We will try to get to as many as we can. We did get some emailed in too, so we will make sure we do refer to some of those as well. If we do not, by any chance, get to your questions, please shoot us an email at ir@hydreight.com, and we will try and answer your questions there as well. This presentation contains forward-looking statements under applicable Canadian and U.S. securities law, and these statements reflect current expectations regarding future operations, growth, products, and performance, but involve risk and uncertainties that may cause actual results to differ materially. Hydreight Technologies does not undertake to update these statements except as required by law. Investors should refer to our filings on SEDAR+ for additional risk information. We are just going to give it a few more moments here before we begin.
We hope you guys all had a great American Thanksgiving yesterday and got to enjoy some good food and company, as well as, I'm sure, watching some of those football games happening yesterday. Maybe about half a minute before we begin, just to be mindful of everyone's time here as well. Again, this webinar will be recorded, so we will try and get this sent out to you guys as soon as possible too. All right, I think we will begin. For those of you just joining us, welcome to Hydreight Technologies' Q3 earnings call, and we will pass it off to Shafin Tajani to start.
Thanks, Abbey. Like Abbey said before we get started, just wanted to say I hope everyone in the U.S. had a great Thanksgiving time with family, time to recharge, and thank you for spending part of your post-holiday time with us today. For those of you who've been with us since the early days, I think you can feel it. Something has fundamentally shifted. Hydreight isn't a story anymore. It's a business, a business with real revenue, real margins, real scale, and a model that's getting stronger with every single month that we go by. Let's start with the numbers. This is the KPIs, the key financial metrics that we kind of look at. We wanted to kind of summarize Q3 in a snapshot. GAAP revenue was up 132%. Top line was around $12.83 million, with nine-month top line at $26.71 million. That's four straight profitable quarters.
Cash on hand right now is about $18.64 million, and margins are sitting at about 28.21% year to date. This is the part of the story that matters most. We're not growing at the cost of profitability. We're growing with profitability baked in. The model is scaling exactly the way it was built to.
Thank you, Shafin. Thanks, everybody. Just to echo the comments, thanks for your time. Thanksgiving in the U.S. yesterday, so hopefully everybody had a great day. I'm just going to go back over again just the kind of vision for the company. I won't spend too long. Obviously, this is an earnings call, and I know most people know the story, but I think it's very applicable to some of the things we'll talk about in a more granular level later in the call. Obviously, the goal for 2025 was largely based around the release of our third vertical, which has an incredible scaling aspect to it, from not only the medications being recurring, but also the moat that we're providing and building out that direct-to-consumer ecosystem. That was the third vertical of a larger vision, of course, which was Hydreight Technologies that was founded in 2018.
The goal of the company was to address the reactive nature of the healthcare system in the United States, which, of course, was not sustainable. Certain things outside of anybody's control kind of highlighted the vision that Hydreight had, and we were perfectly positioned to take advantage within our first two verticals when the unfortunate pandemic happened, shining a light on the need for accessible healthcare. Of course, the Ozempic craze, as we call it, shone a light on the virtual care self-administered model. Hydreight's vision was to address the $6 trillion spend, of which 90% of it in the US is classified as chronic care. It is technically preventable if the right measures were there. We created a 50-state medical company.
We went vertical by vertical, starting with the nurses' vertical, which is essentially mobile health and wellness, where a provider is giving a true healthcare service in a remote setting. That has gone year on year, scaling at a very aggressive rate. We are the only company still. We were first movers back in 2018. We're still the first company to allow nurses to essentially monetize their credentials outside of your traditional bricks and mortar. Again, why we get called sometimes by third parties the Uber for nurses around the independent contractor side. Again, we'll go into some granular level details later in the conversation here. Our second vertical was based around the bricks and mortars, non-traditional doctor's office. This is the vision of preventative healthcare. Hydreight Technologies recognized that essentially the healthcare system was not sustainable, and it was going to go in three areas.
It was going to go mobile health and wellness. The bricks and mortar component would comprise of the non-traditional doctor's office, but still true healthcare, so it has to comply with medical boards, pharmacy boards, nursing boards. Of course, the third vertical was the direct-to-consumer virtual care, where the product is actually sent to the home and is self-administered by the client themselves. Again, our goal for 2025 as Hydreight was to continue growing the first two verticals, which have been growing year on year, 30% and plus, and to release and the effective execution of that release of our direct-to-consumer model. We've achieved that, essentially the third quarter being the best quarter in the company's existence. It's the first full quarter of revenue recognition on that third vertical and true validation of the moat that we have created.
Sometimes it feels like we've been talking about VSDHOne for a couple of years now, but really it is brand new. As I said, the first full quarter of revenue recognition was Q3. We'll talk a lot more detail about those, but again, the validation of what Hydreight has created, a 50-state medical ecosystem based around compliance, where corporate practice of medicine laws in the United States are very real. It's a federal offense unless you have a specific structure to be in the practice of medicine and monetizing that in 30 of the 50 states. In the other 20 states, which are non-CPOM, there are still other kind of prohibitors, barriers to entry. Again, we've created an ecosystem addressing three different, very different verticals, and our goal was to execute that third vertical in 2025, of which we can be very proud of our execution.
Thanks, Shane. I love this slide. It's a revenue-by-year slide. What you can see is it's up every year and up every quarter, and it's built to keep scaling. Like Shane mentioned a bit earlier, Hydreight keeps expanding because more orders are flowing through the platform, more partners are onboarding nationwide, more verticals are driving multi-use adoption, and more efficiency from automation and optimized workflows. What makes this growth that we've seen defensible? As Shane has mentioned before, we've got an expanding national medical and pharmacy infrastructure, multi-vertical utilization, increasing platform throughput, improved partner onboarding and automation, and margin-aligned growth, not growth at any cost. The best thing about this is that it's growth without burning cash. That's the biggest difference.
Now, revenue growth is great, but the real question investors will always ask is, is the business scaling efficiently, or does growth require burning cash? I think this slide answers that. Again, four straight quarters of profitability and expanding as we scale. The Hydreight's adjusted EBITDA trajectory reflects growing order volume across all core treatment categories. Like Shane mentioned, VSDHOne is new. This is really the first quarter of revenue recognition. As we have transitioned partners on, we have seen better partner onboarding driving higher platform utilization. We have also started to integrate automation, which is reducing manual workflows and kind of increasing the throughput that we can put through the platform, and stronger pharmacy and medical infrastructure, which lowers friction and improves efficiency. Anyone that saw the news release this morning, we closed the Perfect Scripts transaction, which we will get to a little bit later. Again, these stronger pharmacy and medical infrastructures are improving the business model as a whole.
What makes this profitability sustainable? Again, disciplined operating structure, stable fixed cost base. One of the exciting things is people have heard past webinars, a lot of time and money was spent on building infrastructure, but going into next year, CapEx costs will stay pretty fixed. Margin expansion, tied to scale-out spending, and profitable growth across multiple verticals. This is what a real scalable digital health business looks like, growth with profitability built in. When adjusted EBITDA is consistently positive like this, the next thing people look for is whether that profitability converts into real bottom line strength. That brings us to net income. Profitable, consistent, and strengthening as we scale. What you're seeing here is that part of the Hydreight story that sets us apart from almost every other high-growth digital health company out there is we're generating real net income while still expanding aggressively.
The trend reflects a few important things about our model: efficient national infrastructure. The engine is already built, so every incremental order drops more to the bottom line. Higher utilization per partner, so more nurses, more verticals, more repeat usage. I mentioned earlier automation, cutting manual work. We're seeing faster workflows, fewer touchpoints, more throughput, and a stable fixed cost base. Again, we're not layering and having new expenses to chase growth. This is the Hydreight difference: top line growing, margins widening, adjusted EBITDA positive, net income supporting it all. This is a profitable scale, the way digital health is supposed to look. On this slide as well, again, you're seeing a breakout quarter across every major metric. This is what it looks like when the full Hydreight engine really showed what it can do. Q3 delivered strength everywhere that matters.
As I kind of summarized at the top, you're seeing 132% GAAP revenue growth, top line of $12.83 million, $26.7 million for the nine months, year-to-date margins 28.21%, and again, fourth straight profitable quarter. It is not a one-line story or one vertical story. This is kind of a broad-based strength that we have driven by higher order volumes across GLP-1s, hormones, NAD, TRT, hair genetics, more partners using the platform. I mentioned earlier, better onboarding, faster workflows, and a nurse network that's expanding faster than ever. Most importantly, we did all of this while maintaining discipline. We did not inflate expenses. We did not overspend to chase growth. We did not compromise margins. Q2 is the proof point that Hydreight's not just growing. It is growing the right way, profitable, efficient, and scalable.
This quarter really is setting the foundation for everything we're about to walk through next, including AOV expansion, accelerating monthly volume, and the 2026 setup. The street is already modeling into their numbers. Shane, I'll turn it over to you.
Yeah, fantastic. Thank you. We'll talk a little bit more about the third vertical in some detail. Again, the first two verticals, which were the first two in 2018 and 2020 that Hydreight Technologies released, they've been growing. 198 new nurse signups in just Q3. Remember, these nurses are paying $3,000 to join the platform. The moat is so high from what we provide, and the earning potential is so high that that really is a non-factor. We are working on some accelerators to that. Again, I'll touch on it a little bit later talking about next year, which will be quite exciting in that vertical. 133 last year, so again, a 49% increase on that. Again, validating this consistent year-over-year moat. If a moat was a fad or if it was a kind of a loose moat, you wouldn't be having this consistent year-over-year.
Our whole premise is to build an ecosystem where we are everybody's partner, whether it's an independent contractor joining so that they can monetize their credentials, improve their life, essentially, whether that's reducing hours at the hospital or essentially earning potential completely away from the hospital. We're a platform where business is done, whether it's the bricks and mortars that are using us essentially for a myriad of reasons, from EMR to doctor access to pharmacy procurement and supply chain, whatever is needed, we're the partner across all these three verticals. We are seeing year-on-year validation of the platform, of the ecosystem, of the moat. We are going to see that again aggressively increase into next year for some of the things we'll go into here shortly.
193 new nurses sign up compared to 384 last year, a 63% increase on the previous year, 72% on our pharmacy vertical, which is a lot of the time based around some of the moats we have around the bricks and mortar side of things. Again, an incredible increase there. Again, we have some accelerators. We have not just been focusing completely on the third vertical in 2025. We have some very exciting accelerators for the first two and an incredible opportunity to capture and corner a lot of those markets as well. From the public side, obviously, we got expanded coverage, analyst coverage in 2025 from Maxim Group, Beacon Securities, and obviously Canaccord Genuity with additional coverages in talks at the moment. We got some awards as well, Canada's Technology Fast 50, and obviously the Deloitte Technology Fast 50 and fastest growing company in North America.
The awards are nice. They're validation that the company is doing the correct things, the company is growing, the company is scaling. Obviously, revenue, profit margins, and eventual profitability is where the company's main focus is. Just going to move on to the next, there we go. I want to talk a little bit more specifically about the third vertical. Again, as I said earlier, it feels like we've been talking about that vertical for quite some time, but again, Q3 was its first full quarter of recognition. What we've provided here is the marketplace of sorts, the ecosystem for anyone that wants to be in the direct-to-consumer space. One of the biggest things we did here was we built it in a modular fashion. It's not take it or leave it. It's where can I help you in what area?
Because of our layered structure, we can help in any area, a myriad of areas, whether that is pharmacy procurement and supply chains, whether that is end-to-end ecosystem from technology to doctor network to medical direction to corporate practice and medicine compliance, everything. We want to focus on being everybody's partner. We're a must-have, not a nice-to-have in many cases. Again, you've heard me talking about the various groups of types of customers. During COVID, a lot of laws relaxed. Even when they came back, people already started to look for the gray area, look for ways where they could stay in business but not be compliant. The clock was running out. Obviously, boards had to catch up before things actually started to get serious for some people. Hydreight was positioned beautifully. We haven't been around for a couple of weeks or a couple of months. We've been here since 2018.
Our structure is very different, very compliant. We are widely versed. We are not focusing on just one board. Because of our model, our ecosystem, we focus on three boards: medical, pharmacy, and nursing. Our legislation outlook, what we look at, what we're constantly checking and validating are 9 and 12 months ahead. We have a very comprehensive look at compliance that most other businesses would not have. Now, extrapolate that and say, "Okay, the direct-to-consumer virtual care model was expanding, exploding." Of course, it was driven primarily by the Ozempic and access to that type of one type of treatment. Even recently, you hear about Donald Trump coming out, President Trump coming out with his news around the big pharma. That was a huge positive for us because it brought more awareness to this vertical.
It wasn't by any means an issue because that was around the patented drug. It was a reduction in price for customers that were not on this ecosystem anyway. Again, it highlighted the awareness of the direct-to-consumer. This is an absolutely exploding vertical, but we're coming at it from a B2B to C perspective. We're providing a home for businesses, whichever area you need support in: technology, pharmaceutical, just general compliance. Again, not a nice-to-have, a must-have in many cases. We have over +45 treatments across five different categories. The whole goal is to provide an end-to-end ecosystem for individualized healthcare. From at-home testing to the next step of that journey, which is, "Okay, upon my results, upon my lab results, what is the next medication that I'm getting? Is it something in the GLP-1 space? Is it something in the peptide space?
Is it something in the general wellness space, like an NAD+ or something like that? Is it a sensitive nature, skin care, hair care, those types of things, ED, weight loss? By providing that step-by-step process and by vertically integrating in the pharmacy side of things where you control the supply chain, you control the cost of the medication, how many states you can provide it in, and then providing a tech plug-in, which takes all of the complexity of each state having their own interpretation of the laws and building that into a funnel where the same product, the same treatment can be treated 15 different ways by the boards. We build that into a plug-and-play, easy to follow flow. That is basically what VSDHOne was offering. We obviously had immediate traction last year when we released news about this vertical with over 400 licenses.
Again, the validation, the migration has only proven not only the space that we're in, but also the strength of the product itself and the moat that we've provided. Just moving on here a second. Okay. Yeah, that sounds good. Again, why would somebody use us? Again, we have a number of categories of businesses. You have businesses that opened up during relaxed laws, and they need to become compliant. You have businesses that opened up and are reasonably well-structured, but only structured for one or two states or for a few products, and they can't expand into other states. They can't increase the LTV of their customers by going into other products, other categories. We provide a home. Also, we provide a home for brand new businesses, so businesses that have large patient or client infrastructure.
People who are loosely in the healthcare space but can't actually operate as a medical company, incredibly attractive to them. Those we would consider a brand new customer. They can plug in with VSDHOne. They can get access to our whole treatment of 45 treatments and just focus on marketing. Again, that's a huge part. There is a fourth category of customer, which we'll go into here in a little bit, which is around what our expansion into 2026 will go over. Just talking about some numbers, here we go. From inception, this third vertical was very, very new. We've been talking about it since last year. We've had a migration process. We've done since inception over 510,000 product orders as of mid-November of this year.
One of our goals for 2025, as we've communicated kind of numerous times throughout the year, was to have +1,000 licenses. We're already past that as of mid-November with +1,100. Again, validating the power of this. That is without outbound sales. That's all inbound. We are working on sales divisions and building out that aggressively for 2026. Again, the validation of the moat that we create, which is based around compliance, convenience, access to doctor network, access to pharmacy, and basically anything that's involved in the direct-to-consumer virtual care, that's an absolute validation of our, and we're very, very excited. Obviously, there's kind of an internal line that I say to the team all the time, which is we can control operations and executions. We can't control much past that, right?
This year, obviously, in any exploding vertical, which like direct-to-consumer is, there's going to be volatility, volatility in pricing, volatility in legislation. Again, some of the products have actually come down a lot in cost. The GLP-1 space, for example, is 300% less than it was this time last year from a cost perspective. Again, the average order value would come down. Then we've got the operational challenge of migrating. It's one thing you provide this moat, but a lot of these businesses are already very successful. Responsible migration is what we've been really, really focused on. What does that mean? If you have a large customer base and you're already doing a lot of business, you're not moving one thing. You're moving your whole operation to VSDHOne. That means new medical directors, new physicians, new pharmacies in most cases.
Migrating those has to be done very responsibly. You have the lowest lightest footprint possible in this migration process. A lot of the larger clients wanted to work on groups, okay? Each of these treatments generally have a scaling dosage from one to six or one to eight months in many cases. You start off on one dose, then next month, if you're approved, you go to the next dose and so on and so forth. Those dosages, starting with the lowest impact group, would be your newer clients, people who are on one or two months. Obviously, those dosages would be the lowest price of the dosage compared to when you're on month six and a higher dosage. That will affect the AOV of the customer.
The other thing is starting with lower-priced medications instead of, so basically starting by SKU, starting by a group within that SKU and migrating effectively. Now, there's an organic increase that happens. Obviously, month two is higher, month three is four, and then you're migrating the other groups as well. That's why there's kind of a rapid hockey stick expansion in the future quarters because, again, Q3 was kind of our first monetization of this vertical. We kind of touched on that in webinars prior. We're seeing that already aggressively into Q4. We'll talk about 2026 here and what we expect to see in the future. Behind all of this, we've also been building out the tech for scalability. The VSDHOne that we launched is not the VSDHOne that we see right now.
Literally, in the last four to five weeks, we've been releasing our new version of VSDHOne, which has increased capabilities for our clients from a back-office perspective, built for scalability of millions and millions of orders, broadening some of the tools we needed on the doctor side for accepting and speeding that side of it up, and then obviously the migration itself of the clients across. We've been really doing that, building out some other things that have kind of come up during our migration process, which is the bundling of services. Certain services need additional medications and having that in a bundle, so to speak, as opposed to each in different purchases. That was something that needed to be built out and is already having an impact in Q4 on the overall platform.
VSDHOne as a whole, brand new, the moat was compliance mixed with convenience, which, of course, we're seeing tremendous traction. Proof is there with the amount of licenses being sold, and the migration has been very, very steady, has been executed well. You only get one chance to migrate somebody, and we haven't had any falloff. We've been doing it responsibly, as I said, SKU by SKU, group by group. Q4 is already seeing that reflection, as you would expect, month on month from an order perspective, a revenue perspective, and a profit perspective. Yeah, we went to some more things here on VSDHOne a little bit. For 2026, our focus, of course, is growth and profitability. As I said, as we migrate, the ecosystem is continuing to get larger. Each and every license is not the same.
You can have somebody who is brand new looking to get into the space, or you can have a customer who already has a lot of clients. Not every license is the same, but the ecosystem is growing. Increased revenue, profit margins are going to increase. One of the things that we did was an aggressive customer acquisition approach for the first SKU, giving them a discount to encourage faster migration. As they go to level two, level three, all the way up to level six or eight, that obviously organically increases, and the profit margin would increase as well because the discount is not on, it's only on the first SKU. Huge focus on that, increasing, obviously, the amount of products available. We're currently at about 45 treatments.
The growth of peptides, and especially what's called category two peptides, is what's going to be the news in 2026. It's an explosion. Most people heard about BPC- 157 and other things like that, which are incredible. But those are considered a category two peptide still in the United States. Watching that legislation, as they start to get moved into category one, they're going to be far more easier from a compliance perspective. That will take the products available from 45 probably up to 100 treatments, which again increases the LTV for these platforms and increases our ability to client acquisition. The other thing that is going to be a natal mover essentially in 2026 is, other than the current categories of customers that we have with VSDHOne, which I just described earlier, we also have some newer funnels coming to the platform, ACOs, which are doctor networks.
Different to a telemedicine group, actual physician doctors who are part of a group called an ACO, giving them the tech to be able to prescribe direct-to-consumer products, similar to the bricks-and-mortar model. We are in talks with a number of those, and they are significant. They are thousands of doctors. They are not just small groups. We have also been approached by unions who want, again, a connective tissue with the tech to be able to provide preventative healthcare measures. We have also been approached by independent pharmacies, but they are all using one collective software on the pharmacy side, and again, connecting with us to be able to offer direct-to-consumer health and wellness. Those are all very exciting. Each and every one that I just spoke about, there are talks in some capacity to do something on a large scale there.
2026 looks like it's going to have an increased funnel other than the licenses that we're selling at an aggressive rate. In terms of 2026, for our first two verticals, we also have two very aggressive expansions. The nurses, already we procured kind of an insurance financing, should I say, for them earlier in the year. We have a more custom model for them now that works almost like a credit card. We're hoping to have that released. It's specific to Hydreight, almost works like a Hydreight nurses credit card so that essentially they can pay it off later in the year as opposed to having an upfront cost. A very minimal upfront cost, less than $100. Again, the subscription money would come to Hydreight. There would be no impact on us, no recourse if it wasn't paid.
The nurse has the ability to obviously get in at a very low cost and then remove that barrier to entry. That is going to be an incredible accelerator for us. We are hoping to have it released by the end of the year, but it might go into Q1 of next year. It is a custom product with a very large finance. The second, the bricks-and-mortar. In addition to our digital offering, we are also releasing a physical. We have been working with a merchant processing company who are also the hardware side of this for the last eight months. We are going to be releasing that towards the end of Q1 next year. Our goal is to capture a large portion, 15%-20, we think is possible next year of the addressable bricks-and-mortar non-traditional doctor's office, of which there are about 200,000 in that category.
Again, any other runner in that space is just the point of sale or just something over here. We're the whole ecosystem. From the physical point of sale to the digital part, which is the EMR, the telemedicine, the access to the pharmacy network. Also, our second and third vertical, which we've seen by our franchises, are complementary, where you can increase the LTV of your customer instead of having them come through the door. Similar to what DRIPBaR does, they use us at the bricks-and-mortar level, and they also have what's called DRIPBaR Direct, which is the direct-to-consumer aspect. This is going to be a very, very powerful offering, and it's going to be pretty aggressive. The merchant processing company has agreed to be pretty aggressive on our rollout to gain those clients.
That's very, very exciting. The addressable market's very, very large, and we hope to capture quite a bit of that. 2026 looks exciting from that component. I'll just pause there for a couple of minutes and let Shafin talk about a couple of other things.
Yeah. I wanted to share this slide just given that we've had three investment banks cover Hydreight. It's three banks, three models, one direction, which is up. The 2026 revenue projections between the three are from a range of about CAD 90.8 million to about CAD 130 million for 2026. Canaccord is on the low end, Beacon is in the middle, and Maxim is at the high end. They all agree on the drivers.
AOV climbing fast, as Shane mentioned, getting to about $40 on an AOV by the end of the year and then pushing that north of 50 as we go into 2026. Orders accelerating. As Shane mentioned, there were approximately 510,000 orders that were delivered by the middle of November, which really means that they were kind of ordered up until, I would say, the first week of November. There was a question that popped up, and I saw a lot of questions pop up, so I just want to address that. That is year-to-date. That's not 510,000 for just October and November, so that's year-to-date. Orders accelerating also. Shane mentioned that there's 1,100 licensees that have signed up or purchased licenses now, which is significant because, as anyone that's followed this story, the focus for most of the year was onboarding the first 500.
Now there's a backfill going into Q1 of next year. Shane mentioned margins expanding with incentives to have licensees onboard their patients early. That's one of the reasons for the lower AOV. We are more focused on the LTV, the lifetime value of that customer. We're now seeing margins expanding where I think analysts have forecasted them being around the 26%-28 range next year. Multi-vertical adoption kicking in. We've shared this: patients come in for one product, and then they get on to another product, and it increases that LTV. Just the infrastructure we built. As Shane mentioned, a lot of the CapEx costs have been spent over the past couple of years building that infrastructure and that automation. With that V2 engine coming in, we now see that CapEx costs kind of staying flat going into next year.
As revenues increase and margins increase, profitability will increase. This is what a real business looks like, one where you've got multiple independent analysts kind of aligning on the same trajectory.
Thank you, Shafin. Again, our focus for next year outside of the obvious, which is revenue, profitability, and growth. Our three areas are product supply and control, which kind of aligns with our recent partnership and partial acquisition of Perfect Scripts. Increased funnels. We have a very strong funnel with the existing VSDHOne, well over 1,100 licenses, I said, but the other funnels, which are providing a direct-to-consumer outlet like no other because we're plug-and-play. All of these people have customers, whether it's the ACOs, whether it's the unions, or whether it's any other group that wants to have an additional offering to get into this direct-to-consumer space without all of the prohibiting factors.
Some of these factors are not just cost; they're time. Just becoming an expert in 50 states across three boards and then having to figure out product supply, medical direction, and all that stuff, it's just time. It's incredibly difficult to replicate. Our focus is obviously control of the product, control of the supply chain, and increasing the funnels, and then, of course, the products themselves. The other thing that we're in talks with at the moment is actually ownership and IP in some of these at-home tests. We're quite far down the road with a few conversations, hoping to have some announcements towards the end of this year in December around ownership of at-home tests, which is, of course, very unique ones, which is going to have a huge impact on the company as a whole.
Other things we're looking at is obviously the use of AI. Every company right now should be looking at some form of AI. I've talked about this before. The previous company that we were looking at, we're not going to move forward with that from the due diligence process, but we are looking at other options. The ability to streamline, automate the results aspect, and then have a treatment plan based off of our categories and our verticals is something that we're very, very aggressively looking at and is super attractive to our business partners. We've talked about, obviously, some of the other things, which is the point of sale. Just on the pharmacy side of things, you just saw the announcement this morning that we finalized the 5% stake in Perfect Scripts.
Not sure if any of the Perfect Scripts team are on the call, but we're delighted to be a part of that company and we're delighted to be going down this endeavor. Perfect Scripts is actually a much bigger deal than it looks like. There's an ecosystem behind Perfect Scripts from the B side and from the compounding A side, which makes them a perfect partner. They have proprietary software, which is really attractive to other pharmacies, which basically can ingest scripts from Bs and As. It's proprietary. It's built. That's very attractive, essentially, for automation, for B2B plays within the pharmacy space. There are 50 state pharmacies. Essentially, we can control, again, our destiny from a product perspective, from a shipping perspective.
It is an incredible ecosystem that we can build out together to control not only the cost of the product, but the supply of the product, branch out into these other peptides. 2026 is going to be the story of the peptide. We all know GLP-1 is a peptide, but it was a peptide that was kind of fallen upon for a different reason. Now, these peptides that are coming out are very specific to something from your sermorelins to your category two peptides, which the legislation is going to be changing around those. We have positioned ourselves as a company very, very well to take advantage of this exploding market. We have validated the moat that we have been describing since December of last year.
We have actually executed very, very well on the migration process, navigating these challenges that businesses are real-world challenges, moving from one medical group to another medical group and making sure that there's no drop-off, no impact on their business, and being able to reflect it, of course, over on our medical platform. We are super excited about Q4. 2026 is exciting across all verticals for the various reasons. We are going to continue to make vertical integration moves that protect the company, protect our supply chain, protect our partners, and then, of course, obviously increase these funnels. We are very, very proud of Q3. Q4 looks extremely exciting. We are definitely going to give guidance over the next couple of weeks for Q4 in form of an update. We are very excited to do so and looking forward to 2026.
Thanks, Shane. Before we open things up for the Q&A, I just want to kind of summarize with this. What you've seen is kind of the clearest version of what Hydreight's becoming: a business with real revenue growth, real margins, and real profitability, a platform that scales without burning cash, and an engine designed for multi-vertical expansion and nationwide reach. This Q3 wasn't an anomaly. It was the result of years of work building the clinical, legal, and operational infrastructure that digital health companies need but rarely have. Now that that engine's turning over faster, we're seeing more orders, more partners, more workflows automated, more treatment supported, and more kind of efficiency across the board. As we share, the analyst community is finally catching on. There's multiple independent models pointing in the same direction. The demand is there. The infrastructure is built, and the path to scale is clearer than it's ever been.
Everything we've done this year, the platform improvements, the partner onboarding, the vertical expansion, the operational discipline, has been about setting the stage for what comes next. What comes next is simple: a more automated, more efficient, and scalable Hydreight, one that can grow aggressively, profitably, and responsibly. I want to just send a big thanks to everyone: our partners, our nurses, our medical teams, our investors, our supporters who have been part of this journey.
With that, let's jump into the questions.
I can start reading the question. There are some questions regarding the monthly orders. Just a clarification on that. We're staying away from the monthly numbers announcement simply because the volume is so great. Also, some of the orders, one of the challenges that we had on the revenue side, because it's a brand new line of revenue, we've been working with our auditors, with our finance team on the recognition of the revenue. Some of the orders that are being delivered in the last few days of the month and being received in the following month or the following quarter won't be recognized. When the questions are around the monthly numbers, it is really hard for the business to be able to, especially on these types of numbers, to talk. By mid-November, there are over 510,000 product orders that came to the business. That's not even including the full November. We're going to continue the same level of the growth. I see a bunch of questions regarding the monthly. I just wanted to have that clarification.
Based on what you're seeing today with the VSDHOne, what are the main constraints to scale to 5 million to 10 orders per year over the next two to three years? Can you rank the bottlenecks: 503A, 503B-based supply, nurse capacity, technology, automation, or regulatory, or which of those you already consider largely de-risked?
Yep. Brilliant question. All of the reasons listed. Again, they're opportunities. Category two peptides will be an explosion in 2026 from a product perspective, from a market demand perspective. That's currently not being added to our system at the moment because of legislation, but we're actively watching it. Of course, there are other peptides under that are category one, not category two. I know that's the opposite of the question, but I just wanted to make that known because that expansion is going to be great.
Bottlenecks would be speed of migration, the automative nature of the tech, and how fast some of the newer businesses, because not all licenses that come to us are existing business. There is a category of businesses that come that want to get into the space. Speeding up that time from sign-up to activation and migration and going live. One of the things we did this year was we brought in an in-house marketing division because one of the things we saw in Q2 was some of the newer clients were not experts in the marketing of this space. We hired a very senior marketing CMO, former CMO for Teladoc, and we brought in and created almost an internal agency. That was one of the reactions to something that we saw that was slowing down progress. Other than that, it's purely execution.
We have created, again, the ecosystem that is highly sought after. The licenses show that. The other funnels that I spoke about, again, those were inbound. We have created that, essentially the execution of the migration, the speeding up of that, and then the speeding up of the newer clients once they are on from a marketing perspective. If I zoom out a little bit, the market is going towards direct-to-consumer care. It is not going away from it. It is exploding. The amount of services that are available are exploding. The amount of businesses that want to expand is exploding. I think we are seeing that in some of the numbers.
Just to add to that too, I mean, I think when we launched the product, announced the product in Q3, Q4 of 2024, we kind of looked at all those things. One, given the compliance to our moat, it was important to always be, I would say, about 18 months ahead of where regulation's happening. I think from a de-risk perspective, I know people are going to hammer me for this, but going where the puck, not where the puck is, but where you think the puck's going to be. We've taken that initiative of being, I would say, 18 months ahead of legislation and kind of staying there. The next was, as you onboard all those licensees, you want to make sure you have access to supply because if you don't deliver someone's prescription, that patient will leave. Supply and pricing were two big things that we kind of de-risked.
One, as Shane mentioned, the Perfect Scripts announcement and some others that we have in the works really kind of ensured supply to scale up to that volume and pricing. The third, which we talked about, which was just the technology, the Version 2 infrastructure costs have been spent to be able to build a platform that can scale. One note too, I think we were so focused on orders. Given that VSDHOne really just kind of went through its first real quarter of revenue, we've started to look at orders maybe being not the right way to look at it because some orders are better than other orders. We've kind of looked at this thinking, okay, there's certain patients that will want more, call it, scripts with higher margins, and there's a better value for us to kind of focus on there.
All orders are not kind of equal, as we've kind of seen as we've gone through this, but really looking from a growth perspective, a revenue growth perspective, as opposed to just looking at orders as we've kind of realized that. I think the focus was it started in 2024 to start to tackle all those potential risk factors.
Thank you. Next one question, is there a sales force driving new licenses and partnership? If not, how is it being done?
Again, when I say inbound traffic, there's a lot of collaboration in this space. With our verticals, we obviously have a 50-state medical company. We have physicians who are providing the telemedicine. We have medical directors who are also separate to the physicians. Of course, we have an army of nurses. We have an army of bricks and mortars. Of course, we have our pharmacy connections. There is a lot of inbound relationships, and it is quite incredible. As big as the industry is, especially from a pharmaceutical perspective, it is as small as it is.
There are only a few key players. When you have an offering like ours, which is a B2B direct-to-consumer side of things, we have actually been inundated by referrals, by introductions, and that is where you are seeing the licenses. We are building out an outbound sales department, as we have said in previous months, and that will reflect in our customer acquisition for 2026. Right now, we are more than happy with the power of the referrals just from the existing ecosystem we have.
How is the current pace of the orders at the VSDHOne influencing your expectation for next year at the margin, if it changes them at all?
Yeah. As I said earlier, the aggressiveness of the approach was customer acquisition, giving a discount on the lower SKUs to help with the speed of migration, and then, of course, go group by group and SKU by SKU. Some of the larger, larger clients, obviously, were very cognizant of not dropping the ball, not impacting their current business. Going by group and going by SKU. Moving into next year, of course, with our release of the new tech, it is going to help with automating some of the migration, having it as less manual. VSDHOne is going to be a huge part, of course, of the overall ecosystem across all the three verticals.
The expansion of treatments, whilst it'll be very powerful into the category two, our ecosystem is already so strong from a number of licensees, from the amount of treatments, from the amount of business they're doing. The focus is still migration. We don't need an accelerated, something dramatic to happen from a customer acquisition perspective for 2026 to be absolutely incredible.
Does Hydreight Pharmacy offer non-prescription healthcare products to partners such as Medspas? How attractive does the market look with regarding to the future growth beyond the current 45-approved treatments?
Yes. Two different questions there. Non-prescription would fall under the B side of things. So absolutely, we do on the bricks and mortar side, as well as the nursing side, operate on the B channel. The third vertical is completely prescription-based. It is direct-to-consumer. It is self-administered virtual care. Each and every product and treatment has a prescription specific to that person, and the medication is specific to that person. The bricks and mortars, of course, work a little differently, where they order B product, which is larger vials that is then compounded at the facility for those people. In that case, that also requires a prescription, but it is at a later point.
There is a confusion on the orders. Is 510,000 on the same base as the prior monthly orders, or is it year-to-date?
510,000 is the third vertical only, and that was since mid-November from inception. Obviously, Q4, as you would imagine, is an increase on the other months and obviously the first quarter, which was Q3 from a full quarter perspective. As the migration goes on, as the SKUs go up, of course, the revenue, the average cost of the product goes up, and then the profit margin itself goes up because the discount was only on the first few.
I think there's a huge—one thing to clarify—sorry, go ahead. -- Sorry, one thing to clarify on, I think one of the challenges is this was a new vertical. The auditors have looked at when we recognize an order is once it's actually arrived at where it's supposed to be shipped, not from the time the order is placed. Just as a reference point, the auditors have now been reviewing kind of how we recognize revenue and recognizing an order once it's actually arrived on site, not once it's placed.
What revenue share is accounted for by the GLP-1 product and the services dependent on them? Could these revenues be negatively affected by the SRCA or FDA enforcement after the end of the GLP-1 shortage? Are these risks related to the compliancy violations by the B2B partners practically regarding the continuation of the GLP-1 compounding in conversion of the FDA regulations?
Y eah. GLP-1 is about 40% of the orders at the moment. Again, the regulations or changes or news that you've seen was around patented big pharma type things. It was not around the business that we do, which is essentially compounded side of things. Again, the B2B side is anywhere you see someone really getting in trouble was more around the claims, the marketing side of it from big pharma. Right now, if there is a patient need, if there is a prescription for that person, the pharmacy is more than allowed to compound that drug. GLP-1 is a peptide.
It was a peptide that was almost fallen upon. The explosion of peptides is what we're seeing from, as I said, sermorelin, which would be category one. The release of these category two peptides is going to be what 2026 story is all about.
What was the AOV in Q3? What's the expectation for Q4?
AOV for Q4, we're going to give an update, as I said, in a couple of weeks about Q4. Moving forward, obviously, as the SKUs go from stage I to stage II to stage III, the average cost of the product is going to go up. Obviously, our profit margin will increase because we're only given a discount on the first SKU to help with the migration and the speed of the migration.
Is my understanding correct that the Hydreight technology currently does not have any ownership of the VS Digital Health, which my understanding is the technology enabler for the VSDHOne? Can you explain Hydreight technology, VSDHOne business ownership versus VSDH owned by Victory Square?
Yeah. I'll answer the first part, and Shafin, you can answer the second part. Hydreight technology is 100% the owns the technology.
Okay. Can you explain this slowdown in the order growth after September? 510,000. Sorry, the question jumped. The question was about the clarification on 510,000 orders. In which period and if the order has slowed down in October and November?
No, orders have not slowed down. The 510,000 was what's been done on the VSDHOne platform. Remember, Q1 and Q2 were all about migration. Just at the end of June was the first orders that we saw coming in, and then Q3 was the first full vertical, sorry, the first full quarter. The orders have not slowed down. Again, we're going to be given guidance on Q4 here in the coming weeks.
Do you still feel confident on an uplifting trajectory? These growth projection exceptions look to be very estimated at this point, to be overestimated at this point, sorry.
Absolutely. I think what we see here from a validation perspective of Q3, again, this cannot be taken lightly. This is a brand new vertical. Our goals were at the start of the year to execute, migrate, and we've done that very effectively. Q4 is looking very strong. We're going to give some guidance, and that's as expected. That should be expected. The way we're migrating, the way we're onboarding, there should be incremental growth all the time. 2026 should be no different. An uplifting, I think, onto we're 100% operating in the United States. I think an uplifting to NASDAQ or something like that is the next logical step for 2026, for sure.
In previous presentation, you mentioned a revenue target of $40 per VSDHOne product orders. Revenue per order in Q3 appears to be significantly below that target. Will the $40 target be achievable in the future?
Yeah. For reasons we went over, migration of not only the product itself, some of the clients wanted to go for a lower-priced product, again, and then obviously, we will give a discount on the SKU for the first dose of certain SKUs. Now, don't forget that the average price of the medication as a whole for this industry has come down, which always happens in an exploding industry. The average price that we were talking in November of last year and the average price now, of course, if the cost of the medication comes down, of course, that's going to come down. Absolutely, $40 is the goal. The other SKUs, as customers go month on month, are organically higher. Of course, that's going to grow. Into Q1, absolutely, that's achievable.
Could you clarify how many of your issued VSDH licenses are actually active today?
Again, we can give an update, but I believe about 50% of the active licenses are fully onboarded. What category of customer they would fall into, which is brand new and starting to market, which is one or two states and branching into other states, or which is doing a lot of business and are migrating simply SKU by SKU and group by group, that's part of the guidance that we want to give. We want to give a bit more clarity closer to the end of the year, obviously, which is what Q4 is, across some various categories in there because I think the company is very proud to do so.
In user reviews, the most common customer and nurse concerns are about the Hydreight app UI/UX. Will VSDHOne Version 2 improve the UI/UX to make it more intuitive and frictionless? Another often stated concern is the nurse must be able to develop their own client to succeed with Hydreight. Does the company plan to increase consumer visibility and SEO to truly become something like Uber for nurses, where the app and ads bring enough inbound business to sustain a less self-promoting nurse?
Yep. On the tech side, what we've been doing for the last sort of 12 to 18 months is spending an aggressive amount of money on rebuilding all three verticals from a technical perspective. We're actually releasing it in three different ways. VSDHOne Version 2 was first, which we've been releasing for the last four to six weeks. Hydreight is next, and then the bricks and mortar is going to be third with the point of sale addition that we brought up. That's from a technical perspective. From a sales perspective, absolutely.
The company was focused on entrepreneurial nurses, of course, nursepreneurs, they get called locally, and basically supporting them to get business through our success teams, through different strategies, etc. Now, if you zoom out from a corporate perspective, we wanted an effective monetization of the market. We did not want to be another company who just marketed a bunch of services, spent $50,000-60,000-70,000 every single month and got minimal results. We wanted a very specific tool. The at-home testing was basically what we have been waiting for. We are going to utilize the selling of at-home testing for the nurse to have the second stage of the healthcare. When the results come, the nurse is booked. Obviously, that was part of our marketing strategy when we brought on Moiz as CMO. That's something that we're releasing here throughout Q4 and into Q1.
One thing, I just noticed a lot of questions here regarding 2026 guidance. There was a question specifically on why we used the street's guidance and not our own. A couple of things. One, there are a lot of things happening right now. You saw the Perfect Scripts announcement today, and you've seen the order ramp up for Q4. We expect to double revenue going into 2026, but there are a number of things that we're working on that could materialize within the next two weeks. I think Shane mentioned, I was hoping we'd give guidance earlier, but I would imagine within the next two weeks, you'll see 2026 guidance a bit more clear, kind of based on some specific things that have been initiated.
That was one of the reasons why we just shared what Canaccord, Maxim, and Beacon had delivered. Our expectation based on what we're seeing is that our revenue will double going into 2026. Shane, I don't know if you want to add any color to that.
Yeah. No, that's one of the reasons that we wanted to give guidance towards the end of the year. First of all, we're very proud of the performance of Q3 and Q4 is very, very strong. Again, the reasons that we just outlined earlier about the natural progression from the migration process and then give guidance from there. We're going to have a much bigger data set. We're going to almost be done with migration of everybody, which was our goal for Q4. Obviously, the ecosystem, the orders that are on the ecosystem, whether they are fully, truly recognized and migrated or not, we'll be able to confidently give our guidance separate to the analyst guidance.
We're going to read two more questions, and then we'll be more than happy to answer any questions if you send us an email. It's been speculated that not all 295,000 orders for the VSDHOne in Q3 had revenue recognized in that specific quarter. Is this true? Can you provide more details on how quickly the revenue recognition typically occurs?
Yeah. The revenue is recognized when the order is received. We've been working with the third-party auditors on clarifying all of this. Another reason for the guidance, it's still ongoing in talks. Yeah, some of the orders were shipped but not received, and that would not be factored into the revenue.
How should we think seasonality in terms of the orders flow for December? Also, how much visibility do you currently have into the AOV approaching $40 going into the year-end?
Yeah. Seasonality does not really come into it because it is recurring medication. It is more of a migration process and how many groups and how many SKUs of the larger clients, because of course, they are the immediate needle movers, the people that already have tens of thousands of business orders. That is the focus. Seasonality does not really play a part into it. From a visibility perspective, we are going to have pretty much almost full visibility. That is the reason we want to give guidance and are very excited to do so because of the migration being completed of the current licensees.
We will not factor in, we will give an estimate of any of the new businesses because, again, there is a marketing component, there is a customer acquisition component there. We will, of course, have enough of a data set over the last sort of eight months with the newer customers to see how that goes so we can give some type of an estimation. We will be mainly focused around the businesses who are simply migrating current clients because we will be complete with that. We will be able to give estimates on how long a SKU takes, how long a group takes, and be pretty able to give a very accurate estimation.
I know there are a lot of questions here. One I want to address, I am going to get to right away, which is I think there has been a lot of confusion around the October and November orders. After this call, and I think one of the changes has been really in how the auditors want us to recognize orders and revenues. I will find those numbers out and I can share them either in a corporate, we can share that in a corporate update or I'll post it on our Discord channel so that there's clarity on the October-November orders. I apologize. I know that might have confused a lot of people, but we'll get that breakdown. I think there's a lot of other questions that we weren't able to get to, too. Feel free to share them on our Discord channel or email us directly, and we can get responses and share those responses on our channel too so that everyone can see them.
I know the most important one, I know the two most important questions really that I think that I'm seeing popping up are really around clarification on October-November orders and 2026 guidance. Again, 2026 guidance from the company will come within the next two weeks because there are some things that we're working on that are material that we want to make sure we close out before putting that out. Like I said, both Shane and I and Vahid and the team are confident in doubling those revenue numbers. To get the clarification on October-November, I think is probably one of the most important things that investors want to hear. We'll get on that after this call.
Thank you, everyone. Yeah. Appreciate everyone tuning in. Yeah, thank you for your support.