Claritev (NYSE:CTEV) used its fourth-quarter 2025 earnings call to highlight a year of improving financial performance, an acceleration in sales activity, and continued progress on what management described as a multi-year transformation plan under its “Vision 2030” strategy. The company also issued 2026 guidance calling for modest reported revenue growth and stable adjusted EBITDA margins, while emphasizing a growing focus on free cash flow and cash conversion.
Management frames 2025 as a “turn” year
President and CEO Travis Dalton said he is nearing his second anniversary in the role and described 2025 as a year in which the company “returned to profitable growth sooner than expected.” He credited the company’s strategic focus, digital transformation efforts, and expansion into additional vertical markets, while also noting the intent to build “a well-run, disciplined healthcare technology company that delivers sustainable, profitable growth.”
- A comprehensive provider network built over decades
- Deep workflow knowledge and longstanding client relationships supporting renewals and sales growth
- Proprietary IP and data analytics capabilities, along with technology scale
- Provider acceptance “greater than 90% across our solutions,” according to Dalton
- Regulatory expertise to help clients adapt to changing state and federal requirements
AI priorities and product development
Dalton also addressed artificial intelligence, arguing the “moat is no longer code,” but instead the combination of data, workflow integration, distribution, and trust. He said the company is prioritizing AI initiatives tied to clear outcomes such as revenue generation, cost reduction, and workflow automation, citing examples including No Surprises Act-related processes, Payment and Revenue Integrity products, and credentialing automation.
He added that Claritev had published an AI strategy briefing online and planned to discuss the topic further at an Investor Day scheduled for March 16.
Fourth-quarter and full-year 2025 financial results
Chief Financial Officer Doug Garis said the company’s financial performance improved across 2025, with revenue, adjusted EBITDA, and free cash flow ending the year “well ahead” of initial guidance.
For the fourth quarter, Garis reported:
- Total revenue: $246.6 million, up 6.2% year over year
- Adjusted EBITDA: $151.3 million, up 7%, representing a 61.4% margin
- Levered free cash flow: $36.4 million
Garis noted Q4 included the final quarter of a one-time revenue benefit of about $5 million in the company’s P&C business within its network service line. In total, he said Claritev recorded roughly $18 million of non-recurring revenue in 2025—about $2 million in Q1 and $5 million in each of Q2, Q3, and Q4—that will not repeat in 2026.
For the full year 2025, the company reported:
- Revenue: $965.4 million, up 3.7% versus 2024
- Adjusted EBITDA: $602.6 million, up 4.5%
- Levered free cash flow: use of $12.3 million
Garis said the company began 2025 forecasting levered free cash flow would be a use of $70 million, but finished near the midpoint of its most recent guidance.
On the balance sheet, Garis said Claritev ended 2025 with $28 million of total cash, including $17 million of unrestricted cash, and reported net leverage of 7.7x—an improvement of nearly 0.5 turn from the company’s position at the time of its debt refinancing in January. He also reiterated expected seasonality following the refinancing transaction, with Q1 and Q3 expected to be cash consumption quarters and Q2 and Q4 expected to generate cash “in the near term.”
Sales momentum and bookings metrics
Dalton highlighted bookings of $23 million in Q4, which he described as a company record, and said management expected bookings growth in 2026. He also pointed to renewed top clients and expansion of existing relationships in areas including No Surprises Act solutions and Payment and Revenue Integrity, along with momentum in third-party administrator (TPA) and broker verticals and continued activity in provider and government segments.
Garis provided additional sales detail, saying Claritev finished 2025 with $67 million in annual contract value (ACV) booked and closed more than 650 opportunities. He added that the company closed more than 100 deals over $100,000 of ACV—up 30%—and that average deal size improved by 50% for the full year. Looking ahead, he said the pipeline for 2026 was already strong and the company expected “strong double-digit ACV bookings growth” in 2026, with revenue conversion beginning toward the end of 2026 and into 2027.
Garis also noted that core offerings accounted for 94% of total revenue in 2025.
2026 guidance: revenue growth and free cash flow focus
Claritev initiated 2026 revenue guidance of $980 million to $1.0 billion, representing 2% to 4% growth over 2025. Excluding the $18 million of one-time revenue recognized in 2025, Garis said the company was modeling 4% to 6% growth in 2026. While the company typically does not provide quarterly splits, Garis gave directional modeling assumptions, including low single-digit growth in Q1, modest sequential growth in Q2 due to the one-time revenue headwind, and an acceleration to 3% to 5% growth in the second half of the year as revenue from new ACV ramps.
Adjusted EBITDA guidance for 2026 was set at $605 million to $615 million, with margins of 61% to 62%. Garis emphasized that 2025’s one-time revenue benefited adjusted EBITDA at a 100% margin, and said that normalizing for that impact implied 3.5% to 5% adjusted EBITDA dollar growth on a like-for-like basis.
On investment and cost structure, Garis said the company expects $10 million to $15 million of operating expenses in 2026 that were previously classified as capital expenditures, tied to moving technology infrastructure to the cloud. He said the shift would have “a $0 cash flow impact” in 2026 because total capital investments are expected to remain consistent, though the reclassification would increase OpEx and reduce adjusted EBITDA with an offsetting reduction to CapEx. Garis also said Claritev plans to invest an additional $20 million to $25 million in go-to-market and delivery functions to support planned bookings growth.
For cash flow, Garis forecast total capital spending of $160 million to $170 million and free cash flow of $0 to $10 million in 2026. He said 2025’s metrics were distorted by the company’s debt refinancing transaction and that, in 2026, Claritev expects double-digit operating and unlevered free cash flow growth, with adjusted cash conversion normalizing to approximately 50% to 55%.
Garis also discussed market factors affecting projections for the company’s PAVE revenue, citing out-of-network claims volume, medical inflation, and claims mix as key modeling inputs. He said out-of-network claim volume has remained around 7% of total healthcare claims over the past five years, while medical inflation has remained elevated, and that mix has favored certain out-of-network and higher-priced services such as behavioral health and urgent care.
Finally, Garis reiterated capital allocation priorities including organic investment to support Vision 2030, debt reduction, and a renewed focus on “value-creating M&A.”
The company’s question-and-answer session was cut short due to technical difficulties, with management noting that the webcast was working but phone lines were not. Claritev asked investors to send questions to [email protected] and said it would post a transcript of Dalton’s prepared comments online.
About Claritev (NYSE:CTEV)
Claritev is a healthcare technology, data and insights company focused on improving affordability, transparency and quality. Led by deeply experienced associates, data scientists, and innovators, Claritev provides tech-enabled solutions and services fueled by multiple data sources from over 40 years of claims repricing. Claritev utilizes world-class technology and AI solutions to power a robust enterprise platform that delivers meaningful insights to drive affordability in healthcare, brings price transparency and optimizes networks and benefits design.
