Good morning, everyone, and welcome to NeuPath Health's Q1 2026 earnings call. Today is May the 14th. The financial statements and MD&A have been filed and are available on the SEDAR+ website. Stephen Lemieux, NeuPath's Chief Executive Officer, and Jeff Zygouras, NeuPath's Chief Financial Officer, will present the company's financial results and provide a business update, followed by a Q&A session. Investors are encouraged to submit their questions via the Q&A box, and we will address them at the end of the session. If there are any analysts on the call, you may raise your hand and verbally ask questions to management. Please make your questions clear and succinct. Gentlemen, please begin.
Thank you, Martin. Thanks for hosting us on this call. We'll start with a brief presentation, then we will open it up for Q&A. Just note that during our presentation Q&A, we will make forward-looking statements. If there's any questions about risk factors, please refer to our AIF and other documents that are filed on our website in SEDAR+. We also use non-IFRS measures in our financial performance and assessment. For anyone new to the story, NeuPath operates one of Canada's largest networks of community-based medical facilities focused on the treatment of MSK and chronic pain. We have approximately 150 healthcare professionals working for us who see 200,000 patient visits annually, and all of our patients are referred. Those patient visits come from a network of over 5,000 referring physicians in the country.
We have 12 regulated medical facilities, our business right now is focused in Alberta and Ontario, we have a high patient satisfaction score, just over 4.6 out of 5. Turning to our first quarter highlights. Revenue growth in the quarter was 11% to CAD 21.5 million. Adjusted EBITDA growth of 15% to CAD 1.5 million. Our leverage is still low, coming in at 0.4x . We increased our physical capacity utilization to 52%, compared to 47% in the prior year. We're gonna be expanding our footprint to Guelph, Ontario, we signed the lease with this facility recently, we will be expecting to open this facility in late Q3. We saw our patient visits grow by 9% in the quarter.
With that, I'll turn it over to Jeff to walk through our financial performance.
Thank you, Stephen. For the first quarter, our revenue grew roughly 11% over last year and also represents an 11% CAGR over the past two years. On the Adjusted EBITDA side, Adjusted EBITDA came in at CAD 1.5 million, up roughly 15% versus the same period last year and representing a 29% CAGR over the two-year period. Ultimately, we're pleased with these results. Our Adjusted EBITDA growth is outpacing our revenue growth, which demonstrates our operating leverage in the business. As Stephen said, ultimately, from a net debt perspective, we have Adjusted EBITDA to debt leverage of roughly 0.4x and a large capacity to take on more debt as we grow. Back to you, Stephen.
Great. Thanks, Jeff. Just to highlight on our growth strategy, for everyone on the call, our growth strategy is all focused around increasing available physician hours, and we were able to do this multiple ways in a quarter. We did onboard two new physicians in the quarter, it's a total of seven new physicians in the business since 2025. We're expecting to onboard another six to eight physicians throughout the balance of this year. We continue to utilize technology and roll out AI to help our physicians with charting to increase their time available to see new patients. We announced the expansion into Guelph, which will open in the third quarter. We're continuing all of our active discussions on the M&A side, looking at new opportunities and new markets in Ontario, Alberta, and BC.
On the capitalization, no major changes here. 56 million shares outstanding, 63 million fully diluted. We continue to utilize our stock buyback program. To date, we've purchased about 1.1 million shares, and leadership continues to buy stock in the open markets when we have available windows open to us. Overall, there's several great pathways for us to continue growth. The demand for chronic and MSK pain is treatment. The demographics, it just impacts one in five Canadians and one in three Canadians over the ages of 65, and it's a very fragmented Canadian market. There's over 250 individual or one or two shop clinics across the country. We will continue to use our share buyback as long as we feel the company is undervalued compared to our peer group.
With that, Martin, I'll turn it back to you for questions.
Thank you very much. Attendees, please type your questions into the Q&A box. clinic revenue grew 12% year-over-year, but gross margin declined slightly. What was the factor for that?
That was really driven by some increases in staffing costs. During the quarter, we ran a few training programs for some of our nurses, so we were bringing them in for training work, which will help benefit some of our growth in the future. It was in addition to the work they were doing for patient treatments at Contura.
Thank you. What is the CapEx expected for the new facility in Guelph?
The CapEx we're gonna be putting a fluoroscopy suite in there, it'll be roughly around CAD 200,000 for the facility. We were fortunate enough with the landlord putting that building in place that they paid for a majority of all the leasehold improvements, it's really just the medical equipment we need to treat patients.
All right. Who would you say is your peer group?
That's a great question. When we look at the public peer groups, we look at businesses like WELL, who are starting now to segregate out their clinic business, so you can see what the results are for, like clinic specialty and that piece. We look at other companies like VieMed Healthcare, anyone really in that medical services business. From delivering like hospital beds to like other and everything in primary care through different specialty businesses, you know.
You mentioned six to eight physicians in 2026.
Is this in addition to the two onboarded in the quarter?
Yes, that's correct. Yes.
Utilization improved from 47% to 52% while you expanded your capacity. Is this correct? Can you add any additional color to this?
Sure, yeah. In, in the quarter, we expanded our capacity by about 2.5%, so we added five new treatment rooms in one of our facilities that was at capacity. That to just represent, if we did not add that additional capacity, we would have been around like 40% or 54%-55% capacity in the quarter. It's great to see that even with expanding the capacity to meet patient needs at some of our clinics, we're still able to grow that on a quarter-over-quarter basis.
You treated 50 Arthrosamid patients in the quarter, bringing the total to 250. What is your current capacity to scale this service? Can you discuss the revenue or value of the Arthrosamid service?
Arthrosamid is a private pay service. It's a permanent knee injection for people suffering from arthritis. We've been rolling that out to and training physicians across our network. Majority of our facilities, we have one or two physicians that have added that to their practice, and we continue to train new physicians. We have a lot of capacity to continue to onboard more patients as Contura continues to market that product. It's approximately CAD 4,300 per injection or per joint for that procedure. The majority of the cost of that is the product cost, and it's about a high single-digit margin for us at Contura.
Thank you. Q2 seems to be your strongest quarter seasonally. Is this true? Can you talk about any seasonality in your business?
Q2 does seem to be our strongest. If you look at seasonality, Q1 this year, we were impacted by weather. Where you get severe snowstorms, and we have to close the clinic, that does impact a little bit in Q1. Q3 is typically where some of our physicians will take more vacation time. Q2 is typically our strongest. The caveat, just so everyone remembers with Q2 is, when we talked about our annual growth last year, we had a one-time adjustment in Q2 for some payments that we received that relate to prior periods. Last year, our growth was 20% year-over-year. If you adjusted for that one-time item in Q2, our growth would have been around 17%.
When you see our Q2 numbers come out, the comparative will have the impact of that one-time adjustment.
Outside of chronic care facilities, are there any other revenue verticals that you would look at?
Outside of chronic care, so we're looking at the mental health vertical, 'cause a lot of our patients suffer from mental health, so it's how can we either collaborate, work or acquire into that space. We also look in the diagnostic space 'cause all of our patients need imaging. Trying to see the same thing, can we partner as we expand new facilities, can we add diagnostics to those facilities and/or mental health? Those are the two probably core areas we're looking at right now.
Your lease obligations total CAD 7.1 million, and CAD 1.2 million are due within 12 months. As leases expire, what should we expect in terms of are you able to renegotiate leases lower or expand into new facilities or switch facilities? Can you clarify that?
Yes. As leases expire, the goal is always gonna be to stay in the locations we're at, and if we need to expand, see if we can take over adjacent units. We'd look at moving if we needed a larger facility or if the facility we were in, like, wasn't being maintained as well as we would've liked. The majority, like, on the lease cost, we typically see that pretty stable where the landlords are give us more incentives. It's on free rent or on tenant improvements when we, when we extend leases.
Your MD&A stated that fluoroscopy as a revenue growth driver alongside Arthrosamid. Can you quantify the contribution of fluoroscopy and what is the trajectory, especially given that you are adding a fluoroscopy unit in the new Guelph facility?
Yeah. Fluoroscopy is becoming a bigger part of our business, so most of what we do in Alberta is fluoroscopy-related procedures, so that represents probably about, like, CAD 10+ million of our revenue. In the Ontario market, this is growing, so currently we have two suites that are up and operating. We've, like, the new Guelph facility will have one. We've recently renovated Oshawa, and we'll be putting a suite in there as well. That's gonna be a good growth driver. A lot of the new doctors we're recruiting in all have the experience to work in fluoroscopy and a lot of the we're making this investment because we're recruiting these doctors and they're coming into the business. We expect that to be a good revenue growth driver for us in the future.
Is preventative healthcare something the company is looking at?
It is. Like the, what we try to do is, like, right now if you think of the referral and the patient journey is they're going through what they can with their GPs and they get referred to us, and a lot of times by the time they get referred to us it's near the end. We spend time educating GPs and going to different events to work with them to show all the services that we can provide. We also really try to educate our patients as well, so it's not just come in and get a procedure.
It's like, "Here, here's, like, a, like, a physio plan that you can use to keep you active even once your treatment's done." Like massage therapy, work with nutritionists, but really trying to find ways to keep people as active as we can and educate them on that process so they're not deteriorating too much where it gets to be more complicated procedures at the end, but doing the best that we can for preventive care. Preventive care is really awareness on, like, being active. Even on the nutritional side, you'll see a lot of, like, a lot of the conversations around foods that cause inflammation, which really impacts joints, so educating patients just on those different foods makes a big difference.
Can you discuss your M&A pipeline? How is that looking?
Yeah. Our M&A pipeline, we're in various stages of discussions, everything from, like, someone we've given LOIs to early discussions. We've got a group, like, two groups in BC, Alberta, and Ontario that we're, I'd say, like, in mid to late stage discussions with where we're working through, like, LOIs and valuation and moving towards definitives. On the early stage, we've got a number of clinics and physicians where they're meeting with different doctors really to get, as I mentioned before, it's getting that understanding that from the business side we are not gonna control the medicine and getting that input from other doctors and learning that they're gonna have control over their medicine, there's a healthy pipeline on that side as well.
When we look back at the way we look at M&A and onboarding new doctors, it's all about growing physician hours, so we look at what's the best return on our investment from bringing doctors in. The doctors that we're bringing in now, that's all through either recruiters or word of mouth, when we talk about the seven that we've onboarded, the six and eight coming, so that's a great return on investment. The M&A is really focused more on centers where we're bringing in either multiple physicians and/or new services that we can bring to our business.
Thank you. As a reminder, if there are any additional questions from the audience, please enter them into the Q&A box. Non-clinical revenue physician staffing to other locations has remained flat. Is this to be expected, or is there any growth opportunity there or any risk of that declining in the future?
Yeah. That it's a great question. Our non-clinic revenue, this is we have a small research business that does clinical studies, our revenue depends on the studies that we win. The staffing business works with putting physicians into prisons in the Ontario market. These are two businesses that have been very stable, but they're I'd say there's more growth opportunity here than downside risk. Like, we are looking, like, with the staffing business, we do have security clearance, we are looking at can we expand that to different provinces? What are the opportunities? That's going through the government RFP system.
On the clinical research side, we're looking to expand to see, like, what other physicians can we bring in as principal investigators, is there other companies that we can partner with on their clinical trials? It's not gonna be a major growth driver, but it's an area that we are spending a little more time on.
Thank you. That is all the questions for this call. Any final comments before we wrap this up?
Yeah. We'd just like to thank everybody for your time and your interest in the NeuPath Health story. We'll just, we wish you all a great day.
Thank you very much. This concludes the earnings call. Thank you.
Thank you.