HEALWELL Doubles Adjusted EBITDA to $1.6 Million in Third Quarter
Key Facts
HEALWELL AI reported unaudited results for the third quarter and nine months ended September 30, 2026, in a release issued after trading closed on November 9. Revenue from continuing operations was C$32.6 million for the quarter, up 7% from C$30.4 million in the year-earlier period. The company posted positive adjusted EBITDA of $1.6 million, up from $0.7 million, a year-over-year increase of 144%. Meanwhile, net loss from continuing operations remained at $16.0 million, unchanged from the third quarter of 2025. The results call was held on November 10 at 8:30 a.m. Eastern Time, after the release; a decline in the stock following the announcement was not confirmed.
The figures show a divergence between revenue growth and improved adjusted profitability on one hand, and continued losses and a lower gross margin on the other. Gross margin fell to 52% from 54% a year earlier, despite higher revenue. The company defines adjusted EBITDA as a non-IFRS measure, so it should be read alongside the $16.0 million net loss. Net loss was unchanged from the year-earlier period, while the adjusted profitability measure more than doubled. The quarter’s results therefore show operating growth that has so far had a limited effect on the bottom line.
By revenue mix, subscriptions, support and maintenance revenue in the health software segment rose 10% to $22.379 million for the quarter. In contrast, revenue in the data sciences and artificial intelligence segment fell 22% to $1.544 million, as life sciences project revenue declined. The divergence indicates that growth in recurring subscriptions was not matched by similar growth in data sciences and artificial intelligence activity during the period. The company ties its commercial expansion to enterprise and existing-customer opportunities, but the two segments delivered mixed results in the quarter. Subscriptions, support and maintenance remained the largest of the figures cited for the two segments in the release.
Cash flow from operating activities for the first nine months turned positive at $5.9 million, compared with $20.1 million used in the year-earlier period in 2025, an improvement of $26.0 million. The CFO said the company remained in compliance with all covenants under its credit facilities during the first nine months, attributing the improvement to operating efficiencies and a shift toward larger enterprise opportunities with recurring revenue. The CFO added that the company “generated $5.9 million of cash flow from operating activities during the first nine months of 2026, an improvement of $26.0 million over the comparable period of the prior year.” Cash stood at $14.9 million on September 30, compared with $18.6 million on December 31, 2025. The decline in the cash balance over the period puts the improvement in operating cash flow in the context of liquidity and financing management.
On expansion, the company said Orion Health’s agreement with Converge Health Iowa covers deployment of search and summarization tools powered by the DARWEN platform across a statewide health information exchange network in Iowa. The network receives data from 115 hospitals, according to the HEALWELL release. The CEO said the agreement “extends an existing infrastructure relationship with Orion Health to the use of DARWEN-powered AI across a statewide health information exchange network.” The CEO added that the company is seeking to replicate cross-selling opportunities across its global customer base. The deal links the company’s health software business with the deployment of AI tools in existing data-exchange infrastructure. The release did not provide a value for the agreement or projected revenue.
The results follow a 2025 in which the company ended the year with continuing operations revenue of about $103.8 million, up 427% from $19.7 million in 2024, but recorded a net loss from continuing operations of $39.1 million. HEALWELL said it completed a series of strategic divestitures in the fourth quarter of 2025 to focus on AI and software, generating about $9.7 million in cash. That provides context for the shift in its business model toward software and AI, while losses from continuing operations remain in the latest quarterly results. The next step announced after the results release was the management call on November 10 at 8:30 a.m. Eastern Time. The available information did not include reliable confirmation of the stock’s reaction after the results were released.