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

Good morning, and welcome to the Annual General and Special Meeting of Shareholders of WELL Health Technologies Corp. My name is Hamed Shahbazi, I'm the Chairman of the company. And with your consent, I will serve as Chairman of today's meeting. Before we begin, I would like to remind shareholders that to the extent we make forward-looking statements about our business or prospects in the course of today's meeting. Any such statements are based on management's beliefs and opinions and are subject to risks and uncertainties that may cause actual results to differ materially. Shareholders are encouraged to review our public disclosure documents available on SEDAR, which contain detailed discussion of assumptions and risk factors. I now ask that the Annual General and Special Meeting of the shareholders of the company come to order. We have 4 matters of formal business to conduct today. One, the presentation of our 2025 audited financial statements; two, the election of directors; three, the reappointment of Deloitte LLP Chartered Professional Accountants as auditors of the company, four the re-approval of the company's omnibus equity incentive plan and unallocated entitlements thereunder. Following the formal process, we will proceed with the corporate update and a question-and-answer period. Before we begin with the formal business of the meeting, we will go through the procedural matters. First, I appoint Eva Fong, Chief Financial Officer of the company, as Secretary of the meeting. I also appoint Pardeep Sangha, Investor Relations for the moderator of the virtual meeting. I appoint Dave Baines from Computershare as scrutineer of this meeting. And finally, I appoint Loreto Grimaldi, Chief Legal Officer of the company to take conduct of and attend to the formalities of this meeting.

Thank you, Mr. Chair. Good day, everyone. As this meeting is being held virtually via live webcast, we have determined it necessary to set out a few rules for the orderly conduct of the meeting. Number one, voting on all matters will be conducted by electronic ballot using the Lumi virtual meeting platform. Registered shareholders and duly appointed proxy holders will be asked to vote on each matter of business. . If you have not already voted by proxy, it is important that you do not vote again here at the meeting unless you intend to change your initial vote. Secondly, questions in respect of a motion can be submitted by any registered shareholder or duly appointed proxy holder using the instant messaging service available on the Lumi virtual meeting platform. Please note that there will be a slight delay in the publication of the communications received. When asking a question, please indicate your name, which entity you represent, if any, and confirm that you are a registered shareholder or a duly appointed proxy holder. Questions will only be addressed during the question period at the end of the meeting, provided the questions regarding procedural matters or those directly related to motions before the meeting may be addressed during the meeting itself. For the purposes of the meeting today, voting on all matters will be conducted by electronic ballot. Registered shareholders and duly appointed proxy holders will be asked to vote on each business item after the presentation of all business items. Once the votes have been called open, you will see the resolutions appear on screen with the option to select your vote. If you have moved into another tab while the votes have been opened, you can return to the votes in the voting tab you will only have a certain amount of time to vote when the votes are open. With that, we will now proceed with the formal portion of today's meeting. To expedite the formal part of the meeting, I have requested that the Chairman move all motions in advance, which he has now done. Thank you. The purposes of today's meeting are set out in the management information circular of the company dated May 8, 2026. The company has used notice and access for delivery of the meeting materials. The notice calling this meeting was mailed to shareholders on May 15, 2026, the Management Information Circular, the form of proxy, the audited consolidated financial statements of the company for the fiscal year ended December 31, 2025, and the related MD&A was mailed to shareholders of the company who requested such documents. I will dispense with the reading of the notice of meeting. Copies of the management information circular and other meeting materials are available under the company's profile on the SEDAR website and the company's own website. Our transfer agent, David Bains of Computershare Investor Services, Inc., has attested to the proper mailing of the notice calling this meeting. Proof of such notice -- or excuse me, proof of such mailing has been provided by the company's transfer agent to me. I direct a copy of such proof of service be annexed to the meeting minutes as a schedule. The company's articles state that a quorum for the transaction of business at a meeting of shareholders is one or more persons present and being or represented by proxy 2 or more shareholders entitled to attend and vote at the meeting. I have been advised that a form of shareholders of the company is present, and therefore, the meeting is properly called and duly constituted for the transaction of business. I've received the scrutineer's report, and I direct that their formal report be annexed to the meeting minutes as a schedule. Now to the first item of business on the agenda for today's meeting. I now present to the meeting the audited consolidated financial statements of the company for the fiscal period ended December 31, 2025, together with the auditor's report to the shareholders thereon. Copies of such documents have been mailed to the shareholders who requested such statements, and it is not proposed to read them at this meeting. As a reminder, registered shareholders and duly appointed proxy holders will be asked to vote on each business item after the presentation of all meeting business items. After the presentation of all meeting business items, I will pause for approximately 30 seconds to confirm that there are no questions on any matters before opening the voting polls. The first item of business is the election of directors. The 6 directors to be elected by the shareholders of the company shall hold office until the close of business on the next Annual Meeting of Shareholders of the company following election or until their successors are elected or appointed. The Directors, Hamed Shahbazi, Tara McCarvill, Kenneth Cawkell, John Kim, Sybil Lau and Thomas Liston, have been nominated as directors for the ensuing year or until their successors are elected or appointed. Each of the persons nominated has confirmed that he or she is prepared to serve as the Director of the company. In accordance with the advanced notice provisions of our bylaws, no further nominations may be made at this time. Therefore, I declare the nominations closed. The next item of business is the appointment of auditors of the company for the ensuing year and to authorize the directors of the company to fix the remuneration of the auditors. The Audit Committee of the Board of Directors of the company has approved, subject to shareholder confirmation, the reappointment of Deloitte LLP chartered professional accountants as auditors of the company. I now move that Deloitte LLP charter professional accountants be appointed auditors of the company until the next Annual Meeting of Shareholders and that the Board of Directors be authorized to fix their remuneration. The next item of business is to reapprove the Omnibus equity incentive plan of the company in the form attached to the company's management information circular and approval of any unallocated entitlements thereunder. The reapproval of the Omnibus equity incentive plan must be approved by the majority of the company's Board and the majority of the votes cast by its shareholders at this meeting. The Chairman has moved the motion that the following ordinary resolution be approved. Be it resolved as an ordinary resolution of the shareholders that, number one, the Omnibus equity incentive plan as amended adopted by the Board of Directors of the company on May 8, 2026, and in the form attached to Schedule B to the management information circular of the company dated May 8, 2026, is hereby confirmed, ratified and approved. Number two, the options and awards each as defined in the equity incentive plan to be issued under the equity incentive plan and all unallocated options and awards under the equity incentive plan be and are hereby approved and the company has the ability to grant awards under the equity incentive plan until June 16, 2029, which is the date that is 3 years from the date of the meeting of the holders of common shares of the company at which shareholder approval of the equity incentive plan is being sought. Number three, the Board is hereby authorized to make such amendments to the equity incentive plan from time to time as may be required by the applicable regulatory authorities or as may be considered appropriate by the Board in its sole discretion provided always that such amendments be subject to approval of the regulatory authorities, if applicable. And in certain cases, in accordance with the terms of the equity incentive plan, the approval of the shareholders. And fourth and finally, any one director or officer of the company is hereby authorized and directed acting for in the name of and on behalf of the company, to execute or cost to be executed under the sale of the company or otherwise and to deliver our cost to be delivered all such other deeds, documents, instruments and assurances and to do or cost to be done, all such other acts as in the opinion of such director or officer of the company may be necessary or desirable to carry out the terms of the foregoing resolutions. That now completes the motions for business to be conducted at the meeting. I will wait approximately 30 seconds to confirm that there are no questions before proceeding to opening the polls. Will the moderator please confirm if there are any questions.

I confirm there are no questions. .

Thank you, Pradeep. As mentioned, voting today will be conducted by electronic ballot. I will now take a moment to ask that the balloting be opened to registered holders and appointed proxy holders. The polls are now open, and at this point, all registered holders and proxy holders who have properly logged in with their control number or invitation code and have input their password and wish to vote will be able to see on the screen all motions being brought forward at this meeting. As a reminder, if you have already voted by proxy, it is important that you do not vote at this meeting again unless you intend to change your initial vote. Please register your votes by accessing the voting page and selecting the for or withhold buttons next to the name of each proposed director next to the resolution with respect to the reappointment of Deloitte as the company's auditors and by selecting for or against buttons next to the approval of the Omnibus Equity Incentive Plan. Once the electronic balloting closes, the voting page will disappear, and your votes will automatically be submitted. We will now provide registered shareholders and duly appointed proxy holders approximately 30 seconds to complete the electronic ballots. [Voting]

Thank you. Voting has now closed. I would ask the scrutineer to compile the report regarding the results of voting on all business matters. The preliminary results show that all matters have been approved subject to file tabulation by the scrutineer. Final results of voting will be promptly published on SEDAR and by news release. The formal items of business as set out in the notice of meeting have now all been dealt with as there is no further business to come before the meeting, and on behalf of the Chairman, I now declare the formal part of the meeting to be terminated. Now that we've finished the formal business of the meeting, we will proceed with a corporate presentation, which will be followed by a question-and-answer session. With that, I will now turn the meeting over to our Chairman, Hamed Shahbazi.

Thank you, Laredo. We will go through a short presentation and take some questions from analysts and conclude the meeting for today. Next slide, please. And next slide. We're very pleased to speak to our shareholders today. We are very excited about our growth and very much working on really deploying new messaging as it relates to just how important we've become to the Canadian health care ecosystem. I'm sure a lot of people know that we are a large platform owner in terms of the owned and operated business here in Canada. We are the largest and have been for a number of years, but we're increasingly tech-enabled, and that's something that's really important for folks to understand. We are not only the clinics that deliver care, but we own and operate and WELL Star, the software that runs our clinics and in Heal WELL, we have the data science and AI that makes our clinics and care delivery smarter. And so really, our goal is not just to own and operate a bunch of assets and support physicians and their operating duties, but to really underpin outpatient care at scale with high quality and through a motion of modernizing Canada's health care ecosystem. Let's go to the next slide. As a reminder, our guidance for the year in revenue is somewhere between $1.55 billion and $1.65 billion. And on an adjusted EBITDA basis, $175 million to $185 million. Note that in our press release a couple of weeks ago, we indicated that we will be through. We are now expecting to be through the top end of our guidance, given recent acquisitions and performance in the business. We're really pleased to be able to convey that. One of the great things about our business is that it is so defined and clear in terms of our revenue stickiness -- our revenue is about 98% of it is either recurring or highly reoccurring. We are now delivering over 5 million patient visits per year and more than $10 million care interactions, but actual visits is over $5 million a year. Just for perspective, the largest hospital system in the country deploys about 2 million patient visits per year. And so at $5 million and growing at 30% per year, we are truly playing at a scale that no one else is playing at in the marketplace. And we're very pleased to be able to support the health care ecosystem in the way that we are and the investments that we're making in delivering care in the most tech-enabled and efficient way possible. Next slide, please. As you've probably seen in our last few conference calls, we are increasingly talking about not just revenue and EBITDA and cash flow. But some of the impacts that we're having on the health care ecosystem that are felt by patients and providers every single day. And while these show up as a byproduct in our revenues, and performance. There are some really incredible stories about how we are reducing pain, provider burden, and enabling patient access and delight in our clinics. And we'll continue to do that. This is about time saved for the physicians. This is about reducing operational complexity and burden and really taking a lot of the challenges that physicians face when they run their own clinics and either providing them with the platform tools to do that through the WELL Star network or having them come over and practice it well. While clinics. Let's go to the next slide. As we've talked about before, we're continuing to grow the network. And so this slide has been updated now. You may have seen it in our last conference call but we are now at 270 clinics in the country. So growing quickly, and we're pleased to note that in provinces where we have clinics and clinic infrastructure, 75% of the population lives within a 20-kilometer radius from a well clinic. And across the -- and across the country, we are at 70% regardless as to whether or not we are in a province that has well infrastructure. Next slide, please. I'm sure most of you have seen this slide before. Again, what it really conveys is how unique a value proposition we have at WELL. We are scale players not only in delivering care in our Canadian clinic network, which is multidisciplinary between primary care, specialized care and executive and preventative care. But we're also scale players through our technology stack, which obviously has very comprehensive technology tool to support the health care provider at WELL Star, Heal WELL and their platform to support public health and the data interoperability, health care information exchange and disease detection capabilities that they have and then, of course, data protection at Cyber Well. We don't know of any other entity in the country that comes anywhere close to providing similar attributes and scale capabilities in both care delivery and technology. Actually, it would be hard to find similar players even on a global basis that would have the same kind of posture and profile that we have between the ability to, again, deliver scale on care delivery and technology. This has unique benefits for the company because there's enormous learnings that occur by virtue of having technology and providers so closely knit together. Let's go to the next slide. I referred to this a bit earlier, but our AI product suite continues to grow. WELL Star is not just a collection of software capabilities. It is a truly integrated Agentic platform that brings together a multitude of functions in one platform. The health care ecosystem is very much going into a direction where point solutions, even AI-driven point solutions will not cut it. Everything needs to be part of a knowledge graph and a system of action that brings together and orchestrates all capabilities in one platform. That's what Nexus AI is. And the vision and the capabilities of WELL Star are really exciting. We invite you to learn more about Nexus AI because it is truly an exciting platform. And in Heal WELL AI, as you may know, we own Orion Health, which is a scaled, very unique cornerstone data science and interoperability platform globally, serving health systems such as the NHS various health systems in Canada and the United States and as well as France, Spain, New Zealand, Australia, Saudi Arabia, where they operate the largest health care information exchange in the world and Abu Dhabi, amongst others. And now being able to bolt on and integrate best-in-class clinically validated artificial intelligence. We are now seeing take-up of those AI services by those health systems. And we've seen and announced some strong wins in terms of economically demonstrating the take-up of those services. So the industrial logic of Orion being in the heel well and well family is very much alive and well, and we're very excited about that. Above and beyond that, our clinically validated AI, which is clinically validated with over 40 peer-reviewed published papers and esteemed publications. Those clinically validated algorithms are at work essentially screening and identifying high-risk patients, we've saved lives with the Heal WELL clinical decision support and disease detection platform. And this is something that we very much have focused on in order to deploy more comprehensively across our network later this year. Stay tuned for that. Let's go to the next slide. Our clinical performance, in fact, really the performance of all of WELL Canada, but zooming into Canadian clinics has been really quite remarkable. Our multiyear CAGR growth here on revenues have been at 47% and on EBITDA as being 44%. Note that a couple of weeks ago, we did just indicate that. We reached our $100 million EBITDA goal for Wealth Canada, more than 3 quarters earlier than planned and at much better operating margins. We had initially indicated that we would achieve that goal based on approximately $800 million in revenue, but we were able to achieve it at roughly a $700 million revenue scale on a run rate basis. Almost 200 basis points improvement. So we're very pleased about that, and we are excited about speaking to that in greater detail at our next conference call. Let's go to the next slide. Of course, our historical performance continues to demonstrate significant growth and I would say sustained profitability, and we expect EBITDA and cash flow to follow suit in the years ahead. Next slide, please. A couple of new members of the management team that we've announced recently. Very pleased to repeat that here for you today. Derek Clark has been appointed Chief Operating Officer of the company. Derek is a very experienced health care executive who's been running scaled and significant teams in health care across Canada for a couple of decades now. He had significant responsibilities at General Electric, GE Canada, particularly with a focus on radiology for a number of years before going to Calian where he ran the health care P&L there in addition to other diversified services. We're very pleased to have Derek join us. It's already been a big boost to our team. And then most recently, we have appointed Dr. Andrew Bond as Chief Health Officer Andrew was previously the CMO at Greenfield Insurance. He brings a wealth of experience in health care. And he is now going to be not only leading our clinical side of our business, but also public sector where he brings a wealth of experience. So a portion of Dr. Bonds responsibility will be to have all the medical directors and of our business reporting into him. And then also really driving and strategizing our -- bringing together the various different components of our business as part of one holistic public sector strategy. When you combine the capabilities of well clinics with WELL Star and Heal WELL, we really have an incredible ensemble of capabilities and Dr. Bond would really be bringing that together and sharpen our messaging with public sector. There's lots of opportunities there, particularly at a time when the country's focus is to source more sovereign-based solutions. There are very few companies at the scale that WELL and it's the WELL Group is playing in. And so bringing Dr. On board really gives us tremendous capability in this area. So stay tuned. And of course, Dr. Marcel Frankle, who was previously the CMO is no longer the CMO as Dr. Band has taken over that sort of chief clinician position. Dr. Frankle continues to focus in his core area of President of Canadian clinics. Let's go to the next slide. One of the things that I'd like to point out is coming your way, is our fifth impact in sustainability report. We're very excited about this year's report which is called built for this moment in health care. The 3 key pillars will look familiar to you. They've been slightly updated to pillar #1 being provider and patient obsession. Our focus -- this really reflects our focus on wanting to make the lives of our providers and patients better by delivering care, providing patient access and improving the tools and the circumstances in which care can be provided. And secondly, of course, as part of our risk management and platform really advancing AI responsibly with very strong governance and day protections. And then last but not least, continue with our focus on people and community and really deliver for the people that work not only in our clinics. We are now 7,000 people, more than -- well over 7,000 people a well, but also all the different communities that we touch across the country. We're becoming increasingly an important staple that's very very much with roots in the marketplace and in communities across the country. And we can see that as anchors in the community, we're being relied upon, and we're here to really support patients and the community. And so please look out for this report. I think you'll really enjoy it. A lot of hard work and effort goes into creating a quality report that really speaks to our -- our -- we call it a sustainability impact. Some people call it kind of DI report however you want to refer to it, this is really important because it really demonstrates our commitment to the community. So next slide, please. And so this will be the last slide. Really, we want to sort of remind shareholders that we are the largest clinic chain in the country. we have very durable compounding growth. More than 40% of all the doctors in the country are touching our technology platform in WELL Star, we have real AI and data traction. And I don't believe anyone in the country has mobilized AI at the point of care, the way that we have and supports public health in the way that we do. We are per share compounding and will continue to, especially with some of our higher-margin focused acquisitions and focuses in terms of driving improved margins across our clinical businesses. And our founder led team is here to serve and we'll continue to focus on building out this business. As we've indicated before, we have an 8- to 10-year goal of reaching 10% of all care across the country, we're probably approaching 1.5% right now. That should kind of coalesce around a $7 billion a year revenue scale. We're laser-focused on that, and we don't believe there's anything that really can get in our way except for us. And so we obviously won't do that. We will be very focused because we are the leader and we do have all the key tools and capabilities in order to get there. And I think that concludes our presentation for today. We will take some questions now from analysts.

Thank you, Mr. Chairman. First, a couple of housekeeping matters on the process. [Operator Instruction] The first question comes from Jan Lakotuci, an analyst from Haywood Securities. He asked WellStar raised $62 million in Series B ahead of what management has signaled could be a public listing event, with Nexus AI gaining traction and the large EMR installed base, what are the specific milestones revenue run rate margin profile or market conditions that management is using to evaluate the timing of such a spin-out.

Thanks for the question, Jon Luca. Look, we've generally been quite consistent in that we liked the spinout to occur with WELL Star, reaching around $100 million or so in revenue, and that continues to be our general goal for 2026. We think that, that is the appropriate goal to be a public entity. And we feel -- and that's for this year. And of course, we'll eclipse that number next year -- and we feel very good about that objective. Note that Well Star continues to also deliver Rule of 40 performance as a company. So we continue to be quite confident in our ability to complete the spin this year as intended. We've had very supportive conversations around WellStar, and this continues to be a big focus for us for the next several weeks and months. So stay tuned, as I believe this will be an exciting development for the company.

The second question comes from Justin Keywood of Stifel analyst. What is the ideal mix of revenue for the Canadian Health Network as for primary care versus executive health versus diagnostics in the future, by, say, 2030 compared to the revenue mix today.

Yes. Thanks, Justin. Great question. right now, I expect that our Diagnostics and Primary Care segments will grow fairly evenly. As our executive health platforms grow, I do expect them to be a larger percentage of primary care revenues, but they will still be fairly small compared to overall clinical revenues. Note that our diagnostic business has historically enjoyed much higher margins than our primary care segment. But that is changing, as I'm sure you've seen as margin expansion occurs in our primary care segment. And in fact, during our last quarterly conference call, we discussed the improvement in margins in our primary care business, and we expect that to continue given the trend of our most recent acquisitions. So as you've probably heard me say before, I really love the diagnostic business. Obviously, we just announced the acquisition of the OID network. And so -- but we also made a fairly substantial acquisition in our primary care segment as well with UninMD. So these are going to be a bit more even. I would think that revenues may scale a little bit higher in the primary care segment, but profitability will continue to index a bit higher on the Diagnostics segment. Hopefully, that's helpful.

Next question comes from Michael Freeman, analyst from Raymond James. He asks as well increases the scale of its Canadian clinic acquisitions what are the company's ROIC, return on invested capital, expectations on these investments over time.

Thanks, Michael. Great question and a very important one, given that we our very disciplined capital allocator. So our ROIC expectations continue to be very focused on the 22% IRR number. And this goes for both clinical and digital acquisitions. It's harder, of course, to do that on the digital side, but we found that it continues to be a very important goal for us. And I will say that more often than not, we've really achieved that. And so we are -- we closed the loop, we really review these things very rigorously over time, and that continues to be a very important bar for us at the 20% IRR mark.

Next question comes from David Kwan, analyst from TD Securities. His question is, you have previously spoken about the -- well Intelligence platform and how -- do you see it driving productivity in your internal processes in the future? What are examples of these processes? And what are potential benefits do you expect to achieve from the upcoming cost optimization initiatives?

Thanks, David. Yes, I'm very excited about the -- well Health Intelligence platform. Note that we are in development now. So this is one of the reasons why we highlighted those investment costs in our last conference call -- we expect to launch sometime in September, sometime in the fall. The platform will really allow us to mobilize the company's operational and back-office data for AI agents and advanced orchestration to help us accelerate our operations and reduce costs. The cost optimizations this year, which will be partially attributable to the intelligence platform, and which will be invoked later this year will be sort of single-digit million range. But as the company grows -- this will be very important and will allow us to grow more profitably as our back-office scale costs will scale more favorably with the growth of the business. So we really expect the Well Health Intelligence platform over the next several years to really bend that cost curve down as we scale revenue, gross profit and EBITDA, which obviously is an incredibly important part of getting shareholder value.

Thank you. There are no further questions. I turn the call back over to Hamid for closing remarks.

Thank you very much to everyone for attending today. We really appreciate everyone's attendance and all the support that the shareholder community has provided us. We look forward to our next conference call with you as we report our Q2 earnings in August. Thank you for attending WELL's 2026 AGM.