Welcome to the WELL Health Technologies Corp First Quarter 2023 financial results conference call. My name is Laura and I'll be your operator for today's call. At this time, all participants are in a listen-only mode. We will conduct a question-and-answer session later in the call, which will be restricted to analysts only. Please note this conference is being recorded. I'll now turn the call over to Tyler Baba, Manager, Investor Relations. Mr. Baba, you may begin.
Thank you, operator, and welcome everyone to WELL Health's Fiscal First Quarter Financial Results Conference Call for the three months ended March 31st, 2023. Joining me on the call today are Hamed Shahbazi, Chairman and CEO, and Eva Fong, the Company's CFO. I trust that everyone has received a copy of our financial results press release that was issued earlier today. Portions of today's call, other than historical performance, include statements of forward-looking information within the meaning of applicable securities law, including future-oriented financial information and financial outlook information. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management, are inherently subject to significant business, economic, and competitive uncertainties and contingencies.
These forward-looking statements involve known and unknown risks, uncertainties, assumptions, and other factors, many of which are outside of WELL's control, that may cause the actual results, performance, or achievements of WELL to differ materially from the anticipated results, performance, or achievements implied by such forward-looking statements. These factors are further outlined in today's press release and in our management discussion and analysis. 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 it is required by law.
We may use terms such as Adjusted Gross Profit, Adjusted Gross Margin, Adjusted EBITDA, Adjusted Shareholder EBITDA, Adjusted Net Income, and Adjusted Free Cash Flow on this conference call, all of which are non-GAAP and non-IFRS measures. For more information on how we define these terms, please refer to the definition set out in today's press release and in our management discussion and analysis. The company believes that Adjusted EBITDA is a meaningful financial metric as it measures cash generated from operations which the company can use to fund working capital requirements, service future interest and principal debt repayments, and fund future growth initiatives. Adjusted EBITDA should not be construed as an alternative to net income or loss determined in accordance with IFRS. With that, let me turn the call over to Mr. Hamed Shahbazi, Chairman and CEO.
Thank you, Tyler, and good day, everyone. We hope you're all keeping safe and healthy, and we appreciate you for joining us today. Overall, we're very pleased with our record-breaking quarter in which we achieved record revenue and growth across all key metrics. WELL achieved revenue of CAD 169.5 million in the first quarter, representing 34% year-over-year revenue growth. First quarter of 2023 also marks our seventeenth consecutive quarter of record revenue. The company's growth was driven by acquisitions made over the past year as well as solid year-over-year organic growth of 21% in the first quarter. Most of our 34% year-over-year growth came from organic growth.
I'm proud to report that WELL has healthy cash flows, having achieved almost CAD 26.7 million in Adjusted EBITDA in Q1, 2023, resulting in adjusted free cash flow available to shareholders of approximately CAD 10.8 million. Our record revenue, profitability, and patient visits are a testament to the company's continued focus on tech enabling healthcare providers and supporting them in terms of simplifying their work lives, modernizing and digitizing their practices, and delivering the best healthcare possible. We're extremely passionate about supporting our providers as we've set up our business in a way that we only succeed if they do. This attitude and focus is what allows the company to continue to witness healthy growth across all its business segments, including both online and in-person care channels, with minimal impacts due to recession, inflation, supply chain, or other macroeconomic effects.
Last quarter, we discussed a number of new catalysts that we felt were going to act as key tailwinds for WELL. We'd like to reiterate and update them as follows. One, the emergence of artificial intelligence, including generative AI, to power revolutionary new tools that can dramatically improve the productivity of the healthcare provider. We will spend a considerable amount of time on later on today's call discussing our AI strategy and key progress updates. Two, the increased likelihood of more public and private partnerships announced by political and public health leaders, most recently in Ontario earlier this year. Three, a commitment by federal authorities in Canada to add significant additional funding to help Canada not only improve sustainability of its healthcare system, but to also digitize and modernize it.
Four, the demonstration, particularly in the U.S., of how valuable hybrid care networks are based on a string of highly visible multi-billion-dollar acquisitions where major companies such as Amazon and large pharmacy chains have been acquiring providers of scaled hybrid healthcare providers, particularly in primary care with strong physical and telehealth offerings. To that end, WELL has considerably grown its physical infrastructure in the U.S., ending the quarter with 23 physical facilities from 5 at the end of December 2023. 2022, pardon me. Five, our own M&A pipeline is very strong, and we are seeing some of the best opportunities we have seen in a while. We'll give this topic some due focus today. Before I hand the call over to Eva to review the first quarter financial results, I'd like to provide some additional background on WELL and our growing patient volume metrics.
Over the past five years, we've grown both organically and inorganically into one of the leading digital healthcare companies in North America. In Q1 2023, WELL achieved record patient interactions of approximately 1.4 million patient interactions, an increase of 27% representing 5.6 million patient interactions on an annualized run rate basis. In Q1 2023, WELL achieved 975,500 total omni-channel patient visits, including both Canadian and U.S. patient visits, an increase of 25% compared to the prior year. The growth of our patient visit metrics demonstrates the company's continued leadership position as the preeminent end-to-end healthcare company in Canada with increasing market share in the United States. I'm also pleased to announce that WELL has now surpassed over 3,000 practitioners who deliver patient care from one of WELL's own clinics or business units.
We offer these practitioners a fully managed service where the practitioners can focus on delivering care while WELL takes care of everything else. Furthermore, there are now over 28,000 unique practitioners who rely on WELL in some way to power their medical practices. That equates to more than one out of every four healthcare providers in Canada who uses one of WELL's technology solutions. These practitioners can pick tools and solutions on an à la carte basis, such as practice management, telehealth, revenue cycle management, or patient engagement tools such as online patient booking or e-referrals. If you haven't had a chance to look at our Q1 2023 MD&A or Management Discussion Analysis report posted to SEDAR this morning, I urge you to take a look.
Inside, you'll find that we provided some enhanced segmentation, which now breaks down the business between our fully managed patient services and SaaS and technology services businesses. You'll find a lot of new detailed metrics across both US and Canadian businesses, as well as detailed KPIs on our SaaS and services businesses. We'd like to continue to shine a light on all the different levers of the business to help investors and analysts better understand WELL and how we're delivering on our mission of tech-enabling providers. Let's look at this new lens on segmentation and how it reflects our business. First, we've got our patient services business. This segment includes WELL's owned and operated network of clinics, which is Canada's largest network of clinics consisting of 139 clinics operating out of 77 physical facilities.
WELL strongly believes in the benefits of an integrated health offering and bringing together a diverse multidisciplinary offering of providers in the same setting. As such, many of these physical facilities have multiple clinics operating within the same location. Keep in mind that the total number of clinics across both the U.S. and Canada is north of 160 clinics operated out of 100 physical facilities, not including any ASCs or ambulatory surgery centers served by CRH Medical. Our Canadian patient services business includes primary care, allied health, executive health, and diagnostic clinics delivered through in-person and telehealth means, which combined generating almost 504,000 patient visits in Q1 alone, a 14% increase over Q1 2022. Secondly, in terms of segments, our patient services business in the United States.
This group includes omni-channel healthcare services and solutions WELL provides in the U.S. targeting specialized markets such as the gastrointestinal market, women's health, primary care, and mental disorders under the CRH Circle Medical and Wisp business units. Our U.S. patient services business generated almost 472,000 patient visits in the first quarter, an increase of 40% as compared to the same quarter last year, driven mostly by the organic growth at Circle and Wisp, in addition to the acquisition growth at CRH. Under the CRH brand, we are the leading provider of sedation services for colonoscopies in the U.S. in an ambulatory setting. In the U.S., WELL continues to expand its clinical presence, with anesthesia services now being offered in 128 ASCs NGI clinics across 18 states.
Headquartered in San Francisco, California, Circle Medical is a leading provider of telehealth-based primary care with an emphasis on mental health services with a growing physical clinic network. Also part of this segment is, of course, Wisp, one of the largest and fastest-growing specialty telehealth businesses focusing uniquely on women's reproductive and sexual health. The third segment that you'll see is our SaaS and technology services segment. This group includes all of our best-in-class platform tools and services that help providers digitize, modernize, and support their clinical operations. Inclusive of EMR, billing, revenue cycle management, digital apps, including OceanMD, and of course, cybersecurity and data protection divisions, which essentially form the entire practitioner enablement platform. Keep in mind that WELL is a unique company with both patient services and technology.
We own significant intellectual property which drives our industry-leading solutions and has created compelling and relevant links with healthcare providers all over the country. What is really interesting about the link between our SaaS and patient services segments is that WELL is the largest customer of our own platform. How is that for authenticity? A company that uses its own software at scale and demonstrates that it works every day. Additional key metrics for this business unit include the fact that now the WELL EMR Group serves 3,900 clinics in Canada. OceanMD reported 190,000 e-referrals just in Q1. Our billing and revenue cycle management business has expanded to serving over 5,700 healthcare practitioners, and our apps.health now has 54 digital applications or apps on its platform, making it the largest healthcare-focused app marketplace in Canada.
With that, I'd now like to turn the call over to our CFO, Eva Fong, who will review the financials for fiscal quarter 2023. I will then come back and provide further commentary on our business units and of course, our outlook. Eva.
Thank you, Hamed. I'm pleased to report that we had very strong results for the three months ended March 31st, 2023. Our overall first quarter results were as follows: WELL achieved record quarterly revenue of CAD 169.4 million in Q1 2023, an increase of 34% as compared to revenue of CAD 126.5 million generated during Q1 of last year. This growth was driven by acquisitions and organic growth. WELL achieved record Adjusted Gross Profit of CAD 86.2 million in Q1 2023, an increase of 24% as compared to Adjusted Gross Profit of CAD 69.4 million in Q1 last year. Growth in the company's Adjusted Gross Profit is attributable to higher revenue in the period.
Adjusted EBITDA was CAD 26.7 million in Q1 2023, an increase of 14% as compared to Adjusted EBITDA of CAD 23.5 million in Q1 of last year. Adjusted EBITDA attributable to WELL shareholders was CAD 20.6 million in Q1 2023, an increase of 28% as compared to Adjusted EBITDA attributable to WELL shareholders of CAD 16.1 million in Q1 2022. Adjusted net income was CAD 14.1 million or CAD 0.06 per share in Q1 2023, an increase of 58% as compared to Adjusted net income of CAD 8.9 million or CAD 0.04 per share in the same period last year. WELL generated 12% of its revenues from truly recurring and subscription revenues and 83% of its revenue from its highly recurring patient services revenues.
That means that approximately 95% of its revenues are highly predictable. I will now review our segmented results as described by Hamed earlier. Our Canadian Patient Services business achieved another record quarter with revenue of CAD 50.9 million in Q1 2023, an increase of 23% as compared to CAD 41.3 million in Q1 2022. Canadian Patient Services revenue includes revenue generated from our primary care and MyHealth divisions. Primary Care revenues increased 45% to CAD 24.8 million in Q1 2023, compared to CAD 17.1 million in Q1 2022, primarily due to organic growth and the addition of new clinics.
Primary care revenue also benefited from a one-time stabilization payment from the BC government of approximately CAD half a million in the first quarter, as well as higher billings from the new payment model for BC Doctors that was implemented in February earlier this year. In Q1, 2023, MyHealth revenue increased 8% to CAD 26.1 million as compared to CAD 24.2 million in Q1, 2022. The growth in MyHealth revenue is attributable to continued efforts to alleviate staff shortages experienced last year, leading to higher billable time for many of its diagnostic procedures. MyHealth also benefited in the quarter from the addition of new cardiologists to its practice. Our US patient services revenue was $99.2 million in Q1, 2023, an increase of 38% as compared to $72.1 million in Q1, 2022.
U.S. patient services includes our CRH, Circle Medical, and Wisp businesses. For Q1, 2023, CRH revenues were $57.5 million, an increase of 19% as compared to $48.2 million in Q1 last year. CRH's case volumes also continue to be very strong, with 132,580 anesthesia cases completed in Q1, 2023, an increase of 13% compared to Q1 last year. Case volumes in the first quarter were positively impacted by the acquisition of Affiliated Tampa Anesthesiologists in the quarter. Given the nature of how health plans and their deductibles work through the year for elective procedures such as colonoscopies, fourth quarter is usually CRH's strongest seasonal quarter, and normally we would expect CRH's Q1 revenue to decline from Q4.
However, this quarter we witnessed an increase of 10% in CRH's revenue from Q4 2022 to Q1 2023, which was largely due to a one-time promotional campaign for its O'Regan product, resulting in a record 59,620 O'Regan Ligator units being sold in the first quarter, an increase of 41% as compared to 42,280 Ligator units sold in Q1 2022, and an increase of 39% compared to 42,760 Ligator units sold in Q4 of last year. The O'Regan product promotional campaign has now ended and Ligator unit volumes have returned to normal levels. Circle Medical revenues were $23.1 million in Q1 2023, an increase of 93% as compared to revenue of $12 million in Q1 of last year.
Wisp achieved revenue of $18.6 million in Q1 2023, an increase of 56% as compared to revenue of $11.9 million in Q1 2022. Both Circle Medical and Wisp have achieved tremendous revenue growth over the past year, which has been entirely organic in nature. We increased our ad spending in Q1 2023 for Wisp to take advantage of much lower ad rates in the first three months of the year as compared to the last three months of the year. Although this did have a softening effect of our overall Adjusted EBITDA in the quarter, I'm pleased to report that Wisp still managed to achieve positive Adjusted EBITDA in the first quarter.
SaaS and technology services revenues were CAD 19.3 million in Q1 2023, an increase of 47% as compared to CAD 13.1 million in Q1 2022. The vast majority of this growth came organically, which was 42% growth year-over-year. In Q1, SaaS and technology services revenue growth was driven by exceptional growth in the cybersecurity and data protection business, which achieved its best quarter ever. Cybersecurity and data protection revenue tends to be lumpy, we are not expecting this growth to continue into Q2 2023. WELL ended Q1 2023 with a solid balance sheet. As at March 31, 2023, WELL had cash and cash equivalents of CAD 41.7 million.
WELL continues to be in good standing and fully compliant with all covenants related with its two credit lines, JP Morgan in the U.S. and Royal Bank in Canada. The debt from the two credit lines was approximately CAD 253.4 million as of March 31st, 2023. I'm also very pleased to report that we have reduced WELL's leverage ratio to 2.6 times as at the end of Q1 2023, compared to 3.5 times as at Q1 of last year. We define leverage ratio as total debt, excluding convertible debentures, less cash on hand, divided by shareholder-adjusted EBITDA. The improvement in WELL's leverage ratio was achieved by a decrease in the company's debt levels and an increase in shareholder-adjusted EBITDA.
In terms of our share capitalization, as of May 11, 2023, WELL had 253,787,569 fully diluted securities issued and outstanding. That is my financial update, I turn the call back over to Hamed Shahbazi.
Thank you, Eva. Before I speak to our outlook, I'd like to take a few minutes to talk about the development, use, and proliferation of artificial intelligence or AI-based technologies and solutions at WELL. I'm pleased to report that as a company with deep tech experience and capabilities, we've made AI a key priority within the company and are working on compelling new products and enhancements to roll out to our provider network. At WELL, we have developed a three-pronged AI strategy as follows. First, the first prong is to develop and deploy new physician tools and technologies that better support our providers.
Earlier this week, the company launched WELL AI Voice, a transformational ambient scribe product that leverages generative AI to dramatically reduce a provider's administrative burden by privately and securely capturing a patient encounter conversation and automatically generating a succinct and medically relevant chart note for the patient interaction. What makes WELL AI Voice so powerful is not only its ability to leverage generative AI, but also its ability to communicate seamlessly with WELL's EMR products, making it easy for providers to deploy, manage, and benefit from the technology quickly and easily without having to harmonize the usage of disparate tools. Our focus is on provider-facing technologies in AI and thoroughly de-risking and creating guardrails for this sort of technology for healthcare providers. We believe that AI technologies can be used safely and securely to increase the efficiency and effectiveness of healthcare providers and to deliver better patient outcomes.
Second prong for us is to establish centers of excellence at WELL to help our employees become better users of AI. Long term, this may end up being the most important facet of AI for us. We have placed a high priority on the safe and secure usage of AI technologies at WELL and are well on our way to embrace the technology to increase the core productivity of the company. We are thoughtfully considering different ways of putting the technology to work, including hosting internal hackathon sessions to help us coalesce around best ideas. We're also in the process of hiring AI facilitators to help ensure that our teams are deriving maximum benefit from AI. Third prong is to place more bets or investments on AI in healthcare-focused companies.
As part of our commitment to developing AI technologies, WELL recently announced that it was launching the WELL AI Investment Platform in our WELL Ventures group, whose goal is to invest in at least 10 companies this year with a minimum investment of CAD 250,000 and to ensure that each investee has a strategic alliance agreement with WELL that allows it to benefit from WELL's healthcare ecosystem. Since launching this program, we have already seen more than 100 companies come inbound into our channels. In addition, our apps.health platform is a very attractive aspect of the AI investment program as it provides a framework for AI-based technology companies to integrate with our OSCAR EMR as well as other EMRs and healthcare-related applications. We already have several AI-focused applications in our apps.health platform.
Lastly, for AI, we're also investigating opportunities to unlock the value of our own data to help further propel our providers and help them not only create more efficiency and productivity in their practices, but also importantly, drive better patient outcomes. We believe that our data can help create new decision support systems in the future. This is actually a good segue to WELL's ESG program. As you may be aware, WELL has a fulsome ESG program that is expressed at its dedicated ESG website at esg.well.company. There are effectively three key pillars to this program. One, our practitioner support and digital enablement, which of course is our mission and mandate. The second is the safeguarding of patient data. The third is to be a very healthy place to work. We believe AI will profoundly impact and strengthen WELL's ESG program at all levels.
I'd like to zoom into pillar two for a minute and discuss how we believe WELL can add societal value using its ESG program and commitments. You see, we believe that WELL's commitment to champion the cause of privacy, safety, and security of patient data now needs to be achieved within the context of allowing patients to knowingly, in a clear and unambiguous manner, be able to have their data work for them and help them create personal insights for them that can help them acquire life-changing insights, but also support the greater good by allowing their data to be shared, again, knowingly, for neural networks that are powering deep learning. This is a very important but highly fundamental shift. Data security is not good enough.
It does not allow me as a consumer or as a patient to derive benefit from my data, especially as we shift into a world where we finally have the technology that allows machines to learn, find that needle in the haystack problem, and provide outstanding insights. Now I'd like to speak a bit about our outlook for 2023. We're pleased to report that all of our business units are executing very well, and we are expecting to have very strong performance in 2023 across all of our BUs and for the entire company as a whole. The company doesn't foresee any material influences or challenges that would impair its ability to deliver solid results in 2023, as we're poised to invest in, achieve significant growth while delivering on enhanced profitability. As such, management is pleased to provide the following guidance for 2023.
We are increasing our guidance for annual revenues to between CAD 690 million and CAD 710 million, representing 21%-25% annual growth. This is an increase from our prior guidance of annual revenue, which was between CAD 665 million and CAD 685 million. We're also pleased to reiterate our guidance for annual Adjusted EBITDA to increase by more than 10% over 2022 levels. Our guidance does not include any unannounced acquisitions. Previously, we've indicated that between our organic growth and steady acquisition program, we believe we have a clear line of sight to CAD 1 billion in revenues within three years. Today, we'd like to report that we are now seeing one of the most compelling pipelines of acquisitions we've ever seen.
This doesn't mean we're going to go rush out and execute on all of them as we're going to continue to be extremely disciplined in terms of our due diligence and our capital allocation processes. However, it does mean that if we are able to execute on some of these opportunities, we could potentially reach $1 billion in sales in less than time than three years. Again, this is highly conditioned on our ability to execute on some of these opportunities, but highly encouraging to know that this potential exists, especially given the health of our balance sheet. Stay tuned on this as your team here at WELL executes. I will now provide some additional outlook for our business segments. First, our Canadian patient services business, including primary care and MyHealth.
It has become a lot more difficult for doctors to run their own clinical businesses, we've talked about this in the past, due to the increasing complexity brought about by hybrid and complex workflows, IT security, and other challenges, making it very difficult to the physicians to run even small practices. For this reason, we are seeing more physicians seek WELL out as a professional partner to help them run their businesses so they can focus on providing patient care. Our model allows for healthcare providers to maintain similar per unit economics, but end up seeing a lot more patients because they don't have to run a practice, which allows them to elevate care, improve earnings, and better support the healthcare ecosystem.
Growth in our patient services business in 2023 will be driven by continuing to focus on organic growth and executing on a highly disciplined clinic acquisition program. Our organic growth includes recruiting more physicians and recruiting or absorbing clinics themselves. In addition, we have a very active pipeline of clinic acquisition opportunities ranging from single clinics to small networks. I'd like to now comment on our MyHealth business in Ontario. WELL's Ontario-based MyHealth Partners is the largest single license holder and service provider for specialty clinics providing diagnostics in the province of Ontario, and we believe is very well positioned to support the Ontario government's mandate, particularly in the areas of diagnostic imaging. Last quarter, we discussed the Ontario government's new multi-pronged strategy to reduce wait times by partnering with independent service providers for Ontarians, including areas associated with MRI, CT, colonoscopy, and endoscopy services.
We intend to apply for new MRI and CT licenses, which will be provided by the province of Ontario under this new program. We anticipate the new licenses will be awarded in the second half of 2023. If MyHealth is successful in its applications, we would need to incur additional capital costs to purchase imaging equipment and for leasehold improvements. We anticipate lead times of several months to having these services fully operational in clinics. As such, we don't expect meaningful contribution in 2023 if we were to win these licenses. Our outlook for Q2 remains positive as we're expecting MyHealth to report a strong quarter, as the second quarter is seasonally the strongest for MyHealth historically.
Almost all of MyHealth's revenue arise from referrals from physicians, and as such, as there are more working days in Q2 compared to the slower summer months or the December holiday season. MyHealth therefore experiences more patient volumes in the second quarter. Now some commentary on U.S. patient services businesses, including CRH, Circle, and Wisp. For the CRH business, we expect CRH case volumes to follow normal seasonal patterns in 2023, with the number of cases increasing in each subsequent quarter, as we expect Q4 2023 will again be the strongest revenue quarter for CRH. It should be noted that between Q1 and Q2 2022, CRH received more than $2 million in US dollars in pandemic-related government assistance.
This grant helped offset labor costs and thus improved EBITDA in Q1 and Q2 last year, which will not be repeated in Q2 2023. Also, as Eva previously mentioned, CRH revenue in Q1 was boosted by a 1-time promotion on O'Regan product sales. We're not looking to repeat this product promotion in Q2. Hence, we do expect O'Regan product sales to decline in the second quarter, which should not materially impact overall results. For our Circle Medical business, Q1 was a transformative quarter in which Circle built out its physical clinical network. Already a leader in providing telehealth services for primary mental health, I'm pleased to report that Circle Medical aggressively grew its physical clinic network to 18 clinics across the United States as of the end of Q1 2023, compared to only 2 clinics at the end of December.
The expansion of Circle Medical's physical clinic network will improve its hybrid care capabilities and strengthen its ability to better support its patients. The new clinics, strategically located in cities across the United States, offer a range of medical services, including primary care and specialty care. The clinics are equipped with state-of-the-art technology, staffed by highly qualified healthcare professionals, and designed to provide a seamless healthcare experience from Circle Medical's excellent telemedicine platform. The clinic expansion of our Circle Medical network positions the company well for the end of the public health emergency in the United States. Going forward, our plan is to follow a slower and more measured pace in expanding Circle's physical clinical network as compared to the aggressive pace that we've witnessed in Q1.
We expect the expansion of Circle Medical's physical footprint and related investments to create some softness around their results in Q2. We believe this will further fuel their growth in the back half of the year and have considered this as part of our overall guidance. Our Wisp business is expected to continue to experience healthy revenue growth in 2023. We're purposely reinvesting any cash flows generated by this business back into growth. The additional spending is primarily on marketing costs to gain new patients and drive additional revenues. As a result of this reinvestment, we are expecting minimal Adjusted EBITDA contribution from Wisp in the first half of the year. Wisp is also retooling some of its key product and distribution partners in Q2.
While we expect revenues to be strong over the full year, we will have lower growth temporarily next quarter in Q2 2023. Finally, SaaS and technology services. The outlook looks promising for our SaaS and tech services group. As Eva noted earlier, this group had incredible growth in Q1 with 42% organic growth. Also, for the first time in a while, SaaS and services comprise more than 10% of WELL's overall revenues, which is really great to see. As part of the SaaS platform, let's talk about Ocean. Ocean is emerging as a leader in patient engagement and e-referral solutions. Most recently, OceanMD's e-referral platform was selected by the province of Nova Scotia, which will make a surgical consult referrals easier and reduce wait times for patients.
The e-referral software allows primary care providers to send their requests to surgeons through the Ocean e-referral network instead of faxing, emailing, or mailing. Already the dominant e-referral solution in the province of Ontario, we feel OceanMD has the potential to be the e-referral standard across the country, and we are currently in the bidding process for additional e-referral related proposals in other provinces across Canada. Meanwhile, the technology assets acquired from CloudMD have been well integrated into our Provider Solutions group, with Juno EMR completing our acquisitions for the OSCAR EMR-based providers and ClinicAid fitting in with our billing and re-revenue cycle management division. As Eva pointed out earlier, cybersecurity and data protection had its best quarter ever in Q1. Being a lumpy business, we don't expect this level of activity in the second quarter.
We are expecting our overall SaaS and technology services revenue to experience a slight decline in Q2 as compared to Q1. In summary, we're very pleased with our financial performance thus far in 2023 and look forward to delivering strong results again for the rest of the year. Our outlook for 2023 remains positive. I'm confident in raising our annual guidance again. We have many tailwinds driving growth in the business, and we have a committed and disciplined team to ensure that we're able to execute on our objectives. Finally, I'd like to thank you all for joining us on the call today and thank our shareholders and investors for all of their support. The capital markets have been supportive of our vision and provided us with the funding needed to pursue our goals and of course, power and tech enable our healthcare providers.
I would also like to thank WELL's senior management team and our employees and contractors for their tremendous effort. In particular, I'd like to thank our team of healthcare practitioners and other frontline workers who provide unbelievable patient care every single day. They remind us why we are here and what we are doing to support them. Thank you. With that, we'd like to open the call for questions. Operator?
Thank you, sir. For our analysts, we will now begin the question and answer session. Should you have a question, please press star followed by the number one on your touch-tone phone. If you would like to withdraw your request, please press star followed by the number two. Your first question comes from the line of Doug Taylor from Canaccord Genuity. Please go ahead.
Yeah, thank you. Good afternoon and or good morning for you, I guess. Congrats on a great start to the year. I'll start with, I think the most obvious question in that it's been just two months since you established your annual guidance for the year, and you're making a pretty material increase here in it. And that's not because of M&A. In fact, you've actually sold a business, it seems, since quarter end. I guess the question is: where is the major source of surprise and upside versus your original expectations for this year?
Thanks, Doug. That's a good question. Look, if you just annualize our Q1 results, you'll see that there's already a lot of strength in the platform. If you just look at the organic growth that we've seen from, you know, reliable organic growth from a lot of the different aspects of the business, including our U.S. patient services, and actually our Canadian business, you know, we think that this level of increase is fair and something that we, you know, as a management team can get behind with conviction. I'll note that with the 21% of elevated organic growth that we had this year, sorry, this quarter as compared to last year, it was actually pretty evenly weighted too, between the U.S. and Canada.
U.S. was a bit more and Canada was a bit less. I believe Canada was around 18%. Sort of gone is that narrative where the only thing that's growing for us is Circle and Wisp. We had excellent performances clear across all of our business units. I think that's very, very encouraging. You know, of note is our primary care business as well. Look, we talked about some of these, you know, some of these trends and tailwinds, you know, some of the increased healthcare spending across the country I think is starting to show up as well. That's a bit of color for you.
As a follow-up, maybe I'll ask, you mentioned the incredible increase and then the footprint, physical footprint of Circle and just your U.S. patient services business overall. I think it's at 23 clinics as at the end of the quarter. Can you maybe just refresh us on, you know, what your ambitions are there for, you know, a clinic footprint within, you know, the U.S. market so we can kinda understand, you know, how far you intend to take that physical location build-out?
Yeah. I mean, look, the need for ramping this up quickly was to harmonize this with readiness for the public health emergency. There was no other kind of burning need to do that. This is why in the script, I mentioned that, you know, further increases will be more moderate, you know, because we feel that we've already established a pretty good, you know, platform to support patients. As the business grows, we are committed to hybrid care. We think it results in the best patient outcomes, and we think that, you know, that is also where sort of the world will land now that the public health emergency is finishing up.
We don't have any particular goals, you know, in terms of wanting to be at a certain number, but I do believe that you will continue to see this number go up.
Just as a related question, the staffing of those clinics, it's one thing to establish it, but to staff it with the appropriate, you know, professionals, is that something that's lagging, or are you able to do that at the same pace? I'll pass the line after that. Thank you.
Yeah. Look, this is why I think what Circle did was truly remarkable. This is why I, I was sort of preparing for some Q2 softness because I think it's hard to execute on everything, you know, all at the same time. We think that they're going to catch their breath a little bit in Q2 and get back to, you know, doing instead of kind of having a lot of the kind of all hands on deck approach to, you know, growing their physical footprint, really being able to benefit from that. I think it gives the business a enormous contrast with its competitors. You know, we're seeing still elevated NPS scores, and, you know, they're changing lives with their platform.
We think that, you know, we have certainly high hopes and expectations for the balance of the year for them.
Thank you.
Thank you. Your next question comes from the line of Christian Sgro from Eight Capital. Please go ahead.
Hi, good afternoon. Several of the tech services metrics spiked nicely in the Q1 quarter. That's providers in the network, referrals, those sorts of metrics. Wondering, you know, there wasn't any M&A in Canada to sort of obviously support that bump, but wondering, you know, where the traction's coming from, if there's any new efforts to get practitioners onto the platform and what supported those, the lift in those metrics?
Thanks, Christian. You know, I think you're seeing in terms of our success, in, in the tech and SaaS, you know, kind of SaaS and platform services is the benefits of integration. You know, there was a lot of focus on bringing those e-elements together. As you may remember, a lot of those were actually separate business units. Collapsing those into one unit, establishing connectivity between them, and actually getting out and selling them as a bundle, you know, I think has been really, really key. I think, you know, management and team have really worked hard on integration. I, it's one of the things I'm really proud of. WELL isn't just good at, you know, finding great assets and acquiring them.
We're also really good at integrating them. I think that may be, you know, the more important part of our M&A strategy. I think what you're seeing here is the combined benefits of that platform and being able to speak with one voice about how we can tech enable providers.
Okay, perfect. The second question I'll ask is around artificial intelligence, which is becoming core to the offering and some of the structure internally. AI Voice was certainly an exciting start this week, but wondering if there's any other concrete examples or things you could leave us with, you know, on products and other solutions you'd go to market with on the AI front in the coming months or quarters.
Sure. Look, I think this whole category, I mean, AI Voice talks about capturing an encounter and creating a note, you know, a medically relevant note that usually would take, you know, providers a long time to do because, you know, they have to observe the entire conversation, all of the different notes, and they have to create this sort of, you know, condensed medical note. You know, the thing to think about here with, you know, AI is that we think it's sort of, you know, a lot of the patient-facing. We're not focused on patient-facing elements of the business. We think that on the provider side of things, you know, think about Alexa for providers, you know, as a vision.
You know, AI Voice is just a component of that. We think, we are investing in this vision of a provider really being able to just, you know, talk to their software as opposed to having their head buried in the software. Having that software not only be able to capture notes, but actually digging deep, you know, of course, with patient, informed consent, but digging deep into the data and identifying things that could be helpful in that interaction.
There's so many cases that I've heard of, and it's, you know, a lot of them are frankly just very sad stories about how a doctor somewhere in that patient, you know, record had information that should have, you know, kind of come up or, you know, he could have become aware of, but it's just, it's just buried too far deep. That means that, you know, providers can sometimes miss stuff and interactions can be caused with, you know, drugs that are, you know, that are prescribed. This is what's truly incredible about the ability to, you know, confidently, you know, prosecute a database of patient data, you know, again, with the appropriate approvals.
I think this is a vision that's gonna take time, but it's one that I think fundamentally changes the patient-doctor interaction and just reduces errors and improves elevated patient outcomes.
Got it. Looking forward to updates there throughout the year and which targets come out of the investment program. Thanks for taking my questions, Ahmad.
Thanks, Christian.
Thank you. Your next question comes from the line of Allen Klee from Maxim Group. Please go ahead. Mr. Klee, your line is now live. Mr. Klee, I think your line is muted, sir. There seems to be no response from Mr. Klee's line. I will now clear his question. Your next question comes from the line of David Kwon from TD. Please go ahead.
Good morning. I was wondering, can you talk about maybe how you see the margin progression here for the balance of the year on the EBITDA margin side? I guess particularly given what I assume is gonna be a moderation in growth in terms of the ad spend for Circle and Wisp versus what you spent in Q1, but also maybe factoring, I guess, you know, Circle's clinic footprint, which I assume would lead to a bit of a near-term drag on margins?
Yeah. Look, with Circle Medical's clinics, not all of them are sort of big flagship clinics. A lot of them are smaller clinics, again, just designed to support the patient volume. We're still thoughtful about making sure that we don't, you know, create a crater in our results. Yeah, I do agree that... That's why I mentioned that there will be some softness initially. As far as overall progression, you know, I think if you look at sort of where we're guiding on revenue and our commitments on EBITDA, we are being intentional about investing in growth. We really like the elevated organic growth profile of the company.
At the same time, we want WELL shareholders to feel that they can rely on a certain level of profit growth. This kind of brings us back to the framework of Rule of 30. You know, we feel like it's great for management to have the flexibility and to thoughtfully kind of, you know, focus on organic growth at times and operating margins and not need to, you know, feel like they need to over-optimize on any one. We wanna accommodate this growth, I think you're gonna see, you know, sort of margins be pretty stable. Again, this is ex M&A. As I mentioned, there's a very good chance that there will be M&A.
I have a feeling that the M&A will be more impactful to margins than the actual, you know, trajectory of the organic growth.
No, that's helpful, Hamed. When you talked about the softness, expecting some softness in Circle's results in Q2, was that related to revenue growth or profitability or both?
We think it'll be a little bit of both. It's something that we think gets made up in the back half of the year, just based on, you know, all this, all this growth that they're experiencing. You know, since those numbers that I mentioned, they've even grown the physical footprint even more in Q2. Yeah, it's been a pretty frenetic pace. Yeah. No, we're still of the belief that they will have another, you know, phenomenally, you know, organic growth fueled, kind of, you know, phenomenal performance for the year.
One last question, just on that expansion, the clinic footprint understanding that you wanna try to cover off, I guess as it relates to patients that are being prescribed controlled substances. I guess with the footprint that you have right now, like, can you say, like, how much of the business that is still maybe out there that isn't kinda within those geographic regions where you are right now, kind of what the revenue at risk is?
The revenue at risk is actually really, really nil. I'll tell you why. Notwithstanding our preparations for the PHE, the DEA actually, you know, went ahead and extended those waivers until November. I'm not sure if you're aware of that, but, you know, we had to get ready. We knew that the end of the PHE was happening. Even though Biden ended the official PHE, the DEA, as it relates to controlled substances, which I think was the focus of your question, have been extended and more flexibilities allowed for companies like Circle.
Really, you know, we ramped up to be there and to be able to support this, but, you know, we will continue to enjoy those flexibilities for quite some time. Even in November, there will be a one-year grandfathering period after that. They wanna give, it looks like, ample time for anyone operating in this space to be able to make this transition. That just came by the way last few days.
Yeah. I know about that extension to November. I was just wondering more like when it eventually, you know, when it eventually comes into effect, how much of that revenue could be impacted?
Yeah. I mean, look, as of now, it's not even a thing. With the locations that we had ramped up, we were kind of positioned to support the vast majority of our revenues and customers and continue our growth path. Our budget continues to be very strong for Circle. This was even pre the understanding and recognition of the fact that these restrictions would have additional flexibilities associated with them.
I appreciate the color. Thanks, Hamed.
Thank you.
Thank you. Your next question comes from the line of Jason Zandberg. Please go ahead. Apologies. Your next question comes from the line of Michael Freeman from Raymond James. Please go ahead.
Hey, Hamed, Eva, Tyler, thanks very much for taking my call, and congratulations on a tremendous quarter. My first question is on acquisitions. I mean, at the end of last year, you talked about a robust pipeline, starting out the year. As we saw, very little came through in Q1. Sounds like you're still very bullish about the prospects for this pipeline. I wonder if you could give us a bit more color on perhaps like what that pipeline looks like, perhaps how many deals are sort of looking at in the near term, maybe total deal value and maturity across that funnel. Given you gave some commentary about, you know, clinics being the focus of this, of your M&A.
Wondering if you could talk about perhaps as focusing on Canada geographic areas of focus and creating ecosystems of multidisciplinary clinics and I'll leave it there.
Thanks, Michael . Look, yeah, I, I think you nailed it. You know, clinics is a focus both in the U.S. and Canada. WELL's business can be characterized as wanting to accumulate this precious and scarce resource of providers. I mean, they're, at the end of the day, the people that deliver care. Demand for healthcare services is extremely high in both countries. Most growth, what we found is not, you know, doesn't seem to be, you know, challenged on the demand side, but more on the supply side. WELL has, I think, a very focused strategy on acquiring assets that are provider rich so that we can accumulate that precious and rare resource and increasingly precious and rare and scarce.
That manifests itself in a number of ways. It manifests itself in why do we want clinics? Well, clinics are great. It's not so much the physical four walls that you get in a clinic, but what you do is you get providers that are entrenched with patient volumes, demonstrating that there's a pattern of delivering care in a sustainably economic manner. Of course, the WELL business model is to come there and ameliorate that in a significant way with our tech and expertise. You know, we see deep pipeline opportunities in both the U.S. and Canada. They're a little bit different, though. In Canada, I would say, a lot of smaller networks. In the U.S., you know, I think they're bigger networks.
In the U.S., we're also looking at, you know, different innovative approaches to acquiring providers. For example, you know, services that provide locums to hospitals and clinics. This is highly desirable for WELL to be able to traffic in those types of areas because, again, it puts us, you know, in a position where we can be partner with the provider, tech enable that provider, and have that provider improve their productive outcome. Hopefully, that's helpful.
That's very helpful. I appreciate it, Mohammed. As a follow-up question, I wonder if you could shed some light on the Government of Canada's investment over, you know, over 10 years and, you know, starting now, in the modernization of the healthcare system, among many other things. You mentioned that you're seeing some of this healthcare spending showing up across the country. I wonder if you could expand on what you're seeing and then also just looking down the road, how WELL could further benefit from this investment.
Sure. I'm sure you're aware of some of the improvements in pay for doctors here in British Columbia, where I am. You know, I think we're seeing after, you know, many years of not really staying current with doctor pay, BC has dramatically ramped up its pay and even providing some one-time payments. I think Eva covered that off in her script. We're not just seeing one-time payments. We're seeing new programs. We're seeing an effort to make primary care providers feel that they are participating in, you know, in a business that does not leave them behind.
You know, if you kinda compare CPI and, you know, the per unit economics of a physician in some parts of the country like BC, it was quite lacking. Our understanding is that, you know, there will be other, you know, spiffs and upgrades across the country as we sort of deal with this, you know, healthcare crisis, which again, to a great extent can be characterized as a lack of primary care physicians. I mean, it's other physicians too, but I will say mostly primary care physicians.
All right. That's really helpful. If I could throw in one more thing in here. You mentioned that Wisp is seeking to retool its offerings. I wonder if you could shed some light on that.
Sure. I mean, look, they sold, they're a pure play provider of women's reproductive and sexual health. There's a bunch of different products and services that they provide. They are, you know, as they scale, they're adding new partners, you know, reviewing old partners, making sure that everyone's ready, able to scale. You know, as you grow your business, you encounter, you know, different situations and opportunities for improvement. I think, we believe we got a tiger by the tail here with Wisp. We feel that, because especially of their kind of scalable growth traits in terms of, you know, that revenue that you saw, I think the $18 million this quarter, that's not supported by a high number of providers.
It's enormously scalable due to the asynchronous nature of the business. Really a lot of the actual fulfillment, you know, responsibilities rest with your actual partners. You know, once a patient has been cleared for a medication and a script has been established. Making sure that those scripts manifest in, you know, products delivered on time in a highly compliant way. I mean, these are things that, you know, as we grow, we wanna expand the products. We wanna add partners that can give us more access. I think what you're gonna see with time is that Wisp is gonna expand its product line.
I think it's very exciting because, we're not seeing any slowdown of any of the categories that they're in currently, we see opportunities to kind of participate in a number of new categories.
Fantastic. Thanks. I'll jump back in the queue.
Thank you. For our last question today, we have Justin Keywood from Stifel. Please go ahead.
All right, thanks for taking my call. On the 10 strategic investments in AI at CAD 250,000 each, I'm curious, you know, why those parameters? Is each investment not unique where, you know, maybe it warrants more or less? I think in the opening remarks there was mention of 100 potential acquisition opportunities. Is that just within AI or is that a larger across primary specialty care and potential digital assets?
Thanks, Justin. Yeah, no, the 10 is really, you know. First of all, let's start with the word, with the number 10. It's really a number that's demonstrative of our commitment. We wanna have at least 10. I think I said this year, I kind of meant really in the next 12 months is our goal. If you look at our press release, we didn't say they'd be CAD 250 each. We say they'd be a minimum of CAD 250 each. The point there is that we just, we wanna make sure that, you know, we're not approached by folks asking for CAD 30 grand or CAD 40 grand or CAD 50 grand for something that's, you know, really early stage.
At the same time, we think that it's important not to come in, you know, into a more mature AI company where our investment would get lost and would be, you know, irrelevant. The idea here is for us to use our structural advantages, which include our provider network, our EMRs, you know, our digital health highway, you know, to help these, you know, companies proliferate their technology. When we put out that press release, we thought we'd get response, but we were really surprised and that's the 100 number. No, these were specifically related to the AI Investment Program. We had 100 reach outs just in the past few days since that announcement. It kind of floored us.
It's great because we're seeing, you know, some incredible business plans, operators out there because. And again, I don't think they're necessarily seeking us out for our cash. There's plenty of people that are willing to give you cash right now, but the fact that WELL can bring Ask About Health, it can bring, you know, the largest provider network in the country, that it can bring, you know, connectivity with, you know, so many health systems, digital health systems in the country, I think is something that really truly, you know, is top of mind for these entrepreneurs. Hopefully that's helpful.
Thank you. That ends our Q&A session for today. I'd now like to turn the call back over to Mr. Hamed Shahbazi for any closing remarks.
I'd like to thank everyone for joining us today and for all your support. We look forward to getting back to you on all our advancements in AI, in M&A, and of course, our efforts to tech enable providers in a confident and passionate manner. Thank you for your time. Have a great day.
Thank you, sir. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines. Have a lovely day.