WELL Health Technologies Corp. (WELL.TO) Q2 FY2025 Earnings Call Transcript & Summary

Welcome to the WELL Health Technologies Corp. Second Quarter 2025 Financial Results Conference Call. My name is Joanna, and I will be your operator for today's call. [Operator Instructions] Please note that this conference is being recorded. I'll now turn the call over to Tyler Baba, Investor Relations Manager. Mr. Baba, you may begin.

Thank you, operator, and welcome, everyone, to WELL Health's Fiscal Second Quarter Financial Results Conference Call for the first 3 months -- for the 3 months ended June 30, 2025. Joining me on the call today are Hamed Shahbazi, Chairman and CEO; and Eva Fong, the company's CFO. I trust that everyone has received a copy of our financial results press release that was issued earlier today. Portions of today's call other than historical performance include statements of forward-looking information within the meaning of applicable securities laws, including future-oriented financial information and financial outlook information. These forward-looking statements involve known and unknown risks, uncertainties, assumptions and other factors, many of which are outside of WELL's control, that may cause the actual results, performance or achievements of WELL to differ materially from the anticipated results, performance or achievements implied by such forward-looking statements. These factors are further outlined in today's press release and in our management discussion and analysis. We provide forward-looking statements solely for the purpose of providing information about management's current expectations and plans relating to the future. We do not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in our expectations or any change in events, conditions, assumptions or circumstances on which any such statement is based, except if it is required by law. We may use terms such as adjusted gross profit, adjusted gross margin, adjusted EBITDA, adjusted EBITDA margin, shareholder EBITDA, adjusted net income and adjusted free cash flow on this conference call, all of which are non-GAAP and non-IFRS measures. For more information on how we define these terms, please refer to the definition set out in our -- in today's press release and in our management discussion and analysis. The company believes that adjusted EBITDA is a meaningful financial metric as it measures cash generated from operations, which the company can use to fund working capital requirements, service future interest and principal debt repayments and fund future growth initiatives. Adjusted EBITDA should not be construed as an alternative to net income or loss determined in accordance with IFRS. And with that, let me turn the call over to Mr. Hamed Shahbazi, Chairman and CEO.

Thank you, Tyler, and good day, everyone. We appreciate everyone for joining us today as we discuss our Q2 2025 financial results. We are extremely proud to deliver what we feel may be our best financials ever to our shareholders. There is much to talk about on today's call as it relates to numbers and performance, especially given the fact that quarterly revenues reached an annualized figure of approximately $1.4 billion. But before we do that, we wanted to profile the evolution of the company for shareholders. As we discussed last quarter, we're working on strategic alternatives and divestiture processes for all 3 of our U.S. care delivery divisions, and we'd be pleased to provide more updates later in the call on this. This WELL family tree slide provides a view of our corporate family once those processes have been completed. WELL Health Technologies provides exposure to 4 pure-play digital health markets and segments. Our largest division by revenues is our Canadian Clinics network, which is focused purely on tech-enabled health care delivery. This includes our primary specialized and diagnostic imaging businesses, which are the largest and most scaled in the country. Then you have WELLSTAR, which is our pure-play SaaS and services company focused on technologies that support the care provider. And then we have HEALWELL AI, which yesterday reported record financial results and advised the market of the Board's decision to immediately become a pure-play AI data science and health care software company by divesting all non-SaaS and digital businesses. Finally, we have CYBERWELL, our pure-play data protection and cybersecurity business, which works extremely hard and confidently to protect a significant portion of health care data in Canada and beyond and which is in an exciting ramp-up stage in its revenue and development, and we believe will be an excellent spinout candidate in a few years. Shareholders of the parent company, WELL Health, will benefit from the consolidated financial statements and enterprise value of all these pure-play areas. We also note to investors that any capital raised by WELLSTAR or HEALWELL will not be dilutive to WELL shareholders. This structure is very capital efficient for WELL shareholders who benefit from WELL's ownership in these key segments. Moving on. In Q2 2025, WELL delivered another record performance, and it's safe to say that we really shattered records and delivered our best performances ever really across the board this quarter. This slide shows some of our key quarterly financial highlights. WELL achieved quarterly revenues of $356.7 million in Q2, an increase of 57% year-over-year, driven by total enterprise-wide organic growth of 19% and acquisitions. WELL achieved adjusted EBITDA of $49.7 million in Q2 2025, an increase of 231% year-over-year. And excluding the impact of Circle Medical deferred revenues, Q2 would have been a little bit less at $347 million, representing 53% growth, while adjusted EBITDA would have been $40 million, representing 166% increase compared to the previous year. Importantly, WELL's consolidated gross margin was 44.5% in the quarter. Even without the Circle Medical deferred revenue impact, gross margins would have been 43%, which are higher than last year and last quarter. Free cash flow attributable to shareholders was approximately $11.7 million in Q2 2025, an increase of 35% -- 34% as compared to $8.7 million last year. Please note that our free cash flow available to shareholders metric was impacted by elevated cash taxes and capital expenditures, which were focused on investments in upgrading our clinical portfolio. Had we had not had these elevated expenditures, we would have had record cash flow as well. Moving on. Before we get into the operational highlights, I want to just share with you an illustrative case in which we look at the performance of just WELL Canada and CRH. In this case, we excluded HEALWELL as Q2 is the first time we're including HEALWELL in our consolidated financials, and HEALWELL does not factor into our historic results. We also excluded Circle Medical and its deferred revenue as well as Wisp from this analysis as both of these assets have been in process of divestment the longest. The objective of this illustrative view is to demonstrate a clear year-over-year comparison and margin profile and helps illustrate the strong underlying performance of the rest of the business. So as you can see, quarterly revenue in Q2 in this illustrative case for WELL Canada and CRH was $254 million, an increase of 36% year-over-year as compared to Q2 2024 and organic growth of 20%. Gross profit in Q2 was $98.1 million, an increase of 37% year-over-year as compared to Q2 2024. WELL achieved 49% gross margin percentage in Canada and 28% gross margin percentage in CRH. Quarterly adjusted EBITDA in Q2 for WELL Canada and CRH was $38.4 million, a 40% increase as compared to Q2 2024. Adjusted EBITDA margin percentage was very healthy at 15.1%. This strong EBITDA margin is reflective of a healthy and profitable core business. Looking at just WELL Canada, we achieved revenue of $131.4 million, representing total growth of 40% and 25% organic growth. Meanwhile, WELL Canada achieved adjusted EBITDA of $23 million, an outstanding 76% year-over-year improvement. As you can see, the core business remains not only in excellent health, but also growing with exceptional growth rates. These results, in particular, highlight the strength of our Canadian business, which is a core focus of the company moving forward. And now I'll share with you some of our operational highlights for Q2 2025. At the end of Q2, WELL had 4,300 providers and clinicians delivering care across our network of physical and virtual clinics. Of that number, we now have just over 1,000 physicians in Canada, which is just over 1% of all physicians practicing in the country. We have tremendous runway to continue to expand our footprint across Canada. In addition, over 42,000 health care providers across the country, the majority of which are physicians, benefit from our SaaS and technology services provided by WELLSTAR. We estimate that more than 40% of all physicians in Canada engage with the WELLSTAR technology platform in some capacity. As we continue to expand our digital capabilities and deliver best-in-class AI-powered solutions, it's clear that WELL is playing an increasingly vital role in Canada's healthcare ecosystem. We remain committed to driving innovation and making a meaningful positive impact on the future of care in this country. Looking at our patient visits, which are a strong indicator of the health of our business and of revenue growth, we delivered 1.6 million patient visits in Q2, a 21% year-over-year increase from the prior year, with strong organic growth of 14%. These results demonstrate our strong fundamentals and unique platform, which is winning in the marketplace. Canadian patient visits reached a major milestone surpassing 1 million patient visits in a single quarter for the first time. Total patient visits increased 38% year-over-year, including organic growth of 12%, accounting for both clinic absorptions and same clinic expansion. Total care interactions, which is defined as total patient visits plus technology interactions plus biller provider hours, were over 2.5 million in Q2, which represented a 34% increase compared to last year and represented 27% organic growth. Now that we've covered off the key results, I'd like to go over a few key presentation themes that we'll be covering in the rest of the presentation. These won't surprise you. One, Canadian Clinics update; two, WELLSTAR; three, HEALWELL AI; and fourth, we'll provide an update on our strategic alternative processes for our U.S. assets. The first thing I'd like to address this morning is the success of our Canadian business. As you can see from these charts, the historical performance of our Canadian Clinics business has been exceptionally strong. Over the past 4 years, our Canadian Clinics business has exceeded 50% CAGR. During the 6 months ended June 30, 2025, Canadian Clinics achieved revenue of $214 million and adjusted EBITDA attributable to our Canadian Clinics business has grown at a CAGR of over 44%. During the 6 months ended June 30, Canadian Clinics achieved adjusted EBITDA of $32 million. Our Canadian Clinics network has grown to 222 clinics at the end of Q2 compared to 128 starting Q1 2022. We expect this strong performance will continue in 2025 and beyond, driven by healthy organic growth and our very significant M&A pipeline. As I mentioned on our call -- on our last call, we have a really special capital allocation program at WELL that we've worked very hard to improve over the years. Here, we've included and updated the same slide we showed at our last conference call that speaks to all of our clinical acquisitions since inception. Note that on this slide you can see our clinical acquisitions grouped into cohorts by year of acquisition. For each cohort, we provided the EBITDA multiple associated with our original acquisition of these clinics shown in the dark blue color. And then we also show [Audio Gap] the resulting or improved implied EBITDA multiple that we've achieved for each of these cohorts since then due to the improvements we've made over time. This is shown in the light blue color. On the right-hand side of the slide, we provided total figures -- total comprehensive figures, not cherry-picking, not excluding anything. As you can see, we've allocated $280.7 million overall in 31 separate transactions, and we have acquired $273 million in revenues. Our total deal multiple for all acquisitions was 9.4x EBITDA at the time of acquisition. Since then, we've grown the EBITDA of our acquired assets by 101%, re-rating the implied multiple to 4.7x, which was pushed up by our largest Canadian acquisition to date, which was MyHealth. Interestingly, if one takes out MyHealth, which was our single largest and most expensive acquisition in Canada, the remaining portfolio would be almost entirely primary care oriented. In this population, the average original multiple that we transacted against was 5.8x EBITDA. But given that we've substantially improved the EBITDA for these businesses, the implied multiple after improvements currently is just at 3x EBITDA. I'll point out a couple of other observations here. WELL achieved 101% adjusted EBITDA growth across all cohorts, demonstrating our ability to improve the efficiency and operating margins after we acquire a clinic. Note that in 2021, we had our highest original deal multiple of 10.5, which again was our acquisition of the MyHealth platform. Since then, we've significantly improved the EBITDA of MyHealth and the implied multiple of that cohort is now closer to 5.1x. We hope you agree that this is a very clear demonstration of the power of our platform. True value creation is one -- when one can repeatedly deliver above-average returns over time consistently. We've been able to demonstrate steady performance over a significant period of time where we have methodically delivered great returns. And this is due to the great work of our clinic transformation teams and the people on the ground and our [ technologists ] who provide incredible tools. We continue to find ways to convey -- we will continue to find ways to convey the results of our capital allocation program to shareholders and demonstrate strong accountability and discipline in carrying out this program. Moving on. Our Canadian Clinics business continued its strong growth trajectory in Q2 2025. Patient visits in Canadian Clinics totaled 1.1 million in the second fiscal quarter. our first quarter with 1 million patient visits and up 38% from 766,000 in Q2 2024, demonstrating a significant increase in patient volume and engagement. The number of billable providers within this network reached 1,935 in Q2, up 13% from 1,706 in Q2 2024, highlighting the growing magnitude of our scale. In Q2 '25, our patients per billable provider was 548 compared to 449 in the prior year, representing an increase of 22%. With patient visits growing faster than the number of billable providers in WELL's Canadian Clinic network, we are demonstrating increasing efficiency in our clinics, resulting in an increase in the number of patients per billable provider. While there are many factors that contribute to this improvement, we believe improved tooling and technology provided by WELLSTAR and sourced from HEALWELL AI to be one of those key reasons. Our platform allows providers to spend more time seeing patients and not to have to worry about the overhead tasks or managing a clinic or spending hours on charting patient records. This shows that our business model is working, and we are successful in helping the most important constituent in our business, the health care provider. Now looking at our Canadian business, including Canadian Clinics, WELLSTAR and CYBERWELL, our WELL Canada business is experiencing accelerating growth as you can see from both of these graphs. In Q2 '25, Canadian clinics generated $131 million compared to $93.6 million in the prior year, an increase of 40% as compared to the prior year's growth of 39%, thus the acceleration. Similarly, adjusted EBITDA for our Canadian Clinics business reached $23 million in Q2 '25, up from $13 million in Q2 '24, representing an increase of 76% as compared to the prior year growth of 19%. That is a good segue to this new slide, which shows our very steady history of improving EBITDA growth -- adjusted EBITDA growth in Canada, which is comprised of Canadian Clinics, WELLSTAR and CYBERWELL. Note that just last quarter, we indicated that it was our goal to reach $100 million in adjusted EBITDA on a run rate basis by the end of 2026, inclusive of organic and inorganic growth. Note that we are now targeting to reach this milestone by mid-2026, which would be at least 2 quarters earlier. We believe it may be possible for us to pull this schedule even further as we continue to accelerate and improve our business. Stay tuned next quarter for an update on this. Note that in 2025, we're expecting our adjusted EBITDA in Canada to experience over 25% growth, inclusive of both organic and inorganic growth. We see this target as entirely within reach and are fully committed to making it a reality. Turning our attention to the Canadian clinic market. WELL is the largest network of outpatient clinics in the country. To put that in perspective, in Canada, there are roughly 290 million patient visits each year and WELL Canadian Clinics current run rate accounts for approximately 4.1 million of those visits. WELL still represents only about 1.6% of the total Canadian patient visits nationwide. This small market share highlights the significant growth opportunity ahead of us. Even as the market leader, we have substantial runway to expand both our clinic count and our patient base. On the right-hand side here, you can see how our clinical footprint is larger than the next 5 Canadian clinic peers combined. The takeaway here is clear. There is a large and fragmented market in front of us with thousands of clinics and hundreds of millions of patient visits, and we believe we are uniquely positioned to capture a more significant portion of market share over time. In Q2 2025, we continue to execute on our strategic growth plan through the expansion of our clinic network. We acquired 3 clinics generating $8 million in annual revenue. Our owned and operated clinic network welcomed 45 new providers in the second quarter, further strengthening our capacity. While Q2 activity was technically lower compared to Q1, several transactions we have been working on, closed just after the end of the quarter, at the beginning of Q3. As you can see here, thus far in Q3, we've already acquired 4 clinics adding more than $15 million in revenue and welcoming 70 new providers to our network. With a diversified clinic strategy, a growing physician base and a scalable expansion model, we are well positioned to drive long-term growth and operational efficiency. On this slide, we highlight our M&A pipeline. As you can see, we have a very healthy pipeline of clinic acquisition opportunities, which we believe is directly correlated with the challenges doctors are feeling in the marketplace and WELL's growing brand recognition. We continue to focus on Canadian -- acquiring Canadian clinics under both our absorption model and our acquisition model. As a reminder, under the absorption model, we're usually acquiring clinics with lower operating margins for nominal consideration. Meanwhile, under the acquisition model, we're acquiring more profitable clinics that can typically be acquired for approximately 3 to 4 to 5x multiple. Our current pipeline of Canadian clinic acquisition opportunities is very active. In Canadian Clinics, we currently have 7 signed LOIs, representing 25 clinics and approximately $48 million in annual revenue. This is an improvement from our prior call in May where we had 10 clinics with $44 million in annual revenue under LOI. In total, across the organization, including Canadian Clinics, WELLSTAR, WELL USA and HEALWELL, we have a total of 15 signed LOIs, representing $134 million in annualized revenue. We're expecting to execute on this pipeline of signed LOIs in a non-dilutive manner to current operating margins. We also have a very large pipeline of target acquisitions that are in the pre-LOI stage. We have more than 35 targets engaged, representing about $440 million in annual revenue and more than 110 clinics represented. Now let's talk about the long-term vision for WELL's Canadian clinic market share. Looking forward, our target is ambitious, but highly achievable. We see a path to 1,400-plus clinics delivering $4.5 billion plus in revenue and $650 million in EBITDA. We estimate this represents more than 40 million patient visits each year, which is approximately capturing an 8% to 10% of the market share with growth implied within that. We have a scalable acquisition engine already in place, supported by a robust clinic pipeline that can drive accelerated expansion in the near term. Our dedicated transformation team, combined with AI-driven acquisition and integration workflows enables us to significantly shorten timelines and enhance efficiency. This is backed by a proven track record of optimizing hundreds of clinics across Canada. From a unit economics perspective, incremental clinics are highly accretive, delivering strong returns on incremental capital invested, which in turn raises our long-term ROIC. We monitor payback periods closely and focus on the speed at which each acquisition begins contributing EBITDA, and the results so far give us confidence in our ability to hit these targets. The second theme I'd like to talk about is WELLSTAR. As a reminder, WELLSTAR is a WELL subsidiary, which we intend to spin out as a publicly listed high-growth, profitable pure-play SaaS or Software-as-a-Service healthcare technology company, which would still be majority owned by WELL. WELLSTAR is a technology platform that powers WELL's own clinical ecosystem in addition to serving thousands of clinics and doctors outside of WELL's owned clinics who purchase WELLSTAR's solutions. In fact, 95% of WELLSTAR's revenue comes from external customers. WELLSTAR is dedicated to empowering healthcare providers with innovative solutions that enhance patient care and optimize operational efficiency. WELLSTAR is laser-focused on addressing the diverse needs of healthcare providers by streamlining care delivery, integrating fragmented care systems, reducing provider burnout and improving patient experiences and outcomes. As noted before, over 40% of all providers in the country use at least one product from WELLSTAR. We believe WELLSTAR will be a very strong IPO candidate on the TSX main board sometime as early as Q4 of this year, depending on market conditions. Our plan is to build additional scale before going forward with the go public initiative by completing additional acquisitions and enhancing our organic growth. This will position WELLSTAR towards achieving more than $100 million in annualized revenue on a run rate basis. We can't predict how the capital markets environment will be in the future, but our plan is to be ready for any market opportunity that may appear in late 2025 or early 2026. As well as a majority voting shareholder of WELLSTAR, we expect to continue consolidating WELLSTAR's financial results into WELL in accordance with IFRS accounting rules, even after WELLSTAR is its own public company with its own listing. Now let's look at WELLSTAR's financial performance. We're pleased to report that WELLSTAR delivered another exceptional quarter, generating revenue of $16.8 million and adjusted EBITDA of $4.4 million. This reflects approximately 15% organic growth and adjusted EBITDA margins of 26% on a pre-shared services basis. WELLSTAR is operating on a rule of 40 or better -- operating as a Rule of 40 or better business. WELLSTAR achieved annualized recurring revenue or ARR of $53 million in Q2, an increase of 51% compared to Q2 of last year. WELLSTAR is already one of the most relevant and consequential companies in Canada's healthcare technology landscape and has firmly established itself as a de facto market leader in technology enabling clinicians across the country. WELLSTAR operates in 3 distinct segments. First is EMR or electronic medical records, where we serve approximately 16,000 providers working in over 3,700 clinics. Secondly is our Digital Health App segment. This includes apps.health marketplace and OceanMD as well as our suite of AI solutions, including Nexus AI, altogether reaching approximately 25,000 providers. And finally, the billing and practice management division that serves almost 14,000 practitioners working in over 1,500 clinics. I want to zoom in on OceanMD now. Just a reminder, OceanMD is the Canadian leader in patient engagement tools and e-referrals. OceanMD is trusted by over 49,000 providers and clinic staff at over 5,600 clinics and hospitals across Canada. Ocean's patient engagement tools are the most used across the country with over 3 million online appointment bookings annually and 36 million annualized automated reminders sent to patients. Ocean's e-referral platform facilitates over 1.7 million annual e-referrals and growing rapidly. Ocean is active in 9 provinces across Canada and is winning larger contracts all the time. We look forward to telling you more about Ocean's recent wins in the coming weeks. They are very exciting. The third theme I'd like to talk about is HEALWELL AI. We are very pleased with the progress at HEALWELL, a company that we had a central and foundational role in conceiving and developing after we acquired its MCI clinics in October 2023. We took on a major leadership role in capitalizing and relaunching the company and shaping its fundraising and M&A journey along with the management team. We're also very pleased to report our first quarter with the inclusion of HEALWELL AI, a company that, again, we helped incubate 2 years ago, in which we took a majority voting control position just this past April. As a reminder, HEALWELL AI is a global data science and AI leader, serving 70 of the largest health systems here in Canada and globally in 11 countries, including customers such as the NHS in the U.K., the governments of France, Spain, Saudi Arabia, Abu Dhabi and UAE, New Zealand, Australia and health systems in the United States as well. HEALWELL's Q2 '25 financial results revealed a truly transformational quarter for the company where HEALWELL achieved quarterly revenue from continuing operations of $40.5 million, 645% higher than the $5.4 million generated in Q2 of '24. Revenue growth in the quarter was largely driven by the Orion acquisition, resulting in a record 1,064% year-over-year increase in the company's healthcare software business compared to Q2 of '24. The company also had excellent growth in its all-important AI division. During Q2 '25, HEALWELL reported positive adjusted EBITDA of $1.9 million compared to an adjusted EBITDA loss of $3.7 million in the prior year. This marks the company's first quarter of positive adjusted EBITDA, reflecting strong operating fundamentals and accelerating business momentum. Yesterday, HEALWELL announced that it is seeking strategic alternatives for the company's clinical research and patient services business units and has signed a number of nonbinding LOIs to investigate this effort with the goal to become a pure-play digital SaaS and services company, with a focus on enterprise-grade data science and AI offerings. This is a major strategic initiative by HEALWELL. By divesting of its clinical research and patient services businesses, HEALWELL envisions becoming a pure-play enterprise-grade provider of high-margin AI data science and SaaS software services to some of the largest health systems globally. And we are very excited about their ability to connect, surface and analyze complex healthcare [ arena ]. The fourth theme I'd like to talk about is our current strategic review of our U.S. assets. We are limited in what we can obviously say about these strategic review processes with our U.S. assets until they come to terms with binding commitments, but I will try to give you some high-level color as we are making progress. We remain committed to our strategy of divesting the company's U.S. care delivery assets, including Wisp, Circle Medical and CRH. We believe these divestments could result in significant cash benefit for WELL. Our strategy would be to redeploy this capital into our Canadian clinic footprint, where we have significant leadership advantage and exceptional growth potential. Recently, over the last few months, when we started to see the capital markets improve and get back to record levels, we have also witnessed increasing levels of interest and activity in these assets, frankly, at levels that we've never experienced before since we started the initial processes over 1 year ago. Currently, we have multiple advanced conversations occurring across these assets, and our objective is to announce at least one divestment by the end of the year. We'd also like to take note that although we are exiting our patient care and digital delivery businesses in the United States, including Wisp, Circle and CRH, our technology-focused subsidiaries such as HEALWELL, WELLSTAR and CYBERWELL will continue to serve customers in the U.S. and around the globe with their SaaS and services offerings. In fact, we believe the U.S. to be an excellent growth market for SaaS and services, and we are less interested in the U.S. for care delivery businesses, and that is why we are executing on these divestiture processes. And now a quick word on Wisp. Wisp continues to demonstrate strong business fundamentals with consistent revenue growth and operating margin expansion. Wisp had a very strong Q2 with quarterly revenue of $28 million, an increase of 15% from Q2 of last year, and it achieved positive adjusted EBITDA of $866,000 in the quarter. This performance reinforces the Board's conviction in Wisp's long-term value potential as we navigate our sales processes. We're expecting Wisp to have solid performance in the back half of 2025 and remind investors that Wisp has typically performed better in the second half of the year than the first due to some seasonality in the business. And a few words about Circle Medical. Last year, we were just getting started on executing on our strategic alternatives process for Circle, and then we had to slow down this process due to the regulatory inquiry, year-end audit and reclassification of deferred revenue, which we are now in the process of recognizing. Since we've already discussed the impact of Circle Medical and its deferred revenues extensively in this report and our financial statements, we won't get into the numbers here. We continue to be focused on improving our compliance program and clearing our regulatory review process and look forward to continuing to report on this matter in the next earnings event. And finally, CRH and provider staffing. In addition, we have now initiated a strategic review process for our CRH and provider staffing businesses, as we indicated last call. We're still early in the process, and we'll provide updates as we are able to. The combined CRH Anesthesia and Staffing business has been performing very well, having generated revenue of $122.8 million in the quarter compared to $93.3 million in Q2 of last year, an improvement of 32% year-over-year. Adjusted EBITDA for the combined Anesthesia and Staffing was $24 million in Q2 compared to $19.6 million in Q2 of last year, an improvement of 22%. These results are indicative of the growth and strong profitability of these 2 assets. I will now turn the call over to our CFO, Eva Fong, who will review the financials for Q2 2025. Eva?

Thank you, Hamed. WELL achieved record quarterly revenue of $356.7 million in Q2 2025, marking a 57% increase compared to $227.3 million generated in Q2 2024. This growth was driven by strong organic expansion and recent acquisitions with HEALWELL contributing $40.5 million to the quarter's results. Adjusted EBITDA in Q2 2025 was $49.7 million, a 231% increase compared to $15 million in Q2 of last year. The strong growth in adjusted EBITDA demonstrates the underlying strength of our operations and solid financial position with the fundamentals of our business continuing to improve as we move forward. This was the first quarter that we consolidated HEALWELL into our financials. As you can see in the slide, HEALWELL had a positive impact of $40.5 million to revenue and added $2.2 million to adjusted EBITDA in the second quarter. Excluding the impact of Circle Medical's deferred revenue, Q2 2025 revenue would have been $347 million, while adjusted EBITDA would have been $40 million in Q2. Notwithstanding Circle Medical's own results, which has seen a year-over-year decrease due to the focus on compliance, we expect Circle Medical's deferred revenue will continue to make a positive contribution to adjusted EBITDA in Q3 and Q4, with the impact significantly declining in the second half of next year. Now on to our quarterly adjusted net income. Overall, our Q2 2025 results reflect a solid first half of the year. WELL reported record adjusted net income of $25.8 million or $0.10 per share in Q2 2025 compared to adjusted net income of $4.1 million or $0.02 per share last year. During the quarter, HEALWELL contributed $4.8 million to adjusted net income, while the net impact of Circle Medical deferrals contributed $2.8 million. Excluding the impacts from Circle Medical revenue deferrals and the inclusion of HEALWELL, the company improved its adjusted net income by $14 million compared to Q2 of last year, representing a significant improvement in profitability over the past year. We achieved record free cash flow in Q2 2025. Adjusted free cash flow attributable to shareholders was $11.7 million in Q2 2025, an increase of 34% from $8.7 million in Q2 of last year. This increase was largely attributed to increase in shareholder EBITDA, which was offset by taxes, interest and capital expenditures. In Q2 2025, we had high quarterly cash taxes for the company. Capital expenditures were also greater than normal due to investments in new equipment and clinical facilities to drive new revenue, especially related to our executive health clinics. Note also that Circle and Wisp combined had a negative incremental impact of $2.1 million to free cash flow. Turning to our balance sheet as of June 30, 2025. WELL ended Q2 2025 with a solid balance sheet, holding cash and cash equivalents of $98.9 million. We remain in good standing and fully compliant with all covenants related to our 2 credit lines: JPMorgan in the U.S.; and Royal Bank in Canada. The outstanding debt from these credit lines was approximately CAD 253.2 million as of June 30, 2025. Orion Health, a wholly owned subsidiary of HEALWELL, entered into a new credit facility with the Bank of Nova Scotia in Q1 2025 with an outstanding debt balance of $44.3 million as of June 30, 2025. Our balance sheet continues to be strong, and we are confident that we will continue to see strong free cash flow generation in 2025. We've also resumed our normal-course issuer bid or NCIB in the second quarter. Year-to-date, as of August 13, 2025, the company has bought back approximately 175,000 shares in 2025, and we are expecting to continue with our share buyback program in the second half of the year as permitted. I'm pleased to report that we have the cash and available resources to continue to fund our M&A program. This is true for Canadian Clinics and WELLSTAR where the majority of our M&A pipeline is focused on. That concludes my financial update, and I will now turn the call back over to Hamed.

Thank you, Eva. I'm very excited and confident about our outlook for the balance of the year and into 2026. For the balance of the year, we believe shareholders can expect to see us continue to achieve new levels in revenue, adjusted EBITDA and adjusted net income as well as cash flow until divestments take place, at which time we will reissue updated outlook and guidance figures. As for the current guidance, we are reaffirming and slightly updating and upgrading. I will explain. We're pleased to reaffirm our 2025 annual guidance for revenue to between $1.4 billion to $1.45 billion, representing 52% to 58% annual growth as compared to 2024. Excluding the impact of the Circle Medical deferrals, the company's annual revenue guidance would be $1.35 billion to $1.4 billion. This annual revenue guidance only includes announced acquisitions. However, WELL expects to be in the upper half of this guidance range with the inclusion of planned acquisitions in the second year -- half of the year. Furthermore, we're pleased to increase our guidance for annual adjusted EBITDA to be in the upper half of the previously provided guidance of $190 million to $210 million, so an improvement of approximately $10 million. Excluding the impact of Circle Medical deferrals, we are similarly improving our guidance for annual adjusted EBITDA to be in the upper half of our previously provided guidance of $140 million to $160 million, again, roughly a $10 million improvement. This improvement of the company's annual adjusted EBITDA guidance only includes announced acquisitions. While the improvement in revenue guidance is with additional M&A, our improvement in adjusted EBITDA guidance does not require any additional acquisitions, which, of course, is highly likely to occur. So this shows the improving profitability profile and margins for the company. Second quarter was a milestone quarter as we included HEALWELL's financial results for the first time, and it was an exceptional quarter for HEALWELL where it surpassed the $40 million revenue milestone and achieved positive adjusted EBITDA. Our Canadian Clinic business, including Canadian Clinics and WELLSTAR and CYBERWELL, is outperforming, and we have many tailwinds in the health care market, including the Buy Canadian sentiment from federal and provincial governments that we expect will activate over time. We're expecting WELL Canada's adjusted EBITDA to grow by at least 25% this year, inclusive of acquisitions. Our longer term view of the Canadian market remains bullish. As we indicated last quarter, we're still targeting inclusive of Canadian Clinics and WELLSTAR to be over $800 million in revenue within 2 years, and we are ahead of plan with the company's expectation to be over $100 million in adjusted EBITDA by mid-2026 instead of the end of 2026, which is what we said last quarter on our call. We are the market leader in Canada with the largest owned and operated clinic network, and we expect we will experience substantial growth and profitability improvement in the coming years as we continue to pursue our long-term market share goal of 10%. In addition, WELLSTAR is the health care technology leader in Canada, whose growth will only accelerate as a publicly traded company. As noted earlier, we remain committed to the sale processes of our U.S. digital assets as well as CRH, and our objective is to deliver at least one transaction that unlocks value by the end of the year in this portfolio. In summary, we are very pleased with the strengthening fundamentals of our business and look forward to delivering strong results in 2025 and beyond. WELL's growth engine has never been stronger. Our organic growth is operating at its optimal level while we are executing on an extremely healthy M&A pipeline. We have a strong balance sheet and are well positioned to improve shareholder value. We have a committed and disciplined team to ensure we can execute on our objectives. And in line with that, I would like to thank WELL's senior management team as well as the senior teams at WELL Clinics, WELLSTAR, HEALWELL and CYBERWELL and all our employees and contractors and of course, our Board of Directors, for their tremendous effort and support. In particular, I would also like to thank our team of healthcare practitioners and our other frontline workers who provide unbelievable patient care. They are the true heroes of the healthcare ecosystem, and we are grateful to have an opportunity to serve them. I would like to thank you all for joining us today on this call and thank our shareholders and investors for their continued support. The capital markets have been very supportive of our vision and have provided us with the resources and means and support to pursue our goals and not only deliver shareholder value, but provide positive societal impact. And with that, we would be open to questions. Operator, would you please open the line?

[Operator Instructions] The first question comes from Rob Goff at Ventum Capital Markets.

Congratulations on the results with the quarter.

Thank you, Rob. Appreciate that very much.

Perhaps if I could dive into WELLSTAR. Could you talk a little bit more towards the leverage of WELLSTAR to outstanding RFPs, acquisitions and growth as an international player versus domestic player?

Sure. Yes. And look, I made a little bit of a comment in the script where I sort of tease a little bit that we have some good news coming. We, in fact, have been participating in significant RFPs across the country. We have reason to believe that we have very good results that we'll be able to share with the market shortly. As you know, e-referrals is one of the most important priorities for public health across Canada, both at the provincial and the federal level. Of course, Canada tends to execute on these types of initiatives at the provincial level. And Ocean has been very successful historically, and we are very bullish on its ability to continue to win business. And I think it's going to be a source of organic growth for us that we're going to be able to really count on and build on. So stay tuned there. Look, WELLSTAR is a Canada-focused player today, but very much is looking at picking its spots to expand. This is why it was so important to highlight that we are only exiting the U.S. as it relates to patient services businesses and not SaaS and services. We're very much interested in growing SaaS and services in the United States. And WELLSTAR is actually very deep in looking at targets that span across the border, so -- and across globally as well, primarily within the Commonwealth, which, of course, has similar health care ecosystem to us. So hopefully, that's some perspective for you.

That is very good.

And the next question comes from Gabriel Leung at Beacon Securities.

Congrats on all the progress. I had 2 questions on the -- focused on WELL Canada. First, Hamed, on the clinical side, given the size of the opportunity that you outlined during your presentation, have you seen any changes to the competitive environment around M&A, whether in primary care or diagnostic? Or do you think that your existing scale and I guess your tech stack via WELLSTAR is too much of a barrier for other potential entrants?

It's an excellent question. I think we have started to see a little bit of competition for, I'll say, the bigger assets, of which there are not that many, frankly. And we saw that, particularly in the process related to the ELNA assets. That was obviously a very well kind of publicized situation where you had a significant player go through an insolvency process. So it was widely marketed, and there were some folks that kind of bid on that, and I think it just attracted so much attention because it was on TV and whatnot. We don't see the same level of kind of engagement with the smaller assets. And in our view, small is beautiful, small is where you get the better multiples. We don't seem to have much competition in those smaller assets. And look, the country is generally -- the opportunity is generally characterized by smaller assets because of the deep fragmentation and extreme fragmentation of the country. So I think it's an excellent question because it is what makes us very confident in our ability to continue to pattern these high-quality acquisitions over time.

Second set of questions on WELLSTAR. I know it's still early in the Orion integration, but do you see any opportunities to cross-sell some of your products, and I'm thinking Ocean specifically into the Orion Health client base? And then the second part of my question is, you kind of touched on this earlier, but do you see adding, I guess, a fourth product category to WELLSTAR, perhaps some tools that you could sell into larger Canadian hospitals versus primary care clinics and maybe into some of Orion's larger health care system customers? Do you see that as an opportunity? And are there any specific modules that you'd be interested in?

Yes, it's a great question. We do believe that there are opportunities for Orion to resell certain WELLSTAR products globally. We have not focused on that too much yet just because there's been so much focus on integration and kind of like the cost side of things and just making sure that we do a really competent job in our first sort of 100 days to secure all aspects of the business. But this is something that we'll be investigating together. And look, your point is well taken that distribution potential exists the other way as well. And whether or not we actually resell Orion services, I think that we definitely want to be supportive of their growth. And we really do not overlap much with them. There's very little overlap, and we work at very different parts of the ecosystem, which I think is excellent for a number of reasons. And that allows us to collaborate really well. And so I think with time, that will occur. As you can imagine, both companies right now have a very heavy kind of focus on their existing businesses. And so this is one of the sort of secondary items, especially when you have kind of a pending goal for us to get to scale for an IPO. So WELLSTAR is very much focused on its own organic and inorganic growth and definitely we'll be looking for opportunities to grow with Orion.

Appreciate all the feedback and congrats on the progress.

The next question comes from Daniel Rosenberg at Paradigm Capital.

First, I wanted to dive a bit deeper in the MyHealth business. It seems like the Canadian business overall is seeing strong growth, but it looks like profitability was particularly strong for MyHealth this quarter. I was wondering if there's anything to call out there this quarter? And how should we be thinking about the margin profile of that business going forward?

Yes. Thanks, Daniel. We did have -- I mean, look, MyHealth has just been a really fantastic story for the company over the last several years. I would say management and the team there are really to be commended for just the excellent execution across cost management, developing their physician and patient base, continuing to really create a very healthy business there. Of course, as you may remember, last year was sort of, we executed on our first tuck-in under the MyHealth banner. It had been a while since we actually done a tuck-in under that banner. That tuck-in has gone extremely well. So some of the improved profitability is coming at the hands of that tuck-in. We also did have a kind of like a one-time reimbursement improvement this quarter that -- and look, I think the provincial health authorities are still trying to find ways to counter the effects of inflation over the past few years and ensure that physicians are being treated fairly. And so those things are happening. This quarter had a benefit there. But note that if you even take that out, MyHealth's performance year-over-year was still fantastic. And I think what you're going to see with MyHealth moving forward is continued really strong performance, but more tuck-ins. So some of the pipeline that we talked about earlier in terms of our M&A opportunities, is actually now MyHealth. It's not all just primary care stuff. It's not all absorptions. A lot of this is sort of higher quality, better margin diagnostic MyHealth type deals. We are, again, very encouraged of the results of our tuck-in last year. And remember, MyHealth before we bought it had done over 20 of their own acquisitions, and they had an excellent history of tucking in assets, getting new growth and demonstrating superior margins. And they really have demonstrated that again this past year. So we want to reward them with more capital allocation.

Good to hear. Thanks for that color. Continuing on the theme of M&A activity, it sounds like the pipeline is robust. It sounds like you're working through a number of integrations, especially now with Orion under the umbrella. I was just curious to hear how you're prioritizing resources outside of capital, but more time and people across business lines? How do you think about that? And then maybe if you could just comment on the cadence of integrations as you've been executing them for a number of years now?

Daniel, on that last part, I had a bit of a blip on my phone here.

I was just curious if you could comment about the cadence of your integrations now that you've done so many over the past several years?

Got it. Yes. So as far as how we're prioritizing resources, look, I think that we are -- I'll sort of say 2 things. One is we are very focused on automation and AI internally. And so, I made a comment around this in the script, but just the use of AI in our M&A platform, just our own M&A machine and the way that we prosecute M&A transactions and our whole process has gone from a bunch of really well-intentioned and kind of experienced people with spreadsheets and normal tools to today it's looking a lot more like a machine. Like it is tools and workflow and just the maturing of this process. Now the leveraging of AI tools has allowed us to drive productivity up very substantially. Similarly, we are investing heavily in the back office automation. We're doing this at all levels. We understand that, that's going to be the key to operating leverage in the future. So we're not just for getting the juice on new M&A and that's it. We want to create fundamentally a type of platform and structure that ensures very long-term success. We are playing the long game here. And so, I'm really proud of that effort. I think that it's going to take some time to really show the results of that. We're starting to see some of the results, but some of these fundamental refactoring initiatives of our shared services are occurring, and occurring at all levels. I think finance is a big example of that. IT is a big example of that. Look, the power of AI to help us improve our resources and our integration activities is just frankly limitless. And it's -- we're moving slower than I would like us to move, but we are very intentional and focused after -- going after this. And so that, to me, is #1 in terms of priority. And in terms of cadence of integration activity, look, I think we are very structured and very intentional around our integration activities. We know -- we don't buy something before knowing what we're going to do like clockwork. And so that's something that I think that is very much programmatized in terms of the WELL M&A activity. And I will say another note about prioritizing resources and just like zooming out how do we think about Canadian clinics. Look, I think that people are going to -- I hope people on this call appreciated the solid gross margins we're seeing, the great organic growth that we're seeing. This is a high-quality business and becoming more high quality. Two of our last acquisitions were high-quality clinics better margins. We are investing in executive health, concierge health, we're investing in longevity health. There is a group of patients and consumers in the country that are very interested in preventative health and they're looking for the best preventative care that the country has to offer. I would submit to you that our Vancouver Clinic at False Creek and our longevity program there is the most sophisticated longevity program in the country and what it's doing with AI and how it's taking imaging, clinical data points, biomarkers, all that and creating a very useful blueprint for how to improve health. So that's all to say that we are very much a comprehensive platform when thinking about care across the country.

The next question comes from Gianluca Tucci at Haywood Securities.

Congrats on the quarter.

Thanks, Gianluca. Appreciate that.

Hamed, I'm just wondering if you could share some perspective on how you're thinking about ROIC targets evolving in the medium term in the Canadian business as you continue to employ the M&A playbook here in Canada.

Yes, it's a great question. Look, we are very disciplined. We basically will not do a deal if we do not think that we can get to a 20% IRR over time. And if you actually look at what I noted earlier in terms of our capital allocation program and the sort of slide that included all the clinics, you'll see that we have been very much able to generally hit those numbers. And look, even in our digital acquisitions, we're seeing -- over time, the results that we're seeing are demonstrative of us more often than not meeting that 20% IRR threshold. And so that is a big driver of our decision-making. And look, a lot of the tools and technologies that we're thinking about now are related with getting more synergies from these acquisitions over time. So it's something that we work on every single day. It's kind of like a batting average that we're relentlessly and obsessively focused on.

That's great color, Han. And as a follow-up, pretty solid provider patient growth of about 22% on average, you mentioned. That's solid growth. I'm just wondering, like is there like any specific technology that you can call out? Like is it like Nexus AI? Or is it a combination of things that's helping drive that accelerated efficiency at the provider level?

Yes, it's a great question. And candidly, we're still digging into those productivity improvements to better understand them. But we think it's the entire platform. We do believe Ambient Scribe is changing the game. It is we think by far the most important piece of technology that's come out in digital health anywhere in the world. I mean we're seeing this kind of take up everywhere. You can't sort of understate the value of giving hours back to a physician every single day. And that is what this technology has done. Of course, with Nexus, to your point, we're doing more than just Ambient Scribe with this Agentic platform that orchestrates activity. And so -- and we're in the early innings of that, but we are building with that Agentic platform and Nexus AI something that I believe is sort of Ambient Scribe 3.0. We have [ pole vaulted ] the competition there. And I think over time, you'll see that the platform that's being developed, we are not just acquiring stuff. We are really building and innovating at WELLSTAR. And that is to be true -- that's true in the past, too, with the apps.health marketplace, with our work at Ocean. We've really invented, focused on building new features and functionality. And I do think that all this will contribute to improved ROIC over time as well.

Thanks for the color, Hamed.

I know we're over time. So we'll go ahead and stop there. Thank you so much, everyone, for the wonderful questions and your time today. Really appreciate your support, and we look forward to speaking with you in November where we hope that we will level up these results even further. Thank you very much for the opportunity.

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating, and we ask that you please disconnect your lines.