Hello, everyone, and thank you for joining us today for the Claritev Corporation Third Quarter Earnings Call. My name is Sami, and I'll be coordinating your call today. [Operator Instructions] I will now hand over to your host, Todd Friedman, Head of Investor Relations, to begin. Please go ahead, Todd.

Thank you, Sami. Good morning, everyone, and welcome to Claritev's Third Quarter 2025 Earnings Call. I'm excited to be on my first earnings call since joining the company. I look forward to working with all of you in the months to come. Joining me today are Travis Dalton, President and Chief Executive Officer; and Doug Garis, EVP and Chief Financial Officer. During the call, we will refer to the supplemental slide deck that you can find in the Investors portion of our website along with the third quarter 2025 earnings press release that we issued earlier this morning. Before we begin, a couple of reminders. Our remarks and responses to questions today may 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 on our Annual Report on Form 10-K and other documents that we will 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 the reconciliations to their comparable GAAP measures can be found in the earnings press release and in the supplemental slide deck. And with that, I will turn the call over to Travis.

Thanks, Todd. Good morning, everyone, and thank you for joining us today. This is an exciting call for Claritev and for me personally. When I joined the company early last year, we laid out a multiyear journey to create a vision and a foundation that would deliver sustainable growth. We call 2024 the Year of the Foundation and established our guiding principles of clarity of purpose, alignment of talent and focus on results and boldly declared 2025 as the year of the turn. I'm proud to stand here today and say the turn has happened. We set out to be fit for growth by investing in people, tools and processes that will allow us to have better visibility into the business to apply our critical resources to areas with the highest impact. This has allowed us to have better telemetry into the business to call a number and hit a number, thus improving our credibility with internal and external stakeholders, what I call the say-do ratio in simple terms, and we are keeping our word. We will go into more detail over the next 20 minutes, but our Q3 results show a second consecutive beat and raise quarter and most significantly is our core business driving that strong performance. We will roll into Q4 ready to close a transformative year for Claritev and begin executing on the next phase of our 5-year strategy, what we will call the Way Up in 2026. On today's call, I'll provide some of the highlights from the quarter and share how we made the turn ahead of schedule. Then Doug will come on for the financial discussion, and I will end with some thoughts on the state of healthcare and how we see it impacting our progress. One strong quarter is a data point,…

Thank you, Travis, and good morning, everyone. Q3 truly marked a turn in our business. Delivering on our promises is a grounding principle, and it's a reward for us to be able to share these results with you today. I will cover selected Q3 and year-to-date financial highlights, and we'll also give more color by service line as reflected in our supplemental earnings deck posted on our website [ this a.m. ], and then I'll end by sharing our updated capital allocation priorities. Let's get right into the numbers. Total revenue in Q3 was $246 million, up 6.7% year-over-year. Adjusted EBITDA was $155.1 million for the quarter, reflecting a 9.5% growth rate. Corresponding EBITDA margins were 63.1% in Q3 and 62.8% year-to-date, tracking to our guidance on a full year basis. Year-to-date revenue through September is up nearly 3% and adjusted EBITDA is up 3.7%. This is our best absolute revenue dollar performance in the last 12 quarters. It is worth a shout-out to our whole team who stayed on mission and executed with focus and discipline as we navigated through a foundation year in 2024 and we have turned Claritev back into a growth business. The strength of our core offerings should be reiterated. Our multiyear vision is based on strategically investing across the business and nurturing our expanding portfolio of products, solutions and end markets. We are in the middle of '26 planning and it is the stability, visibility and profitability in our core solutions that allow us to confidently think about next year and beyond. During Q3, core revenue grew year-over-year and sequentially. On a year-over-year basis, all three of our service lines grew at healthy rates, led by network revenue at nearly 15%. Analytics, our largest service line, grew 4.2% year-over-year and payment revenue integrity grew…

Thank you, Doug. Before taking questions, I'd like to discuss the healthcare market and the trends shaping Claritev's work. The industry continues to face structural, regulatory and reimbursement pressures heightened by inflation, rising employer plan costs, shifting employee burdens, complex regulation and growing demand for transparency. Fragmentation still drives inefficiency and waste, but that's where Claritev creates the most value. Our solutions in network advancement, pricing transparency, NSA and surprise billing compliance and payment and revenue integrity powered by world-class analytics are designed to address these challenges and strengthen our financial performance. We anticipate healthcare inflation will rise 6% to 9% with out-of-network claims stable at 5% to 7% and an increase in high-cost cases, particularly those in behavioral health. Our analytics and BenInsights platform are uniquely positioned to help clients optimize benefit plans, control costs and improve their outcomes. Healthcare remains a complex space with competing interest and misaligned incentives. Claritev sits at the intersection of healthcare, innovation and technology with a business model that's grounded in measurable ROI. We're well-aligned with the administration's focus on transparency and efficiency to reduce system misalignment and benefit patients. In Q3, we demonstrated strong execution of our strategic transformation, delivered our best revenue quarter in 12 quarters, renewed our top 10 clients, advanced our 6 market verticals and progressed in our digital transformation, migrating to OCI and modernizing applications for better speed and data integration. Claritev is on the way up to 2026. As we reflect on '25's achievements, I'm confident in our ability to drive sustainable growth, serve clients, support our associates and deliver shareholder value. Thank you for your continued trust and support. And with that, we'll take questions.

[Operator Instructions] Our first question comes from Joshua Raskin from Nephron Research LLC.

I was wondering if you could talk a little bit about just starting with the guidance, revenues going up and then the EBITDA margin, at least at the high end, tempering a little bit. So obviously, a lot of fixed costs in the business, but were there investments that you were accelerating or is this part of that bundling strategy that you've talked about in terms of the top 10 accounts and others?

This is Doug. I'll take a shot at that. Yeah, so I think we've actually done a pretty good job of managing costs this year. And as we think about Q4, I know there's probably going to be a couple of questions. Well, we really look at the business on a year-over-year basis. And so we've provided sequential information historically just to show the trends, and we've improved our -- some of our supplemental materials. But if you take a look at the guide for Q4, it implies a quarter up roughly 2% to 6% on revenue with EBITDA up roughly 3% to 9%. So we feel pretty comfortable with that as a benchmark and again, sustained year-over-year performance. But that's how we're thinking about Q4 and the rest of the year. And then as we go forward, we have a multiyear transformation, and we're running a little bit ahead of our internal expectations. So to the extent that we have capital projects or OpEx that we might want to pull forward to drive revenue growth, we'll opportunistically do that as the quarters arise.

Okay. That makes a lot of sense. And then I know it's early for 2026, and we'll wait until next quarter. But maybe outside of that $15 million to $18 million of nonrecurring revenue that you suggested maybe we take out of the baseline. Any other big headwinds or tailwinds that we should be thinking about next year? And maybe more specifically, mid-single-digit revenue growth in the second half. Is that a reasonable starting point for 2026?

I would say, yes, in the second half without giving too much on guidance. Recall that the $15 million to $18 million started in Q2 of this year. There will be a lapping effect for Q1. But I think tailwinds are healthcare inflation. If you look at the sequential improvements to our [ PSAV ] volumes, Travis had mentioned that we still think volumes out-of-network claims, all else equal, will be approximately 5% to 7%. And we're seeing between 3 million to 3.5 million claims come through our windshield a quarter that we grab and price. And then you're also seeing things like behavioral health and even some inpatient -- some things go out of network inpatient that are higher dollars that have benefited us in the near-term. What's really hard to predict is when you look at the regulatory environment and the government shutdown, we're not so sure when those are going to resolve, but the underlying I would say, price environment for our business is very favorable, and we're highly encouraged. And then we're going to continue to focus on managing our large accounts, which we have a pretty good funnel. But I think that's probably a fair assumption for the second half of the year.

And maybe if I could just sneak in then and just on your last comment there, the 10 renewals then, as I think about headwinds, tailwinds, we shouldn't be thinking about that as headwinds. Is it fair to say that those were renewed generally similar to previous contracts? I know with big extensions, typically, you see a little bit of pressure on the margin.

That's correct.

Yeah. I'll just comment on that. Yeah, that was -- Josh, that was foundational to kind of [ have ] the stability that we're trying to achieve inside of this year and last year. We actually -- not only is it not a headwind in my mind, a tailwind because we now have -- we can plan against that, we can execute with them. We've noted the last [ two ] quarters that our white space is growing dramatically inside of our installed client base. And so we view that as a great opportunity for us. And so I think the macro of healthcare, the stability of our client set are tailwinds for us. And the headwinds are normal business factors that you would expect, not existential things that we may have experienced. And competition, uncertainty, all of those things you navigate as a business leader are there for us. But we actually feel very good about the wind at our back as it relates to our core business and the macroeconomics and our growth thesis.

Our next question comes from Daniel Grosslight from Citigroup.

Congrats on another beat and raise here. Maybe I'll just stick on the 2026 line of questioning. It does seem like you have a fair amount of visibility now just given the renewals and all the ACV you have signed. But maybe I just want to double-click into how we should be interpreting that ACV growth. I think you mentioned it was -- it's going to be around $60 million of new ACV signed this year by the end of the year. Is all of that going to convert into revenue next year? And is that incremental on top of the core business or these renewals so that if the core business is growing, I don't know, call it, mid-single digit, 4% to 5%, we should think about $60 million being layered on top of that growth?

Thank you, Daniel. So for the -- let me answer the ACV first. So I think we had stated this on the last call. I know we introduced it as a new metric, and I think it's something that we'll continue to provide. The incremental -- the ACV that we booked this year, the approximately $60 million that we expect to book is incremental. So I would think about that as an addition to the core business, even though a lot of the ACV that we booked is within our core customers. And so our opportunities that we booked, the 500 that we've booked year-to-date, it's actually a very good mix of payers and TPAs within our core 700 customer set. The $60 million of ACV will largely convert to revenue next year. And so there is a timing element to convert with any business to convert a booking into the first dollar of revenue. That's something we expect to take a few quarters for each new deal to show up as revenue. Some deals will be a little bit quicker. If you have software, you turn it on and you have first productive use within a quarter. Some of our larger installs like Payment & Revenue Integrity or Data iSight or our network business might take 2 or 2.5 quarters to turn on. We feel pretty confident that at least 60% to 65% of the ACV we book turns into revenue and converts to revenue next year. And then without spending most of our time focused on '26 because we'll do that in the next call, the reason why we're being a little bit cautious is because the pricing environment and the inflationary environment is really high, right now. It's hard to tell if that's going to cool down or not next year. We still feel very good about the core business. And then I would give a big shout-out to our operations team who is actually identifying more savings, commanding more savings and revenue per claim. And when you look at Slide 14 on our supplemental deck, you've really seen the fruits of those efforts and putting in a general manager model over the last 10 to 12 quarters where we've been able to make our products work better, which provides more values to our customers and ultimately patients. And so without giving you all of the tea leaves for '26, we feel good about the kind of demand environment. We feel good about where out-of-network claims are landing in the volume environment. And then we're going to continue to expand our funnel and expand to new markets, and we think those all bode well for our medium- to long-term growth objectives that we laid out in March of this year.

Yeah, that's great. That's great. And I'd also love to get an update on your NSA products and how that market is trending. We've heard that there are now a slew of third-party NSA vendors that are working with providers to really aggressively go after the national payers, particularly in the IDR process. What are you seeing there? Has that -- is that -- the trend isn't new, but is it accelerating? Is it diminishing a little? And has it had any material impact on you guys?

Yeah. Maybe I could start that off and then Travis, if you have a general comment. So when you look at our NSA business, it's performed pretty nicely with the exception of -- we mentioned the one large customer did in-sourcing. The rest of our business, we've actually put a lot of operational focus. And we've actually taken our unit cost down approximately 70% to service each IDR claim over the last year. And so we continue to think that is a growth area for us. But the reality is from a regulatory and a top-of-the-house perspective, providers still win 80% of NSA disputes, which is a structural problem that while we -- I would say we have the best performing NSA product in the market, and I think CMS, we shared last quarter, CMS published a study in June that highlighted that it's still not a fairly weighted scale when you think about the relationships and the abrasion between payers and providers. We've seen a bunch of point solutions come up, and I think they have modest improvement. But when you look at the scale, it's still roughly 80-20 towards the provider with our products performing pretty well, but our large customers have sent us more business, and that business is performing pretty nicely for us.

Yeah. I'd just add a couple of things there. So yeah, I think Doug kind of hit it, but I'll just reiterate. We actually are significantly better than any of our competition as it relates to the value we bring to clients with that product set. So we view it as a positive and a differentiator for us and an opportunity. We're going to continue to invest in the NSA business and automation and using our AI tools, along with PRI and network and other areas. And Doug mentioned some of the structural elements of that policy that I think many think it should be looked at and that we participate in. So it will be an area of focus and area of investment for us. And as Doug brought up a broader point, I won't parse on it, but I'll just say one of the things I think that makes us unique with our clients is that we're not simply a point solution or a widget that's narrowly focused on a single area. So we actually hold a unique position across the network, analytics, PRI and data science and prediction that we can bring. So I think that, that creates a positive opportunity for us with clients, but also really puts a moat around some of our capability with our core clients as we go forward. So NSA is an important area for us. It matters to our clients. We're going to continue to focus on it as we go forward.

[Operator Instructions] Our next question comes from Jessica Tassan from Piper Sandler.

On the NSA business, I want to follow up. So we know you're supporting a large number of payers, obviously, in the IDR process. How does Claritev get paid on these disputes? Is your revenue contingent upon the IDR judge selecting the payers' bid? Do you get a portion of savings? Can you just remind us how the contract economics work for this business? And then what segment you're reporting the revenue in?

Yeah. Sure. Thanks, Jessica, for the question. And I think we spent a little bit of time, and we can do so in post call again walking through the economics, but it's a PSAV business. The IDR dispute process happens, right? There's an IDR fee. We work with our clients. We actually front that fee. We take them through the arbitration process. And as a matter of fact, I think only a small -- less than 20% of the IDR claims get disputed post QPA. And so if you think about the funnel of potential claims that go through Surprise Bill and the ones that get disputed, it actually is a small fraction where we're able to offset any potential abrasion before it gets all the way through the end of the funnel. But to the extent that a claim does get disputed and we're not able to resolve it and we win the claim on behalf of the payer, we capture a percentage of the savings on the negotiated rate or the win rate. So it's very much aligned with our PSAV business. And then the -- I think your second question was where does that fall? That's within our analytics-based services. Surprise Bill is our third largest product behind Data iSight and financial negotiations.

Awesome. That's really helpful. And then I wanted to just follow up about the client renewals. I think in your response to Josh's question we can infer that these were conducted at stable levels of 2025. Is there anything else we should be inferring about these renewals or anything that you wanted to share context-wise on that process? And congrats, obviously, on closing all 10 of your top customers.

Yeah. Just a little color on it. I mean I'll just say that that was a major focus for me, been here over a year now. One of the key focuses was shoring up our key clients. and ensuring that they understood the value that we had, not just in what we're providing today, but ultimately also in new capabilities. So I'm not just focused on renewal activities. I'm actually focused on growth of those clients with our new products, which I think we're getting more and better education and understanding of that. And I also have to note that encompass -- I was asked once, I was asked 100 times about some single client issues that we were able to renew our single client that we've talked about publicly and openly. That's a big deal for us that shows trust and focus going forward collectively. And as noted, we think this underpins the business and creates a nice place for us now to launch forward with a little more predictability and focus and stability. So those would kind of be some additional comments I'd make, Jessica.

We currently have no further questions. I'd like to hand back to Travis for some closing remarks.

Yeah. Appreciate the time. I'll just close out by saying that I'd be remiss if I didn't have a quick shout-out to the entirety of our team. I'm very proud of the team. We have existing resources that have been here a long time that are understanding what we're trying to do, have worked extraordinarily hard and are embracing change. That's not always an easy thing to do. And then we've tightened up our -- and shored up our management team and talent. So I couldn't be more excited about going into '26, considering this will be the first full year I've been able to have the team that I wanted to put together on the field. And so we're very enthusiastic about it, and we look forward to the next call talking about results, but also talking about our guidance for '26 and beyond. Thank you.

This concludes today's call. We thank everyone for joining. You may now disconnect your lines.