Healwell AI (TSX:AIDX) Q1 2026 Earnings Call

0:00 Thank you for standing by. My name is Carly, and I will be your conference operator today. At this time, I would like to welcome everyone to the HealWELL AI Q1 twenty twenty six Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. Thank you. I would now like to turn the call over to HealWelSiNi, Head of Investor Relations. Please go ahead. Hello, and thank you, operator. Joining me on the call today are James Lee, CEO of HealWELL Doctor. Alexander Dovanovsky, President of HealWELL and Anthony Lam, HealWELL's CFO.

0:53 I trust that everyone has received a copy of our financial results press release that was issued yesterday. Listeners are also encouraged to download a copy of our quarterly financial statements and management discussion analysis that was filed on SEDAR plus Please note portions of today's call of their historical performance include statements of forward looking information within the meaning of applicable securities laws. These statements are made in the Safe Harbor provisions of those laws. Please refer to yesterday's press release under our management discussion analysis for more details on the company's risk and forward looking statements. 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 as required by law.

1:51 We use terms such as gross margin and adjusted EBITDA on this conference call, which are non IFRS and non GAAP measures. For more information on how we define these terms, please refer to the definitions set out in our management discussion analysis. There will be a question and answer at the end the call, which will be limited to analysts only. To ask a question, analysts are required to call in to the conference call using the dial in number provided in our press release. And with that, let me turn the call over to HealWELL's CEO, James Lee. Thank you, Heather, and thank you everyone for joining us today. Let me start by grounding us why HealWELL exists. HealWELL is focused on becoming the primary enabler of preventative care by making healthcare data usable, actionable and scalable. We now have access to over 150,000,000 patient lives across our network and we're putting that to scale to work.

2:40 The challenge we're addressing is not a new one, but rather a structural one. Healthcare systems today are largely designed to treat illness, not prevent it. As a result, a disproportionate amount of spending is concentrated on patients with advanced disease, where interventions are more complex, more expensive and often less effective. At the same time, many of these conditions delivered drive this burden are preventable and manageable if identified earlier. So the issue is not whether prevention works, it's that prevention has not been made implemented at scale within real world healthcare systems. And that's the core problem we're methodically approaching and solving. Now the scale of this problem is significant and the data makes it dark. 80% of healthcare data is unstructured and untapped embedded in the clinical notes, reports and disparate systems and they were never designed to be analyzed at population scale.

3:34 This is not a marginal inefficiency. It means the vast majority of available clinical intelligence and visible to the people and the systems that could act on it. And now at the same time, seventy four percent of global deaths are caused by conditions that are preventable or reversible if detected early enough. Heal addresses these key issues by connecting disparate and complex healthcare information, surfing meaningful clinical insights, implementing those insights in real world environments. We do this now in some of the biggest partners across the world in both clinical, healthcare systems and with life science partners. Today is a really exciting time for us as the science exists, the tools exist and the data exists, and we have the ability to bring this all together. Now solving this requires more than a single capability.

4:22 It requires solving four interconnected problems. The first is infrastructure. Healthcare systems cannot act on data they cannot see. The foundational requirement is the ability to connect disparate data sources and surface them in a way that is meaningful at population scale. The second is clinical grade tools. Data alone is insufficient. Clinicians need tools that can interact directly in their workflows, surface the right patients at the right time without adding friction to an already stretched system. Third is scientific evidence. Prevention must be grounded in validated science, not simply assumed. That means peer reviewed research, real world validation, partnerships with life science organizations that set the standard for both clinical treatments and clinical evidence.

5:08 And the final one is economic incentives. Even when the science is clear, healthcare systems will not change behavior without aligned incentives. Healthcare moves when incentives align. The financial case of prevention needs to be quantified and made compelling, equipping insurers and reinsurers to price the value of early intervention and build models that reward prevention, not treatment. Now these four problems exist independently across the healthcare system. What has been missing is the ability to integrate those problems. Now each of those problems maps directly onto what HealWELL has built and is building, and we are making tangible progress across all four. On the infrastructure side, the Orion acquisition has been the defining move that gave us global distribution scale.

5:55 Now a year on, the integration is behind us and the results are starting to come through. Our AIDX platform now connects over 150,000,000 patient lives, unlocking longitudinal multi source data at the foundation of every preventative model we build. And critically, it gives us the distribution layer so we can scale our entire offering globally. On clinical tools, our strategic alliance with Well Health allowed us to prove that AI can be embedded into real world clinical environments at scale. Darwin and Well Decision Support are now live, embedding our algorithms and IP directly into clinical workflows, servicing high risk patients and shifting care from reactive to proactive. This is no longer a theoretical capability that's working today across our network. On science evidence, where the foundation is genuinely difficult to replicate, with 47 peer reviewed publications and partnerships with leading life science organizations.

6:51 That trust takes years to build and increasingly recognized across the industry as being a meaningful competitive moat. And the final one, economic incentives. Translating population level and some sustainable financial performance is the final step. The insurance industry represents our next significant opportunity and we're actively building towards it. Now each step has been deliberate. The pillars are in place and the strategy is now fully in motion. Now let me speak to what we've delivered in Q1 twenty twenty six and what you should expect from us for the balance of the year. Q1 was another strong year over year quarter and we maintained positive adjusted EBITDA, demonstrating we are growing with discipline, commercially and operationally. It was also a quarter of meaningful progress with new contract wins and platform milestones we'll walk through shortly.

7:41 Q1 gives us confidence what lies ahead. The pipeline is building, the platform is scaling and the commercial momentum is real. While healthcare systems are considered with long sales cycles, the foundational growth signs are exciting. We're seeing strong growth in physicians using our products, increased patients being identified, new life science partners and The U. S. Market is the most active it's been for a long time. As we look across second half, we will be accelerating enterprise pipeline development across The U. S, Australia and The Middle East. We continue to deepen our life science partnerships, leveraging our validated AI models and regulatory grade real world data for clinical trial matching and drug discovery. And we'll continue to expand Darwin across additional EHRs and population platforms.

8:28 By year end, our targets are clear: activate our global network across life sciences, increase enterprise AI sales and achieve approximately 10% exit run rate for adjusted EBITDA margin. The foundation is built, the strategy is clear and Q1 demonstrates we're executing against it. Turning to some of our key strategic and operational highlights for the quarter. First, we successfully unified Cure and Pentavir into a single Darwin powered AI engine. Now this is an important milestone in our platform strategy as it enhances integration of our ecosystem, enables more effective cross sell and up sell opportunities, particularly across the Iran Health and Verisource customer bases. Second, we launched Well Trust in partnership with Well Health.

9:13 This is a consent first, AI powered data governance and patient identification platform that enables privacy, compliant, clinical mobilization of scale. Importantly, it also improves patient recruitment for clinical research, which remains a critical bottleneck in the life sciences industry. This has already demonstrated significant value to our life science partners. Third, we can continue to build commercial momentum across all parts of the business, including AI contracts and opportunities outside of Canada, increased momentum in ANZ and our first RFP response with a genomic partner. This reflects the growing global demand for our AI solution and reinforce our expanding international footprint. Overall, these milestones highlight the continued execution of our strategy to combine AI data and clinical validation to drive meaningful impact across healthcare systems and life science organizations.

10:06 I'd now like to turn the call over to our CFO, Anthony Lam, to walk through Q1 financial results. Thank you, James. Before I begin, I'd like to remind everyone that all of the figures I will be discussing today are in Canadian dollars and our financial statements are presented in accordance with IFRS International Financial Reporting Standards. Our first quarter twenty twenty six results are as follows: HealWELL achieved quarterly revenues of $33,200,000 during Q1 twenty twenty six compared to $8,000,000 generated in Q1 twenty twenty five, an increase of 316%. Revenue growth in the quarter was largely driven by the Orion Health acquisition and organic growth of the company's AI division. During Q1 twenty twenty six, QL reported positive adjusted EBITDA of CAD0.7 million compared to an adjusted EBITDA loss of $2,300,000 in Q1 twenty twenty five, representing a year over year improvement of 132%.

11:09 The improvement in adjusted EBITDA is attributable to the Orion Health acquisition and improved performance across HealWELL operating segments. HealWELL achieved gross profit of $19,500,000 during Q1 twenty twenty six, an increase of 340% compared to $4,400,000 in Q1 twenty twenty five. The increase is due to higher revenue performance across the business in the quarter. HealWELL achieved gross margin percentage of 59% during Q1 twenty twenty six compared to 56% in Q1 of the prior year. HealWELL reported IFRS net loss from continuing operations of $6,800,000 in Q1 twenty twenty six and this compares to a net loss of $14,000,000 in Q1 twenty twenty five.

12:03 QOL ended the quarter on 03/31/2026 with $21,900,000 in cash, an increase when you compare this to year end year end balance of $18,600,000 I'd also note that the company holds a strategic investment position in xAI, now part of the broader SpaceX ecosystem, which represents additional balance sheet value beyond our reported cash. As we evaluate the appropriate timing to monetize this position, it provides meaningful optionality to further strengthen our capital base and support the company's growth initiatives. Now looking at our revenue segments. As of 11/01/2025, following the divestiture of the company's clinical research and patient services division, HealWELL now generates revenue across two core segments.

12:57 One, AI and data science two, healthcare software. Our AI and data science segment achieved revenue of $2,600,000 in Q1 of twenty twenty six, marking a 13% year over year growth compared to the $2,300,000 in Q1 twenty twenty five. The increase was driven by contributions from the Verisource Data as a Service offering and Orion Health Systems component with the AI segment. This growth is partially offset by the divestiture of Mutual, which was completed on 11/01/2025, and contributed to revenues in the prior year comparative. Excluding the impact of this divestiture, the company continues to advance its AI and data science capabilities through a combination of strategic and organic initiatives.

13:51 The second revenue stream is healthcare software, which generated $30,600,000 in revenue in Q1 twenty twenty six, an increase of 439% from 5,700,000 in Q1 twenty twenty five. This increase was primarily driven by significant growth in the Healthcare Software segment, reflecting the continued contribution of Orion Health that acquisition happening and organic growth expansion initiatives. With the recent divestiture of non core assets, QOL is now fully focused on driving growth, innovation and profitability across its two high margin scalable segments, AI and data science and healthcare software.

14:38 This strategic focus positions the company to continue delivering strong financial performance with rapidly growing revenue streams, expanding customer adoption and meaningful contributions to overall profitability. With that, I'd now like to turn the call over to our President, Doctor. Alexander Dobernowski, who will discuss our Canadian and global public sector opportunity, HealWELL's competitive moat and key investment highlights underpinning our strategy. Thank you, Anthony, and thank you, James. I want to start today by discussing an important opportunity that is presented before us. Over the last year or so, we have seen a dramatic and positive shift in global public sector posture towards addressing key pain points in healthcare inclusive of data interoperability challenges.

15:30 Never before have we seen such exciting public sector tailwinds with major funding commitments being announced and being made in key jurisdictions where we operate. We have seen this shift happen not just in Canada, but also in other important jurisdictions. For instance, in The USA with the introduction of the OBBA, this has led to the addition of US50 billion to the Rural Health Transformation Program, a program that is directly targeting to address healthcare data access and compatibility issues. In The UK, we have seen revitalized commitment to healthcare investment as echoed in their well publicized ten year plan to transform the NHS.

16:16 And finally in Canada, I've broken down this opportunity into two parts. Part one, at the federal level, Bill S-five, the Connected Care for Canadians Act, currently under review in the Canadian Senate, represents a meaningful shift in Canada's healthcare policy landscape. It mandates interoperability across health IT systems and explicitly prohibits data blocking practices. From an investor standpoint, this effectively establishes a new national baseline for how healthcare technology must operate in Canada. The implications are significant. First, federal funding and procurement are expected to increasingly favor platforms that are compliant with these interoperability requirements.

17:02 Second, scale becomes a key advantage, particularly for platforms capable of integrating clinics, EMRs and AI into a single unified workflow. And third, it creates additional pressure on legacy vendors operating closed ecosystems or point solutions, which may face challenges adapting to these new standards. At the same time, provincial procurement trends are also evolving with a clear preference emerging for Canadian owned sovereign technology platforms. Taken together, these dynamics create a really strong structural tailwind towards vertically integrated Canadian based healthcare technology companies. HealWELL is fundamentally built around AI and data interoperability and has already demonstrated its ability to deploy large scale public sector health information systems, including the Health Information Exchange in Saudi Arabia, which is the world's largest implementation of its kind.

18:02 Together with Well Health and Wellstar, HealWELL is uniquely positioned to meet the requirements of the Connected Care framework. Collectively, this forms a vertically integrated end to end Canadian sovereign stack spanning care delivery, data infrastructure and clinical intelligence, fully aligned with both interoperability mandates and sovereignty driven procurement priorities. Now on to the second or part two of the public sector opportunity in Canada. On 03/19/2026, the Ontario Minister of Health announced the province's plan to launch a province wide primary care medical record initiative aimed at advancing an integrated interoperable electronic medical record system for primary care.

18:48 This initiative forms part of the Ontario Primary Care Action Plan supported by more than $3,400,000,000 in funding with the objective of connecting approximately 2,000,000 additional residents to primary care by 2029. The province has indicated it will run an open competitive procurement process and is evaluating a multi vendor approach. Our Chairman, Hamed Shebazi noted in yesterday's earnings call that Well Health strongly supports this initiative and intends to actively participate in the forthcoming procurement process led by Supply Ontario. HealWELL already plays an active role in supporting the province through its 811 service, which provides clinical guidance to over 15,000,000 users as well as through the Ontario Patient Viewer, a digital care record that consolidates patient data across care settings.

19:39 In addition, HealWELL's award winning and clinically validated Darwin platform delivers intelligent search and summarization plus clinical decision support capabilities that directly align with Ontario's requirements. The province's initiative closely aligns with HealWELL's core strengths. HealWELL intends to support Well Health and Wellstar on their bid for this opportunity and we are well positioned to help deliver this vision for the province of Ontario. Now I'd like to turn our attention back to HealWELL. As the healthcare AI landscape continues to evolve, we are seeing a clear transition from very early stage experimentation towards real world deployment of AI solutions that are delivering measurable clinical and economic outcomes at scale.

20:27 From a strategic standpoint, we believe the companies that are best positioned to lead in this environment will be those that combine advanced AI capabilities with strong distribution, access to high quality clinical data and solutions that are embedded directly into care delivery. At HealWELL, our first key competitive moat is our clinical validation and scientific credibility. You heard about a little bit about this from James. Our Darwin AI platform has now been supported by 47 peer reviewed publications and was recognized with the 2024 Pre Galleon USA award, one of the most respected honors in the life sciences industry. Importantly, our AI platform can generate regulatory grade real world evidence, which we believe is a highly differentiated capability on a global scale.

21:20 We continue to collaborate with leading hospital systems, cancer centers and pharmaceutical companies and today we have active commercial relationships with eight of the top 10 largest global pharma companies. The second core advantage is our global distribution infrastructure through Orion Health. This provides us with enterprise access that is both broad and difficult to replicate. Through Orion, we maintain relationships with more than 70 large healthcare customers across 11 countries. This is a very unique and special customer base. We also recently secured our first major public sector AI deployment in The Middle East, marking an important step in expanding our AI products beyond Western markets.

22:13 Looking forward, we see a strong and growing pipeline across Canada, The United States, The United Kingdom, Australia, New Zealand and The Middle East, which positions us well to scale our solutions globally. Our third competitive advantage, we believe we benefit from meaningful embedded switching costs and a continuously expanding clinical data network. Our solutions are integrated directly into electronic health record systems and clinical workflows, which supports strong customer retention and long term partnerships. On top of this, we currently have approximately 35 master service agreements with pharmaceutical companies, including as mentioned many of the largest global players.

23:00 Each additional deployment enhances our proprietary datasets and contributes to ongoing improvements in model performance. And finally, our proprietary Darwin AI platform serves as the technological foundation of our business. Over the past year, we've successfully unified the capabilities of Cure Health and Pentavir into a single integrated platform powered by Darmin. This includes now our product set of Smart Identify, Smart Search and Smart Summary artificial intelligence solutions, which are designed to automate complex clinical data analysis and patient identification across large scale datasets. Taken together, we believe these factors of scientific validation, global distribution, a unified AI platform and deep work flow integration from a strong competitive moat and position HealWELL to capture significant opportunities as healthcare AI adoption continues to accelerate.

23:59 Now turning some attention to our investment highlights. At a high level, HealWELL is a healthcare AI company that is mission driven to move the needle to preventative care. How we do this is through our focus on early disease detection. Now to add a little bit of color to this, over the last six months, our team and incredible technology has helped identify over 160,000 patients that are at high risk for rare, ultra rare, chronic and complex conditions. And we believe we are uniquely positioned at this intersection of clinical data and AI to deliver outsized results and value for our shareholders. Now starting in the top left of this slide, as mentioned, we are already generating revenue from eight of the top 10 largest global pharma companies.

24:48 This is a real strong validation of both our technology and our commercial model and reflects the trust that large pharma organizations are placing in our platform. Next, we are operating what we believe is a multibillion dollar market opportunity. As healthcare systems increasingly adopt AI to improve outcomes and reduce costs, we see significant long term demand for solutions like ours that can operate at scale. In fact, we believe that those companies that are best positioned to unlock true value in preventative care have a shot at being one of the first trillion dollar businesses in healthcare. The addressable market opportunity is that immense. Importantly, through our platform and partnerships, we now have access to over 150,000,000 patient lives.

25:38 This scale of data access is a key competitive advantage enabling us to deliver more accurate insights and continuously improve our AI models. From a growth perspective to date, we have completed six material acquisitions and we continue to see a strong pipeline of opportunities and we believe we are well positioned to deploy capital strategically to drive further expansion. We are also supported by an experienced Board and a talented management team with deep expertise across healthcare, technology and capital markets. And finally, our relationship with Well Health remains a key strategic advantage. It continues to accelerate our growth, expand our multinational footprint and provide us with direct access to clinical environments where our AI solutions are being deployed and scaled.

26:28 Taken together, these elements reinforce our position as a differentiated healthcare AI platform with strong momentum and a clear path for continued growth and profitability. And with that, I'd like to thank everyone for attending this call. I'd like to thank our Board of Directors, our management team, all our hard working staff. And with that, I will hand it back to the operator and move to the Q and A portion. Thank you. Your first question comes from Kevin Krishnarante with Scotiabank.

27:15 Good morning. James, you had mentioned that The U. S. Market is the most active, it's been in a while. So I'm just wondering if there's any way you can size that, quantify that, whether that's maybe pipeline growth, number of conversations, just curious to hear what you're seeing there in The U. S? Yes. Firstly, good morning, Kevin. Thanks for the question. As it happens, Alex and I are both in The U. S. Currently. We've been here for the week seeing clients and customers. So giving you a bit of flavor is that last year we saw some new activity. We a new contract in The U. S. Which we announced this quarter. But what we're seeing here is that the new activity driven by OBBA, but more particularly the rural health funding bill, has meant that what I would say RFPs in the market are at least two to three times more active than they were this time last year.

28:14 And those are for a wide range of new HIEs in this market. But interestingly, what we're also seeing is that that funding for rural health is now pushing in to and being extracted out to AI opportunities as well. So we're probably having more AI conversations now in The US than we were having certainly in three months ago. Now that's driven by that first round of funding is now being dished out and people wondering how they spend it. But it is significant portion of money going to this part of the world. Great to hear. Maybe one for Anthony. If the health care software line this quarter looked good. I know there's a mix of software also deployments and pro services work. So wondering if you could dig in a little bit deeper into that number. Was there any sort of things that you called as one time ish?

29:10 And then how do we think about the segment as we move into Q2? Thanks, Kevin. That's a great question. We did see in Q1, I would say, a bit of a catch up in some of our pro services side of the equation. So I would say that, yes, some of it is maybe a little bit of a catch up on some opportunities that we've been working on at the end of last year that have not caught up this year with some really good revenue recognition with the completion of some key milestones. And so what we saw here is that benefit our margins a little bit as we got into Q1 here because we had obviously some costs related to that that were incurred in prior periods, but revenue now being recognized. So I would say that there was, I would say, just a marginal amount of that happening in this quarter that created a little bit of that lift.

30:06 Great. Thanks for the color guys. I'm going to pass the line. Thank you. Your next question comes from Gianluca Tucci with Haywood Securities. Hi, good morning guys. I think last quarter I think it was last quarter that you called out over 50 organic growth for AI for this year. I'm just wondering at this point of the year how you're thinking about organic growth for both AI and software? Why I cover that? Obviously, it's early in the year. What I would say is the pipeline still gives us confidence in our previous comments about AI growth.

30:53 Revenue recognition is always tricky to get that kind of precision this early in the year. So we're not at the stage where we can update that. But what I can say is that the pipeline continues to build nicely. Software development, I'll probably we'll probably give you an update in the second half. What we are seeing is that there is, as I said, significant uplift in RFP activity turning up in Q2, Q3 this year. But we feel comfortable with the numbers we've given previously. Okay, thanks. And then just following up to the prior question on software and how that impacted gross margin in the quarter. It was up nicely Q on Q gross margins. Anthony, like is this kind of a new baseline or because of the one timers in pro services, we should see kind of a step half down for Q2 in gross margin?

31:50 Yes. Gianluca, thanks for that. Yes, definitely, you had a great quarter from that perspective, a little bit of a catch up taking place. We can expect to see that our margins will be in that mid-fifty percent range that we've seen historically. I think we had a nice little benefit in this quarter, but I think we'll be in that mid-50s range for the year as we get as we look ahead. Your next question comes from Derek Greenberg with Maxim Group. Hey, guys. Thanks I for taking my wanted to just ask, I think on the previous call you'd also mentioned you had expected 10% year over year growth in the subscription support and maintenance segment for healthcare software. I was wondering if there was just any updates on that as well.

32:50 Anthony, do you want to cover that? Yes, absolutely. We see continued on that line, we see continued similar performance. I think we will that's a really steady part of our business. We I would say it continues to progress at the same level that we've seen historically. Yes. Got it. And then I was wondering if you could maybe just give some color in terms of in The Middle East when you're engaging with government sovereign health entities. Just what that process looks like in terms of how the sales cycle progresses? And then once live, how long it takes to go from signing a contract to scaling revenue?

33:41 That's a really good question. I don't think there's a clean answer. I think what we can say is that every part of the region is different. So what we're seeing there are some parts where activity can get up in quite quickly, where it's an established market, there's no need for an RFP, we're already embedded and it goes we can go from a initial discussion to what I would say revenue within six months. Now, obviously what we're seeing with it was the I'm trying to think what I would say the global conflict in the region, We are seeing some slowdown in sort of initial conversations progressing into secondary conversations. That conflict has gone longer than we had expected.

34:27 But equally, we had nothing baked in this year, just to be clear with our numbers and thought processes for The Middle East for new contracts and the numbers were given previously. Now there are as we extend slightly beyond the regions that we're currently active in, We are still seeing activity in RFPs come to market. They're probably more I would say a nine month process from beginning to revenue recognition and with a ramp up. You've got to remember the implementation phase for us from winning an RFP begins with contracting, which can take anywhere between three to six months from the time we would announce a contract one. And then because obviously we have to contract with a bunch of secondary parties, including the likes of AWS.

35:16 And then the recurring revenue might be a year after that because new regions can take up to a year of implementation. Does that answer your question? Yes, definitely. That's very helpful. Okay. Thank you. I'll pass it along. Your next question is from Ryan Kisslinger with Alliance Global Partners. Great. Thanks so much. In the first quarter, subscription revenue for AI and data sciences declined sequentially. It was the first time that's ever happened. Was there a churn or lower usage? Or maybe what explains the dip, particularly in that subscription piece sequentially? Anthony, do want cover that? Do you want me to?

36:03 No, I got it. No, it's a great question. We did see a bit of a change there. I would say that as we recalibrate all of our AI business here, we did see that a small move in it, but I would say it's it continues to be an area where we're focusing our efforts to grow. As you know, the subscription portion of our AI business is a very small portion. It's less than 10%. The larger component continues to be the elements that we have more episodic revenue. As we build out capabilities and we cross start seeing the cross sell opportunities through our carriage network with Orion, we can expect to see that subscription element become a much more important portion. But health care systems are relatively slower moving in decision making.

36:57 And I would say that at this early stage, we're very pleased with the performance, and we continue to see incredible interest. As James and Alex have highlighted earlier in the call, they're in The U. S. Now having very, very fruitful conversations with a lot of the opportunities there, all of which have an element of the AI component in it. Okay, great. And then my second question relates to the major your statement on a contract, a major government health system in The Middle East and continued expanding enterprise deployments across North America. What's the potential size of some of these opportunities on a run rate basis? What would be considered small when you move to production? What might be considered a large contract? Help us understand so we can see how this might scale.

37:48 Just so I have some clarity on that. Are you talking about when we're fully in production or what a first stage would look like? Well, maybe the life cycle. Maybe talk about what your fleet might look like and then how we get to production and how long that might take? Yes. Not that's a nice way to frame it. So what I would say is that within it's not linear. So I'll just give you a range. For a small healthcare system, a first stage implementation might be, call it, US250000 of revenue from implementation and something similar for ongoing. And then at scale and fully implemented, it might be $05,000,000 a year ongoing.

38:37 For a large system, it's probably four times that. What we're seeing is that the potential for these to come in as platforms into healthcare systems, they're probably more like an HIE sort of contract, US1 million to US2 million type contracts depending on the scale and size of the opportunity. Again, as the product matures and the number of use cases becomes more apparent, I think the way we're considering the platform in the later years is a deeper embedded platform and you could see an area here and we're already having conversations of having embedded resource, which would probably lift that number again. So if I'm thinking about that in the most broad sense, the reality is that the AI deployments are not going to be $100,000 a pop type deployments. I think what we're seeing is that the interest is not in point solution, but fully embedded platforms.

39:37 Now they will take more time, but the margins are materially higher and far more exciting. And so you'll see our language shift and talk about that in terms of this coming, I think Anthony made the comment of being going from being episodic to being embedded. And those embedded platform conversations are really what's leading through here. What's very clear in this market is that the time and energy to deploy a point solution or a proof of concept is pretty much the same as going fully for enterprise grade. And so what we've seen has been a real change in The U. S. Market from very nascent, almost immature approach to governance to now very strict thought processes on procurement, governance, connectivity being embedded, scientific validation, all of which plays very, very clearly into our hands.

40:31 And if we have a little bit of bounce in our voices, it's because we're here at the moment hearing it firsthand from every single party of the realistic answer where our platform sits in the universe. Great. Thanks for that. I'm going slip one more in. There was a significant step up in R and D. Can you highlight what these R and D investments are, where they're focused on and directionally how we should think about R and D expenses for the next few quarters? Yes. Look, R and D, there's two key areas, right? We're obviously spending on integrating the platforms and bringing it to new markets, bringing a integrating the new Verasource Orion platform into The U. S. Was a is a first time process. So there will be R and D spend on that. We're also at the final stages of delivering a digital front door in Ontario.

41:26 Again, means it's heavy in the R and D cycle and a lot of new product development within the AI division. What I would suggest is that we're at the tail end of that growth. With the platform coming live here in The U. S. In the last quarter, we're at the end of that, I would say the initial deployment phase and moving now into the more steady state. And there's obviously a bit of what I would say the integration spend on getting these businesses aligned. The final thing there is that there is a period of what I would say is removing significant across tech the organization. And so we have approved a few projects to which will be multi year projects, I call it a couple of years, but very, very significant ROI projects in terms of reducing costs.

42:14 So while there is some upfront in the current year and we saw a bit of that in the last year, that will start to tail off. I think what we're seeing and thinking is that we're seeing significant improvement from deploying AI internally within R and D. So once we've completed the tech debt and completed some of the new the current projects, we would expect our R and D as a percentage of revenue to decline and to be fair probably R and D to flat line decline in absolute sense as well. Great. Thanks for all your responses. Your next question comes from Max Zamwelski with Stifel. Hi, guys. Just a few questions.

42:59 Maybe Anthony, you could help me out on this first. This is Max, by the way, on for Justin Keywood at Stifel. Maybe besides some of the margin improvement lift in Q1, could you help us understand the cadence of invoicing and revenue recognition in Q1? Should we expect that there is sort of this bolus of collections in this quarter on a seasonal basis from contract work through the year? Max, thanks for the question. The cadence of invoicing hasn't really changed. I will say, though, that one of the dynamics that we see with now with the we're seeing a full cycle with Orion and the mix is that they do have a customer base.

43:47 We have a customer base that where we do have a handful that we will build annual revenues upfront. And again, close to two thirds of our revenue there is recurring. And so we do have we will see some benefit from a balance sheet perspective, where we have some cash twelve months build upfront as we get into right now into Q2, we'll start seeing a bit of a bulge in our cash collections on those annual build relationships. And then we'll it will be drawn down partially throughout the rest of the year. But I would say it's a smaller portion of our recurring revenue, but definitely a nice little benefit for us from a balance sheet perspective. Other than that, the rest of our business is building on a regular basis, contracts, milestones, they're billed as and recorded similar to how we've seen in the last few quarters. So not a lot of movement there in that. We just had a just a small benefit this quarter that was a bit of a catch up. That's all.

44:53 Perfect. Great. And maybe more of a broader question. If you could help us understand maybe which types of customers are most amenable to these cross sell, upsell opportunities? Is there a bigger opportunity with, say, HIE or maybe another enterprise context and if there's a meaningful difference between geographies on bringing additional products into a project given the sophistication or how well those systems are resourced or funded? I'll take that. The short answer is there is no meaningful difference by geography. I think there's a meaningful difference in timing. And so our customer bases, whether HIEs or digital front doors, realistically, they're still government platforms.

45:46 And so while we are always part of the solution, we're never ever going to be 100% of the technical stack they have. So the conversations we're having doesn't really matter which part of the stack we're in. We're still having those conversations. It's the readiness that is the driving force and generates the funding cycle. So we're having conversations in all of our major regions. So active conversations in The UK, active conversations in A And Z, U. S, Canada, Middle East. So we're trying to be really methodical about where we apply our time. What I would say is there's probably more conversations demand than we are capable of delivering right now.

46:32 So we need to scale with that. But as we said, these are long dated cycles and they're not things that will switch on tomorrow. These are conversations that can take three to six months and then that can take six months to implement. But what we're seeing from and I think Alex mentioned in his presentation, we're seeing governmental support now coming through in Canada, The U. S, The UK, ANZ actually behind supporting AI being deployed in this really common language, which is the exciting piece of The UK talks about getting people out of hospitals into the community. Well, requires a shared care record, that requires an HIE. Then there's conversations about treating people treating wellness not sickness.

47:19 And again that's the same language they have within the CMS. In fact the CMS has extended the period of what they want to see people looking after their customers so in terms of accountable care. So the language, the financing is actually quite global right now, which is exciting and it matches our footprint nicely. I think what will be an interesting component in 2027 will be as we broaden from regions we're not in, because our capabilities work in any healthcare system. And what we're seeing within preventative healthcare is that as we begin to show use cases and proof points and what I would say tangential or adjacent revenue streams. There isn't what we find is there's no real I'll say it in silly way that there's no real opportunity that we can't participate in. I think I mentioned before we put in our first RFP with the genomics partner, which was an exciting change of just a range of the things we can apply AI and platforms to.

48:25 That's great. Thank you so much. Your next question comes from David Kwan with TD Cowen. Yes. Good morning. I was wondering, could you talk about some of the conversations that you guys are having with life sciences companies as I guess you're in a much stronger position now to help them with their clinical trials given your AI capabilities and the integration there. And then you've got WellTrust and now I guess Well Health was talking about Well Research on their call yesterday. So just curious to see, are you having more inbound interest and also how you're planning to work with Well in terms of going after these opportunities? David, hey, thanks very much for your question.

49:16 Look, I think our credibility and our relationships with life sciences companies, which includes, of course, big pharma, med device and biotech, I think it's all been really maturing in an exciting direction. And just to give you a quick snapshot, David, of what we're able to do, right? We started really with this capability of being able to risk stratify patients, right, identify at risk patients of all sorts of different conditions, including rare, ultra rare, chronic and complex conditions. And on top of that, we've been able to offer our life sciences partners a capability of being able to generate regulatory grade real world evidence, which could then inform and help generate clinical studies.

50:08 And that's really key. And then a third kind of value proposition is being able to not just screen and identify at risk patients, but identify patients that are also of strong eligibility for clinical trials. This work is really meaningful and I think that's what you're touching on with partnerships and strategic alliance with Well Health and their initiative around Well Trust and Well Research, right? We're able to identify patients years in advance that then get access to in some ways is lifesaving clinical trials. So that's a really exciting partnership opportunity and we encourage you guys to watch that closely and I'm sure Hamed will share more news on that front in coming quarters.

50:57 Only thing I'd add there is that's already in market. It's not an idea. We're already seeing use cases and RFPs coming in. I think the scale of Well Trust at the speed of which has grown surprised us. We're seeing really good consent from people going through the clinics. And so it's an area that we're actually looking at accelerating our spend and growth to accelerate the size of the scale of consented patients we have access to. That's great. Do you guys actually have an updated number in terms of how many of Wells patients have given their consent through WellTrust?

51:43 Don't have it in front of me. It's changing rapidly week by week. So we're in the early phases of deploying it across all the well ecosystem. And so it will be a more meaningful number for me to give you next quarter. But what I can say so far is that the it's a week by week growth that has surprised us from but let's be clear, from a small start early, but now we're getting to the point where it's enough to be meaningful. Like we're now using what we have to identify patients for clinical trials and at a commercial growth. So not just not theoretical, we're actually doing it. That's great. That's it for me. Thanks. At this time, there are no further questions.

52:39 I'll turn the call back over to Mr. James Lee for any closing remarks. Actually, I'll take it. So in closing, I want to thank everyone once again for joining our call today. Thank you to the analysts for their questions. Everyone, please stay safe and healthy, and we look forward to providing more updates in the future. Thank you. Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.