Good morning, and Welcome to Q3 2026 Earnings Call for NeuPath Health. Today is Thursday, November the 12th. The financial statements and MD&A have been filed and are available on the SEDAR+ website. CEO Stephen Lemieux and Chief Financial Officer Jeff Zygouras 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. Gentlemen, please begin.
Thank you, Martin, and thank you for everyone for joining us on our Q3 Financial Results Call. These are typical forward-looking disclosures, and we do use non-IFRS measures. Just a brief overview for those who are new to the call. NeuPath operates one of Canada's largest networks of community-based medical facilities focused on treating MSK and chronic pain. We have approximately 160 healthcare professionals that treat approximately 200,000 patient visits annually, and the majority of these patient visits are from referring physicians. We have a growing referral network of over 5,000 referring physicians. We now have 13 regulated medical facilities in Canada. We just opened our new one in Guelph, Ontario, so it is 11 in Ontario and two in Alberta, and we continue to have a strong and growing Google rating score of over 4.6 out of five.
Just to paint the picture of where NeuPath sits today. Take a little bit lower, at September 30th, roughly a CAD 34 million market cap. We have done CAD 67 million of revenue year-to-date, which is approximately just over 6% growth year-over-year, and our Adjusted EBITDA is CAD 4.6 million. It is 6.8% of revenue. We talked about in Q2, we were down a few days for fluoroscopy, and then we made about a CAD 200,000 investment in recruiting physicians in this quarter. Adjusting for those two impacts, that grows that rate to, I think, approximately 7.4%, 7.5% of revenue. On our capacity utilization, so we are 53%, up from 51% Q3 of last year.
What is interesting with the 53%, though, is that includes adding the new capacity at our Guelph facility, Oshawa, and some of our other clinics, so that if you were apples to apples with last year, it would be an even higher number. We are continuing to grow capacity as we are adding new capacity to our network. With that, I will turn it over to you, Jeff, to walk through the financials.
Thank you, Stephen. Good morning, and thank you, Martin, for having us here today. It is always nice to be here with you and your audience discussing results. Turning to our financial results for September 30th, 2026. For the current quarter, revenue grew by approximately 1% to CAD 22.3 million, and Adjusted EBITDA was CAD 1.4 million for the quarter, representing just over 6% of revenues. During the quarter, Adjusted EBITDA was lower than expected due to approximately CAD 200,000 of investment in physician recruitment costs, which will drive revenue growth in subsequent quarters. If we exclude that investment, Adjusted EBITDA would have been approximately 7% of revenue for the quarter. The quarter was also impacted by extended physician vacation and holidays around the late Labour Day long weekend this year, which impacted revenues as well as the bottom line.
Despite these items, during the quarter, we still increased our cash position by approximately CAD 0.5 million versus Q2 of 2026, which puts our leverage at about 0.2 x. Next slide, please. On a year-to-date basis, we continue to see strong revenue growth and strength to our bottom line and Adjusted EBITDA. As mentioned previously, there was a material one-time payment in Q2 of 2025, which related to positive adjustments to physician reimbursement rates for prior periods and had a CAD 1.9 million positive impact on revenues, with a CAD 0.6 million positive impact to margin and Adjusted EBITDA. With that one-time prior year payment adjusted out, revenue growth was approximately 6%, reaching CAD 67.1 million, and Adjusted EBITDA grew approximately 4% to CAD 4.6 million, or 6.8% of revenue for the nine months ended September 30th.
Overall, we are pleased with the investments we are making, which have increased our revenue this year and will continue to increase it in the coming years and quarters. The growth in Adjusted EBITDA demonstrates the operational scale we have achieved in this business. Back over to you, Stephen.
Thank you, Jeff. Just want to take a few minutes to talk about our growth strategy and what we have been doing so far this year. When we talk about the organic group, this is where we have been focusing a lot of our time for the simple reason that it is the most cost-effective for us and provides the best return on investment. With recruiting new physicians, everyone knows we have onboarded six physicians this quarter. What I want to stress is that we have made the investments in the immigration and the recruitment fees ahead of when that revenue comes in. We will see a lot of the benefits of those new physicians in the upcoming quarters.
As those physicians get onboarded, it is typically a six-month process, but because they will come in, do their trainings, a lot of them are in the position now of converting consults into patient visits, and that is some of the benefit we will see in Q4. The revenue and EBITDA benefit from them will continue throughout Q4, Q1, and throughout all of next year. We continue to have rostered physicians adding time, and as we are going through the process now where a lot of our physicians are looking what their hospital schedules are or their other practices, we are working with them. But we are happy to say we have a number of physicians who will be adding days to their schedule for fiscal year 2027.
Utilizing technologies, we have talked a lot about using Heidi, which is integrated with Mika and AI Scribe, and this is bringing a lot of efficiency to the physicians and their practice. This is typically resulting in our early adopters seeing anywhere from three to five more patients per day, which is a savings of anywhere from one to two hours in a normal eight-hour workday that these physicians utilize. We continue to always look at ways to improve efficiencies in our clinics in patient flow. With respect to new locations, our Guelph clinic is open and seeing new patients. We are really happy with that news. We have got a great doctor and great patient flow and a wait list of patients in that practice as our doctor builds up his practice to scale.
We are continuing to look for new service offerings and continuing our discussions with some pharmaceuticals that need to roll out their products in clinic settings, and also continuing to offer arthrosamid as new doctors add that to their practice across in Alberta and Ontario. On the inorganic side, we continue to have discussions with a lot of players. With the success we are seeing in the organic, we are very structured and specific in the deals that we are looking to bring in. There will be M&A in the future, so we are going to keep working through that and keep giving you updates. But it is everything, as mentioned on this slide, from adding new pain clinics, looking at some adjacencies where we can either acquire or partner with, or bring in other medical procedures or spaces.
The one I do want to circle back on, in the organics that I forgot to mention, on the service offerings, one of the new physicians we did bring in is a pediatric pain specialist. This has allowed us to start seeing pediatrics at the clinic she has, but also opening up our other physicians that are going through some of the training with her, where instead of seeing patients 18 and up, they can now suddenly go to 16 or 15. One of the new doctors was also a sports medicine physician from the University of Hawaiʻi , so he is helping build out our sports medicine service offering in the Ontario market. On the cap structure, no changes to the share capital or ownership.
We continue to buy back shares through the NCIB, so we are just under 1.6 million bought back and canceled over the last 22 months. Board and management continues to buy shares in the open market when we have buying opportunities. Overall, before I turn to questions, we are very happy with the investments we have made this year in building out new fluoroscopy rooms for doctors, recruiting efforts to bring new doctors in, expanding the treatments we can offer to serve more patients struggling with chronic and MSK pain. It is a very fragmented market in Canada. We are continuing to work and meet and talk to a lot of the other players there and sell them on the benefits of joining our platform. We continue to think that we have a low market valuation compared to our peers.
With that, Martin, I will stop sharing and turn that back over to you for questions.
Thank you very much. If you have any questions, please type them into the Q&A box. First question, can you please walk us through the recent additions of new physicians? When did they start? How much revenue did they contribute? What is the expected pacing of their contribution to revenue going forward? Also, what are the expectations for future physician additions from here?
Sure. That is a great question. The six new physicians that just started, all of them are practicing. Some started in, let us say, mid to late September, and then some were like late September, early October. When they typically start, their first week is training, is coming in, learning EMR system, learning clinic flow. Then they will start to see consults. To give you an idea, some consults can be anywhere from an hour to an hour and a half appointment versus a typical treatment, which is about 20 minutes. Consults are a much lower bill code than a typical treatment is. Q3, the impact of these physicians was very nominal, it really had almost no impact on the results.
Q4, you will start to see, as they convert those consults to patients, build out the treatment programs, we will see some impact in Q4, but we expect to see the impact at full scale more in the Q1, Q2 results of 2027. With respect to the pipeline, we have a very healthy pipeline of physicians that we continue to talk to that are looking to join us in 2027. We just attended an anesthesiology conference. We got some really good leads from that one, as well as our physician forum. We ran our physician forum last month, and that was really successful for us.
It not only introduced us to some new doctors that are looking to join, there were some doctors that were speaking who, some of the new treatment approaches they have, they are starting to train our physicians to add that to their basket of treatments that they have available. And there were also a few physicians that we invited to the clinic that have practices that it gave them more comfort, kind of that get to know our doctors, get to know us, and we are into discussions now about acquiring some of those clinics.
Thank you. You added nine doctors year to date. How many doctors are you expecting to add in the remainder of 2026 and in 2027?
Yeah, in the remainder of 2026, we will not have any new doctors. The ones that are looking to join us, they may do some training, but they will start their practices in early 2027, just with the way, for someone coming from the U.S. with U.S. Thanksgiving and Christmas, it does not make sense to come up during this time period. Our goal would be to really add roughly around the same number we have this year, like somewhere in that two per quarter, but it really depends on the physician timing and when they can give us time in their schedules.
All right. Patient visits were up 7% in Q3. How are they tracking in Q4 with new doctors and the Guelph facility open?
You will continue to see patient visits grow. With the Guelph facility, that is bringing a lot of new patients into that market, and the impact of that will be pretty much all entirely seen in Q4. That is the big part. The growth in patient visits, you are getting some of that from our existing physicians through the adoption of Heidi and Mika, and then the balance, we will see that number continue to grow in Q4 as the new six continue to add patients to their practices.
Patient visits rose 7%, but clinic revenue only rose about 2%. Is this due to the new doctors that brought on board, or what was it contribute for that disconnect?
A lot of that is from some of the new doctors, as I mentioned. As they start their consults, there are more visits with consults, but it is not the same reflective impact on revenue that you would see from our existing patient visits for doctors in the treatment phase of a patient cycle.
G&A declined in the quarter. Should this be the new normal, and how will G&A scale as you grow the business?
Yeah, G&A in the quarter, with the exception of the CAD 200,000 investment we made in the recruiting of new physicians, it's a good run rate, I think, in where G&A is in this quarter on a go-forward basis. As we talk about operating leverage, we can scale this business quite a bit before having to add to our G&A number. We've made investments on the finance team to consolidate systems, to bring more efficiency and technology there, as well as some of our other service offerings. So, I would say Q3 is a good run rate to use on a go-forward basis.
The new AI tools you are using, does that increase general efficiency, or does it provide an ability to increase revenues as well? And how does it do that?
Yeah, it is both. On the efficiency side, from a physician perspective alone, it allows them, as I mentioned, they can see approximately three to five more patients across their eight-hour shift. So that has a direct impact on the efficiency driving more revenue. On the clinic side, between, we use AI to help with our screening for new referrals, rolling out more kiosk tablets when patients check in to make that a quicker process to allow our front desk staff to deal with more patient calls and/or help out with the clinics. And then also other tools to drive efficiency in the clinic. So it's all really tied to either driving more revenue and/or improving cost efficiency to improve our EBITDA margins and our positive net income.
For the new Guelph facility, how long will it take to get to standard capacity utilization? How long to add? Is it fully staffed with doctors, or how much more ability to just grow that capacity utilization number?
R ight now it's opened with our doctor from the U.K., so he's using Clinic to See consults to start building out his fluoroscopy practice. We have a couple other physicians that are adding time to go to that clinic as well, so they're going to start probably in January. It'll probably take a year to get that clinic to, with three treatment rooms, one fluoroscopy room, so a year to get that to, let's say, a good operating capacity. We do have the availability to add another physician to that practice as well.
For your growth strategy, can you discuss the pros and cons and how you're deciding between organic, investing in organic growth versus acquisition growth? Can you discuss what the acquisition pipeline looks like at this point?
Sure. You think about on the organic side, as you bring new physicians into the business, if you think of a typical physician that works three to four days a week, they bring in CAD 1 million top-line revenue at our 20% margin, it's about CAD 200,000 to the bottom line. We're typically paying CAD 30,000-CAD 50,000 to acquire that cash flow. So it's a great return on our investment. That's, we spend a lot of time on that channel working with those doctors because that's the best return we can get, even though the revenue scales a little bit longer than it would be if you did an M&A transaction. It's the best utilization of our capital. On the M&A side, we're about a dozen or so conversations.
We've added a few more to the group that I talked about at Q2, and we're just pulling them through the funnel. We're really looking for physicians that are not looking for an exit strategy, but really looking to utilize our back office, practice more medicine, but also bring different clinical skill sets, different treatments, or new geographies to the business.
Thank you. You were recently at the Planet MicroCap Investor Show and the Small Cap Discoveries Investor Show. What feedback are you getting from investors and potential investors from there, and what is the general response to the NeuPath story?
I'd say overall, the general response is very positive. At both conferences, as people know, it's one-on-one meetings every 30 minutes. Planet MicroCap, we were completely booked and had probably another nine meetings that we unfortunately couldn't find room in our schedules to fill, so we're trying to work on those meetings after the Planet MicroCap. I think on the general side, investors love the fact that the business is now growing top-line revenue, growing EBITDA, but also net income positive, and has low leverage. When we find the good M&A opportunities, we can actually purchase stuff utilizing our own balance sheet versus having to go out to the equity markets. They like the stability of, as we operate in two provinces, which provides some diversification. There was a lot of talk at both about M&A.
There are groups of investors that want to see more transactions and more on the M&A side, so we spent time with them, what we just did now, walking through the benefits of bringing new doctors in, bringing that durable revenue stream, and the return on investment on that stream versus an M&A, but giving with the same notice that they're all open channels that we're looking at the same time.
Are you pursuing any institutional investors, and is there anything you are doing to make yourself aware to small-cap institutions?
We are. In addition to the two conferences we did in the Q4, we did do a non-deal roadshow with Acumen, who covers us. We went around to Vancouver, Toronto, and Montreal. That was targeting different institutions there that target high-net-worth individuals. We also had a number of, even at Planet MicroCap, there were a number of institutional funds that met with us as well. We try to balance between telling this story to new institutional funds as we do these meetings and as well the high-net-worth market and the retail market.
Thank you. That is all the questions today. Are there any final comments you would like to say before we wrap this up?
Yeah, I would just say I thank everyone for their support. We will keep you updated as we go through Q4 and into Q1 with the story. We appreciate everyone's support and enjoy the rest of 2026 if I do not talk to anyone before then.
Thank you very much, and this concludes the Q3 earnings call for NeuPath.
Perfect. Thank you, Martin.
Thanks, Martin.