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Good morning, and welcome to the Claritev Corporation First Quarter 2026 Earnings Conference Call. I am France, and I'll be the operator assisting you today. 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, simply press star 1 on your telephone keypad. If you would like to withdraw your question, simply press star 1 again. 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 in 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 their 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. 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 in 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. Third, we've expanded our markets and our offerings to connect all phases of the healthcare lifecycle. That expansion has been critical to diversifying our revenue streams, 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 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, 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 NSA 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-$100 million ACV sales target for this year, which will represent a 20%-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. Two, it demonstrates our capacity to create new partner relationships with a shared goal of making healthcare more affordable and accessible to those who need it the most. Another bit of news we teased at Investor Day was our signing of a top-five 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. 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's a clear focus on driving affordability across the healthcare 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 the long-tenured client relationships and results to back it up. We're seeing a clear industry shift. Platform consolidation is accelerating, and clients are moving toward fewer, more integrated partners with scaled 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. It's not a rising tide that lifts all boats equally. In regulated high-stakes industries like healthcare, AI disproportionately benefits incumbents with trusted data, compliance expertise, and established relationships. That's where we operate. 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're 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 and vetted 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 and becomes a 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 saves more than 2,000 hours of processing time at a fraction of the cost. Another area that gets a lot of attention is the IDR process.

It's a high-volume, workload-heavy process with which you are familiar. Using AI, we have automated the invoice extraction and reconciliation process for our accounts payable IDR workflows. We're now handling thousands of invoices each day, automating 100% of the daily processing in less than 1 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 do 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 healthcare markets. Our recent wins with the World Trade Center and a 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 healthcare 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 a TPA that was focused on using AI throughout the TPA client's lifecycle. 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. 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 was our first full Investor Day in nearly two years. 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. Our story is getting simpler, sharper. It 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 healthcare lifecycle and how our comprehensive suite of solutions play an important role in helping us deliver affordability and transparency in healthcare, 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 healthcare technology ecosystem. 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 multi-year 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 is 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 one-time revenue benefit in our P&C business last year, which falls under 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-$100 million in ACV at Investor Day, representing 20%-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 remains 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 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 2025 each had approximately $5.4 million of one-time revenue that was recognized at a 100% adjusted EBITDA margin, which will impact the year-over-year comparisons for the balance of the year.

For the 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. As revenue from new ACV ramps, we expect our growth rate to increase to between 3%-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-$615 million, with margins of 61%-62%. When normalizing for the impact of the $18 million in one-time P&C revenue and EBITDA contribution last year, our guidance implies 3.5%-5% adjusted EBITDA growth, dollar growth on a like-for-like basis. As we previously stated, we're gonna 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 6-12 months to convert to revenue, which means we are investing in 2026 for those new and expansion revenue drivers that are largely that largely begin to contributing to our top line in 2027.

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 Dalton 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 automations, 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 2026 guidance for total capital and free cash flow unchanged, with capital at $160 million-$170 million and positive free cash flow. In 2026, 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 de-levering and de-risking 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 enter 2026 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 de-levering 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 wanna 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. Thanks.

Your first question comes from the line of Jason Cassorla with Guggenheim. Your line is open.

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

Hey, Jason. Thanks for your question. This is Doug, and good morning. I think we indicated in Q4 we had really started investing. When you look at kind of the run rate and annualized OpEx of the business, it was adjusted EBITDA expenses were approximately $385 million. 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 mix. I think, with respect to our internal targets, we slightly outperformed both revenue and EBITDA. 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, you know, maybe say for $1 million to $2 million here or there. 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. It's helpful. 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 that there's been a weaker respiratory system, some weather events impacted volumes across providers, you know, broadly, but not sure if you're seeing that, but maybe if you could just, you know, 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. Thanks.

Yeah, sure. I'll take that. 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, you know, I would say maybe a little bit less volume than we would have expected, but strong performance on a savings, identified savings, in revenue and savings per claim. It was really some of the mix that I would say has compounded over the last five quarters in the outpatient setting. From an inpatient facility perspective, we saw a little bit higher ER and room and board.

Don't know if that's, you know, don't know if that's impacted by weather per se. It was a little bit better than we had internally modeled. Really when you look at kind of the last 5 quarters in slide 11, that continuous pacing and trend of the higher acuity areas, especially in the outpacing setting, is about where 80% of our identified savings in 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.

Your next question comes from the line of Jessica Tassan with Piper Sandler. Your line is open.

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-$100 million bookings target, and then just how do the margins look on that, on those services bookings maybe at contract launch, and then over the course of the contract lifespan, and how would you expect the margins to progress?

Hey, Jess, I'll take a stab at that, and maybe if Travis wants to give any color, he can. When we look at Q1 of our $44 million, the provider and public sector contribute about 20% of the bookings. 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-$100 million, we expect growth from these areas, and especially services, to be meaningful.

The total mix of bookings is still gonna be around, I'd say, probably 20-ish% of our total number at the midpoint. These investments are critically important to us, which is why we announced the additional $20 million-$25 million in 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'd add anything.

Yeah, I'll just add a couple of things. 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. We've got the people, we've got the talent, we have acquired OPCG in order to create those relationships. We'll also be, you know, deeply embedded in their workflow, complex problems they're trying to solve. You know, even more so, a few things are important. One is it's high level of recurrence in some of these opportunities we have on recurring revenue services. You get some immediate revenue benefit when you can sign an opportunity like that, and you start it quickly.

We're not having to constantly just wait for the revenue to flow, which is so seasonal and cyclical in some of our core business. It also gives us the opportunity to pull through, again, horizontal and vertical. I can't stop talking about it, and I won't. We can pull through our horizontal products into those organizations we're working with on the services basis to help them with efficiency. Products like CompleteVue, our transparency products. 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, our margin view over time.

Got it. That's helpful. I guess just my follow-up. We had one of our MAOs kind of talk about these changes to concurrent reviews in the 2026 MA final rule. 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 ostensibly, you know, less frequent in 2026? 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. Thank you.

Thanks, Jess. Limited impact. We think MA could be an opportunity kind of mid and long term for us. As it relates to the kind of quarterly progression, limited if, you know, close to zero volume impact from that ruling quarter to quarter. Thanks, Jess.

Thank you. Again, if you would like to ask a question, press star then the number 1 on your telephone keypad. Our next question comes from the line of Stanislav Berenshteyn with Wells Fargo. Your line is open.

Hi. Good morning. Thanks for taking my questions. First on ACV, you're already halfway there on your ACV goals for the year. I'm just wondering, how's your visibility into your remaining go get? Do you expect any changes in the mix of upsells versus new logos? Just any color you can add there would be helpful.

Yeah, great. Thanks for the question, Stan. I'll take that first stab. 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 2025. That trend's been pretty consistent. I think the most, the most compelling piece of that is we have a ton of white space within the payer and TPA segment. 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. Make no mistake, our core business is still most of where the bookings are occurring. 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, and the funnel sufficiency is multi-9 figures. We feel very confident with $80 million-$100 million on the full year. You know, 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.

You know, I'll just add 1 comment, Stan. This is Travis. You know, we had 30 new logos last year and 6 new logos in the first quarter. We, you know, focusing on the core and what was said, we see significant white space. Doug just reiterated that. We're also, you know, really focused on creating more diverse, sustainable growth over time, and that starts with new clients. You know, we have a lot more telemetry into our business as it relates to our forecast, our processes, our win and close rates, the data with which we operate, and we have significantly more coverage, pipeline coverage to quota than we had 2 years ago. Almost 4.8 times, which is significant number. I think it was closer to one and a half times.

More pipeline, more coverage, better visibility. The last thing I'll say is we, you know, we have the confidence to invest in the business because we can see the top line. You're confident enough to make decisions like we made in Q4 and 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. That's a great leading indicator for us. You know, 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, you know, forcing payers to be a bit more mindful of, you know, 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. Thank you.

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

Great. Thanks so much.

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 the time and attention today. Thanks for the questions and the interest in the company. As noted, looks 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.

Ladies and gentlemen, thank you for joining us, and welcome to the Claritev Fourth Quarter 2025 earnings call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I will now hand the conference over to Todd Friedman, Head of Investor Relations. Todd, please go ahead.

Thank you, operator. Good afternoon, everyone, 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 in the investor portion of our website, along with the Fourth Quarter 2025 earnings press release issued earlier this afternoon. Our remarks are statements. These forward-looking statements represent management's beliefs and expectations only as 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 in the supplemental slide deck, and a more detailed description in our annual report, and other documents that we follow 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 the release in the supplemental slide deck. With that, I turn the call over to Travis.

Thank you, Todd. Good afternoon, everyone, thank you for your time today. I'm excited to share our Q4 results, 2026 guidance, and transformation progress. 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, I've 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 strategy plan. We set out very intentionally to create Vision 2030 and are very committed to that. That is not meant to be dismissive of immediate results and short-term objectives. To be clear, our goal and the focus of this management team is to build a well-run, disciplined healthcare technology company that delivers sustainable, profitable growth.

The business real and pressing problems in healthcare today and the future, specifically with laser focus in the areas of transparency and affordability, which are key to better health outcomes and economic forward. I'm exceedingly proud of the work we have done to lay a foundation, clarify our purpose, align and recruit talent, and focus our company and associates for performance. That combination of Claritev, alignment, and focus by our digital transformation and the introduction of horizontal new vertical markets has allowed us to turn to profitable growth sooner than expected. Simply put, our strategy is working. Most importantly, allowed us to prioritize with urgency to help our clients with their most. One comment on my remark that we have returned to profitable growth sooner than expected. One year ago, we stood on this call and provincial guidance of flat to down revenue was significant free cash.

I'd be remiss to not take a moment and give recognition to nearly 3,000 associates at Claritev who have showed up every day, aligned to our making healthcare affordable for everyone, in line with our Vision 2030 plan, and delivered these results that have far exceeded what we could do entering the year of the turn. On that note, let me foundational reasons why Claritev is positioned to keep winning in this market. Operating a highly complex and sometimes fragmented, 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 continue to rise. High claims are increasing, the regulatory environment is fluid, and are real challenges to tackle.

As of our results, we are well positioned to meet these pressing needs, network innovation, claims intelligence, transparency, and predictive models that ultimately benefit the healthcare industry. That combination of solutions 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 say it centers around us. One, the comprehensive network that we have developed over many decades. Two, the deep workflow knowledge and substance of our client relationships has inspired renewals and sales growth. Three, proprietary IP, business ability to analyze data, flexibility to adapt, and technology scale. High provider acceptance. For all the noise around provider, we achieve greater than 90% across our solutions. Five, a long history of regulatory expertise that is invaluable to our clients trying to adapt to a constantly changing state and federal environment.

About our competitive advantages, let me take this moment to comment about AI. Technology is a massive force improving health. AI is giving us the opportunity to tackle the biggest results, fragmentation and sensitivity of data, and incentives, complexity of work, and access. AI is reshaping the way we develop and our collective future. These persistent challenges are the opportunity, are the opportunity for us. Our working with clients across the ecosystem are major, major advantage, along with the competitive moat we have created with the new IP. The competitive advantages I just listed become even more pronounced, considered alongside our strategy. There will be winners and losers in this market. We believe key three core ingredients are going forward. One, embedded domain expertise.

Guys, we're gonna pause for one second. We're getting notes that the audio is bad. Operator, if you can hold on one second, we're gonna go to a different line here, okay? There you go. The audio is bad. Operator, is that a better connection now? Can you hear us better?

Sounding clear?

Complexity of workflows and access. AI is developing work in our collector. These persistent are the opportunity for impact. The time is now. Our four-plus decades of working with clients across the ecosystem are a major advantage of the competitive moat we have created with IP. The competitive advantages I just listed become even pronounced when considered alongside our strategy. Winners and losers in this market. We believe three core ingredients will be crucial going forward: embedded workflow domains. Two, client agreements and data rights access, and trust. We will work with our clients and by data partners where appropriate. We are prioritizing AI where it supports clear outcomes, revenue, cost reduction, can be embedded directly into workflows that find more value for our clients by cumbersome processes, measurable revenue growth, and taking real costs out of the business.

We have clear examples of success, including the use to advance our No Surprise Bills, 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. Limit trust. We have 40 years of making and keeping promise designs. They trust us to act responsibly, to govern well, the integrity of our data and solutions. The moat is no longer code. It is the data, workflow, distribution, and trust that will matter the most. Simple tools will go by the wayside. The long-term winners will be platforms that support rich workflow. Those will be the places where AI will enrich what we are capable of delivering. That is, when you add all that up, we not only like our position, but embrace the AI revolution.

We published a strategy briefing on dot-com 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, between the creation of our competitive advantage and our AI leadership, nobody is better positioned to meet the coming demand, impact, and affordability than we are. Turning to the results, we are on the way up, as evidenced by our Q4 highlights. Full year 2026 guidance. We achieved 6.2% revenue growth in Q4 year-over-year, continuing to demonstrate durability, but that our vertical market strategy is working in effect roadmap. Doug will give a fulsome update on the numbers. I'm also really pleased with our bookings of $23 million in Q4, running a record, record for the company.

That result, along with our expected full year bookings growth in 2026, bodes well for our future in creating sustainable growth. Let me give a few quick highlights. As previously reported, we have renewed our top clients and continue to expand our solutions and white space with them in areas like NSA and Payment and Revenue Integrity. We continued 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 soon. We deployed a number of partners and solutions that reinforce our culture of innovation. Our new solution, made possible through our digital transformation, is our Network Builder. Claritev Network of 1.4 million providers is one of the least appreciated assets we operate.

A key feature for our clients pass over the whole network, or a specifically tailored narrow network addressing geographic needs, like niche facilities or 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 throughout, replaced to be a lengthy manual process. We will be showcasing this and many other relations during our Investor Day. We are expanding our footprint internationally in the Middle East, signing two additional clients that will create momentum for growth in 2026. Overall, in 2025, we acquired new logos across our vertical markets.

Our bookings in over year. We had more diversification in our selling activity, including significant expansion of our Payment and Revenue Integrity solutions. More telemetry into our session 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 planning, just getting started. We are well into our digital transformation that will create a stronger and more operating and technology platform for the long haul, complemented by our products and AI. All this bodes well for Claritev, but most importantly, for our and our ability to serve their emerging needs. I'll turn it to Doug.

Doug, if you could wait one minute, we're going to change the audio here to Jason. Jason, can you turn your microphone on? Just push the microphone button on the phone. There we go. There we go. Can you hear us, operator?

Much clearer. Yes, can hear. I can hear. Thank you.

Okay, go ahead, Doug.

Okay. Thank you, Travis. Good afternoon, everyone. I have a lot to cover today, so I'll move quickly through my remarks, highlighting Q4 and full year 2025. 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. 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.

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 one-time revenue benefit of about $5 million in our P&C business, which falls under the network service line. In total, we had about $18 million of non-recurring revenue in 2025, with roughly $2 million of benefit in Q1 and $5 million of benefit in Q2, Q3, and Q4 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 a 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 0.5 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 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 it to be a use of $70 million to start the year, finished the year near the midpoint of our most recent guide with the 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 costs to OpEx, particularly around cloud computing cost, 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. You will hear us focus more on free cash flow and adjusted cash conversion as key metrics to highlight progress against our multi-year strategy. From a go-to-market perspective, Q4 capped a remarkable year of sales motion. We exceeded our internal expectations, finishing the year at $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, 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 at bats. Now on to revenue guidance. We are initiating 2026 revenue at $980 million-$1 billion, representing 2%-4% growth over 2025. Excluding the $18 million of one-time revenue in 2025, we're modeling 4%-6% growth this year. While we historically do not provide quarterly splits, given the addition of new ACV and the impact of the one-time 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 one-time revenue headwind. As revenue from new ACV ramps, we expect our growth rate to increase to between 3%-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-$615 million, with margins of 61%-62%. For a year-over-year comparison, keep in mind that $18 million of one-time revenue in 2025 flowed through at a 100% margin.

When normalizing for that impact, our guidance implies a 3.5%-5% Adjusted EBITDA dollar growth on a like-for-like basis. As discussed earlier, we expect to incur $10 million-$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-$25 million in our go-to-market and delivery functions to maintain momentum and best support 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, we're prepared to thoughtfully reinvest incremental upside to further strengthen our growth trajectory.

We are forecasting total capital of $160 million-$170 million, and we're projecting free cash flow of $0-$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 normalized into pre-2025 levels at approximately 50%-55%. I'll add one last thread about the broader macro environment and how that impacts our internal projections. 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 three key factors that underpin our modeling and have the greatest impact on our PAVE revenue.

In the past five years, out-of-network claim volume has remained consistent, around 7% of total healthcare 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. Lastly, our mix has continued to favor certain 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 and 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 deleveraging and de-risking 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. 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. A moat's not enough. 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 healthcare, I believe in those across the ecosystem that care deeply about access, quality, and cost. The value we bring will continue to lift Claritev into new heights. With that, let me turn it over for questions.

Operator, before we go to questions, to everyone 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's comments on our website for you, so you'll have easy access to them. With that, operator, we'll open up for questions.

Thank you. We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star one on your telephone keypad. To withdraw your question, please press star one again. Please pick up your handset when asking a question. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Our first question comes from the line of Joshua Raskin with Nephron Research. Your line is open. Please go ahead.

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

Your next question comes from the line of Luismario Higuera with Citi. Your line is open. Please go ahead.

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. If that's true, can you please check that on the, on the speakers and see if you're getting audio from them? If so, pipe it through.

Yes, please hold. 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.

Alexandra, thank you. Can you hear us?

Hi. Yes, I can.

I think given, to everyone on, on the call, I apologize for the technical difficulties. It sounds like the webcast is working, the phone lines are not. Given that, rather than, than hold this, we will, we will cut the call now, and we'll be glad to follow up with you after the call. If you have questions, please feel free to send questions to [email protected], or give a call. Thank you very much for your time.