Good morning, everyone, and welcome to NeuPath Health's Q2 2026 earnings call. Today is August 13th, 2026. Financial statements and MD&A have been filed and are available on the SEDAR+ website. Stephen Lemieux, 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. Please make your questions clear and succinct. Welcome, gentlemen, and please begin your presentation.
Thank you, everyone, for joining us. We are just going to go through a brief presentation on the quarter, and then we will open the floor up to questions. Just a quick recap about NeuPath. We are one of Canada's largest operators of community-based medical facilities focusing on treating chronic and MSK pain. We have approximately 160 healthcare professionals in our network that see roughly 200,000 patients annually. The majority of our patients are referred to us from a network of over 5,000 referring physicians. We operate 12 facilities in Canada, mostly in Ontario and Alberta, and we continue to have a high patient satisfaction rating. In our second quarter highlights, to note here in our Q2 of 2025, we had a material one-time payment. It impacted revenue by CAD 1.9 million and adjusted EBITDA by CAD 0.6 million.
We have revised the numbers you will see in this presentation to reflect the excluding that impact. Excluding that impact, our revenue grew 7% to CAD 23.2 million, adjusted EBITDA grew 3% to CAD 1.7 million. We continue to be under levered, so we are at 0.4 x, which gives us a lot of capacity to work on some of the business development transactions we are looking at. Capacity utilization increased to 56% from 52%, and we had record patient visits in the quarter that grew 6%. I will now turn it over to Jeff to walk through our financial numbers.
Thank you, Stephen. Good morning, everybody, and thank you, Martin, for having us here today to be with you. Turning to our financial results for the quarter ended June 30th, 2026. Again, just a reminder to the audience that we previously disclosed the one-time award that Stephen just mentioned, which had a positive impact of CAD 1.9 million to revenue in Q2 of 2025, as well as a positive impact on adjusted EBITDA and gross margin. Removing that one-time event, revenue grew by 7% to CAD 23.2 million for the three months ended June 30th, 2026, and adjusted EBITDA grew by 3% to CAD 1.7 million for the same quarter.
During the quarter, adjusted EBITDA was lower than expected due to some professional fees that were incurred in order to recruit some additional physicians and healthcare professionals that we anticipate will drive revenue in future quarters and future years. We also had an operational issue with one of our fluoroscopy suites at one of our clinics, which led to some downtime during the second quarter and had a negative impact on revenue and adjusted EBITDA. Next slide, please. On a year-to-date basis, we continue to see strong revenue growth and continued strength to the bottom line and adjusted EBITDA, with revenue growth of 9% to CAD 44.7 million and adjusted EBITDA growth of approximately 8% to CAD 3.2 million when adjusted for the one-time payment. Back to you.
Great. Thanks, Jeff. As we talk through our growth strategy, I just want to highlight some of the success we've had to date, really as we focus on growing physician hours. We mentioned in our press release we've onboarded six new physicians, three in Alberta, three in Ontario, in late July, early August. This is good for the business because not only is it bringing new doctors in to see patients, but we've added an anesthesiologist and a neurologist that also brings new service lines to us to focus on migraines and some new areas that we're not currently treating, so we can use that to educate some of our physicians as well.
We continue to utilize technology and have been piloting Heidi in some of our clinics and have seen great success in that, and we're starting to roll that out across our organization. One of the areas we've worked on too is building out our academic affiliation, so we were able to affiliate with an Ontario university. We're going to start seeing upwards of 40 medical students that are going to come through our facilities to train in everything from sports medicine, image guided, but it helps build that long-term pipeline of potential physicians as well that can join the company. We're very proud of the accomplishments our team has made from that perspective.
As we turn to our capitalization, we continue to have strong institutional ownership and good inbound at our stock through the NCIB program, and we're just under 1.4 million shares that have bought and canceled in the past 18 months. Board and management continue to actively buy when we have available windows open to us. Overall, we continue to have several pathways to grow. With growing or the growth we're seeing lately and in the quarters, that's from what Q2 growth was no new doctors. That was just our, like the doctors that we onboarded historically building their practices up to scale. Our new, some of our doctors that joined us in the past, adding new days to see more patients.
The chronic pain is a growing market, and it is fragmented across the country, so we are building out our network and starting relationships with more clinics and more markets. We continue to see this as a low valuation versus our peers, and we continue to build out. But overall, we are very excited with what we saw in the quarter, the growth that we are seeing, and the continued interest from new doctors that want to come and join our team and help treat all the patients, provide great patient experiences for all our patients. With that, Martin, I will turn it back to you for questions.
Thank you very much, gentlemen. The first question is, can you provide an update on the new Guelph facility? Is it on track to open in late Q3 2026?
Sure. Yes, so the Guelph facility, we had a couple week delay on some of the construction buildouts, so it is slated to open the first week of October, so very early in Q4.
You added six doctors subsequent to quarter end. Does this include the three physicians for the new Guelph facility?
It does not, no. It is three physicians in Ontario. When Guelph opens, we will have three physicians joining that facility as well, and then a few more out. We should probably, in addition to the six, we should be able to onboard another probably two to five throughout Q3 and Q4.
How many doctors are currently in the network compared to this time last year?
We are probably around 105 or 106 physicians in our roster now, and we would have been like high 90s at this time last year.
How large was the impact from the operational downtime? Is that now fully resolved?
It is fully resolved. It happened earlier in Q2, so our June numbers were good and showed the consistent growth rate. If you backed out the impact on gross margin, it would have got gross margin more in line a little bit above where we were last year once you adjusted out the noise and a few percentage points on adjusted EBITDA.
Excluding the CAD 1.9 million prior year reimbursement rate adjustment, clinic revenue grew approximately 7% year-over-year in Q2. What proportion of this organic expansion was driven by patient volume versus higher revenue per patient or procedure mix change?
The majority was driven by patient volumes. I think our patient volumes were up 7% or 8% in the quarter, and I would say a few percent is probably mix in different services that the patients are seeing.
Physical capacity utilization improved to 56% in the quarter, from 52% last year, I believe.
Yeah.
How are you managing the capacity utilization, and do you have a level at which you start to add evenings or weekend hours? Your capacity utilization has been a bit of a moving target given when you open and how you operate. Can you add some color to that?
Sure. Different facilities will be at different ranges around our utilization. We use it as a tool. For example, in our Brampton and Oshawa clinic, Brampton was working and Oshawa, they are both working evenings and weekends. We have renovated Brampton in 2025, renovated Oshawa this year, added more treatment rooms, and as well as fluoroscopy in our Oshawa clinic. As we see the numbers approaching probably in that 80%-90% range, we will look at either adding evenings or looking at expanding into adjacent space to create more treatment rooms, which would lower our capacity utilization as we bring more rooms on board. Where we have seen the growth is this is from two main things. It is our doctors that have joined in the past who are adding more days of service to expand into either new space or to see new patients.
As well as the doctors that we added in 2025, building their practices to scale, and then some of them adding days with us as well.
You have now treated over 340 joints with Arthrosamid, including 137 in the first half of the year. What is the patient adoption ramp for this non-insured procedure, and how material could it become to top line growth and gross margins over the coming years?
Yeah, that's a good question. We continue to see great interest in Arthrosamid, and we're getting great feedback from the patients that have treated. We're getting a lot of word of mouth referrals that are coming in as well as the marketing piece. We're probably at about a CAD 1.5 million run rate on that product for a service that we started about a year ago. It could probably grow into the inquiries we're seeing somewhere north of CAD 2 million in the next 6- 12 months probably. The growth rate on that, what we're doing is it's a combination of bringing new patients in. We also continue to roll out, so we had more doctors starting to provide this service, and we continue to have doctors that are getting trained on the procedure. We have more people that can offer this service.
It's a good product for us, great feedback, and we're very excited about the growth that it could generate. As we approach CAD 100 million, it could be 2%-4% of our business in the future.
Does it have higher or average gross margins associated with it?
It's a very expensive material product, so it's a slightly lower gross margin. It's roughly about a 10% EBITDA margin.
What additional non-insured or specialized clinical services are you evaluating to integrate into your facilities and operations?
Right now on the non-insured, prolotherapy, PRP, and some of the sports medicine are areas that we do offer in some clinics, and we are working with some sports med doctors to roll those services out to other clinics. We are seeing good interest in those programs. Other services such as vitamin infusions, ketamine infusions, we started piloting at certain clinics to see what, and we had pretty good interest on those to date. Then we continued to work with a few partners and some psychologists on the mental health side, which is not a covered service.
You onboarded six new physicians post quarter. How much revenue do these new physicians typically add, and how long does it take them to ramp up? Do they start at a lower rate and then slowly add more hours and shifts? Can you describe what a, I guess, a typical new physician would look like in the network?
Yeah. A typical ramp up to scale is probably about six months. When they first come in, they will work through our wait list, see consults to try to start building their practice. When they get to scale six months in, depending on the number of, if a doctor gave us three to four days a week, it would probably generate roughly around CAD 1 million of new revenue for the business.
With your new partnership with TMU, how long do you see for that to start making a meaningful impact in the revenues?
It is probably in the three to five-year horizon. If you think of this program at scale, in our Edmonton facility, they see residents coming through, and those residents get hired every year. This is a new program at TMU, and TMU is a new med school. As their students go through, we are seeing anyone from their post-graduate years one, two. This year's training, we will probably have an ability to recruit some in probably in two to three years.
There was significant amount of tax restructuring going on in the quarter. Could you please elaborate and clarify the impact that made and what future impact that will have?
Sure. Jeff, do you want to take that one?
Yeah, sure. Thank you. The tax impact in the quarter really related to the amalgamation of a taxpaying legal entity and a legal entity that has tax loss carry forwards. The recognition of a deferred tax asset of CAD 0.9 million was relating to the cash tax that we expect that business to realize over roughly a three-year period.
How does your current M&A pipeline look for the remainder of the year or in the following year?
Yeah, it is looking good. We have got conversations that we have continued to advance, and we would like to be able to announce at least one transaction in the back half of this year. Then we have got a range of everything from looking at established clinic groups to partnering with doctors to offer pain services in new markets and new areas that we are not in, such as the Maritimes, different provinces, and so on. But we are very happy with the number of conversations we are getting and some of the new we are starting to get some good inbound reach from some medical communities as well to help offer pain services in their region.
Thank you. You repurchased 308,000 shares at an average price of CAD 0.51 during the first six months. What is the current thought on your share buyback program versus other capital allocation strategies?
Yeah. We still have the share buyback program ongoing. We are starting to, you see in our numbers, more of the capital that we are allocating is a little bit less to the NCIB, but we are starting to put more into growth capital in the facilities. I think we spent about CAD 400,000 the first half of this year, and that was to expand Oshawa, some new fluoroscopy, and start Guelph. We are starting to put more towards the growth and BD pipeline.
How large were the elevated professional expenses this quarter? Are those expenses now back to normal?
Yeah. Those expenses were, some of the doctors that we are onboarding are from the U.S. and Europe, so it was cost related to the immigration paperwork and going through the immigration process with the government of Canada. Those costs were incurred in the first half of the year, and we do not expect to see, it should be nominal to no cost in the back half of the year for that. Then we will start to get the return on the investment as those doctors build their practice.
That concludes all the questions from the audience this afternoon. Any final comments before we finish this quarter's conference call?
Sure. I will just wrap up. Thank everyone for joining. From our perspective, we are very happy with how the quarter went. There was some noise in it, but when you back that out, you can see great organic growth. With the new doctors coming in and where we look at our growth pipeline, we are very excited about where NeuPath is going to grow over the next couple of years, and we look forward to keeping you updated in future quarters.
Thank you very much. This concludes NeuPath's Q2 2026 conference call. You may now close your lines. Thank you.