Good morning, and welcome to the Clarity of Corporation First Quarter 2026 Earnings Conference Call. I am Franz, 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 Claritiv's first quarter 2026 earnings call. Joining me today are Travis Dalton, President and Chief Executive Officer, and Doug Garris, 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 four-looking statements. These four-looking statements represent management's beliefs and expectations only as of the date of this call. Actual results may differ materially from these four-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 filed with the FTC. We will also be referring to several non-GAAP measures, which we believe provide investors with a more complete understanding of clarity's underlying operating results. An explanation of these non-GAAP measures and reconciliations to their comparable GAAP measures can be found in the orange press release and 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 in our Investor Day, in March. We appreciate the feedback you provided and look forward to keeping that dialogue going throughout the year. There were a number of themes that we highlighted in New York, but I want to reiterate a few of those that we'll cover on the call today. First and foremost, we're entering this year with confidence. Confidence in our business, in our strategy, and 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. And third, we've expanded our markets and our offerings to connect all phases of the health care life cycle. That expansion has been critical to diversifying our revenue streams and in doing so, building a foundation for quality earnings driven by sustainable long-term growth. At the heart of that effort is the reinvigorated growth and strengthening of our core, which is most evident in our outstanding Q1 results. We believe strongly that Claritiv's growth originates from those core offerings and gives us the foundation and time to execute against our growth. I'm going to touch on each of these themes in my remarks and explain why they are driving record bookings for organic growth and expanding market growth. 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 AACB 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 to 100 million ACV sales targets for this year, which will represent a 20 to 50 percent 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 Claritep as it represents two important evolutions in the business. One, it is leveraging one of our core solutions to serve a new market, the public sector. We see a number of opportunities in this vertical and hope to share more good news as the year progresses. And two, it demonstrates our capacity to create new partner relationships with a shared goal of making healthcare more affordable and accessible to those who need it the most. Another bit of news we teased out of yesterday was our signing of a Top 5 Health System, one that operates more than 700 total facilities, including hospitals, ambulatory surgery centers, and outpatient centers, and sites of care. This is an exciting addition for Claritin that fortifies our position in our provider vertical. We look forward to sharing more about this exciting relationship in the future, but I note that this relationship came about directly as a result of our acquisition of OPCG in the fourth quarter, which is the cornerstone of our newly launched services offering. Next, let me discuss our strong position in the market, bolstered by industry trends moving in our favor. There is a clear focus on driving affordability across the healthcare ecosystem. We know from our experience that the best way to achieve that objective is through transparency, but we have been a leader for many years with a long-tenured client relationship 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, but 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, and that's where we deliver value. There's also a tremendous benefit to how we run our own business. Last quarter, when we reviewed the code output of the engineering teams that are fully leveraging AI coding tools, we have found that we are nearly doubling coding capacity of those teams without any increase in headcount. We're building a foundation for scalable, profitable, sustainable growth. So the operating leverage we are seeing from the widespread adoption of AI tools is an important lever in achieving our long-term objectives. If you think about our formula for success, it's straightforward. Data rights combined with a scalable workflow embedded platform anchored in trust and amplified by AI. Let me give you a few concrete examples. Within our claims intelligence solutions, we get tens of thousands of claims every month that don't have a provider ID. When that happens, the claim can't be processed to 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, the 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 workloads. We're now handling thousands of invoices each day, automating 100% of the daily processing in less than an hour, achieving nearly 100% accuracy and uptime. For our clients, this is a level of execution that builds trust. For Claritev, it freed up resources to do higher value work while eliminating late fees and accelerating collections. These are just a few of us, 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-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 the top five 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. Zalad Scripps is a highly regarded industry veteran, joining Claritif 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 a TPA client lifecycle. We're already seeing faster pipeline growth under his leadership and are excited by his energy and vision for this month. 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 hour of yesterday. 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 teams are the foundation for driving clarity along the path we outlined at Investor Day for our short, mid, and long-term targets. This is a business built to last, built to grow, and built to deliver the long-term cash flow and deleveraging that will ultimately drive major shareholder value. With that, I'll turn it over to Doug to walk through the financials in more detail.

Great. Thank you, Travis, and good morning, everyone. It was great to see many of you at the Investor Day in New York. The event we held in March at the NYSE was our first full Investor Day in nearly two years, and it was a great opportunity for everyone to hear from our talented leadership team, some of our key partners, and importantly, some of our best clients. Our story is getting simpler, sharper, and is starting to resonate in the public markets. At the event, we spoke about the diversification of our business that is driving our momentum. We also have tethered our presentation to the healthcare lifecycle on 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, and we're excited to share our progress because our first quarter results were yet another reason to believe that our strategy is working. In Q1, we outperformed our internal expectations for revenue-adjusted EBITDA and ACB. 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 eyesight within Claims Intelligence Service Lines, 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. 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 Lines. 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 a 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 to $100 million in ACV at Investor Day, representing 20% to 50% growth. With 44.1 million of bookings in Q1, we are well on track to achieve this aspiration. Importantly, Q1 bookings reflected the underlying strategy we presented at Investor Day with a balanced mix of expansion with existing clients and new client acquisition. Cross-sell and up-sell activity accounted for 73% of bookings, while 27% came from net new clients. A few additional highlights on Q1 bookings' performance. Pipeline growth remained strong, increasing 70% year-over-year, alongside continuous improvements in lead qualification and sales execution. We closed 19 deals over 100,000 ACV and 9 deals over a million ACV, representing a 350% increase in seven-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 PSA revenue where modest volume declines in Q1, we're 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 PSA 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 TSAFE business. Turning to guidance, we are raising the bottom end of our revenue guide range by $5 million with a new range of $985 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 at the second, third, and fourth quarters of 25, each had approximately $5.4 million of one-time revenue that was recognized at 100% adjusted by a margin, which will impact the year-over-year comparisons for the balance of the year. With a quarterly revenue cadence due to the revenue outperformance in Q1 and the $5 million headwind from last year, we expect Q2 revenue to be relatively flat sequentially, largely consistent with current analyst models. Then as revenue from new ACB ramps, we expect our growth rate to increase to between 3% to 5% for the second half of the year, adding up to the full-year guide. We have included a summary in the supplemental deck to help bridge the major revenue drivers this year. It provides more color on how you should model gross revenue retention, expansion, and ACB conversion to get to our full-year revenue guide range. We are maintaining full-year adjusted EBITDA guidance of $605 to $615 million with margins of 61 to 62%. When normalizing for the impact of the $18 million in one-time P&C revenue and EBITDA contribution last year, our guidance implied 3.5% to 5% adjusted EBITDA growth, dollar growth on a like-for-like basis. As we previously stated, we're going to continue to invest while running our business with prudence, balancing positive cash flow and earnings with investments required for future growth. This is especially true as it relates to ramping up sales and operations to support the growth in ACV. New bookings take on average 6 to 12 months to convert to revenue, which means we are investing in 26 for those new and expansion revenue drivers that largely begin contributing to our top line in 27. With our recent sales momentum, I would expect us to continue to seek attractive options to bolster our good market posture. For example, Travis mentioned our increased focus on the TPA market. We see significant upside in this vertical. We have also demonstrated success with investments in AI and 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 26 guidance for total capital and free cash flow unchanged with capital at $160 million to $170 million and positive free cash flow. In 26, we expect to deliver operating and unlevered free cash flow growth with adjusted cash conversion, normalizing to pre-2025 levels by the end of the year. All of this aligns with our guiding principles 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

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

Thank you. At this time, I would like to remind everyone, in order to ask a question, press star, send the number one on your telephone keypad. We ask to please limit to one question and one follow-up. We will pause for just a moment to compile the Q&A roster. And your first question comes from the line of Jason Casarla 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're earmarked as you ramp up your ACV, but maybe can you just help with the puts and takes in terms of margins in the quarter? 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, but maybe perhaps allowing for a better setup in the second half of the year as the ACV contribution ramps. Any help there on the margin side would be helpful.

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

Okay, helpful. And then maybe as my follow-up, obviously encouraging to see the strong top line growth this quarter. Can you discuss what you're seeing in terms of utilization broadly? I know there's been a weaker respiratory system, some weather events impacted volumes across providers, you know, broadly. But I'm 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.

Yeah, sure. So I'll take that. So if you look at slide 10 and 11 on our supplemental deck, it gives some color on kind of the rate mix and volume dynamics of our business. I think the continuous trend, and we covered this a little bit at Investor Day, in the outpatients 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 and revenue and savings per claim. It was really some of the mix that I would say has compounded over the last five quarters and 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 impacted by weather per se. It was a little bit better than we had internally modeled, but really when you look at kind of the last five 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 and revenue play. We've seen consistent elevated trends in those higher acuity areas, including behavioral health. Nothing in the quarter kind of indicated that there was an aberration or disruption to underlying volumes due to events like weather.

And your next question comes from the line of Jessica Tisan with Piper Standler. Your line is

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

at that. Maybe if Travis wants to give any color he can. So when we look at Q1 of our 44 million, The provider and public sector contributed about 20% of the bookings. So these were kind of flagship wins that we announced at Investor Day. We had indicated, too, and I think maybe you had asked the question at Investor Day what the margin profile of services is. We expect it to be roughly kind of half the core business as we ramp and scale. When I look at the full year, the $80 million to $100 million, we expect growth from these areas and especially services to be meaningful. but the total mix of bookings is still going to be around, I'd say, probably 20-ish percent of our total number at the midpoint. These investments are critically important to us, which is why we announced the additional $20 to $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 percent of our total, and we expect the margins to be roughly half of our core business.

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

Got it. That's helpful. And then I guess just my follow-up. So we had one of our MAOs kind of talk about these changes to concurrent reviews in the 2026 MA final rule. And so I'm just curious. I think these are mostly in-network, but I guess, do you guys have exposure to retrospective reviews in 2025 that are essentially less frequent in 2026? And just any comments on whether changes to inpatient determinations within the 2026 MA final rule has any impact on your claim volume, the 8% year-over-year PSAV claim volume decline?

Thank you. Thanks, Jeff. Limited impact. We think MA could be an opportunity, kind of mid and long term for us, but as it relates to the limited, if close to zero volume impact.

Thanks, Jeff.

Thank you. Again, if you would like to ask a question, press star, then the number one on your telephone keypad. Our next question comes from the line of Stan Berenstein 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.

Thanks for the question, Stan, so I'll take that first stab. So I think the 70-30 approximate split, we actually covered, that was our mix on upsell, cross-sell versus net new logos. on the 67.3 million of bookings that we landed in 25. That trend's been pretty consistent. I think the most compelling piece of that is we have a ton of white space within the payer and TPA segment. And so we are expanding our products and solutions to new markets, including provider, public sector, international. We think these are great long-term areas for growth and diversification. But make no mistake, our core business is still most of where the bookings are occurring. And I think the Q1 bookings number was the data which was significant in the coverage

to quota than we had two years ago, almost 4.8 times, which is a significant number. I think it was closer to one and a half times. And so more pipeline, more coverage, better visibility. And 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. And so you're confident enough to make decisions like we made in Q4 this year, and we're confident in our margin profile for the year because we have good visibility to our top line growth and revenue conversion. So that's a great leading indicator for us. And, you know, we have clear visibility and confidence.

I appreciate that helpful. Well, 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.

Thanks, Dan. Yes, absolutely. When you look at our PRI business, had nice growth this year. You look at, 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.

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 your time and attention today. Thanks for the questions and the interest of the company. And as noted, we feel like we're in a good place and we're confident in our year. Look forward to talking to you again here soon.

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