Healwell wants to concentrate solely on artificial intelligence (AI) and data science, even as both it and its parent company Well Health report record second-quarter earnings.
The healthtech firm’s board said in its earnings release that it’s exploring “strategic alternatives” for its clinical research and patient services as it seeks to become a “pure-play” software-as-a-service (SaaS) and services company. It has already signed non-binding letters of intent to pursue the initiative.
“This milestone marks a shift in our financial trajectory and validates the scalability of our healthcare software business and AI-driven business model.”
James Lee, CEO
Healwell
BetaKit asked Healwell for more details about this pivot, but has not heard back at the time of publication. In the associated earnings call, CEO James Lee said his company was engaged in “very early discussions,” and couldn’t yet share how the research and patient moves might benefit the company’s margins.
The change in strategy comes as the company reported a 645-percent year-over-year growth in revenue to $40.5 million CAD, owed largely to the Orion Health acquisition that closed on April 1.
The company also claimed its first-ever quarter of positive adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), making $1.9 million, compared to a loss of $3.7 million in Q2 of last year. Lee said in a statement that the second quarter of this year marked a “major inflection point” that showed its approach was paying off.
“This milestone marks a shift in our financial trajectory and validates the scalability of our healthcare software business and AI-driven business model,” Lee said.
Healwell centres its work on preventative healthcare. Its software for healthcare providers claims to use a combination of AI and data science to detect chronic and rare diseases relatively early, potentially allowing for timelier diagnoses and more effective treatments. Orion Health, in turn, offers services to both consolidate health data and make it more accessible to patients.
Well Health, which exercised a call option to take majority control of Healwell on April 1, also reported strong earnings. Its revenue jumped 57 percent year-over-year to a quarterly record of $356.7 million through a combination of acquisitions from the past year and “organic growth,” according to a release. Its adjusted EBITDA grew 231 percent to $49.7 million, while its net income climbed 532 percent to $25.8 million.
The company recorded its first quarter with more than 1 million patient visits in Canada, a 38-percent boost versus the same period in 2024. The average Well Health provider grew its visits by 22 percent.
The two brands also touted large revenue growth in Q1, although their overall performance wasn’t as robust. Well Health saw its net income drop from $17.2 million in Q1 last year to $7.5 million, due partly to the sale of software provider Intrahealth to Healwell, while Healwell posted a $14-million net loss last quarter that helped prompt layoffs in February.
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Both Healwell and Well Health have gone on acquisition sprees in recent months. Healwell bought contract researcher BioPharma Services in June 2024, following that with the purchases of Intrahealth, AI documentation firm Mutuo, and patient-identification company Pentavere. Well Health acquired Healwell in February 2024, and has bought a string of clinics that include 10 from Shoppers Drug Mart.
Well Health’s call option prompted an executive shuffle at Healwell on July 1. Lee took the CEO reins from Alexander Dobranowski, who became company president. Orion CEO Brad Porter became Healwell’s chief commercial officer, while investigation software firm JSL’s Sacha Gera took over as sole chief operations officer from co-COOs Adam Hutton and Paulo Gomes.
Well Health CEO Hamad Shahbazi said in April that Healwell was entering a growth phase that included integrating its various units and providing a “more holistic customer offering.” Shabazi also noted that expertise from Healwell and Orion was key to delivering AI solutions for patients.
Feature image courtesy of Nappy via Unsplash.