Vitalhub (VHI) Q1 2025 earnings summary

Executive summary

• Annual recurring revenue (ARR) rose 54% year-over-year to CAD 73.7 million, with total revenue up 42% to CAD 21.7 million for Q1 2025.

• Adjusted EBITDA increased 39% year-over-year to CAD 5.6 million, representing a 26% margin.

• Cash balance at quarter-end was CAD 91.2 million, supporting ongoing acquisition strategy and no debt.

• Integration of recent acquisitions (Strata and MedCurrent) is progressing, contributing to results and ongoing cost rationalization.

• The Induction Healthcare Group PLC acquisition, valued at approximately £9.7 million (CAD 18.0 million), is expected to close by end of June or early July, with rapid integration and cost synergies planned.

Financial highlights

• Recurring revenue was CAD 18.3 million (85% of total), up from CAD 12.5 million (82%) year-over-year.

• Perpetual license revenue doubled to CAD 200,000; services, hardware, and other revenue rose 19% to CAD 3.1 million.

• Gross margin was 80%, slightly down from 81% in the prior year.

• Net income before taxes was CAD 1.5 million, down from CAD 2 million year-over-year; net income after taxes was CAD 1.16 million, down 12%.

• Adjusted EBITDA was CAD 5.6 million (26% margin), up from CAD 4 million (27% margin) year-over-year.

Outlook and guidance

• Q2 is expected to meet internal targets, with seasonality anticipated in services revenue.

• Services revenue is projected to remain between CAD 2.5–3 million per quarter, with some seasonal dips in Q3 and Q4.

• Management anticipates closing the Induction acquisition in Q3 2025, expecting strong synergistic value.

• The acquisition pipeline remains robust, with opportunities diversified by geography and scale.

• The company is prepared for further M&A activity, targeting 2–4 deals this year.