguments for negotiations, better results on independent dispute resolution.

And so when I think about the competitive moat, it's fine in network relationships. It's the fact that we have these products, that we're already in the workflow, that we have knowledge of all the custom business rules and the intellectual property around that and that we have the data that allows us to build all of these AI models. And it's the fuel for the AI engine that we have. And so all of that provides a very solid competitive moat for us today.

Yes. It's interesting. I hadn't really thought of it in that way, but it's sort of -- yes, there's tools that are out there that may be better than what you've developed internally, but they're not as useful without the Claritev data and workflow and the contracts and everything like that. So that's a super helpful way to think about that.

Can we shift a little bit about the increase that you're talking about in terms of capital spend and maybe if that's a new baseline that we should be thinking about going forward? And how this is being impacted, hopefully, over time by the digital transformation and how much of that digital transformation spend is in there and maybe when that winds down? Just maybe generally, all of the sort of capital questions in there.

Yes, sure. This is Doug. I'll take that one. And so when you look at it, our guide this year implied about $160 million to $170 million of capital spend, which is roughly consistent with '25. And we had previously indicated that our Vision 2030, our tech transformation and our program was roughly a 3-year program. What I would expect is a '26 spend kind of similar to '25. And if you take a step back, I think our CapEx in '24 was $139 million and '23 was $113 million.

So I think the most constructive way to think about it as CapEx as a percentage of revenue. And so we're kind of in the 15%, 16% range as we invest in the tech modernization. On a go-forward basis, we really should start to see a wind down in scale beginning in '27 and then completing in '28. And then for our modeling purposes, we expect R&D as a percent of sales to land kind of in the 10% range. And so when we ramp down the transformation spend, that ramp down and the benefit really starts to take place in '27. And we largely expect for the transformation program as outlined to be completed in calendar year '28.

Okay. And we can do the math. If you're going from, call it, 15%, 16% down to 10%, how much of that is revenue growth versus how much of that is elimination of the additional spend that I guess we're seeing in '26 and I guess a little into '27.

Maybe, Doug, I'll stick with you on another focus of capital. You guys spoke a little bit more about -- I don't want to say aggressive, but more interest in M&A. Maybe you could help us with the specific capabilities that you're looking for? How we should think about that spend in the context of your current leverage and increased CapEx needs in the sort of immediate or short term?

Yes, that's great. And so I would say, maybe to reframe the question. So M&A as well as organic investments and debt paydown and share buybacks have been kind of the 4 domains of our capital allocation. So I would say it's not a renewed focus. But for us, it's always been on the list of our priorities. I think it's really about discipline against our capital structure.

And so we had an interesting opportunity that we had indicated. We acquired a small company called OPCG in Q4. And they have advisory services in the provider -- in the government space that attach really nicely to our products. And so when you think about our capital allocation portfolio and kind of time and effort, M&A for most companies is always on the radar. We're kind of in a -- we're in a position to where we're looking at things that are highly impactful and complementary to the business.

And if you look at the last 5 years, a few of our acquisitions -- I think with our data and analytics business and our Vistara product, which is the reference-based pricing health plan, very complementary to the core offering. We think that M&A should be part of a focus going forward. And it's part of the things as a leadership team and as a company, we're always thinking about how the balance of organic investment versus M&A plays out. But it will be a focus for us on top of the other allocation priorities, with a primary focus on investing in our tech modernization, our transformation, which is obviously the most impactful, followed by our delevering and debt paydown over time.

Yes. Yes. I think that's helpful. We've gotten that question. I think framing it as discipline against your capital structure is probably an important point that I want to stress there. I should have asked this on the CapEx before, but there's been some shift from CapEx to OpEx. Maybe if you could help us understand that?

Yes, sure. And so part of our updated philosophy on guiding to a total capital number was the reality is hosted software implementation hits operating cash flow. We think about it as $1 spent relative to our return on capital. So you will see a little bit of our hosted software hit our operating cash flow line. As we bring assets into service and as we, for instance, did our Oracle migration to our -- the technical into OCI, cost that historically we would have capitalized now switch to OpEx. The good news is we previously owned and operated a data center and most of our data assets were on-premise. And so we historically would have to spend, call it, $12 million to $15 million a year every year supporting those assets and supporting our data assets.

And so the switch from CapEx to OpEx is just moving the geography to a cost of goods and OCI spend. We largely expect that to wash through in '26. It's a $0 cash flow impact. But the reality is when we look at our technology transformation, some of the cost, call it, about 75% of the cost will be in the software capitalization, will be in cash flow from investing. And approximately 25% will be in the hosted software, and thus, hit the operating cash flow statement.

Got you. Got you. Okay. All right. So 0 cash flow impact. I see what you're saying, and it ships. I should have asked this, I think you touched on this, Doug, also as well. But I'd be curious to get a little bit more specifics on the conversion when you talk about your average contract value conversion into actual revenue. I think you said 2 to 4 quarters earlier. Could you help us understand, like is there a difference in certain segments and business lines or products that you were selling? Would you expect any changes to that over the next year or so?

Yes, sure. And so maybe I'll give a high level, and I'd love for maybe Jerry to give a practical example of a booking in one of our lines. And so the 2 to 4 quarters is an approximation. We have very little bookings that convert immediately to revenue. Because our business model, we don't sell a whole lot of licensed software. And so the 2 to 4 quarter estimation, so if we signed, for instance, $23 million of bookings in Q4, we would begin to start to see revenue attribution in late Q2, early Q3 and then fully ramp on the totality of the bookings by early 2027.

And so similarly, if we sign deals in early '26, we might get a little bit of revenue towards the back half of 2026 and then fully realize it in '27. And so it's a really good directional barometer and something that we will continue to update on a quarterly basis. But I might flip it over to Jerry, just to give you a practical example of how a booking to revenue conversion would work with, for instance, a client implementation.

Sure. Sure. Thanks, Doug. And kind of -- maybe 3 kind of variants on this topic. Our Vistara product is a reference-based pricing plan that leverages our network of 1.4 million providers. As companies do each year, they do their health care planning in the first part of the year. And that's where our BenInsights product is helping employers and the counselors who advise them on how to design the plan. They make their decisions, and then employees sign up for the plan in the third, fourth quarter of each year and the revenue shows up in the following year based upon enrollment.

So sales for us, at close in the first 2 quarters of the year, revenues show up in the first quarter of the following year for that product for our network. Similar kind of thing where if a payer decides to use our network as a complementary or wrap network, once the employees decide to implement that, it shows up 2 to 4 quarters later. And for our Payment & Revenue Integrity business, depending upon the data that we have where we do advanced code editing to correct claims that are miscoded or upcoded or fraud waste and abuse, that can be as quick as a quarter or 2. If we don't have the data, it's typically like a 6-month sale to revenue lag.

Got you. By the time it gets fully reconciled, that makes sense as well. Maybe you could give an update on the NSA? I think you brought up the NSA marketplace. And how that process is working for the payers, for your big customers? How big of a segment is that for Claritev? And then were you guys expecting any regulatory changes? And how are you monitoring those potential updates?

Sure, sure. Like all legislation implemented with the most noble of intent, as it progresses through time, people figure out how to play the game best to their favor. And we've seen that in our NSA volume business. It's a sizable portion of our claims intelligence portfolio. But based upon CMS public use file data, we outperformed our -- one of our key competitors in frankly, all domains, meaning all of the payers who self-perform that work. And it really does -- it starts with leveraging our network by pricing those claims against the 1.4 million providers in our network, which is a unique asset that none of our competitors have. And even our major payer clients only have a cross-section of that, that we've automated our process throughout the 5 or 6 steps it ultimately takes to get to.

The final step that everyone seems to focus on, which is independent dispute resolution, where the provider disputes the bill charges and the proposed payout on it. And they've -- depending upon which of the 15 IDRE firms adjudicates those claims, the results in favor of the payer or the provider vary pretty widely and frankly, pretty inconsistently. These are all metrics that we track very closely. And we've designed our AI tools and our -- the way that we write briefs for the IDR phase to be most compelling for basically arriving at a fair market value for these services.

But our strategy has always been to price those claims, those cases at the network first and then at a fair market value before they are paid. And then even after they're paid, there's a postpay process that we've implemented. And then ultimately, we've got an IDR phase that leverages AI tools to basically present the best case for fair market value for those services.

So we continue to optimize those things. It's kind of a -- bit of a moving target that we adjust our strategy to in real time over time. But across all of those phases, we outperform our key competitors, all the major payers by a sizable percentage. Simply -- partly because of our AI implementation, but because we've got an end-to-end solution. A lot of the start-up AI firms that could come in and say, well, I could create a model to do that. Well, it will only be a part of that. And it really is a sliver, but the value that we deliver to our clients is the end-to-end solution that requires all of those things that I just mentioned. And that's what makes that -- our performance better than our competitors, better than the major payers and makes it very, very hard for anyone to come in and just propose, I've got a -- I've ingested a bunch of NSA claim data, and I think I can do a better job.

Yes. Yes. That's helpful. We spoke -- again, we've spoken about a couple of different customer segments. So I am curious, progress on new customer segments. I'm specifically interested in areas like CompleteVue. And then you mentioned the 10 new logos again. I'd be curious to hear where some of that's coming from as well, the ones that you mentioned on the last call?

Yes. Thanks, Josh. This is Travis. I'll take that one. Yes, a couple -- I'll just reiterate a couple of points and jump on the question. The -- I view 2025 as a pretty integral year for us in terms of setting up the future growth of the company, the current and future growth. So we have -- we now have clear vertical segments with leaders, lead generation, sales enablement associated with each. And we've upgraded our team talent, and we've got a lot of knowledge here that is now, I think, at the proper point of sales. And we're incenting our sales leaders. And so across provider, government, international broker and TPA, we're now starting to see deal mix show up, pipeline growth, as I've noted before in our -- in the total of our pipeline growth over time.

CompleteVue is one of those offerings. It's something that we had put together based off the publicly available data, our ability to understand and use data and bring insights. And so we're selling it. I think we've got 6 health systems now that we're working with that encompass over 70 hospitals. And so a couple of those are large systems that have a lot of needs.

I view CompleteVue really as an entry point into the discussion with them. It's a conduit to continue a discussion, particularly with a product like BenInsights, which has a lot of capability inside of it. You can model risk, you can look at your benefit plans, you can look at your employee population and demographics. There's a lot to be done there. And we're starting to figure out what data and analytics is and the business is for us.

But that client acquisition is really important. The client acquisition is important because we listen, we learn, we develop and then we sell more into it. And so that is not an insignificant lead-in for us to have that many clients that we can now work inside of to find use cases off of our capabilities across not only CompleteVue, but also BenInsights. And so that is -- I continue to be encouraged with the work we're doing there.

And then on the 10 logos, look, that was just in Q4. These are 10 new clients. We had 2 in international. We have 3 provider clients. We had 3 new payer logos, and then we had 2 brokers that joined. And so again, that's encouraging. It's not just going -- tapping the same well over and over and over, which we'll continue to do. And as Doug mentioned, we have significant white space and opportunity with our existing clients. But it's surrounding the business in a healthier way with more diversity, more growth, more opportunity, the ability to fortify the results over time. And so that's how we're thinking about it, but our segments are showing them up both in pipeline, but also in real results.

Yes. Yes. I mean, part of that is just the TAM expansion, right? It's sort of -- you bring in 2 more international and 3 providers, as you mentioned. Even new payers, it just -- the flywheel continues. So I think that's a helpful statistic to keep giving.

And maybe just one last one from my end. I'll turn it back to Todd after this. Is that -- you talked about that $25 million of spend that I think was part of your -- as you described it, go-to-market and delivery functions to maintain momentum and best support that double-digit strong ACV booking growth that you've talked about. Maybe just some color on that additional $25 million? I know we've touched on that already.

This is Doug again. Yes, I think the last question was a perfect frame-up of why we're excited to invest in the business. And I think Travis had mentioned in his opening remarks, we had a highly energized sales kick off with -- we have over 100 [ bagged ] sellers now. And I would partition our investment, which we called out on earnings of approximately 20 to 25, in kind of 3 buckets.

And as you can recall from our earlier calls, I think our last 2 earnings calls. We said, hey, if we felt good about the progress of the business, we'd continue to invest, and that's precisely what we started doing towards the last half of the year. So some of the spending is kind of baked in our run rate. And some of the spending is, of course, new and around investment in the business.

And so I would say it's in 3 areas. First is in sales and marketing. So we've moved to a segment leadership structure within our U.S. markets. So specifically in payer, TPA, provider, government. We have sales leadership that has end-to-end coverage on new client development as well as client success, an important milestone for us to be able to deliver double digit -- strong double-digit bookings growth, which we feel really confident and good about investing in.

The second is the acquisition of OPCG and kind of building out our advisory offering. We acquired that business for approximately $5 million in November. That came with a couple of dozen highly competent folks with specialty skills that we're excited about. And finally, we had mentioned we launched an international business in first half of last year. We actually had our first bit of revenue in 2025, and we have aspirations for that business to grow and potentially even contribute a decent portion of our revenue over time. But I would think about it in the 3 domains between sales and marketing in the U.S., the acquisition of OPCG and extension of our advisory business and then finally, the full run rate and compounding of our international business, which is fully up and running and launched and off to the races.

Perfect. Perfect. Okay. Great. Todd, maybe I'll turn it back over to you. I think we've got through most of my list at this point.

Todd, Let me just close out. I think we're -- Josh, let me just again say thank you for hosting this. That was on short notice. We appreciate it because we got a lot of questions post the earnings call or the lack of earnings call, considering technical difficulties we had. That won't happen again, we promise you. But thanks for giving us the opportunity. There's a lot of people that are thoughtful about our company that have real pressing questions, and we want to continue to give more communication, not less, which is why we're spending this time today.

So I'll just close by saying we're looking forward to our Investor Day, which is coming up next week, where we're going to talk about the work we're doing, similar to what we're doing today, the financial model of the company. But we're also going to talk about some of the things that are beyond that, that are aspirational for us based on our ability to use our talents and our innovation in a way that's different than what you may expect from this company over time as we evolve the company.

So an Investor Day is a spot for us to be able to, I think, demonstrate our products. You'll hear from some of our clients. We got a number of clients that are coming that want to express their point of view on the market and the value they think we bring.

We believe in our company, we believe in our people and what we're doing. We think we're undervalued. So we're going to continue to try our best to explain our story. We know it's not a simple one, but we're going to continue to push forward. And from my view, this is just the beginning. We're early in this process, but I'm very excited that we've been able to return to top line growth. And we know we have to manage the envelope below that, both in terms of CapEx, OpEx and our spend forward in order to meet our full objectives. And I want our investors to hear that we know that. We're focused on it, and we'll continue to do that.

And so I'll just close it with that. And again, we're thankful for your time today, and we'll continue to field questions. We'll continue to answer them honestly and straightforward. Thank you.

Yes. Thanks again, guys, for letting me host. Looking forward to seeing you in New York a week from Monday.

Yes. We'll see you there, Josh. Thank you.

Ladies and gentlemen, thank you for joining us, and welcome to the Claritev Corporation Fourth Quarter 2025 Earnings Call. [Operator Instructions] I will now hand the conference over to Todd Friedman, Head of Investor Relations. Todd, please go ahead.

Thank you, operator. Good afternoon, everyone, and welcome to Claritev's Fourth Quarter 2025 Earnings Call. Joining me today are Travis Dalton, President and CEO; and Doug Garis, Chief Financial Officer. Jerry Hogge, our Chief Operating Officer, will also join us for the Q&A.

During our call, we will refer to the supplemental slide deck that's available on the Investors portion of our website along with the fourth quarter 2025 earnings press release issued earlier this afternoon. Our remarks and responses to questions today may include forward-looking statements. These forward-looking statements represent management's beliefs and expectations only as of the date of this call. Actual results may differ materially from these forward-looking statements due to a number of risks. A summary of these risks [indiscernible] supplemental slide deck and a more complete description in our annual report on Form 10-K and other documents will be filed with the SEC.

We will also be referring to several non-GAAP measures, which we believe provide investors with a more complete understanding of Claritev's underlying operating results. An explanation of these non-GAAP measures and reconciliations to their comparable GAAP measures can be found in the earnings press release and in the supplemental slide deck.

And with that, I'll turn the call over to Travis.

Thank you, Todd. Good afternoon, everyone, and thank you for your time today. I'm excited to share our Q4 results, '26 guidance and transformation progress. However, first, I would like to reflect for a moment on the state of our journey here at Claritev in the industry. As I near my second anniversary as CEO [indiscernible] helped reflect on what we've accomplished and what lies ahead.

When I joined the company, we faced a set of challenges that require a well-thought-out long-term strategic plan. We set out very intentionally to create Vision 2030, not [indiscernible] and are very committed to that. That is not meant to be dismissive of immediate results and short-term objectives. But to be clear, our goal and the focus of this management team is to build a well-run, disciplined health care technology company that deliver sustainable, profitable growth. [indiscernible] real and pressing problems in health care today and the future, specifically with laser focus in the areas of transparency and affordability, which are key to better health outcomes and economics going forward.

I'm exceedingly proud of the work we have done to lay a foundation to clarify our purpose, align and recruit talent and focus our company and associates [indiscernible]. That combination of clarity, alignment and focus [indiscernible] our digital transformation and the introduction of [indiscernible] vertical markets has allowed us to turn to profitable growth sooner than expected. Simply put, our strategy is working. Most importantly, [indiscernible] with urgency to help our clients with their most [indiscernible]. One comment on my remarks that we have returned to profitable growth sooner than expected. One year ago, we stood on this call and [indiscernible] guidance of flat to down revenue with significant free cash flow. I'd be remiss to not take a moment and give recognition nearly 3,000 associates at Claritev, who have showed up every day, aligned [indiscernible] making health care affordable for everyone in line with our Vision 2030 plan and delivered these results that have far exceed [indiscernible] we could do entering the year of the turn.

On that note, the many foundational reasons why Claritev is positioned to keep winning in this market. We operate in a highly complex and sometimes fragmented and misaligned industry. Our fundamental belief is that increased transparency, better data and technology providers and employers will lead to more alignment and better decision-making. Costs continued to rise, high claims are increasing. The regulatory environment is fluid and [indiscernible] are real challenges to tackle. [indiscernible] our results, we are well positioned to meet these pressing needs, network innovation, claims intelligence, transparency and predictive [indiscernible] that ultimately benefit the health care industry. That combination of solutions [indiscernible] and augment each other when used together is the real strength of our business.

I'm often asked about our true competitive advantage. And I'd say it centers around [indiscernible] one, the comprehensive network that we have developed over many decades; two, the deep workflow knowledge and substance of our client relationships as [indiscernible] renewals and sales growth; three, [indiscernible] IP, business ability to analyze this data, flexibility to adapt and technology scale with high provider acceptance. For all the noise around [indiscernible], we achieved greater than 90% [indiscernible] our solutions, actually reducing [indiscernible]; and five, a long history of regulatory expertise that is invaluable to our clients trying to adapt to [indiscernible] and federal environment.

Thinking about our competitive advantages, let me take this moment to comment about AI. Technology is massive [indiscernible] improving health. AI is giving us the opportunity to tackle the biggest [indiscernible], fragmentation and sensitivity of data, incentives, complexity of work and access. AI is reshaping the way we develop in our collective future. These persistent challenges are the [indiscernible] the opportunity for us. [indiscernible] across the ecosystem are major, major advantage along with the competitive moat we have created with the [indiscernible]. The competitive advantages I just listed become even more pronounced considered alongside our [indiscernible] strategy, [indiscernible] and losers in this market, and we believe key -- 3 core ingredients are going forward: one, embedded growth domain expertise.

[indiscernible], we're going to pause for 1 second. We're getting notes that the audio is bad. So operator, if you can hold [indiscernible], we're going to go to a different line here, okay? [Technical Difficulty]

The audio was bad. Is that a better connection now can you hear us better?

Sounding clear. [Technical Difficulty]

[Audio Gap] complexity of workflows and [indiscernible]. AI [indiscernible] the opportunity for impact and the time is now. Our 4-plus decades of working with clients across the ecosystem are a major advantage of the competitive moat we have created with [indiscernible]. The competitive advantages I just listed become even announced and considered alongside our [indiscernible]. Winners and losers in this bucket, and we believe 3 core ingredients will be crucial going forward. Embedded workflow [indiscernible]; two, client agreements and data rights access and trust. We will work with our clients and [indiscernible] partners where appropriate. We are prioritizing AI where it supports clear outcomes to revenue costs [indiscernible] that can be embedded directly into workflows to find more value from our clients by [indiscernible] and processes, [indiscernible] revenue growth and taking real cost out of [indiscernible].

We have clear examples of success, including the use [indiscernible] advance our surprise [indiscernible], advance our payment and revenue integrity products and workflow automation around credentialing and other key areas. AI must function within claims adjudication, payment workflows, contracting and reconciliation processes that work across payers, providers and employers. [indiscernible] trust. We have 40 years of making and keeping promises [indiscernible]. They trust us to act responsibly to govern well, [indiscernible] of our data and solutions. The moat is no longer code. It is the data, the workflow distribution and trust that will matter the most. Simple tools will go by the wayside, but the long-term winners will be platforms that support rich workflow. Those will be the where AI will enrich what we are capable of delivering. And when you add all of that up, we not only like our position but embrace the AI revolution. We published a strategy briefing coming that lays out our AI position in greater detail, and we will go deeper on this topic at our Investor Day on March 16. Quite simply, [indiscernible] of our competitive advantage and our AI leadership, nobody is better positioned to meet the coming impact on affordability than we are.

Turning to the results. We are on the way up as evidenced by our Q4 highlights. [indiscernible] [ 2026 ] guidance. We achieved 6.2% revenue growth in Q4 year-over-year, continuing to demonstrate [indiscernible] durability but that our vertical market strategy is working [indiscernible] road map. Doug will give a fulsome update on the numbers. I'm also really pleased with our bookings of $23 million in revenue record for the company. That result, along with our expected full year bookings growth in 2026 bodes well for our future and creating sustainable growth.

Let me give a few quick highlights. As previously reported, we have renewed our top clients and continued to expand our solutions and life space with them in keys like NSA and payment and revenue integrity. We continue to expand our market presence with momentum in the TPA and broker verticals with additional Q4 client acquisition. The same can be said for our provider and government market segments exciting announcements to come on soon. We deployed a number of orders and solutions that reinforce our culture of innovation. Our new solution made possible through our digital transformation as our network builder.

The Claritev network of 1.4 million providers is one of the least accretive assets we operate, a key feature for our clients to pass over the whole network or specifically tailored narrow network addressing geographic needs, like [indiscernible] for rural access gaps, while we have been delivering bespoke networks for decades, the network builder, we are now able to create those networks in minutes [indiscernible] to be a lengthy manual process. We will be showcasing this in many others relations during our Investor Day. And we are expanding our footprint internationally in the Middle East, signed 2 additional clients that will create momentum for growth in '26. Overall, in 2025, we are acquired new logos of our vertical markets, our bookings year-over-year. We had more diversification in our selling activity including significant expansion of our payment and revenue integrity solutions of our telemetry into our [indiscernible] than ever before, allowing us to strengthen our win rates and increase our deal size. I expect 2026 to be an even bigger record sales year for [ Claritev ]. [indiscernible] started. We are well into our digital transformation that will create stronger operating and technology platform for the long haul, complemented by our products and [indiscernible]. All this bodes well for Claritev, most importantly for clients and our ability to serve their emerging needs.

I'll turn it to Doug.

Doug, if you could wait 1 minute, we're going to change the audio here [indiscernible]. Jason, can you turn your microphone on?

Can you hear us, operator?

Much clearer, yes. Can hear.

Okay. Go ahead, Doug.

Okay. Thank you, Travis, and good afternoon, everyone. I have a lot to cover today, so I'll move quickly through my remarks highlighting Q4 and full year '25. Before I give you the setup for what we believe will be the main catalyst for growth this year. We've also posted a supplemental deck on our Investor Relations website for more detail to support our remarks.

To start, 2025 can be understood most clearly in the remarkable pivot in our financial performance that began in Q1 and progressed throughout the year. Revenue, adjusted EBITDA and free cash flow all ended the year well ahead of our initial guide. And our 2026 guidance reinforces our posture as a business on the way up with a growing top and bottom line and an emerging business model built for durable growth over many years to come. So let's get right to the numbers. Total revenue in Q4 was $246.6 million, up 6.2% year-over-year. Growth in Q4 came from both our core businesses and expansion areas. Recall, Q4 is the last quarter with a onetime revenue benefit of about $5 million in our P&C business, which fall into the network service line. In total, we had about $18 million of nonrecurring revenue in 2025, with roughly $2 million of benefit in Q1 and $5 million of benefit in quarters 2, 3 and 4 that will not repeat this year.

Adjusted EBITDA was $151.3 million for the quarter, up 7% at a 61.4% margin, and we generated $36.4 million of levered free cash flow in the quarter. We also deployed about $5 million for our small tuck-in acquisition we completed in November. We ended the year with $28 million of total cash and $17 million of unrestricted cash. Our net leverage at the end of the year was 7.7x, an improvement of nearly half a turn from our ending position at the time of our debt refinancing transaction in January. As a reminder, since the debt refinancing transaction concluded in January of last year, we expect Q1 and Q3 to be cash consumption quarters and Q2 to Q4 -- Q2 and Q4 to be cash-generating quarters in the near term. For the full year, revenue was $965.4 million, an increase of 3.7% and adjusted EBITDA was $602.6 million, an increase of 4.5% over 2024. Most notably, levered free cash flow, which we forecasted to be a use of $70 million to start the year finished the year near the midpoint of our most recent guide with a use of $12.3 million.

As I frame up our 2026 guide, I want to highlight a few areas that will be relevant to your models going forward. In Q4, we began to see the expected shift of some previously capitalized cost to OpEx, particularly around cloud computing costs, which is normal for technology companies that move from on-prem data center usage to the cloud. This will have a $0 cash flow impact this year as we expect total capital investments to remain consistent. This transition will increase OpEx and thus decrease adjusted EBITDA with a corresponding reduction to related CapEx in 2026 and going forward. I want to be clear that our primary financial objectives this year are driving revenue growth at good margins, combined with a key focus on improving free cash flow.

As we move through our digital transformation, additional costs will shift to OpEx and we fully expect to realize meaningful synergies as we outlined in previous calls. At the end of the day, we are focused on total dollars spent, whether expense or capital. So you will hear us focus more on free cash flow and adjusted cash conversion as key metrics to highlight progress against our multiyear strategy. From a go-to-market perspective, Q4 after a remarkable year of sales motion. We exceeded our internal expectations, finishing the year at $60 million, $67 million in ACV booked and having closed more than 650 opportunities. In 2025, we closed more than 100 deals of over $100,000 of ACV up 30%, with the average deal size improving by 50% on a full year basis. The pipeline for 2026 is already strong, and we expect to continue last year's momentum with both existing customer white space and new logo additions. We expect to deliver strong double-digit ACV bookings growth in 2026, which will begin to convert to revenue towards the end of this year and into 2027. These results are rooted in the strength of our core offerings, which were responsible for 94% of our total revenue in 2025. This powerful combination of a durable core alongside the investments we are making to deliver new and improved solutions to expanded end markets gives us visibility and confidence in achieving the strategic and financial objectives we laid out last year with the Vision 2030 plan. Simply put, we're getting more hits with more advance.

Now on to revenue guidance. We are initiating 2026 revenue at $980 million to $1 billion, representing 2% to 4% growth over 2025. Excluding the $18 million of onetime revenue in '25, we're modeling 4% to 6% growth this year. While we historically do not provide quarterly splits, given the addition of new ACV and the impact of the onetime revenue, we are providing direction to aid in your quarterly modeling. We would expect low single-digit growth in Q1 with modest sequential growth in Q2 due to the onetime revenue headwind. Then as revenue from new ACV ramps, we expect our growth rate to increase to between 3% to 5% for the second half of the year, adding up to the full year guide.

We have included a summary on Slide 15 of the supplemental deck to help bridge the major revenue drivers this year. It provides more color on how you should model gross revenue retention, expansion and ACV conversion to get to our revenue range. We are introducing full year adjusted EBITDA guidance of $605 million to $615 million with margins of 61% to 62%. For a year-over-year comparison, keep in mind the $18 million of onetime revenue in 2025 flow through at 100% margin. When normalizing for that impact, our guidance implies a 3.5% to 5% adjusted EBITDA dollar growth on a like-for-like basis. As discussed earlier, we expect to incur $10 million to $15 million of OpEx costs previously classified as CapEx related to the movement of our technology infrastructure to the cloud.

Additionally, we plan to invest $20 million to $25 million in our go-to-market and delivery functions to maintain momentum and best support the double-digit -- the strong double-digit ACV bookings growth we have planned. You'll also notice that we're returning to a dollar-based adjusted EBITDA guide. We believe this better reflects how we're managing the business in 2026, with a clear emphasis on revenue growth, disciplined investment and improving free cash flow. Importantly, should we outperform or prepare to thoughtfully reinvest incremental upside to further strengthen our growth trajectory. We are forecasting total capital of $160 million to $170 million, and we're projecting free cash flow of $0 to $10 million this year.

One final point on free cash flow. 2025 included our comprehensive debt refinancing transaction, which distorted some of our metrics. In 2026, we expect to deliver double-digit operating and unlevered free cash flow growth. with adjusted cash conversion normalize into pre 2025 levels at approximately 50% to 55%. I'll add one last thread about the broader macro environment and how that impacts our internal objections. We have recently benefited from a few positive market tailwinds. While there are many market trends we monitor, a few stand out. Out-of-network claims volume, medical inflation and claims mix are the 3 key factors that underpin our modeling and have the greatest impact on our PSAP revenue. In the past 5 years, out-of-network claim volume has remained consistent around 7% of total health care claims. Medical inflation has also remained at historically heightened levels. We have traditionally modeled for more conservative expectations for both volumes and inflation-related growth, which is reflected in our initial guide.

And lastly, our mix has continued to favor seen out-of-network and higher-priced services like behavioral health, urgent care and other specialties that can often occur at out-of-network providers from employer-sponsored health plans. I wanted to end by sharing that our capital allocation priorities are clear and unchanged. At the highest level, we continue to focus on organic investments to fuel our Vision 2030 plan. That's where most of our time and energy is directed. These investments are driving innovation, operational improvements and enabling us to get fit for long-term sustained growth. At the same time, we're maintaining a high priority on debt reduction with a renewed focus on value-creating M&A, both of which will strengthen our balance sheet and position us for more flexibility in our capital structure going forward. All of this aligns with our guiding principles to diversify and accelerate, expanding our solutions, verticals and channels to drive growth, while also delevering and derisking our business to enhance cash flow and operating agility.

With that, I will turn the call back over to Travis for some final remarks before taking your questions.

Thanks, Doug. Before I turn the call over for questions, let me just make one last comment about moving forward from the year of the turn into the way up. The opportunity ahead is real and exciting in the tools for disruption, we think are here, and that's a good thing. We made the turn successfully because of our focus on our clients and the competitive advantage that I described earlier. But a moats not in [indiscernible] companies will need clear and delineated strategies to deploy value to clients in a rapidly changing environment. We're prepared to do that. Despite the turmoil we read about in health care, I believe in those across the ecosystem that care deeply about access, quality and cost. And the value we bring will continue to live Claritev into new heights.

With that, let me turn it over for questions.

Operator, before we go to questions, those on the call, we know there were some audio difficulties at the beginning. Once we are done with the call, we will post the transcript of Travis' comments on our website for you, so you'll have the access to them.

So with that, operator, we'll open up for questions.

[Operator Instructions] Our first question comes from the line of Joshua Raskin with Nephron Research.

Josh might be muted. Operator, can we maybe move to the next one. We're not hearing on right now, and we can maybe get them back in queue.

Your next question comes from the line of Louis Mario Gager with Citi.

Operator, if we can pause, I'm getting word that it sounds like the phone lines, you're not getting audio but the webcast is. So if that's true, can you please check that on speakers and see if you're getting audio from them if so, [indiscernible] through?

Yes please hold. [Technical Difficulty]

Thank you for your patience while we are experiencing some technical difficulties on today's event. We are currently troubleshooting with our internal team as we speak. I will revert back with an update as soon as possible.

Alexander, thank you. Can you hear us?

Yes, I can.

I think given -- to everyone on the call, I apologize for the technical difficulty because it sounds like the webcast is working, the phone lines are not, so given that rather than hold this, we will cut the call now, and we're glad to call it you ask the call if you have questions, please feel free to send questions to investors#claritev.com or give a call. Thank you very much for your time.

All right. Thank you, everyone, for joining us this morning. My name is Harry Pearson. I'm with JPMorgan's Healthcare Investment Banking team. It's my pleasure to introduce Travis Dalton, President and CEO; and Doug Garis, CFO of Claritev. We're going to have a presentation followed up by a little bit of Q&A. Travis, do you want to take it away?

Yes. Thanks, Harry. Appreciate it. Good morning, everybody. Thanks for your time. Thanks for being here. As noted, I'm Travis, I'm the CEO, joined in March of '24, and then Doug Garis, our CFO. So thanks for -- thank you for having us. Okay. So I'm going to take a walk through the park of the org that is formerly known as MultiPlan, now Claritev. And so what I'll do is take you through a little bit of our vision, some of our product set, how we've been thinking about the transformation of the company and where we're going.

So look, our purpose statements can become pithy, oh, wow, you guys are about transparent. This is what we do. We've done it for 30 years. So interoperability was the word of the decade, last decade. Transparency seems to be the word now. But to make it simple, we bring really clear insights around pricing. We bring clear insights to employers that are seeking to manage risk and employee benefit. And we're -- we've been focused on affordability solutions in health care for almost 40 years.

So we've gotten pretty good at it. And if it doesn't fit into this purpose, we don't -- we're not going to do it. And so we're not after a shiny lure. We're not making a huge left turn. We're going to focus on innovation inside of this purpose. Look, we serve it really -- it's probably not fully understood, the number of constituents that we have in health care. And one of the reasons I came to the company was because it serves the continuum of care, not just one segment.

And so we do have 700-plus payer clients. We're actually very proud of that. It's not 1, it's not 10, it's 700. We have a lot of clients. Health plan members, plan sponsors, we have a 1.4 million provider network. We have a -- it's a crown jewel of the company that I think has been underinvested in, and we're investing more in our network. And so all of these things work together to find -- to see claims, we have claims expertise, but also to find savings and value in health care. And that's the continuum of care, and we operate across it, and we're actually really proud of that.

And our solutions fit together in a really nice way, which I'll talk about. We've been on a journey since I got here. I think we're proud of our progress. We were -- Doug and I were joking, there aren't too many CFOs and CEOs at the end of last year that were upset that their stock was only up 180%, but we were up 180%, 190% year-over-year. We're proud of that. We still think we're wildly undervalued in my view, and we're going to prove that.

But our journey is -- it's not -- we're not -- I didn't come to do financial engineering. I came to build a great company. And so to me, building the company is the thing that adds the most value. It's also the thing that's exciting. And so we've been laying the foundation for a long-term sustainable growth over time, right, not just short-term thinking. And so we have some structure we put in place in '24. So clarity, alignment and focus, all of our people could tell you about this. Clarity of our purpose, which I discussed, alignment of our talent, and we've turned over and upgraded our management team and a focus on key priorities.

We've built the company around that. We spent last year called The Turn. We like to name things. I do because I think people can get their mind around something when it's called something and they have a goal. Last year, we called The Turn, and I'm really proud to say that we returned to growth well ahead of where I thought we'd be, honestly. And so we had several sequential growth quarters. We're happy with how the -- we'll be reporting our results here in a few weeks, but we're pleased with our progress.

And then the other thing that we did was, we spent last year building a sales team and putting together a go-to-market function that, frankly, was just nonexistent. And so we're just getting started. We're just getting started. I mean we've had monstrous pipeline growth, bookings growth. And so that's a nice forward indicator for us on our revenue conversion that we're going to have positivity forward. This year, we called it The Way Up.

So our goal is we intend to grow. Our focus is on growth. I tell the team that means we're going to focus on the real economy, bookings, revenue, expenses, free cash flow. The shareholder value will come when we demonstrate enough consecutive performance and credibility. And so we're going to focus on that and focus on growth. And then The Way Forward for us, we'll talk about, but I think it's really as a technology company that really can sustainably grow in a diverse way. We're not so highly concentrated.

So we're diversifying our client base, diversifying our product set. And now we're able to grow and sustain that growth over time in a real meaningful way in a changing environment in health care. And the market challenges aren't new to anybody. I wouldn't say we take glee in these challenges. We're all consumers of care in some way. But I could flip them off for you, it's cost inflation, regulatory environment is highly fluid, transparency, fraud, waste and abuse. These are all key words, key topics, key regulatory topics.

We have products and solutions that fit into every one of those areas as it relates to affordability and transparency. We are really well positioned in a high cost increase environment, but also a highly changing environment because we're flexible. And one of the things I liked about the company when I joined was that it's -- we're big enough to matter, but we're small enough to move fast, be agile and flexible. And so we can focus, and we can respond quickly, which is one of the things I think has been a strength for us with our clients.

And so in that environment of medical inflation and waste, and we should catch some of that nascently just through health care economics and our core products. But I think some of our newer offerings should lean into those trends as well. And so I like our position with tailwinds on the macroeconomics of things.

So how are we building the company? Look, we -- our goal was to do it from the bottom up. So we made a material investment in our legacy technology. We moved -- we're -- almost all of our products are now in the Oracle Cloud. So we made a massive investment last year to get our technology infrastructure in place, to get cloud enabled, to get off of on-prem and to unify our data architecture was the second thing. So technology infrastructure, we're scalable, we're malleable. We're on the Oracle Cloud. We're using modern tools.

We've rewritten our legacy apps. We're in the process of doing that. I don't think a lot of our competitors are doing that. I think that, that's different over time. Over time, that shows up different because you don't have legacy tech debt. And so that's important for us. We're unifying our architecture so we can utilize data models, AI, other tools that are coming. It's not just about the widget, it's about the data infrastructure that underlies it. That's important.

So we're making those investments that I think will yield long-term advantage for us. You've seen our product areas. We'll be launching a strategic services focus this year. We get asked for strategic services all the time. And in the past, we've more or less just given it away. We're not going to do that. We're going to be very intentional in what we're doing, and our focus in that area as we seek to provide more value.

And then as I mentioned, we've launched new market verticals. So we're now selling into payers, TPAs, brokers, consultants, government providers through channel partners in a material way. And we've launched an international business in the last year using our same core products that we have in the U.S. internationally because they're on the same U.S. coding standard, have the same data infrastructure and many times use the same EMR, which is the world that I came from.

And so this is our vision is we're building something here from the ground up with technology, digital transformation at the forefront. I think that's built to last. So where does that take us? Over time, we've got the right people. We're serving more of the health care ecosystem. I've mentioned sustainable growth over and over. We've got a capital structure that fits our needs. We know we have work to do there. We're going to continue to mature our capital structure as we go forward.

But we're not looking to make sudden movements. Our goal is to grow this company and delever over time organically. And if something comes up advantageously, we intend to take advantage of it. But we'll do that from a position of strength if we're performing. And so we're going to continue to work on that and then being able to just tell the team, our say/do ratio has to be 100%. Say it, do it; say it, do it, you do that enough, good things happen.

And so we now have the ability with Doug and his team here to call a number and hit a number predictably. And we've started to show that progression over the last 3 quarters as our say/do ratio has improved. Many of you may know the company, these are products and offerings. Our claims solutions are very focused on bringing insights to what I would say is an extraordinarily opaque part of the market. And so a lot of what we do there with surprise bill and Data iSight is we simply bring back a price for something that isn't clear, isn't transparent, isn't known. And then we try to clear the market in that way.

We don't make those decisions. We don't set those prices. We simply bring an insight. That's what we do. And then decisions can be made around that by those that are relevant stakeholders. We have a network, as I mentioned. One of the things that was interesting about the technology innovation for us is that we can now curate networks much more quickly.

We had a big complementary network or primary network. It was large. It covered a lot of areas. That's valuable. But what's more valuable is if someone comes to me and says, hey, I'm thinking -- a partner, a client says, "Hey, we're thinking about the Southeast. We're thinking about Florida. We're thinking about behavioral health in New York. We can actually cultivate a network like that." So one of the things that we've done with our technology innovation is coming up with a product called network builder, where what used to take us 6 months now takes us click of a button. So we can immediately come up with custom network solutions for clients.

That's different. That's unique. I think that will serve us well with this product as we go forward. Payment & Revenue Integrity, it's a growing segment for us. It's important for us. We like that business. We think it's going to do well. And those 3 things really fit well together, and most of our clients buy them all when they buy. So we're getting better at bundled selling because we brought in a more mature sales team. We've really upgraded our leadership team on the sales side and hired a Chief Growth Officer, and we're starting to make progress.

The star is our downmarket -- kind of mid- to downmarket solution for smaller employers, which is an all-inclusive network RBP product and then our data and analytics business, which are solutions that we use for providers and others where we bring back insights based off of publicly available data. So for a provider, we can basically look at their charge master and tell them with clear specificity, exactly how they're priced against competitors of like size and like regions and a clear understanding of where they sit inside the network ecosystem and how their employer networks are structured. That's pretty important.

And we also have used it ourselves, which Doug can describe. In the last 2 years, I haven't been able to find anybody else that can say this. We've been able to improve our employee benefit and take out $4 million of real cost. Our plan costs have gone down 2 years in a row because we use our own product. So we're able to evaluate our demographics. We're able to look at high risk. We're able to use BenInsights to predict where our high-cost claimants are going to be.

And we have the ability to evaluate that very clearly against the many, many iterations of plan benefit on offer. We think that's a huge opportunity. And that's part of the work we're doing with Oracle as part of HCM integration, where we're going to put that inside of Oracle's human capital management system as an offering through Oracle channel for employers that want real-time insights on their employee benefit plan and predictable insights on their cost structure. A pretty big deal -- that's a pretty big deal.

I don't -- we're going to unlock that as a big deal, and we're going to prove it. But we're going to demo that here soon, and it's an amazing product and capability. So market aligned. This is when I say -- the strategy of the company is horizontal products across vertical markets off of our core and innovate out. And so the red box was -- basically was the whole structure of the company when I came. 99% of our focus is in that small area.

Since then, we've been able to expand our TAM dramatically because we're now selling into many, many other market verticals with existing products. So we did not need to do a lot of customization for our product set in order to expand our TAM, increase our bookings, increase our sales potential. I have many examples of this. The easiest one that comes to mind was international. I covered the Middle East when I was at Oracle and Cerner.

I have many relationships. They have the same problems there that we have here. Denials are too high. Costs are too high. Clearinghouses are inefficient. We were able to tackle that with our Advanced Code Editing tool. So we just took our ACE tool and just put it on top of the RCM for Burjeel, and we're able to drive denials down by 7%, which is $70 million benefit to Burjeel. That's what that was about. It wasn't about seeking something -- it's not fun to go for a 15-hour flights to Dubai all the time.

But it was low-cost entry into a new market using current and existing products. And we think that's real potential for us over time. I mentioned our addressable market, I'm not going to spend a lot of time on this. We could -- we'll size it up. We've had a ton of discussion with our analysts and others. But our market potential has increased dramatically in the last 2 years. We -- that's going to show up in results.

So our growth vector, laser, laser-focused on our existing clients and growing the core of the business with better innovation on things like the network, payment revenue integrity, deploying AI against our NSA solution and improving our win rates for IDR. Those are the kind of things that -- that's bread and butter to us. We're going to do that. Advancing growth areas, so that Vistara product was an acquisition. BenInsights was an acquisition.

We've been spending last year integrating those solutions. Now I think we're ready to launch and start to show better results against that. New market verticals I've described and then product innovation. And so we've stood up a product organization in the last 1.5 years, and we have a CPO. And so we've been spending a lot of time. We're going to publish our road maps, imagine that. We have over 30 solution enhancements this year and 10 new products coming out. And that will be published. It will be known. We're going to put it in front of our clients. We're going to stand behind our commitments.

And that's how you grow a technology company is with clarity, alignment, focus, publish road maps and then you listen. And when you listen, you get better because your clients will help you define your road map that matters most. So kind of -- I get asked this question a lot, like why can't someone just replace you? Why is this so sticky? I mean there's a couple of reasons. I think one is, it turns out relationships do matter. We've got 30 or 40 years of experience with our clients. We have deep-seated relationships. We cover our clients top to bottom. We care about them, they care about us. That matters.

We've been writing custom rules and creating custom capabilities for each of our clients for years. So we have 300,000 to 400,000 custom business rules that are written. That's hard to replicate. We have data rights agreements with them. We have access to contracts. We have access to the things that you need, even with AI, it turns out. You can't just throw a widget on top of something if you don't have rights to the data, you don't have rights to the contractual elements that you need. We have technology and scale. We see a massive amount of data. We think that's useful for us. We have a high provider acceptance rate.

Contrary to what you may hear, we actually -- over 90% of the time, it works extremely smoothly. We bring back a transparent insight that wasn't well known. The provider agrees to it. We financially negotiate it, and we move on and everyone is better off for it, including health care. And we respond quickly. Our clients need something, we respond.

NSA is an example of that, state surprise billing is an example of that. There's a number of products and solution areas where clients have asked us to come in and help them. We've been able to do it like that. So all those things create, I think, a competitive advantage on top of the massive investment we're making in technology and analytics. And so together, we like our competitive position.

And I tell people, we're not the thing looking for an exit. If we're going to do that, we would have done it when we restructured our debt. We're here to last, man. I came here to build a great company, not to create something that we're going to exit quickly and monetize. So I also think that's differentiated from many of the point solutions that are out there seeking to be gobbled up in some other way.

So with that, I'm going to turn it over to Doug, and he'll go through our financial overview as we go forward.

Thank you, Travis, and good morning, everybody. All right. So I can't have a financial overview with our deep financials. So when you look at our Q3 print, we grew our revenue by 7% on record EBITDA. And so over the last 12 quarters, our Q3 print was our strongest revenue print on an absolute dollar basis on our adjusted EBITDA. $155 million was our strongest quarter in 9 quarters.

As Travis mentioned, when we laid the foundation for 2025, it was -- we joke around and say dunking on a 7-foot hoop. And so we had initially guided the year down 2% to flat, and we are cautiously optimistic to make sure that we could curate a recovery in the second half of this year so that we can monetize eventually a significant investment we're making in our technology infrastructure. And so we are really pleased with Q2 progress.

We had a beat and raise. We came right behind it in Q3 and had another sequential growth quarter. And importantly, a consistent approach to our revenue and earnings that allows us to make significant investments. And when you think about it, on an annualized basis, we spend about 14% of our revenue in R&D. And over the recent year, we've actually been able to accelerate investment in R&D with the culmination of our Vision 2030 transformation, which is predicated on our technology journey with Oracle, first with our lift and shift to OCI, which was completed in September, followed by the repositioning and rewriting of our core legacy applications, which will conclude over the next few years.

And on a net incremental basis, we're going to spend $100 million on that technology transformation. And as Travis alluded to, over the last 5 years, we've spent $0.5 billion in our core technology stack. And so on an ongoing basis, we're going to spend $160 million, $170 million a year to stay ahead of the curve, ahead of our competition, investing in problems that our clients have to future monetize that.

When you think about our business, it is an out-of-network repricing business, cost containment and affordability. That's about 60% of our revenue. And our revenue model is an ROI-based revenue model called percentage of savings or PSAV. Simply put, we get paid when our customers get paid. It's an extremely sticky business. It's a durable business, and it's a very profitable business.

And so in a given year, we reprice about 13 million claims. And when we look at the -- a true statement of health care inflation, I think this graph perfectly shows the trends that we've all seen and experienced over the last few years. And so over the last 12 quarters, our savings in revenue per claim is up nearly 30%. So a couple of things are happening. One, health care inflation is happening and it's real. Two, the mix of claims that we're seeing that are going out of network have trended much more highly towards high-cost claimants, specifically in surgical, ASCs and behavioral health where our products and our insights perform extremely well.

And finally, when you look at this base, our percentage of savings business, it's about 90% of our revenue. And so on a sequential basis, while we've seen less claims go out of network, we're seeing much more high-cost claimants, which is emblematic of the types of claims that we're seeing go out of network, which, again, is heavily mixed towards things that are happening outside of the 4 walls of the hospital, namely in ambulatory and in the behavioral health sector.

When we think about our strategic investment prioritization and what Travis and I and our leadership team are spending a lot of time focusing on, first, second and third is our organic growth thesis with Vision 2030. We joke around that it's not vision 20 minutes, it's Vision 2030. We refinanced the company at the end of 2024 and into early '25 so that we could set this business up to unlock growth.

And once we get this business growing, our core business, that allows us to invest in new products and innovation. But make no mistake, we're spending $100 million in digital transformation, our Vision 2030 plan over the next few years with high expectations to get operating leverage, scale advantage and revenue acceleration.

Next, we are in a highly levered situation. We're going to end the year a little under 8x levered. And over the next few years, just through the organic growth of the company, we expect to get approximately half a turn or more of leverage reduction starting in '26 and carrying through the next few years. So that when we get to our refinancing window, we can regular way refinance the company if we so choose to. And then we recently elevated our focus on value-creating M&A.

We have had a little bit of constraints within our capital structure because of our high levered situation, but we are investing in things on a bite-sized basis that are strongly aligned to our core focus and then most certainly on our purpose, which is anything related to affordability and transparency, we're going to take a look at this coming year.

And then when I think about what gets me excited about the future, there's a few things. First, we talked about our essential role in the health care ecosystem. Travis had mentioned hundreds of thousands of business rules and customizations. As we think about how AI is going to impact the future, AI embedded in workflows for key processes and systems is going to win. And so when we look at payers and TPAs, that's our largest segment.

We provide immense value to a profit restricted component of health care that is a big piece of the market. And then as we unveil and unfold new solutions in the provider channel to employers, that only is going to deepen our moat which is predicated on having 15 petabytes of claims data, processing close to 6 billion transactions a year and spending quite a bit of money to take advantage of the benefits of our tech modernization, which is well underway.

We do have an operating platform that's built for scale. Historically, we sold our products as kind of point solutions to buying offices within a payer's total buying office. There's a great opportunity for us to bundle our services, and we've had a couple of great wins this year to where we've been able to transact enterprise-level deals, bundling our core services with some of our new technology. And I would expect us to announce that in the future, too, because it's been a great win for us.

And then a few other things, innovation. We're going to spend a little bit of our time on innovation. And we're going to focus on things that attach to our core products. We're also going to partition a little bit of our capital to focus on what's next in health care, and we have a few really interesting ideas. But what that leads us to is we have a strong recurring revenue core business in multiple avenues to unlock growth. '26 is a critical proof point for us now that we've stabilized the business to focus on execution.

And then finally, what we'll land on is we have a refreshed leadership team that's truly in year 1 of us being together. And so over the last 1.5 years, Travis has done an incredible job assembling a world-class leadership team, from technology, from the provider space, and really the minus 1 and 2 leaders that we've hired. Now we are focused as a leadership team. We have 2 or 3 big things that we're working on, and we're really excited for what '26 and beyond holds.

And with that, I think we'll wrap it up and go to Q&A. Thank you.

Thank you both so much for that comprehensive walk through. I want to kick off with one question. Travis, maybe turning to you. You mentioned Vision 2030 and branding 2025 as The Turn. Can you describe some of the biggest changes that you've implemented as part of The Turn since becoming CEO 2 years ago? And what are the reasons? And what was the genesis of that decision?

Yes. Happy to. I mean it's actually the thing that excited me most about the opportunity was the fact that, one, my core belief was we had a lot of products that I thought worked really well and added high value, that could be extrapolated into further growth opportunity across multiple markets. Two, really good people with a service culture. And so those -- that combination of good people, lots of knowledge and market relevance and product, I thought, was underutilized or undervalued wildly.

And so as I looked at the opportunity, I didn't see the problems with that. I saw the potential. I knew we needed to professionalize the company. It needed to run like a public company. And so part of the job first was starting a maturation process of let's bring in senior leaders and executives that are highly motivated, highly incented and then have run in big public growth environments before, that can come in and set up infrastructure and the capability to run as a public entity first.

So laying a foundation that matters, getting all of our associates aligned behind one single purpose, which is affordability, driving out cost and then ultimately putting clear KPIs on that. I tell the team, you get what you inspect, not expect. And so we inspect the business every single week. We have EBRs, QBRs. We have all those things you would expect now so that we can be -- not just react, but we can also be proactive.

So it's been setting up really good infrastructure, bringing in great people. And then as I mentioned, what was, I would say, shocking and optimistic for me was that the company had done well with no sales team, really. I mean we had an account team that covered our core clients really well, served them great, but we didn't have a new growth, new logo sales team. And we didn't have a cross-sell team that really was attacking white space on existing clients.

So we've massively increased our pipeline, our funnel. And at the same time, our pipeline has grown, our bookings have grown and half of that -- over half of that is in our existing client base, which when I joined most people told me, "Oh, fully saturated man, your toast. No way, man." Like we've got half of our opportunities in those existing clients.

And then we're attacking new logos. I think we've had over 20 new logos that we reported out already, the first 3 quarters of last year. So it's really been that progression of doing it in a structured way with discipline, focusing and just pushing forward. And then I should also mention we took a big step by restructuring $4.5 billion of debt. So that was no small feat. We pulled off the Triple Lindy.

We were able to get that done. That was Christmas Eve on -- in 2024, right? So we had a -- we did not have a holiday that others had because we were working on a complex debt restructuring, but we got it done. So that set us up to focus through vision through 2030 in a way that we could run the company with -- for growth and with mature into our opportunity versus having something looming or hanging on us all the time. And so really, that's how we've done it in a methodical, structured way. with leadership and discipline and all those boring things that are just true, right? Those are the things that matter most, right? So that's how we've been building the company off of the vision.

That's great. It's really helpful. You mentioned you have obviously hundreds of customers. Can you also speak about the larger customer relationships that you've had and those long-standing ones? How have those evolved since you've joined? How are you servicing them differently and thinking about helping them as you've built out this much larger suite of product portfolio?

Yes. So we've done -- Doug can jump in too. We've done a couple of things. So one is we realigned the alignment part of clarity, alignment, focus is you align the structure of the company to what you're trying to achieve. And so one of the alignment things we did is we created a client success organization that's wholly and solely focused on existing clients. That really didn't exist.

So it's a different way to serve a client that's worked for me well at other companies, other places I've been. And so that laser focus on those client relationships and servicing them well is really the credibility that keeps them with you. And so focus, focus on senior level relationships, I've been involved with them as well as the rest of our team, expanding their knowledge of who we are and what we do. Most of them weren't even aware of BenInsights in a meaningful way. That's a great product set for us.

So I think it's been a combination of and the team will tell you is -- I tell them -- I use the Anaconda and say Anaconda thing, all the time, look, if you're going to bring me a solution, it better be the whole solution. And the problem is x, you surround it with people, process, technology and you attack it. So we've thought about our clients that way, not just in a single way like can I sell them another bit.

It's, hey, who are the people on the account? Do I have them covered? How are we servicing them? What did they say on their earnings call? What problems are they trying to solve? So we've really done that. And then it's culminated in the renewal of our top 10 clients. So I don't -- I'm not sure many people would have thought we could do that in a year. But we've been able to renew our top 10 clients for multiyear terms, which was not the structure before. So we're not only serving them better, but we're actually lengthening the terms of service that are committed to us, which gives us, again, room and space to operate. Do you want to add anything, Doug?

Yes. I would just say our top 10 clients are 70% of our business and client concentration is a great thing. If you have infrastructure in place where you're serving needs, I think we've demonstrated that with approximately 60% of our pipeline being within our top installed base. And so I think another important thing, too, as we talked about earlier in the presentation, having a robust product organization with a product road map allows you to have a different conversation when you publish what you're going to do.

And if it's off-kilt or off message with our clients' problems, we have a mechanism now through a client success organization, partnering with a product organization to say, you spend a bunch of money on these 3 things, our clients won't buy them in 3 quarters. And so that flywheel of having customer concentration is not a great thing if you're not nurturing your clients' needs. We actually view it as a significant opportunity in the future because we've spent this last year putting the proper protocols in place to have that feedback loop. So if a customer or a client has a need, we have the ability to move pretty quickly and build a new product or fill a service gap for a large customer base.

That's interesting. Yes. So really closing any daylight between you and your clients. We have a few minutes. I want to check with the audience if there are any other questions from the gallery.

Great job, guys, on the presentation. You talked about your network builder a little bit and how you've accelerated the time line to developing it. Very interested in that. Maybe tell us more about the network builder. And also, do you think your movement to a more modern technology stack has contributed to that faster time line?

Yes, absolutely. So that, as I mentioned, when I was talking, the prevailing view was that the network was kind of a decaying asset or a negative growth thing for us. I -- we saw that completely differently. And so I saw a massive potential in our network products and capabilities, not just with, I would say, curated or narrower networks, but also more aggressively selling our complementary network, selling through new channels like TPAs, brokers, consultants and being very aggressive in bringing that asset forward.

So it's allowed us not only to drive some positive growth, but it also is an anchor that you can pull other things through. So as we've sold the network, we've been able to pull through other products and services behind it. Specifically to your question, we -- there's no way we could have launched the network builder product without the digital transformation and technology investments that we've made.

So the fact that we're on modern technology, and we've been working on data architecture as well, so we can unify our data architecture against many legacy acquisitions. We now can do things like that, that used to take us months or weeks. Reports are much faster. We're able to do things like quickly evaluate and understand our network concentration in certain areas or parts of the country or with certain specialties, as I mentioned. And so the technology story wasn't really about, hey, I just love to do -- I want to call my friends at Oracle or pick your brand, it doesn't matter.

It really was about we need to make things better, smarter, faster for clients, and network builder was an example because now a client or a partner can come to us and say, hey, I'm getting a lot of demand for something across a certain specialty in a certain area, and we're able to very quickly evaluate that demand against the providers in the area, the discounts on offer and/or guess what, it turns out, we also have the ability to go create that. A lot of it exists, but if it doesn't, we're very good at servicing a network. And so we can go build it out or round it out in a meaningful way. And so the 2 things absolutely go together. And the last thing I'll say is that, that technology story also is very relevant to our international business.

I could scale into any Oracle Cloud infrastructure platform in the world like that quickly because we're on the cloud infrastructure. So we didn't need to go do a bunch of on-prem. We didn't need to go set up a bunch of physical assets. We were able to quickly deploy our resources in a sovereign way to meet data rights and data sovereignty agreements in particular parts of the world. That's a huge advantage for us, huge. So all of that kind of plays together. But that was -- hopefully, I answered your question on network builder. Yes. Thanks for the question. Appreciate it.

Thank you. We are a little short in time. So maybe just a quick one for me. If we fast forward a year and we're back here at JPM's Healthcare Conference, the 45th, could you give me maybe 1 or 2 things that each of you would be hoping to update us about Claritev and your journey?

Yes. So first and foremost, this year is a year of execution. So revenue, EBITDA, free cash flow, we're at the watermark now where our business is going to start delivering levered free cash flow and the progress against our capital prioritization, this is a year of proof, right? We have higher expectations. It's a year of delivery. So I would love to come on stage and present a financial growth story with strong EBITDA and free cash flow contribution.

And the second thing is, as a product and technology organization, we'd love to actually explain our business in the context of some of our product innovation. We have a couple of really interesting things that we're working on. And the best way to describe it is to look, touch and feel our new products. So hopefully, we have something much more meaningful in the new product and innovation front to showcase or present next year.

Yes. I would say our -- as I mentioned, the obvious ones are numeric, as you would know, right? I mean, we're going to focus on revenue growth, client acquisition. We're going to focus on free cash flow. But beyond that, I would say one thing that I -- really is important beyond some product launch and interesting things we're doing is we're -- is our people. It's our people, right?

I mean, to me, we measure the "satisfaction" of our employee base, great places to work. We participate in that. We listen. At the end of the day, my fundamental belief is you get enough really great people that are committed and motivated and have purpose. The purpose and the personal will go together in a way that you get so much momentum that's beyond any single leader.

And so I want all 2,800 of our people to be fully vested and committed to what we're doing in a way that matters most. And if we get that, there's no doubt in my mind we're going to persevere long enough to be wildly successful. And so that's a key focus for us.

Great. Travis, Doug, thank you so much.

Thanks, Harry. Appreciate it. Thank you.

Thank you.

Thank you, everyone. Thanks for -- I guess, first and foremost, thanks for everyone for joining us at the conference. Really appreciate it. And we especially want to thank, I've said, the management team starting with the team from Claritev Corporation. Doug Garis, Chief Financial Officer is with us.

Doug, a lot of great things to talk about. I thought maybe we'd just start by general introduction. Obviously, it's been a good year, a big turn. So, I thought maybe we'd just walk through the dynamics that and then the level set, and then we can go from there on question.

Yes. Great. So, good morning, everybody. Maybe to start to show off here. My name is Doug Garis, Financial Officer of Claritev. I've been at Claritev for a little over a year now. Been a fast year. 2024 for us was the foundation, which we've talked about in external markets. 2025 was the turn, which we announced that we successfully completed. And now we're focusing on the way up, which is creating a sustainable growth company. And so, a lot of friendly faces in here. Glad to see a packed audience. We're so early in the morning.

But by way of background, I was formerly at Cerner. I was part of the team that sold Cerner to Oracle. Travis and I ran Oracle Health for a period of time, done a lot of interesting things in my background, kind of multiple disciplinary. And I think the opportunity with Claritev, what really attracted me to Claritev was the asset base, and we keep talking about the strength of the core business.

And part of our stabilization plan this year was making sure that we had a core business that we could refinance the company against. And I think what we've discovered is, by and large, all of our businesses are growth businesses, and we have five kind of internal P&Ls that we manage and we've opened up six new market segments. And so, we're really excited to be able to give some color as this business has stabilized and recovered.

And as Travis and I really think about the way up, there is an interesting problem that we have as we're going through our internal planning process. There's too many things we could do. And so, we're really focused on discerning the critical few. And the two or three big things that we're focused on are very well aligned to our core business and our core markets. And I know we'll get into it and talk about it, but that's what we're really excited to share.

Great. And I hope this was coming across, but can you walk us through -- you talked about the six new market segments, kind of your go-to-market strategy, which has been particularly relevant in the past couple of quarters. Can you talk about that strategy in a way kind of compare and contrast to maybe what wasn't there in the past or how it's different from the past? The way we think about the company.

Yes. Yes. And so, the market segments and the kind of the beautiful thing about the business, is we spend quite a bit of money on R&D every year. So, about half of that is to support the current products and then half that we get to choose, we want to invest in. And so, the former multi-plan was known as an affordability and cost containment, payer services company. But what's underneath the company was an incredible set of technology assets, albeit a little bit aged, but extremely well kept. And serviceable to new markets. And so, over 90% of our revenue is still in the payer and TPA space.

So, we do business with the 700 largest payers and TPAs. You pick a payer or TPA, we either sell them a network, either primary or complementary. We have payment revenue integrity, prepay and post pay. And then we have a whole range of out-of-network solutions that focus on affordability and cost containment. That's what Claritev was known as.

The new markets that we've opened up, starting kind of left to right is the provider market. So, we've developed a couple of new products, one of which is a transparency product called CompleteVue, that focuses on all the publicly available data, uses a little bit of our secret sauce and our data asset and provides pricing transparency to providers so that they can better negotiate their network rates with payers and/or TPAs. So, that's a nascent area for us.

What's really interesting, too, is that our Advanced Code Editing, which is our second pass payment revenue integrity product has application for providers in international market. And that's where our expansion into the Middle East has been pretty incredible. And so, our Advanced Code Editing focuses on denial management for payers. So, it catches a claim before it gets paid and something ostensibly went wrong with the coding.

We fashioned the Advanced Code Editing with very little R&D and put it right in a provider's RCM, so that they can manage denials and reduce their denial rates in an international market. And so, when you think about providers in international, we think that the problem of affordability is a global problem. We started in the Middle East because that's where a lot of the money is.

But as folks need private health insurance or better health insurance and coverage, a lot of the kind of international community is procuring doctors. You look at the Middle East, the denial rates are 30% in some countries. And so -- and you get one chance to manage a denial and then you have to resubmit it to next year. So, that's the kind of provider in international markets.

We also opened up a government segment. So, we're selling our core products into federal agencies. We had a nice win that we'll probably broadcast on Q4, that's still going through the process. But no new sales motion other than to put folks in the federal and state and local bidding systems. We think there's incredible opportunities in state local markets. And then, we also think there's some incredible opportunities doing things like selling our network through federal agencies. And so, this one in particular was through the CDC, and we're the subcontractor on a pretty large fit at a prime one. But that is -- the next market is a government market, and it's very nicely attached to our core business.

And then finally, where we think that there is a incredible opportunity is in the employer space and through the broker channel. And so some of our new solutions, namely Benefit Insights or BenInsights, is a health intelligence platform that basically takes a look at an employer, self-insured employers data and helps you manage the risk of your population, native within a human capital management solution.

Why is that important? As a CFO, my second largest expense item is my carrier cost. So, what I pay to United or Cigna is number two behind my W-2 wages. So what I pay my people is number one, what I pay to an insurance carrier is number two. The buying behavior for health insurance has been, "Oh, gee, what's going to happen next year?" I'm going through the renewal process, and I get a 10% increase coming.

That's what's happening right now to all CFOs, Chief People Officers or self-insured companies who are looking at the '26 benefits renewal cycle. We're able to use BenInsights to make sure you buy the right insurance that you can go through and look at if you're doing an RFP process, look at the additional carriers.

And what's really important is, we're embedding our technology native within human capital management. So, we think the next 10 years, as people talk about AI, we are an AI company as well, and we're embedding our technology right in the workflow for human capital management. That's important because somebody can make -- a CFO can make a decision to buy or BenInsights software if they have Oracle human capital management, and it's not a 6- or 9-month sales cycle. It's right there in the solution. And so, those are the six channels and verticals we're thinking about, and we're activating against. And you'll see when we report earnings, we're going to start to give more color.

A lot of the new verticals outside of the payer and TPA space are still nascent. But some of the velocity we've had on the bookings front, it will eventually turn into revenue. But we're highly encouraged, because we didn't have to do any shady or lures or any tricks. We just had to put a go-to-market strategy with a bartering sales force and activating the channels, and it's worked out pretty well.

I follow the company for a number of years. I mean, historically, the international footprint that you're talking about is something that was absent from this platform. I mean, how opportunistic is the international platform within the kind of the six channels, if you will?

Yes. So when we -- actually, when we refinanced the company, we didn't even have an international strategy. It's something we kind of stumbled into. But from my previous life, Travis and I, when we were at Oracle, we -- Cerner and then Oracle, we were in 32 countries. So there are 32 countries out there with U.S. coding standard, CPT-10 or near U.S. coding standards like CPT-11 and Australian coding standards, to have a U.S.-based EHR and who have a revenue cycle function.

And so, the opportunity was there to add value. I think we used and leveraged some of our previous relationships to start exploring use cases. And what we found is applications through denial management for providers. And I think we'll be exploring other areas. There's probably some business to do with either national or private insurance and new markets. But what's clear is there's about 3 dozen countries who have kind of exported some of the inefficiencies of the U.S. healthcare system into their markets.

And when you look at the U.S. healthcare system, we spend about $5 trillion a year on healthcare, and it's probably 5x to 6x more than the next most modern country. But when you total up those 3 dozen countries, there is a huge addressable market, but you have to plant your flag, you have to show up, right?

And I think we've been asked by investors, is it a distraction? It's not, right? It was a great idea, and I think we're going to moderate our growth. I don't need that business to be a $100 million business to be successful. But when we get kind of proof of value and we start getting some major concentration with some nation states and some local providers and payers, we are going to accelerate investment, because there's nobody else out there approaching the market the way that we're doing, especially connecting our solutions through RCM, focusing on the direct to provider.

And to that end, what is the competitive balance on international front?

So there's not really a good compare. So providers, kind of like in the U.S., right, that their smaller providers are doing a whole bunch of exotic things to try to manage denials. And so, they'll typically put an army of folks to try to manage the denial rate.

When you look at a few of the countries that we're either in or going to and I mentioned the denial rate is 30%. Our first customer, Burjeel Holdings, about USD 1.5 billion, a little over 100 provider systems. We put our Advanced Code Editing in our first kind of simulation. We took their denial rate from 7% down to 3.5%. So 3.5%, so we reduced their denial rate by 50% on a $1.5 billion business. That's $40 million of economic value to Burjeel.

Burjeel is a Abu Dhabi listed company. They're a public company in their local markets. That is an incredible value proposition, for a strategic partner and a vendor. To our knowledge, we're the only folks out there approaching the market this way other than just kind of the old-fashioned way of hiring an armada of folks and a provider-to-provider level.

Is that product -- denials will become a greater issue for providers in the U.S.? I think, we're hearing it across the board. Is that a product that you could be deployed here in the U.S. that is...

Absolutely. Yes. So, we announced that we've made a couple of kind of small investments and partnerships as of late. One was with a company called Klaim, which we made a small seed investment and another one was a company called iO Health. We envision healthcare eventually moving into the left through the clearing house into the RCM and potentially even into the EHR. And so, our Advanced Code Editing and denial management and our claims intelligence work even better as you go closer to the provider. And so, the conversations that we're having and the first thing Travis did when he got here is he formed a strategic alliance with the National Rural Health Association.

I can't think of a better population or a more target-rich environment than national rural health providers. They are in the cusp of bankruptcy, most of them, even the most well-run providers have maybe 4 to 6 weeks of cash on hand. And so, when you look at our provider solutions, and the ability to manage denials and catch bad claims before they go out, it's not just a payer problem of managing things that are miscoded, up coded or addressing things like fraud, waste and abuse, right? Those are there. Our products were incredible for that.

We're highly interested in catching the issues much more close to the point of care. The value of doing that accelerates cash flow for the entire ecosystem, right? Payer gets right claim paid immediately, provider gets more infusion of cash flow, not having to go through the dual loop of arbitrating or having a lot of abrasion with the payer. But when you look at some of our newer partnerships, we're looking at building cash flow optimization solutions much more closely aligned to provider markets.

Okay. Great. Thank you. Is there any questions in the audience, please raise your hand at any point in time, feel free to.

In terms of -- I guess it was on the third quarter call, you mentioned the ACV of $40 million, I think it was $45 million year-to-date, and you thought about $60 million for the year. How does that -- how do we think about it if we're looking into '26 and beyond without getting into specific guidance? But how do we see that kind of maturing in terms of what you start to report on a go-forward basis?

Yes. So I think ACV is very well received. Some sort of indication that we can run a growing business, I think, from some of our current and legacy investors is really helpful. We're going to expect to book at least $60 million of ACV.

And if you're familiar with the way kind of software and technology bookings work, it typically takes anywhere from 1 to 3 quarters for those to turn into revenue. And so, there is a huge mix of deals that we've signed. We've actually closed 491 deals year-to-date at an average ACV of approximately $80,000 to $90,000.

And so, the deal velocity is picking up. We expect a good portion of the revenue to occur in 2026 and beyond. But obviously, the closer you get to the end of the year and the more that you book, the more you would expect the kind of revenue to slip into the next year.

I think on our Q4 earnings call, when we provide '26 guidance, we'll do a very sock-puppet simple walk on how to think about our bookings to revenue conversion. But a good -- a decent chunk of the $60 million of ACV will start to turn into revenue in 2026.

Perfect. And within the new product context, is there any one particular product or customer or a landscape that is -- that comprises that $60 million? Is there any one notable?

So, I think, what we have started indicating is our pipeline and the strength of our pipeline. So, our pipeline is approximately $200 million, .55% of our pipeline is within our current installed base. And so the payer -- and so we joke and say, sometimes people view customer concentration as a risk. We love having Fortune 100 customers and solving their problems. So, my top 10 customers are approximately 70% of our revenue. A lot of our opportunities are in the BUCAs and the large payers. And they are kind of longer, more strategic term engagements, highly concentrated, highly accretive deals.

And so, when we look at our funnel, our expansion areas, which are reference-based -- our downmarket reference-based health plan that we've rebranded Vistara, some people might know it as HST. Some people might know it as BDHP. But our downmarket solution, Vistara has gotten incredible traction in the smaller self-insured category given the rate of healthcare inflation that employers are seeing and then our data and analytics business, formerly known as Data Decision Sciences, is where our true kind of software and technology solutions are starting to pick up.

And so, we do risk analytics. We sell our BenInsights solution to brokers. We announced our strategic partnership with Oracle. And Oracle Badge folks are starting to sell our BenInsights solution. So we think about BenInsights as the health intelligence platform. We think that, that will get sold like an enterprise piece of technology and we're excited to share more information. That is 40% of our funnel, just the Vistara and the data and analytics.

So, there is a lot of interesting opportunities. But make no mistake, the core business is the strength of what we offer our payment revenue integrity, our network and our analytics pipeline is very robust.

Okay. To that end, the Oracle relationship, how -- is there more to come from that relationship? Obviously, you and Travis' backgrounds, the teams background as well.

Yes. So we had -- we were at Oracle AI World, which is their big kind of conference, and we had six presentations. So that our Chief People Officer, Carol Nutter, and I gave kind of a keynote speech on BenInsights. We actually had a testimonial on the rapidness of the deployment of Oracle Cloud Infrastructure. We deployed OCI in 9 months, and we kind of joke and say, when I was at Cerner, it would be like until 2035 that we're fully on OCI. Because you're dealing with large health systems and multiple EHRs -- kind of a mess.

Our -- the foundation of the opportunity with Oracle was one of the technology relationship. And so, most companies that have to go through a digital transformation when they embark on the journey, they spend a ton of money, and it takes many, many, many years. We are able to affect our lift and shift to Oracle Cloud Infrastructure for most of our applications in 9 months. That is incredible. So incredible that Oracle even mentioned us on their Analyst Day as one of their strategic enterprise customers.

And so, there is significant relationships kind of at the executive level at Oracle. But if you just kind of, if you didn't know anything and you looked at our technology infrastructure, you would see a tech stack that is running 2x to 4x faster at a 40% cheaper rate to support than our own data centers or AWS, Microsoft or Google.

And so, the impetus behind the relationship started out with getting our technology ready for the future, getting out of the data center business, right, and then being able to affect our products and our go-to-market with different channels in different markets. And I'll give you a perfect example of the power of the relationship with Oracle, we were able to deploy our Advanced Code Editing to Burjeel Holdings and UAE in a couple of weeks.

Historically, if we wanted to put a technology product in a new market, you have to go through all the data sovereignty, you have to find a data center capacity. You got to work with -- it would have taken 12 to 18 months. We're able to do it in a couple of weeks.

So the kind of what's next with Oracle -- now that we're in their partner network and we're live within human capital management, we think the direct-to-employer channel is any self-insured company that has Oracle human capital management that's looking to optimize their benefit plan is a potential customer of ours.

So much so that there's about 3,000 badged Oracle cloud reps that are now starting to enable to sell our solutions through their sales and distribution channel.

On top of that, we have strategic partners like KPMG, some other SIs who are also enabled to sell as well and implement our solutions. We're actually thinking it may make sense for us to open up some advisory services to capture more value. But the partnership with Oracle started as a technology partnership has evolved into a much more staunch go-to-market relationship. It's going to take time to build, but we'll go out to other human capital management providers too, and we'll embed our in technology within ADP, within Cronos, within Workday and some of the other HCMs. But the foundational and the blueprint with Oracle was one that was built on a technical infrastructure that's world-class, and runs way more efficiently than comparable clouds.

Is that what has enabled you effectively to open up those 32 markets, Oracle relationship?

Yes. And so the interesting thing, too, is where Oracle doesn't have -- so Oracle has about 5 dozen public cloud regions. And they're out raising capital to open up a few more mega data centers. I think they're raising like $38 billion of new money to do it. Where they don't have a public cloud region, they can do what's called Oracle Alloy, which simulates their public cloud at a location.

And so, some vendors even resell Oracle's Alloy as a managed service and make money on it. And so, just -- even if Oracle doesn't have a public cloud region in a market, we can kind of open a cloud in a box with the Oracle Alloy, and offer cloud services to some of our customers.

I'm not going to lie to you. I didn't understand that. A public cloud strategy by Oracle in international markets. You lost me. It could take a couple of weeks to me to figure that out.

It's going to take a few years for us to figure out, well the AI and cloud investment was actually worth it. But we're happy to use their balance sheet to grow.

Yes. That's great. Congrats. Looking into kind of 2026, and how do you kind of put -- and maybe you could frame this well in that conversation. Obviously, you stabilized the organic or legacy business, if you will. Can you walk us through how you did that and the relationships and what was necessary to kind of stabilize that business? And kind of how do you -- that and the new business opportunities, how do you kind of puts and takes as you get into '26?

Yes. Since Travis isn't here, he won't be mad at me for saying this, like I view a well-run business works for finance. We did not have a finance function. So the first order of business was putting the emphasis on accountability with how we allocate resources. So when we went through our 2025 planning process, we came out and said we are going to plan the business as if the business is going to decline next year. So, when we went after our cost structure, after my first few months, it was pretty clear, even though that we're an incredibly profitable company, we weren't run efficiently.

And so, there is a lot of -- when you look at our Q2 exit rate, we grew our business with 3% less head count. And so, the tree trimming that needed to happen and the infrastructure to have a general manager over a P&L with accountability and then a market segment leader where they could shake hands and commit to business and results was like the first ingredient.

So part of the stabilization was coming out and saying the thing that we probably should have said before were like, hey, our core business is doing fantastic except one issue. And so, we came out and we addressed that with a ton of transparency. And then, we went on a full kind of top 10 client executive-to-executive mission to make sure we could shore up any relationships. And so, a lot of our large clients are made up of a portfolio of companies.

And so, one of our large client has 10 brands. Some of the brands are up, some of them are down, but the executive-to-executive connection was the kind of the second step behind getting an actual financial foundation that we could plan against.

And then, I mentioned discerning the critical view, we made a big focus on our core business and making sure that we could have hygiene around activating a pipeline and making sure a pipeline was credible. So, we -- for folks who use technology, we have sales force, we didn't use sales force. And so, how the heck can you plan a business if you don't have a pipeline that you can run metrics off of. So, all of the stuff that you would expect, we call it, mastering the basics wasn't there.

The foundation was there, the opportunities were there, but we didn't have a scorecard and we didn't have an agreeable way to keep score. So, those were kind of the foundational elements of 2024.

2025, I think we are highly encouraged by the ability for our new Chief Growth Officer to activate the sales force to go after some of the opportunities. And we were in a position to give -- the Street a forecast on bookings. We weren't necessarily confident in doing so. But our internal planning for bookings this year was $60 million. Right? And so, it's about $15 million a quarter, guess what, we're going to hit or exceed our forecast.

And so that type of discipline allows us to go do something like accelerate an investment and see if an international market play is a great idea. And we don't need five things to happen in order for us to achieve our medium and long-term growth plans. We just needed the clarity alignment and focus to say if we're -- if I'm going to spend $170 million on capital, where the heck am I going to spend it? And who am I going to hold accountable and when can we accelerate things, for instance, right?

We accelerated a little bit of investment this year. Like when do we know when to pull the joysticks, where is the green light, yellow light and red light. But foundationally, that was important for us in '25. And then, I think we found that a lot of our large clients -- if you exclude the one client issue, a lot of our largest clients are up mid-single digits and even high mid-single digits with us this year because our purpose is to make healthcare more transparent and affordable.

The large customers who are seeing significant margin pressure are using our solutions more and relying on us more, and that's what the basis of a strategic partnership is, which we enjoy with all of our 700-plus and especially our 10 largest accounts.

Do you view the organic business as a growing business per se?

Yes.

Like with organic growth?

Yes. And we talked about kind of the core business and the expansion areas. Our entire business is a growth business. And so the importance of having segment leadership and then having a general manager who owns a P&L, when we originally cut our Vision 2030 plan and we refinanced the company, Travis and I looked at the network business were like, it will be maybe -- it's a $200 million business, maybe it's a $150 million business. We have almost 9 figures of pipeline in our network business that we can see in the windshield over the next 3 years, because we've done things like open up the government sector.

We have three incredible networks that the BUCAs use, the TPAs use, that we can resell and we need to think about how the strategy evolves, but you actually need a general manager who you can hold accountable and say, "Hey, man, you got a $200 million, you have $200 million of revenue, you have this much of cost, you get this much of capital." And that's really the, how we think about the core business, and we think about all of our businesses as potential growth factors.

Okay. Great. Thank you. I think -- unless there are any questions, we have time for -- we have a little time. But are there any questions in the audience? Okay. Well, thank you, Doug.

Awesome. Thank you.

Thank you for joining. Thank you, everyone.

Hello, everyone, and thank you for joining us today for the Claritev Corporation Third Quarter Earnings Call. My name is Sami, and I'll be coordinating your call today. [Operator Instructions] I will now hand over to your host, Todd Friedman, Head of Investor Relations, to begin. Please go ahead, Todd.

Thank you, Sami. Good morning, everyone, and welcome to Claritev's Third Quarter 2025 Earnings Call. I'm excited to be on my first earnings call since joining the company. I look forward to working with all of you in the months to come. Joining me today are Travis Dalton, President and Chief Executive Officer; and Doug Garis, EVP and Chief Financial Officer.

During the call, we will refer to the supplemental slide deck that you can find in the Investors portion of our website along with the third quarter 2025 earnings press release that we issued earlier this morning. Before we begin, a couple of reminders. Our remarks and responses to questions today may include forward-looking statements. These forward-looking statements represent management's beliefs and expectations only as of the date of this call.

Actual results may differ materially from these forward-looking statements due to a number of risks. A summary of these risks can be found on the second page of the supplemental slide deck and a more complete description on our Annual Report on Form 10-K and other documents that we will file with the SEC.

We will also be referring to several non-GAAP measures, which we believe provide investors with a more complete understanding of Claritev's underlying operating results. An explanation of these non-GAAP measures and the reconciliations to their comparable GAAP measures can be found in the earnings press release and in the supplemental slide deck.

And with that, I will turn the call over to Travis.

Thanks, Todd. Good morning, everyone, and thank you for joining us today. This is an exciting call for Claritev and for me personally. When I joined the company early last year, we laid out a multiyear journey to create a vision and a foundation that would deliver sustainable growth.

We call 2024 the Year of the Foundation and established our guiding principles of clarity of purpose, alignment of talent and focus on results and boldly declared 2025 as the year of the turn. I'm proud to stand here today and say the turn has happened. We set out to be fit for growth by investing in people, tools and processes that will allow us to have better visibility into the business to apply our critical resources to areas with the highest impact.

This has allowed us to have better telemetry into the business to call a number and hit a number, thus improving our credibility with internal and external stakeholders, what I call the say-do ratio in simple terms, and we are keeping our word. We will go into more detail over the next 20 minutes, but our Q3 results show a second consecutive beat and raise quarter and most significantly is our core business driving that strong performance.

We will roll into Q4 ready to close a transformative year for Claritev and begin executing on the next phase of our 5-year strategy, what we will call the Way Up in 2026. On today's call, I'll provide some of the highlights from the quarter and share how we made the turn ahead of schedule. Then Doug will come on for the financial discussion, and I will end with some thoughts on the state of healthcare and how we see it impacting our progress.

One strong quarter is a data point, but two strong quarters are the start of a trend. Revenue growth of 6.7% and adjusted EBITDA growth of 9.5% were both ahead of our internal expectations. Our strong results last quarter were important to build confidence and demonstrate the power of our strategy to drive horizontal products across multiple vertical markets. It is working.

The Q3 results show focus, discipline and our sense of urgency. I tell the team urgency is about discerning the critical few priorities from the many things that hit the windshield and intense focus on finishing them. We are executing. We are building a company that delivers on our promises through our clarity alignment and focus on executing with clear priorities and performance metrics.

I want to take a moment to explain why I think we successfully made the turn earlier than planned. It starts with our intense focus on our clients, our people and a clear mission that all of our associates understand. We exist to serve our clients and the consumers of the healthcare ecosystem. Put simply, we make healthcare more transparent and affordable for all.

Our core solutions across our network, analytics and payment and revenue integrity businesses, combined with our commitment to delivery, play an important role in addressing healthcare's biggest challenges. Our significant investments in technology, data and AI give us a platform to continue to evolve and innovate as the market evolves.

We have continued to align and upgrade our talent, provide opportunities for our existing associates and align the organization to focused KPIs built on our pillars for growth. All of this has enabled us to play a significant role in providing access to care, reducing costs for consumers, combating waste in a misaligned system and bringing pricing transparency to an opaque industry. Most importantly, we are an honest broker in healthcare that aligns market participants with the needs of the consumer, the patient.

We have demonstrated the value of our solutions and with our improved execution throughout 2025, we have demonstrated how the core will continue to be a launching point that will deliver our long-term aspirations. Underpinning this confidence, as recently announced, we have renewed our top 10 clients for extended terms. This includes the single client we have discussed previously.

These renewals provide visibility and stability for us to build upon as we enter the way up. Beyond that core, we have solidified our expansion into new market verticals, adding new clients, partners and solutions that I'll describe in more detail in a few minutes. Now turning to the highlights from the quarter.

As we have noted previously, our company is now aligned to 6 focused market verticals, each with a clearly accountable leader and sales incentives to serve existing clients and new opportunity. This focus is a primary driver of the success we are seeing across the business. We are seeing increases in white space for existing clients, adding new logos and new solutions that expand our total addressable market.

The underlying metrics in our core business support this view of a business that is on the rise. Through the first three quarters of this year, we're seeing improvements in the percentage of actionable claims while also increasing our revenue per claim, which Doug will cover in additional detail. In fact, we are seeing positive trends in our key growth metrics across the business.

We added 5 new logos, bringing our year-to-date total to 20 and closed 180 opportunities. We closed another $15 million in Annual Contract Value, or ACV. Our average ACV per transaction is up more than 25% over last year, and our funnel continues to grow with a 67% increase in pipeline year-to-date. This is directly attributable to our strategy to focus on existing client value and also drive our horizontal solutions and to new client acquisition across those vertical markets.

The growth team has done an outstanding job and honestly, it's just getting started under the leadership of our Chief Growth Officer, Tiffani Misencik. Now let's look at Q3 in each of our market verticals. At the core of Claritev are our payer and TPA client relationships. The growth in this vertical is the biggest reason we made the turn in our strategic vision ahead of schedule.

We added four new logos and closed several 7-figure deals this quarter coming from expansion with existing clients who see our commitment to client success and value for them. As mentioned earlier, we now have renewed our top 10 clients during this year. That combination of growth, stability and visibility is the key reason we are optimistic about our continued success in this vertical. That optimism is bolstered for a solid Q4 based on early wins and a diverse pipeline.

The broker and employer market continues to be a highlight for our vision to expand our reach across the healthcare landscape. We signed over 100 deals, including our first premier broker agreement with several more in progress to drive greater expansion of our products, including VDHP. We also hosted our first ever Broker Virtual National Summit with more than 300 attendees, which is in addition to four additional webinars and 7 broker conferences that we attended.

Our traction in this vertical is growing, and we are seeing the results in continued pipeline growth. Turning to the provider market. We continue to see the opportunity to have a meaningful impact with healthcare providers who are seeking transparency and analytics solutions to optimize their operations and financial performance. Simply put, with CompleteVue and Analytics, we can drive revenue up, cost down and with efficiency, give providers more resources to deploy to patient care.

We now have over -- we now have opportunities with 60 provider organizations in our active pipeline and continue to demonstrate success. We signed EPHC a 13-hospital consortium in the Eastern Plains of Colorado to use our payment accuracy and market analytics solutions. Rural hospitals, like those in the EPHC face unique challenges, especially in light of regulatory changes coming from HR.1.

Healthcare consumers in rural areas will face significant barriers to care, and we are proud to work with hospitals to serve them as they strive to continue meeting this critical healthcare need. We opened our newest vertical market just over 5 months ago with our expansion to international, specifically the Middle East. We believe the international markets represent a significant growth opportunity where U.S. standards are widely used and our solutions can be quickly adapted and marketed in new countries.

We launched our advanced code editing solution in the UAE with our first client ahead of schedule while signing new existing partnerships with iO Health and Klaim to accelerate development of new AI-driven solutions. I have personally spent time in the MENA region, including last week in Riyadh at Global Health and FII and believe this is one of our most exciting growth opportunities.

Partnerships with iO and Klaim, while grounded in the MENA region, also have the potential to bring more value and solution innovation to our core U.S. markets. You'll hear more from us about this exciting potential. Briefly touching on the government vertical. We expect to have some positive news to share in the near-term with real tangible impact. We've been working on a number of opportunities with prime contractor partners and are seeing some decisions being made.

I'm going to speak to some market trends later in the call, but we see opportunity with core set of solutions across existing government needs, but also with opportunities that we believe will arise with the implementation of HR.1. Our vision is very much aligned with government initiatives on price transparency services and reducing waste, and we are actively engaging in discussions where our experience can deliver immediate value. Lastly, it's been a busy quarter for our strategic partnership team.

I mentioned a couple of our international partnerships. We also closed an agreement with [ QinetiQ ] to provide health and wellness consulting as an added service for our BenInsights and PlanOptix products. Perhaps the most visible sign of our partner engagement model was at Oracle AI World, where we were a title sponsor, gave a number of theater and breakout presentations and earned a shout-out in Oracle's subsequent Investor Day.

We are actively working with our first pilot client and continue to make meaningful progress on embedding our solutions within Oracle's human capital management products. This would bring real-time insights and prediction to help employers proactively manage their health plans, identify risk, drive costs down and improve wellness. We're also seeing active pipeline growth with our payments powered by ECHO with over 30 opportunities.

When you look at Claritev Payments powered by ECHO and our most recent partnership with Klaim, who is an AI-driven healthcare payment acceleration solution provider, you are beginning to see the early stages of a growing financial solutions business. It is one that we believe can expand our presence in the healthcare market and create another new vector for future growth.

I won't elaborate just yet but expect to hear more from us on an innovative approach to one of healthcare's most vexing problems in the coming months. Before I turn the call to Doug, I want to take -- I want to make one last comment about our rebrand. As I've said to the team before, you don't simply change your name, a rebrand must be earned. Kudos to our marketing team as we aggressively campaign and create greater awareness in the market.

Brand engagement is running high. Website visits are up more than 100% and engagement is growing across multiple channels. We're sponsoring more events and building an exciting calendar for '26. This all becomes part and parcel of a consistent market-leading company. You build the brand, you do the hard work to build pipeline, win rates go up, sales cycles begin to shrink and most importantly, you listen to your clients and solve problems.

It is all part of the focus and discipline at the heart of a transformational journey. I'll come back in a few minutes to wrap up our prepared comments, but I'll close these opening remarks by saying this is the most energized I've been professionally.

I visited a number of our offices this quarter on a CEO roadshow, and you can tell the momentum is building and enthusiasm across the company is palpable. Our teams are showing it and our clients are feeling it. It's a good time to be at Claritev, and I'm excited for how we're doing, how we're going to finish the year.

With that, I'll turn it to Doug.

Thank you, Travis, and good morning, everyone. Q3 truly marked a turn in our business. Delivering on our promises is a grounding principle, and it's a reward for us to be able to share these results with you today. I will cover selected Q3 and year-to-date financial highlights, and we'll also give more color by service line as reflected in our supplemental earnings deck posted on our website [ this a.m. ], and then I'll end by sharing our updated capital allocation priorities.

Let's get right into the numbers. Total revenue in Q3 was $246 million, up 6.7% year-over-year. Adjusted EBITDA was $155.1 million for the quarter, reflecting a 9.5% growth rate. Corresponding EBITDA margins were 63.1% in Q3 and 62.8% year-to-date, tracking to our guidance on a full year basis. Year-to-date revenue through September is up nearly 3% and adjusted EBITDA is up 3.7%.

This is our best absolute revenue dollar performance in the last 12 quarters. It is worth a shout-out to our whole team who stayed on mission and executed with focus and discipline as we navigated through a foundation year in 2024 and we have turned Claritev back into a growth business. The strength of our core offerings should be reiterated.

Our multiyear vision is based on strategically investing across the business and nurturing our expanding portfolio of products, solutions and end markets. We are in the middle of '26 planning and it is the stability, visibility and profitability in our core solutions that allow us to confidently think about next year and beyond.

During Q3, core revenue grew year-over-year and sequentially. On a year-over-year basis, all three of our service lines grew at healthy rates, led by network revenue at nearly 15%. Analytics, our largest service line, grew 4.2% year-over-year and payment revenue integrity grew better than 7%. On a year-to-date basis, core revenue is up approximately 3%, further supporting our statement that the turn has happened.

Digging into these numbers a little bit further, we are seeing strength in our two largest solutions, Data iSight and Financial Negotiations, with strong savings in revenue per claim performance on slightly lower volumes. Payment and Revenue Integrity continues to see good volume growth and higher savings yields on process claims.

Our AI-based Advanced Code Editing product, ACE, posted yet another strong double-digit growth quarter and is poised to gain momentum as we more broadly deploy to new end markets. And it's worth noting, while a small contributor, Q3 marked our first revenue from our international expansion. We expect to continue to have good updates on progress overseas in coming quarters and years. Finally, similar to last quarter, a new commercial arrangement in the P&C business resulted in approximately $5 million of nonrecurring revenue benefit in the network business this quarter.

We expect a similar benefit in Q4 that will not repeat in 2026. The approximate total of this benefit from this arrangement is expected to be between $15 million to $18 million on a full year basis in 2025. Our growth areas are also developing nicely. The growth pipeline continues to mature in dollars and number of opportunities with the expansion of our go-to-market team and now represents approximately 40% of our total dollar-weighted funnel.

We have generated an additional net $80 million in new pipeline during the first 9 months of 2025, representing a 67% increase since January. Notably, we are seeing pipeline growth across all lines of business, demonstrating the success of our diversification efforts and the growing contribution from our growth areas with a roughly equal weighting between net new business and upsell, cross-sell opportunities organically present within the current installed base.

We have closed approximately 500 opportunities for $45 million of ACV year-to-date. In total, we expect to book approximately $60 million of incremental ACV this year, which will largely convert to revenue in '26 and beyond. The volume and velocity improvements we have conveyed in our go-to-market stem from one of the key transformation objectives of business realignment.

As the numbers indicate, this effort is starting to deliver tangible and measurable results. We remain disciplined with operating costs. Adjusted expenses grew roughly 2% in Q3. Personnel costs were higher due to talent and transformation-related investments, partially offset by lower expenses in facilities, legal and other operating costs. Our multiyear transformation road map is pacing on schedule.

And as we progress, we may elect to pull forward investments if our business continues to perform ahead of internal expectations. Moving on to cash flow. Levered free cash flow was a use of $16.3 million in the quarter and was driven by investment in our transformation program and timing of interest payments, partially offset by lower cash paid during the period for income taxes net of refunds.

Notably, unlevered free cash flow of $113 million and adjusted cash conversion of 73% are the strongest we've posted in 9 quarters. We ended the quarter with $39 million in unrestricted cash and successfully moved back under 8x net leverage. Now on to guidance. Based on our performance in Q3 and throughout 2025, we are raising full year revenue guidance to approximately 2.8% to 3.2% growth versus prior year and tightening our adjusted EBITDA margin guidance range to 62.5% to 63%.

Combined, those two measures are helping us pace towards our aspiration to become a Rule of 70 company, rare error for any public company in any sector. We are maintaining our free cash flow guide and narrowing our forecasted CapEx spend range to a range of $165 million to $175 million. I wanted to end by sharing that our capital allocation priorities remain clear and disciplined.

At the highest level, we continue to focus on organic investments to fuel our Vision 2030 plan. That's where most of our capital and energy are directed. These investments are driving innovation, operational excellence and helping us get fit for long-term growth.

At the same time, we're maintaining a high priority on debt paydown with a renewed focus on value-creating M&A, both of which will strengthen our balance sheet and position us for sustainable and intelligent expansion.

All of this aligns with our guiding principles to diversify and accelerate, expanding our solutions, verticals and channels to drive growth while also delevering and derisking to enhance cash flow and operating agility.

On our next call, I will be excited to provide a lot more color on how we're thinking about '26 and beyond. I echo Travis' opening comments that this past year has been among the most rewarding in my professional career.

With that, I'll turn it back over to Travis for some closing remarks before taking your questions.

Thank you, Doug. Before taking questions, I'd like to discuss the healthcare market and the trends shaping Claritev's work. The industry continues to face structural, regulatory and reimbursement pressures heightened by inflation, rising employer plan costs, shifting employee burdens, complex regulation and growing demand for transparency.

Fragmentation still drives inefficiency and waste, but that's where Claritev creates the most value. Our solutions in network advancement, pricing transparency, NSA and surprise billing compliance and payment and revenue integrity powered by world-class analytics are designed to address these challenges and strengthen our financial performance. We anticipate healthcare inflation will rise 6% to 9% with out-of-network claims stable at 5% to 7% and an increase in high-cost cases, particularly those in behavioral health.

Our analytics and BenInsights platform are uniquely positioned to help clients optimize benefit plans, control costs and improve their outcomes. Healthcare remains a complex space with competing interest and misaligned incentives. Claritev sits at the intersection of healthcare, innovation and technology with a business model that's grounded in measurable ROI.

We're well-aligned with the administration's focus on transparency and efficiency to reduce system misalignment and benefit patients. In Q3, we demonstrated strong execution of our strategic transformation, delivered our best revenue quarter in 12 quarters, renewed our top 10 clients, advanced our 6 market verticals and progressed in our digital transformation, migrating to OCI and modernizing applications for better speed and data integration.

Claritev is on the way up to 2026. As we reflect on '25's achievements, I'm confident in our ability to drive sustainable growth, serve clients, support our associates and deliver shareholder value.

Thank you for your continued trust and support. And with that, we'll take questions.

[Operator Instructions] Our first question comes from Joshua Raskin from Nephron Research LLC.

I was wondering if you could talk a little bit about just starting with the guidance, revenues going up and then the EBITDA margin, at least at the high end, tempering a little bit. So obviously, a lot of fixed costs in the business, but were there investments that you were accelerating or is this part of that bundling strategy that you've talked about in terms of the top 10 accounts and others?

This is Doug. I'll take a shot at that. Yeah, so I think we've actually done a pretty good job of managing costs this year. And as we think about Q4, I know there's probably going to be a couple of questions. Well, we really look at the business on a year-over-year basis. And so we've provided sequential information historically just to show the trends, and we've improved our -- some of our supplemental materials.

But if you take a look at the guide for Q4, it implies a quarter up roughly 2% to 6% on revenue with EBITDA up roughly 3% to 9%. So we feel pretty comfortable with that as a benchmark and again, sustained year-over-year performance. But that's how we're thinking about Q4 and the rest of the year.

And then as we go forward, we have a multiyear transformation, and we're running a little bit ahead of our internal expectations. So to the extent that we have capital projects or OpEx that we might want to pull forward to drive revenue growth, we'll opportunistically do that as the quarters arise.

Okay. That makes a lot of sense. And then I know it's early for 2026, and we'll wait until next quarter. But maybe outside of that $15 million to $18 million of nonrecurring revenue that you suggested maybe we take out of the baseline.

Any other big headwinds or tailwinds that we should be thinking about next year? And maybe more specifically, mid-single-digit revenue growth in the second half. Is that a reasonable starting point for 2026?

I would say, yes, in the second half without giving too much on guidance. Recall that the $15 million to $18 million started in Q2 of this year. There will be a lapping effect for Q1. But I think tailwinds are healthcare inflation. If you look at the sequential improvements to our [ PSAV ] volumes, Travis had mentioned that we still think volumes out-of-network claims, all else equal, will be approximately 5% to 7%.

And we're seeing between 3 million to 3.5 million claims come through our windshield a quarter that we grab and price. And then you're also seeing things like behavioral health and even some inpatient -- some things go out of network inpatient that are higher dollars that have benefited us in the near-term.

What's really hard to predict is when you look at the regulatory environment and the government shutdown, we're not so sure when those are going to resolve, but the underlying I would say, price environment for our business is very favorable, and we're highly encouraged.

And then we're going to continue to focus on managing our large accounts, which we have a pretty good funnel. But I think that's probably a fair assumption for the second half of the year.

And maybe if I could just sneak in then and just on your last comment there, the 10 renewals then, as I think about headwinds, tailwinds, we shouldn't be thinking about that as headwinds. Is it fair to say that those were renewed generally similar to previous contracts? I know with big extensions, typically, you see a little bit of pressure on the margin.

That's correct.

Yeah. I'll just comment on that. Yeah, that was -- Josh, that was foundational to kind of [ have ] the stability that we're trying to achieve inside of this year and last year. We actually -- not only is it not a headwind in my mind, a tailwind because we now have -- we can plan against that, we can execute with them.

We've noted the last [ two ] quarters that our white space is growing dramatically inside of our installed client base. And so we view that as a great opportunity for us. And so I think the macro of healthcare, the stability of our client set are tailwinds for us. And the headwinds are normal business factors that you would expect, not existential things that we may have experienced.

And competition, uncertainty, all of those things you navigate as a business leader are there for us. But we actually feel very good about the wind at our back as it relates to our core business and the macroeconomics and our growth thesis.

Our next question comes from Daniel Grosslight from Citigroup.

Congrats on another beat and raise here. Maybe I'll just stick on the 2026 line of questioning. It does seem like you have a fair amount of visibility now just given the renewals and all the ACV you have signed. But maybe I just want to double-click into how we should be interpreting that ACV growth.

I think you mentioned it was -- it's going to be around $60 million of new ACV signed this year by the end of the year. Is all of that going to convert into revenue next year? And is that incremental on top of the core business or these renewals so that if the core business is growing, I don't know, call it, mid-single digit, 4% to 5%, we should think about $60 million being layered on top of that growth?

Thank you, Daniel. So for the -- let me answer the ACV first. So I think we had stated this on the last call. I know we introduced it as a new metric, and I think it's something that we'll continue to provide. The incremental -- the ACV that we booked this year, the approximately $60 million that we expect to book is incremental.

So I would think about that as an addition to the core business, even though a lot of the ACV that we booked is within our core customers. And so our opportunities that we booked, the 500 that we've booked year-to-date, it's actually a very good mix of payers and TPAs within our core 700 customer set. The $60 million of ACV will largely convert to revenue next year.

And so there is a timing element to convert with any business to convert a booking into the first dollar of revenue. That's something we expect to take a few quarters for each new deal to show up as revenue. Some deals will be a little bit quicker. If you have software, you turn it on and you have first productive use within a quarter. Some of our larger installs like Payment & Revenue Integrity or Data iSight or our network business might take 2 or 2.5 quarters to turn on.

We feel pretty confident that at least 60% to 65% of the ACV we book turns into revenue and converts to revenue next year. And then without spending most of our time focused on '26 because we'll do that in the next call, the reason why we're being a little bit cautious is because the pricing environment and the inflationary environment is really high, right now. It's hard to tell if that's going to cool down or not next year.

We still feel very good about the core business. And then I would give a big shout-out to our operations team who is actually identifying more savings, commanding more savings and revenue per claim.

And when you look at Slide 14 on our supplemental deck, you've really seen the fruits of those efforts and putting in a general manager model over the last 10 to 12 quarters where we've been able to make our products work better, which provides more values to our customers and ultimately patients.

And so without giving you all of the tea leaves for '26, we feel good about the kind of demand environment. We feel good about where out-of-network claims are landing in the volume environment. And then we're going to continue to expand our funnel and expand to new markets, and we think those all bode well for our medium- to long-term growth objectives that we laid out in March of this year.

Yeah, that's great. That's great. And I'd also love to get an update on your NSA products and how that market is trending. We've heard that there are now a slew of third-party NSA vendors that are working with providers to really aggressively go after the national payers, particularly in the IDR process. What are you seeing there? Has that -- is that -- the trend isn't new, but is it accelerating? Is it diminishing a little? And has it had any material impact on you guys?

Yeah. Maybe I could start that off and then Travis, if you have a general comment. So when you look at our NSA business, it's performed pretty nicely with the exception of -- we mentioned the one large customer did in-sourcing. The rest of our business, we've actually put a lot of operational focus. And we've actually taken our unit cost down approximately 70% to service each IDR claim over the last year. And so we continue to think that is a growth area for us.

But the reality is from a regulatory and a top-of-the-house perspective, providers still win 80% of NSA disputes, which is a structural problem that while we -- I would say we have the best performing NSA product in the market, and I think CMS, we shared last quarter, CMS published a study in June that highlighted that it's still not a fairly weighted scale when you think about the relationships and the abrasion between payers and providers.

We've seen a bunch of point solutions come up, and I think they have modest improvement. But when you look at the scale, it's still roughly 80-20 towards the provider with our products performing pretty well, but our large customers have sent us more business, and that business is performing pretty nicely for us.

Yeah. I'd just add a couple of things there. So yeah, I think Doug kind of hit it, but I'll just reiterate. We actually are significantly better than any of our competition as it relates to the value we bring to clients with that product set. So we view it as a positive and a differentiator for us and an opportunity.

We're going to continue to invest in the NSA business and automation and using our AI tools, along with PRI and network and other areas. And Doug mentioned some of the structural elements of that policy that I think many think it should be looked at and that we participate in. So it will be an area of focus and area of investment for us.

And as Doug brought up a broader point, I won't parse on it, but I'll just say one of the things I think that makes us unique with our clients is that we're not simply a point solution or a widget that's narrowly focused on a single area.

So we actually hold a unique position across the network, analytics, PRI and data science and prediction that we can bring. So I think that, that creates a positive opportunity for us with clients, but also really puts a moat around some of our capability with our core clients as we go forward. So NSA is an important area for us. It matters to our clients. We're going to continue to focus on it as we go forward.

[Operator Instructions] Our next question comes from Jessica Tassan from Piper Sandler.

On the NSA business, I want to follow up. So we know you're supporting a large number of payers, obviously, in the IDR process. How does Claritev get paid on these disputes? Is your revenue contingent upon the IDR judge selecting the payers' bid? Do you get a portion of savings? Can you just remind us how the contract economics work for this business? And then what segment you're reporting the revenue in?

Yeah. Sure. Thanks, Jessica, for the question. And I think we spent a little bit of time, and we can do so in post call again walking through the economics, but it's a PSAV business. The IDR dispute process happens, right? There's an IDR fee. We work with our clients. We actually front that fee. We take them through the arbitration process. And as a matter of fact, I think only a small -- less than 20% of the IDR claims get disputed post QPA.

And so if you think about the funnel of potential claims that go through Surprise Bill and the ones that get disputed, it actually is a small fraction where we're able to offset any potential abrasion before it gets all the way through the end of the funnel.

But to the extent that a claim does get disputed and we're not able to resolve it and we win the claim on behalf of the payer, we capture a percentage of the savings on the negotiated rate or the win rate. So it's very much aligned with our PSAV business. And then the -- I think your second question was where does that fall? That's within our analytics-based services. Surprise Bill is our third largest product behind Data iSight and financial negotiations.

Awesome. That's really helpful. And then I wanted to just follow up about the client renewals. I think in your response to Josh's question we can infer that these were conducted at stable levels of 2025. Is there anything else we should be inferring about these renewals or anything that you wanted to share context-wise on that process? And congrats, obviously, on closing all 10 of your top customers.

Yeah. Just a little color on it. I mean I'll just say that that was a major focus for me, been here over a year now. One of the key focuses was shoring up our key clients. and ensuring that they understood the value that we had, not just in what we're providing today, but ultimately also in new capabilities. So I'm not just focused on renewal activities.

I'm actually focused on growth of those clients with our new products, which I think we're getting more and better education and understanding of that. And I also have to note that encompass -- I was asked once, I was asked 100 times about some single client issues that we were able to renew our single client that we've talked about publicly and openly.

That's a big deal for us that shows trust and focus going forward collectively. And as noted, we think this underpins the business and creates a nice place for us now to launch forward with a little more predictability and focus and stability. So those would kind of be some additional comments I'd make, Jessica.

We currently have no further questions. I'd like to hand back to Travis for some closing remarks.

Yeah. Appreciate the time. I'll just close out by saying that I'd be remiss if I didn't have a quick shout-out to the entirety of our team. I'm very proud of the team. We have existing resources that have been here a long time that are understanding what we're trying to do, have worked extraordinarily hard and are embracing change. That's not always an easy thing to do.

And then we've tightened up our -- and shored up our management team and talent. So I couldn't be more excited about going into '26, considering this will be the first full year I've been able to have the team that I wanted to put together on the field. And so we're very enthusiastic about it, and we look forward to the next call talking about results, but also talking about our guidance for '26 and beyond. Thank you.

This concludes today's call. We thank everyone for joining. You may now disconnect your lines.