VitalHub (TSX:VHI) Q3 2026 Earnings Call

0:00 I just heard a recording in progress prompt, so I'll just begin those comments once more and then we'll keep going. Good morning, everyone. And thank you for joining us for our 2026 third quarter conference call. With me on the call today are Vital Hub CEO, Dan Matlow and CFO, Brian Goffenberg. After our prepared remarks, we will open up the line to questions from analysts. Please press star one or use the raise hand function to indicate that you would like to ask a question. Before we begin, I will read our cautionary note regarding forward-looking information. Certain information to be discussed during this call contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially from those set forth in such statements.

0:47 For a discussion of these risks and uncertainties, please review the forward-looking statements disclosure in the earnings press release as well as in our CDAR filings. As well, our commentary today will include adjusted financial measures, which are non-IFRS measures. These should be considered as a supplement to and not a substitute for IFRS measures. Reconciliations between the two can be found in our CDAR filings. With that, I'll hand the call over to Brian to go over financial highlights for the quarter. Over to you, Brian. Good morning, everyone.

1:23 Thank you for joining the call today. We are pleased to report results for the third quarter of 2026. We closed September with $107.2 million of annual recurring revenue, an increase of 14% over the prior year, including 8% organic growth and approximately $4.5 million from the Buddy Healthcare acquisition in July. Our recurring revenues continue to grow and our adjusted EBITDA margin was 27%, our highest level in the last two years. Some of the key financial highlights for the quarter are as follows. We reported total revenue of $31.9 million in line with the prior year period.

2:08 Recurring revenue or term license maintenance and support segment was $25.8 million or 81% of total revenue. This compared to $23.6 million or 74% of total revenue in the prior year period. Perpetual license revenue was $100,000 compared to $500,000 in the prior period. Services, hardware, and other revenues were $3.7 million compared to $5.5 million in the prior year period. Services revenue is seasonally lighter over the summer against elevated projected activity in the prior year period. Our gross margin was 79% of revenue compared to 81% in the prior period. This reflects timing of services, revenue recognition, and allocations between development, operating expenses, and cost of sales.

3:00 Adjusted EBITDA for the quarter was $8.6 million, or 27% of revenue, compared to $7.2 million, or 22% of revenue, in the prior year period. The increase was primarily due to low research and development expenses, synergies from the integration of induction and NAVARI, and a favorable foreign exchange impact in the quarter. Net income for the quarter was $2.6 million compared to a net loss of $900,000 in the prior year period. Cash provided by operating activities was $23.9 million in the first nine months of the year, an increase of 69% over the prior year period. We closed the quarter with $129 million of cash and short-term investments and no debt.

3:45 With that, I'd like to hand the call over to Dan for an update on the business.

3:52 Good morning, everyone. Welcome today. It was our summer quarter and that's always an interesting one in the government healthcare-based sector, but there's lots of good things happening in the company and lots of good things that happened in the quarter. As Brian mentioned, compared to 2,025 perpetual licenses and services licenses were newer. That's our variable part of our business. And services is always an interesting one when it comes to revenue recognition. But our backlog for our services revenue has never been stronger. It was just the case of getting it into the revenue recognition state.

4:38 And that tends to be lumpy as we go through our revenue recognition policies, which are you know correlated to completion of of certain milestones in in certain projects but we're we're very bullish on what our professional services uh number looks like on a go for a basis We're excited that we got our cash flow back to our levels of our 27% adjusted EBITDA. And as you guys can see, the cash continues to generate. That's always been the primary view of our business and continues to be the primary view of our business. We continue to look at, I think if you look back two years ago, our adjusted EBITDA was in the fives and now it's in the high eights relative to what it is.

5:27 And that's a result of really the induction and the Navarre acquisition that we did just a little over a year ago and our ability of our team to complete what that mission was all about and what our hypothesis was all about. As you can see, we We did succeed in those levels and we have gotten those back to the levels that we wanted and it was proving that those two acquisitions have worked out in a pretty good way. RAR, it did grow by, you know, 800 and something K per the quarter. You know, I know the question is going to start coming back in terms of, you know, where that would have been without the Schrute scenario.

6:13 It would have been considerably higher. relative to this scenario as we got some suspension of certain accounts and uncertainty as it relates to that business. So that's still a part of the business that is still fragile in nature and we continue to wait for answers from the NHS in respect to that and how that looks from the FTP and we expect to get that answer hopefully within the next month or so in terms of what the direction is. I'm not sure we'll get it totally at that time, but we continue to look at that on a go-forward basis. But it continues to be an issue that we're dealing with.

7:01 In respect to AI, we have introduced our AI transcribing product into the market for the treat product and and many more of our products. In particular, we've launched campaigns for our two clinical decision support products that are based on clinical guidelines. Our MedCurrent products and our MCAT products and the customer bases in both those areas are very excited about what those capabilities to do it. We're starting to use AI pretty extensively in our development processes.

7:54 We're starting to see some really good output from some of those in terms of speed and some of the things that we're being able to do. Of particular interest has been our technical integration. We're getting to the ability where we're now integrating our patient flow and care coordination suite in a technological perspective. So we're starting to be able to join the products together in the field a lot more effectively. AI is helping us with that as well as other areas. And we are getting to the position where we can present our suite of solutions as a suite of products that are integrated, which we're really excited about. So you'll start seeing that being messaged a lot more through our organization in terms of Vital Hub and the Vital Hub platform versus the brands of the particular products on a go-forward basis.

8:49 And we're going to be making that shift as we continue to move forward on there. We continue on the acquisition sales. With any luck, we'll be able to get another one over the finish line before the end of the year. We continue to look at some larger scale areas and our activity level continues to be high. And there are two or three companies that we have earmarked since the very beginning that are now in market and We're looking to do some things in terms of making that happen so we continue to work on that front. That's my update for today and I'm sure I'll get a lot more information through some of the questions that some people will ask so we'll turn it over to the questions at this point.

9:41 Thanks, Dan. We'll now open up the line to questions from analysts. Please press star one or use the raise hand function if you would like to ask a question. Today's first question comes from Gavin Fairweather with ATB Cormark Securities. Gavin, your line is open.

10:04 Oh, hey, good morning. Thanks for taking my questions. Maybe just on the FTE impact on ARR. Curious if you looked at the organic ARR growth extrude and give us a sense of how the rest of the business is performing.

10:21 The rest of the business is performing strong, Gavin, like we're I'm reluctant just to give out the exact numbers because they change literally by the week. We got customers that are suspending but then are not suspending and we got customers that are We think are renewing that aren't renewing. And we got customers that all different elements in terms of where it is. And then we got renewals of customers that said they weren't going to renew. So it's just a question of the customers being able to find money other than going to the NHS itself and having money coming from its ICBs in terms of renewals. And we're seeing it just coming from A lot of different directions with it. And the usage of the product continues to be high.

11:12 It just turned into a little bit of a political slash financial scenario when it comes to the product. But I do believe if we didn't have the suspensions or the reversals on some of those products, Some of those root cause we would have been very close to our rule of 40 base level, you know, with the strong adjusted EBITDA numbers would be and we would be on track with our regular numbers that we would be producing and have traditionally produced. So, yeah, we're going through this right now, but it's being made up pretty nicely by the rest of our business.

11:52 Appreciate that. And then there was an interesting FT article maybe last week just on potentially FTP being renewed for two years and new RFP being issued or they're going to evaluate British alternatives. If that's kind of what plays out, would you expect the churn to moderate if trusts know that the FTP might be pulled out and could Vital Hub be kind of part of a British made alternative?

12:16 We're definitely speaking to some of those alternative envelopes to be part of those consortiums for it because I think that's what it would take potentially to do it. But with that being said, I just don't know what the answer would be. There's one argument that says it's going to be a lame duck for two years and they're just doing it for a transition scenario to other products. which is just coming from news channels. We haven't seen any reports from any NHS things. I saw a note today from Palantir that said they've had no notification that they're going to be extended for two years. So So we don't actually know what that will be, but using that assumption, it will be extended for two years. Then the real question comes, are they going to continue to work on FTP initiatives in those two years? Are they going to be transitioning?

13:14 And if they are going to be, continuing to work on FTP initiatives will any of the ICBs take up that software knowing that it could be out of there in a couple years so I just don't know what the answer to that will be and we'll just have to wait and see how that progresses but I don't really want to put an opinion either way because I just actually don't know and I don't think anyone in our organization really knows at this stage.

13:45 Yeah, that's fair. Thanks for the color there. And then maybe just on, you know, heading into the busier sales period of kind of Q4, Q1, Q2 for ARR, you can just discuss kind of how the pipeline is shaping up and how deals are moving, kind of coming out of an acquired or a summer period.

14:03 We definitely got deals. The Navari and the Stratas and the Zestis and the buddies of this world and the InTouches are actually leading the way in terms of what the revenue is. And we continue to... We continue to progress with deals. I'm excited by how some of that work is starting to come into the Canadian marketplace. And I'm excited on our cross selling, not cross selling just from a sales perspective, but we're actually integrating cross sales, which is getting really interesting in terms of what that is. So the suite is really come together with all the different pathways. And there's some interesting things going on in the field with our products.

14:52 Thanks so much. Thanks, Gavin. The next question comes from Doug Taylor with National Bank Financial. Doug, your line is open.

15:04 Yeah, thanks. Good morning. I guess I'll try and ask a couple more shrewd questions, so to speak. Daniel Matlow, Mike Sanders,

15:42 I'm hesitant to do that because we literally got customers that are in... We put them into churn mode, but they're in suspend mode. And it's hard to quantify what that level is. I still think there's close to about 10 million or so-ish of shrewd revenue that's still out there to a degree in all different pockets of it that are there. But it's hard to say which ones are not at risk or are at risk relative to that.

16:23 So of, you know, 10 million of shrewd revenue, maybe I'll just come at this a different way. When someone's gone into suspend mode, as you say, that's been removed from your ARR. Is that correct?

16:38 In some of the cases, yes. In some of the cases, no.

16:43 Okay. All right. Well, a range of outcomes there. I will

16:50 I don't know if I need to speculate anymore. I don't want to speculate because I think we'll know more in another quarter or so how that comes out in respect to it.

17:02 Okay. Well, we'll look forward to an update on that. Maybe switching gears then, one of the The highlights has been the Ontario, you know, the success you've had there. Can you maybe update us on the rollout progress in Ontario?

17:17 Yeah, it's rolling out really well. The imaging world, that part of the pathways has gone live, which is a nice chunk of that, and we're starting to work on some of the other pathways. We expect to continue that work through 2027, but it's been a strong product, and we're also starting to see a lot of activity in the British Columbia area and the Maritimes areas. For both Strata and Navari, Strata has gotten some rejuvenation of its business and we're actually starting to see some really good outputs in the U.S. marketplace with Strata where they already had somewhat of a base, but we're seeing some pretty active business going on in the U.S.

18:09 market as well.

18:12 With some of those areas like Ontario and the Maritimes, as you mentioned, where you've known that there's been built-in growth because you've won business, but there's a staged rollout. I mean, do you have enough visibility with some of those to say that in any event with what happens in the UK with Shrewd, you still expect to produce growth in the, we'll say, high single to low double digits? Yeah.

18:40 Get you to venture that far? at the end of the day we're not all the shrewd business isn't going away for sure um that we got customers that are renewing for multiple years and it's still it it's definitely not going away it's getting a blip with that being said whatever sure falls is being made up by the other businesses and we're you know we're we're happy with uh with that way that work is going on and and in some of those other initiatives so you know yes there is a We're excited about the business in its entirety.

19:23 Last one for me. The integration work with Buddy and also some of your other assets seems to be going well. The margins were indeed a highlight this quarter. Maybe you want to give us an update on The current integration roadmap progress, low-hanging fruit there, how we should anticipate margins on the organic business as it stands right now going forward?

19:50 Yeah, listen, we got ourselves to 27% this quarter, but... We got to 27% with the reduction in services and perpetual licenses, which, you know, which is a blip for the summer from my perspective, right? So if we would have hit our normal services revenue, you know, that we would have hit, that just would have added to the bottom line in respect to this quarter. And, you know, that would have grew that number even more. So from a margin perspective, yeah, I think our teams did a really good job on the integration of Nivari and Induction. There's still a little bit of work to do there, but they're pretty well in line with our business fundamentals and we're happy with how that's going. Buddy's still early days, but Buddy's just a natural fit into a lot of our different products and it's good tech and we've really got a quick start on Doing some of that integration primarily with the Zesty product is a big part of integration into that base product set. So that work is underway and we're starting to see some interest in the Buddy Product, selling into the surgical scheduling product with the Novare. So if you know Novare, it has its referral business, but it also has its surgical referral business where

21:22 it sets up all the surgeries for patients. probably about 40% of hospitals in Canada so we have a lot of relationships with the pre-operative or the booking systems of hospitals in Canada and then there is a need for something like Buddy for pre-operative based assessments all through the Canadian marketplace and we validated that and we continue to to work on seeing what business we can get there but we're excited what that opportunity can bring.

21:53 Okay, thank you. I'll give the others a chance here. Thanks, Doug. The next question comes from Kevin Krishnaratne with Scotia Capital. Kevin, your line is open.

22:04 Hey there. Good morning, guys. Can you hear me? Yeah. Awesome. Hey, question. You talked about the backlog. for your services has never been stronger. Anyway, you can sort of quantify that. How far does it extend? As you think about Q4, does that, will we certainly see that take up from the level that we saw in Q3? Just thoughts there.

22:26 I think it should take up in Q4. If the projects, the problem we got, Kevin, with services revenue in our business, it's just not a straight line, right? It depends how the contracts are negotiated. in terms of milestones and putting timesheets and everything that correspond with it. So trying to get that in a smooth light is sometimes challenging, but we do think there's a lot more milestones that should be hit in Q4 than in Q3. You just sort of got more customer involvement during that period to try to get things finished and over the finish line. So yeah, we feel comfortable that Q4 should get there.

23:08 Okay, gotcha. I want to switch to AI. You talked about, I think I got here four different products now, the transcription and treat, the protocoling Navari you talked about. Med Current, and then MCAP. So the question that I had there is like, you know, if you can give us like how much ARR sort of uplift do you think AI can give you from those products? As long as you start, you talked about customers being very excited. So just kind of curious what, like within that base, you know, what your opportunity might look like.

23:41 I think those four products themselves are, you know, what the potential TAM could be. The Med Current one and the MCAP one, Just building those like if those products come to market what they would be or as an upsell or just overall

23:59 I'd like to know maybe what, yeah, maybe whatever you want to give me.

24:02 Yeah, it's hard. We haven't quantified it totally, but there's millions of dollars just on the MCAP and the MedCurrent product. Those two products are clinical decision support products using guidelines. and AI allows those guidelines to just work automatically against patient data and just start giving information directly without any entry and just letting AI do the work by talking or just asking the systems. What the guidelines are. We've done some pretty good prototypes on both those systems and we think the real IP of those products are the guidelines themselves.

24:48 So we believe those are two products that if we put guidelines in place for them that they should be able to do some interesting things and We're always looking at initiatives with AI with our product sets of what we can build on top of what are solutions, but those two have come somewhat to the top in terms of initiatives that we have. There's other ones that we have going on as well. Our customers continue to ask for it, but we believe just by adding AI products into our install base, there's probably about 30 million, 40 million of TAM just on top of that. So we just continue to work our way through it.

25:30 Okay, well, great to hear on that one. Maybe just the last one, you talked about the good opportunities, Navari and Strata, the Ontario rollout progresses, you've got opportunities in BC. We know sort of what the ARR was for both of those when you bought them, sort of the 12 million, 13 million ARR sort of range. What are your thoughts on how big those businesses could become over the next couple of years, just touching on those opportunities you talked about?

26:04 You know, I think we've already seen some growth in our Navarre products in our numbers. You know, for the first time, we expect that to continue. But yeah, I think it, you know, we should be able to get that Navarre product well over the 20 million in ARR numbers. And Strata, you know, Strata, I think it can continue to grow. And we see another three to five million in the pipeline of some stuff that could happen over the next couple of years. So, yeah, I think both those products can continue to grow.

26:40 Okay. You know what? I'm going to leave it there. Thanks a lot, Dan. We'll chat later. Take care. Okay. Thanks, Kevin. The next question comes from Amr Azad with Canaccord Genuity. Amr, your line is open.

26:58 Good morning, thanks for taking my questions. Maybe switching gears a bit then, you've talked about moving increasingly from individual products towards an integrated Vital Hub platform. Are you guys starting to see that translate commercially into larger contract sizes or more products per customers? Do you guys, maybe you can share with us if you guys track average products per customers or cross-sell penetration internally?

27:30 I wouldn't feel comfortable with data on it accordingly for it, but I do feel comfortable just with my understanding of what the markets are and the integrations that we have completed in the field and through the acquisitions that we've completed, how we've really put together a suite of products that we think co-relate with each other and provide a narrative as well as outcomes when they work together that are pretty effective. and AI has given us the ability to start integrating these platforms a lot more faster when it comes together. So what we are going to start doing is start positioning it more as a platform with individual modules that you can procure versus the brand of the products itself.

28:28 and we feel that will lead to some larger transactions. I think it's probably naive to say that there's any accounts that don't have some of the modules already built or bought either through us or through other products. So you're never going to sell the entire thing at once, but they do correlate to each other. And I think from a positioning perspective, it's just... a better way to describe what our capabilities is. And I do think in the long run we'll lead to some more revenue as we continue to grow.

29:07 Thanks. That's good color. Given where these shares are trading, I'm just wondering, has that changed the return hurdle you guys apply to M&A? You know, like there were no NCIB purchases through September. Was that timing or blackout related or Was it more about preserving flexibility for larger M&A opportunities?

29:33 I think it's more of the latter. We continue to explore some scenarios that we've been scoring on for years. But one of these days we might surprise you or we might not surprise you. I don't know. They're always difficult to judge. But yeah, we do think... The company operationally is in a really strong position that it can absorb something of some larger size. I'm really bullish on how we're running as an organization and the processes and really we're pretty cleaned up. We got some really good metrics. We got tons of data. We understand our roles. We understand our process. We understand our integration methodologies.

30:18 And I'm really bullish on our ability to absorb something. of some you know some critical size and I do think that something would be good but with that being said we're not going to make a mistake as well in that respect so we continue to look we continue to do our smalls our singles we're pretty disciplined and we continue to be disciplined it's always been our our what we're all about and we just want to figure out I always said there's three ways that we make money here one of them is through M&A and we make money through cost absorption and really strong processes and new ARR but that's only one side of our business and we continue to focus on all three of them equally Fantastic, then maybe one last one for Brian just on the R&D it was down quite meaningfully year on year

31:12 and I guess one of the drivers of the strong EBITDA. How much of that reflects permanent integration savings versus timing or allocation? And then for modeling purposes, is the current R&D runway the reasonable base going forward?

31:30 Thank you very much. and you know timing wise sometimes it does like this this quarter there was more uh cost moving because part of our some of our people in in development do work on on projects that gets moved to cost of goods um it probably continue in the same level going forward thank you i'll pass the one thanks summer the next question comes from david kwan with td securities david your line is open

32:19 Thanks, guys. How long do you think it will take to get Buddy's margins kind of up to the corporate average? It's called in the mid-20s-ish. So I think it was running at roughly breakeven when you guys acquired it. And how much of that is expected to come from cost optimization like you've done with induction versus probably more operating leverage like at Navarro? Yeah.

32:47 Yeah, it's not a big organization, right, David? So it shouldn't take us long to get that right size. It'll be through both a combination of a little bit of cost reduction and revenue generation on it. So we do, it is coming with a Pipeline of some interesting initiatives, plus there's more initiatives in our side of the business as well for it. So theoretically, when you start adding new revenue, that also gets you on the margin side. So we always look at both sides when it comes to the margin side to go do it. The trick is not adding people once that continues to grow by Thank you for joining us. Yeah, typically we, you know, we say, you know, it takes, you know, six months to a year and probably that would be the same here.

34:00 And, but, you know, it's well in progress and we're looking at ways to get that to its level. It's pretty small on what it is, but, you know, there's a little bit of work still to do.

34:13 No, thanks. That definitely makes sense. Thanks, Dan. And I guess when you look at the margins, if you took out kind of FX gains and losses, the margins were actually down, I think, a little bit over 100 basis points sequentially, which I assume was just due to that dilution from Buddy. So assuming there's no M&A, should we assume that margins on that front kind of improve from these levels?

34:38 yeah you know we we win some quarters lose some quarters with with that right and you know sometimes it's down because of that too um but yeah we're we're we're generating cash in a pretty serious way um as I mentioned we were low on the services side that what that starts going to the bottom line uh immediately with it and you know you got the buddy work and the other work to do it we're comfortable that we're going to sustain and if not improve that number on a

35:12 No, that's great. Maybe just a couple more questions, maybe on the induction acquisition. You've had that in the fold now for a year, year and a half now. Can you talk about maybe how the Zesty revenue has ramped? To what extent the disruption that's going on in the UK has maybe slowed that growth trajectory and how things are going with the partnership with Cerner?

35:34 I think that the That product continues to grow. It's exceeded expectations on its growth and Cerner continues to do business with us. It's no effect in what's going on in the NHS. That area in terms of digitalization of the front door into the hospitals or into those organizations is a pretty prominent area within the UK and we're right in the middle of it.

36:09 Great. And maybe one last question just on Attend Anywhere. The revenues were up a bit sequentially, albeit last quarter it was down a little bit more. How should we look at the trajectory of that? Do you still kind of expect that to decline moderately?

36:26 Theoretically, yes. Realistically, I'm not, you know, we... We've done a good evaluation of all the customers in there and we got some pretty, a lot of very happy customers that are using that product extensively. And yeah, while there could be some limited stuff, we also see some new deals cooking on it that maybe offset some of that stuff. But yeah, we'll find out. All that stuff gets renewed in the March timeframe and we'll figure it out at that point in time.

37:02 I appreciate it. Thanks, guys. Thanks, David. The next question comes from Michael Freeman with Raymond James. Michael, your line is open.

37:14 Hey, good morning, Tim. Can you hear me? Yes, I can. Yeah. Yes, I can.

37:25 My question is sort of back to the NHS. You mentioned that you think you'll know quite a lot more about the outcomes of some of these dynamics of the NHS within the next quarter or so. Is there a decision point for the ICVs that's coming up? Or why is it that you think you'll know more within the next several months?

37:51 Yeah. We in the we they have a break clause in their contract for February of 2027 that they can exercise on the on the Palantir product. So they have to make a decision on what they're going to do very shortly in respect to that. That's how that's what we're going to know, Michael. So they will announce what their decision is going to be shortly.

38:25 Okay, thank you. And on prospecting new acquisitions, you mentioned that you've been eyeing up some of these deals for a couple of years now. I wonder what is it that you've been monitoring? What is it that you're I guess is it maybe causing reluctance to pull the trigger or what is it that will make the time right to execute these deals?

38:58 Nothing, just your normal process and it takes two to tangle. So we continue to work with these organizations and we just got to get them over the finish line. All right. Thank you very much. Thanks, Michael. The next question comes from Paul Traver with RBC Capital Markets. Paul, your line is open.

39:26 Well, thanks and good morning. Sorry to go back to Shrewd, but just to set expectations, what's the magnitude of Shrewd in terms of the ARR currently? And then what did it previously peak at?

39:48 The magnitude of Shrewd is about 8% of our revenue, right? Something like that. 78% of our revenue to do

40:05 it. Okay, that's helpful. Shifting gears to a couple of other areas.

40:11 Take that back, Paul. 70% of our ARR number, not our revenue number.

40:16 Okay, yeah. The shipping gear is a couple of other areas. Deferred revenue, I think it declines sequentially through the year, but it looks like it's down a little bit on a year-over-year basis. How do you think about like billings? Does that relate to milestones in terms of on the professional services side?

40:41 On the professional services side, yeah. It depends on the contract, but we do have a milestone based on services in a significant amount of our contracts, but not all of them. Okay.

40:58 And then on the expense side, G&A expenses were higher, I imagine. Is that primarily higher sequentially? Is that primarily attributable to Buddy Healthcare or what else is in there and what's your view in terms of driving down G&A?

41:17 Buddy Healthcare is an addition to it. We've introduced new auditors and new professional services and things like that into those equations. That's sort of where that would probably come from a relative perspective to it. But every time you do make an acquisition, you do get new G&A that comes as part of it.

41:42 Okay, thanks for taking the questions. Okay. Thanks, Paul. The next question comes from Justin Keywood with Steeple. Justin, your line is open.

41:53 Hi, good morning. Thanks for taking my call. Not sure if I missed this, but is there a path to recapture rule of 40 status in 2027 through a combination of margin or increased ARR organic growth?

42:08 Yeah, we think so. We do believe that's the case. The margins will continue to increase and we're seeing real pipelines, but we do got our bottom line back to the levels that we had two years ago. So that's definitely the start point here.

42:26 and is it like back half weighted or is there going to be like a gradual recapture or any indication there?

42:37 I think if we didn't have this shrewd scenario, the rule of 40 companies is definitely in existence here, right? So that's the only scenario that's creating some of the challenges in our business. The rest of our 90-something percent of our business continues to operate in a pretty strong fashion.

42:59 Okay, understood. And then nice to see the strong cash generation in the quarter and the balance sheet strength. There hasn't been any share buybacks yet. Is that something that we should expect for the rest of the calendar year?

43:16 That potentially could be happening. It's there for a reason and it just depends on what we got going on the M&A side versus share price and where we think the best value is spent for the money, but it's in place and we meet regularly as a board to chat about that and we'll continue to do that. Thank you very much. Thanks, Justin. There are no further questions at this time. I'll hand the call back to you, Dan, for any closing remarks.

43:47 Yeah, thanks, everyone. I think the overall message to everyone is the business model has always been go make money first and continue to go, and we continue to do that. Thank you all for joining. Thank you.