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First quarter outperformance was primarily driven by higher-than-expected project revenue and the accelerated realization of partner revenue originally anticipated for later in the year.

Management is addressing a difficult year-over-year revenue comparison resulting from poor commercial execution over the last two years, noting it will take several quarters for this pressure to subside.

The company significantly expanded its strategic account coverage from the top 100 to the top 400 accounts, which collectively represent over 90% of total Annual Recurring Revenue (ARR).

A new leadership team is being assembled with key hires in technology, delivery transformation, and sales to accelerate the 'pace of play' and reimagine the customer experience.

Management views AI as a 'force multiplier' rather than a replacement for human expertise, focusing on personalized and predictive applications grounded in real-world data and regulatory compliance.

The business model remains resilient due to the nondiscretionary nature of benefits administration, which provides predictable revenue streams even during economic cycles.

Q2 2026 revenue is projected between $490 million and $505 million, reflecting the ongoing impact of prior commercial execution challenges.

Adjusted EBITDA for Q2 is expected to be lower than Q1 due to more muted project revenue expectations and the shifting of certain expenses into the second quarter.

The company expects solid free cash flow generation to continue through the end of the year, supported by a foundation of more than $500 million in total liquidity.

Management anticipates that the current revenue pressure will take several quarters to completely work through the P&L as new commercial wins begin to scale.

Capital allocation priorities remain focused on long-term growth investments, deleveraging, and opportunistic share repurchases.

Project revenue exhibited significant volatility, growing 29% in Q1 2026 following a 27% decline in Q4 2024.

A leadership transition is underway as Susan Davies steps in as interim CFO following the departure of Gregory Giometti, who had also been serving in an interim capacity.

The company successfully made its Q1 2026 Tax Receivable Agreement (TRA) payment while maintaining a cash balance of $178 million.

Partner revenue of approximately $4 million to $5 million was pulled forward into the first quarter, which will not recur in subsequent quarters of the year.

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Management reported that Q1 renewal and new business activity was stronger than the same period last year.

The improvement is attributed to better commercial execution and increased intensity in client engagement.

Free cash flow was aided by working capital benefits related to cash taxes and general operational timing.

Approximately 25% to 30% of the total book is up for renewal this year, which management characterized as a normal range and lower than the previous year.

Total revenue under contract at the start of Q1 was just over $2.0 billion, with 94% of that being recurring revenue.

The $4 million to $5 million in partner revenue that arrived in Q1 was recurring in nature but concentrated in the single quarter rather than spread across the year.

The projected Q2 EBITDA decline is linked to the absence of high-margin project revenue that boosted Q1 results.

Management confirmed that some planned expenses were shifted from Q1 into Q2, impacting the sequential margin profile.

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