Executive Summary / Key Takeaways

• Claritev (formerly MultiPlan) is undergoing a significant transformation, pivoting to become a data and technology-driven leader in healthcare cost management, transparency, and affordability, aiming for sustainable long-term growth under its Vision 2030 strategy.
• Q1 2025 results showed a slight revenue decrease year-over-year, impacted by customer attrition in Analytics-Based Services, though partially offset by growth in Payment & Revenue Integrity and Network-Based Services. General and administrative expenses saw a notable increase driven by transformation costs.
• Management forecasts full-year 2025 revenue to be down 2% to flat, with Adjusted EBITDA margin guided between 62.5% and 63.5%. This outlook anticipates a 3% revenue headwind from one large client normalizing by Q3 2025, offset by growth in new sales and high-growth segments.
• A successful debt refinancing in January 2025 extended maturities to 2030/2031, providing crucial financial runway and flexibility to execute the transformation and invest in technology and growth initiatives.
• Key strategic initiatives include modernizing the technology platform (Oracle partnership, AI focus), realigning the business for growth in new market segments (providers, employers, government), and optimizing operations for efficiency, alongside managing ongoing risks like complex litigation and customer concentration.

The Pivot to Claritev: A New Chapter in Healthcare Affordability

For over four decades, operating under the name MultiPlan, the company now known as Claritev Corporation has played a critical role in the complex U.S. healthcare ecosystem. Its foundational mission has been to deliver data-driven solutions that bring transparency, fairness, quality, and affordability, primarily by helping payors manage out-of-network costs. This history, marked by strategic acquisitions like HST, DHP, and BST, has built an extensive network of over 1.4 million providers and a suite of services spanning network access, analytics, and payment integrity.

Today, under new leadership and rebranded as Claritev (effective February 2025), the company is embarking on a multi-year transformation journey guided by its Vision 2030 roadmap. This strategic pivot aims to evolve Claritev into a world-class data insight and technology company, expanding its reach beyond traditional payor services to serve a broader set of constituents including providers, employers, and government entities. The core thesis driving this transformation is the belief that amidst escalating healthcare costs and increasing demand for transparency, actionable insights derived from data and enabled by advanced technology are essential to improving affordability and quality for all.

The competitive landscape in healthcare data analytics and cost management is dynamic and includes large, diversified players like IQVIA Holdings (IQV), UnitedHealth Group (UNH) through its Optum subsidiary, and Cigna Group (CI), alongside numerous niche providers and emerging technology firms. While precise, directly comparable market share figures for all niche competitors are not publicly detailed, Claritev holds an estimated 5-10% aggregate market share in U.S. healthcare cost management. Larger competitors like Optum and IQVIA often boast greater scale and faster innovation cycles, leveraging vast integrated ecosystems or advanced AI platforms. However, Claritev differentiates itself through its specialized focus on cost management for U.S. insurers, its expansive independent provider network, and its deep expertise in specific areas like out-of-network claims pricing and payment integrity.

Technology as the Foundation for Value and Growth

Claritev's ability to deliver value is deeply rooted in its proprietary data and technology platform. This platform underpins its core services, enabling the processing of vast volumes of claims data to identify potential savings and facilitate fair reimbursement. The company's analytics-based services, for instance, utilize sophisticated algorithms to detect overcharges and recommend appropriate reimbursement amounts for out-of-network claims. A key quantifiable benefit highlighted by management is the high acceptance rate by providers, with 98% of claims priced through their platform in 2023 accepted without appeal. This efficiency in facilitating transactions solves a significant problem in the out-of-network space, where contracted prices are absent and list prices can vary widely. In 2023 alone, the company priced 15.4 million out-of-network claims, identifying $23 billion in potential medical cost savings across all products. The average revenue per claim for out-of-network pricing services in 2023 was $44, illustrating the transactional value captured.

Beyond the core, Claritev is making significant investments to modernize its technology infrastructure and enhance its capabilities. A strategic partnership with Oracle (ORCL) is central to this effort, aiming to leverage cloud infrastructure for a more robust and scalable platform. This move is intended to enable faster product delivery, improve operating efficiency, and position the company to utilize advanced capabilities like AI. The company is also improving its data architecture to support more value-adding product enhancements and facilitate the launch of innovative products focused on transparency and quality. API enablement of the platform is planned to allow for more holistic integration within the healthcare ecosystem.

New product development, particularly within the Data and Decision Science segment, is a key focus. Products like BenInsights, PlanOptix, and CompleteVue are designed to apply modern data science methods to provide actionable analytics for optimizing plan design, network configurations, and improving clinical outcomes. Management points to the successful internal application of BenInsights, which yielded nearly $4 million in hard savings on the company's own benefits plan, reducing spend by 15% annually while improving benefit quality. This internal success serves as a tangible demonstration of the product's value proposition in the market.

While larger competitors like IQVIA and Optum may possess greater resources for broad-scale R&D and AI integration, Claritev's targeted investments aim to create specific technological advantages within its niche. The focus on automating processes, particularly within the NSA business, is intended to reduce friction, improve performance, and create operating leverage. The strategic intent is to enhance the efficiency and effectiveness of its core offerings while building new, data-driven solutions that expand its addressable market and diversify its revenue streams.

Recent Performance and the Path Through the Turn

Claritev's financial performance in the recent past reflects both the challenges of the current healthcare environment and the early impacts of its transformation efforts. For the three months ended March 31, 2025, total revenues were $231.3 million, a 1.4% decrease compared to $234.5 million in the same period of 2024. This decline was primarily driven by a 4.2% decrease in Analytics-Based Services revenue ($153.4 million vs $160.1 million), attributed to customer and program attrition. This was partially offset by a 9.7% increase in Payment and Revenue Integrity Services revenue ($31.0 million vs $28.3 million), driven by growth in Clinical Review and Payment Accuracy, and a 1.6% increase in Network-Based Services revenue ($46.9 million vs $46.2 million), mainly from the Workers Comp product line.

Operating expenses saw significant shifts. Costs of services remained relatively stable year-over-year. However, General and administrative expenses increased substantially by 45.3% ($50.6 million vs $34.9 million), largely due to $7.7 million in transformation costs and $3.7 million in losses on disposal of assets. Depreciation expense also rose by 16.9% ($24.5 million vs $21.0 million) due to investments in property and equipment, including capitalized software. Notably, the first quarter of 2024 included a significant $519.1 million loss on impairment of goodwill and intangible assets, driven by market factors like stock price decline rather than operational performance, which did not recur in Q1 2025.

Interest expense increased by 11.5% ($91.6 million vs $82.2 million) in Q1 2025, primarily due to $10.4 million in PIK interest on the new debt issued in the January 2025 refinancing. Interest income decreased due to lower cash balances. The Refinancing Transaction also resulted in a $0.7 million loss on extinguishment of debt in Q1 2025, compared to a $5.9 million gain in Q1 2024 from debt repurchases. The net result for Q1 2025 was a net loss of $71.3 million, a significant improvement from the $539.7 million net loss in Q1 2024 (which included the large impairment charge). Adjusted EBITDA for Q1 2025 was $142.1 million, compared to $146.8 million in Q1 2024.

The period leading up to Q1 2025 saw its share of headwinds. FY 2024 revenues were down 3.2% year-over-year, impacted by a decline with one large client and the disruption from the Change Healthcare cyber outage in early 2024, which affected claims flow and revenue conversion. Management noted volatility in revenue yield throughout 2024, primarily driven by negative mix shifts and temporary factors within existing contracts, rather than changes to core contract rates. Despite these challenges, identified potential savings showed sequential growth in 2024, and total identified savings for the year reached $24.7 billion.

Financial Strength and Capital Allocation

A critical development providing runway for Claritev's transformation is the successful comprehensive debt refinancing completed on January 30, 2025. This transaction exchanged approximately $4.56 billion of existing funded indebtedness for new term loans and notes with extended maturities, primarily to December 2030 and March 2031. This significantly pushes out the maturity wall, with the first funded debt maturity now in October 2027. The refinancing incurred approximately $76.6 million in transaction expenses, with $7.8 million expensed in Q1 2025.

As of March 31, 2025, Claritev had $33.9 million in cash and cash equivalents (including $10.8 million restricted cash) and $264.8 million available under its new $350 million revolving credit facility (with $80 million drawn). The company was in compliance with all debt covenants.

Cash flow from operations in Q1 2025 was a net use of $30.1 million, a significant decrease from the $49.7 million provided in Q1 2024. This shift was primarily due to lower earnings (adjusted for non-cash items) and unfavorable working capital changes, including the payment of Refinancing Transaction costs. Investing activities used $38.9 million, an increase from $30.5 million in Q1 2024, reflecting increased investments in technologies supporting the transformation. Financing activities provided $73.2 million, a substantial increase from the $31.5 million used in Q1 2024, driven by the net borrowing on the revolving credit facility to fund the refinancing costs, contrasting with debt and treasury stock repurchases in the prior year.

Management's capital allocation priorities are clear: the highest priority is organic investment back into the business to drive growth aligned with Vision 2030 and the transformation program. This includes investments in the technology platform, new product development (Data & Decision Science), and enhancing core offerings. Following organic investment, the focus is on leverage reduction using excess cash generation. Share repurchases, which saw $10.5 million allocated in Q1 2024, are not a priority for the remainder of 2024, with emphasis shifting to debt retirement.

Outlook and the Turn Towards Growth

Management characterizes 2025 as "the turn" year, where the foundational work of the past year is expected to begin yielding tangible results and position the company for sustainable growth. Claritev is initiating its full-year 2025 guidance with revenue expected to be down 2% to flat compared to 2024. This outlook incorporates several key assumptions:

• Core Business Stability: A net revenue retention rate of roughly 97% is forecast for the core product segments (analytics, network, payment and revenue integrity).
• Client Attrition Headwind: This 97% NRR includes the impact of a specific program attrition at one large client, which is expected to pose an approximate 3% headwind to revenues in 2025 but is anticipated to normalize by Q3 2025.
• Growth Segment Acceleration: Strong double-digit growth is expected in the growth segments (HST and Data and Decision Science), driven by recent bookings and pipeline momentum, though tempered by the partial-year effect of revenue realization.
• Sequential Improvement: Management anticipates sequential growth in overall revenues and Adjusted EBITDA throughout FY 2025, leading to an implied exit rate showing low-single-digit growth by year-end.

Adjusted EBITDA guidance for 2025 is provided as a margin range of 62.5% to 63.5%. Management believes that continued prudent cost management, coupled with the efficiencies expected from the transformation program (targeting a 10-15% net reduction in the operating cost base over several years), will enable them to manage to this margin range in lockstep with revenue outcomes.

The strategic rationale behind this guidance is to stabilize the core business while aggressively pursuing growth in new markets and with new, data-driven products. Management views the successful debt refinancing as providing the necessary runway to execute this strategy. They are implementing more rigorous operating and financial processes to improve predictability and control over expenses and investments. The long-term target articulated under Vision 2030 is to achieve mid-to-high single-digit revenue growth, supported by a focus on profitable growth and cash flow generation, potentially targeting a "Rule of 70" metric (Adjusted EBITDA margin + revenue growth %).

Risks and Challenges

Despite the strategic pivot and efforts to stabilize the business, Claritev faces significant risks and challenges that could impact its ability to execute its Vision 2030 and achieve its financial targets.

• Litigation Risk: The company operates in a highly litigious environment and is currently defending against multiple lawsuits, including putative class action antitrust lawsuits alleging conspiracy to suppress out-of-network reimbursements. These cases are centralized in the Northern District of Illinois, and while management believes they are without merit and is vigorously defending itself, the outcome is uncertain. Litigation can be costly, time-consuming, divert management attention, and potentially impact product use or business practices. The evolving regulatory landscape and increased enforcement activity also contribute to this risk.
• Customer Concentration: Two clients accounted for a significant portion (28% and 16%) of FY 2024 revenues. The loss of a large customer, as evidenced by the anticipated 3% revenue headwind from one client in 2025, could materially impact results. While management is working to diversify and deepen relationships, this remains a key vulnerability.
• Execution Risk: The success of the transformation journey and achieving growth targets hinges on effective execution of strategic initiatives, including technology modernization, new product development, sales realignment, and process optimization. Slower-than-anticipated commercial traction for new products has been a challenge in the past, and successful conversion of pipeline opportunities into revenue remains critical.
• Revenue Yield Volatility: The company has experienced volatility and sequential declines in revenue yield (revenue as a percentage of identified savings), driven by mix shifts and temporary factors. While management believes the yield is stabilizing, continued volatility could impact revenue conversion despite strong volume growth.
• Competitive Pressures: While Claritev has niche strengths, it competes with larger, well-resourced players like IQV and UNH (Optum) who may have advantages in scale, integrated ecosystems, and speed of innovation, particularly in areas like AI. Maintaining competitiveness requires continuous investment and successful differentiation.

Management is actively addressing these risks through legal defense, enhanced corporate and government affairs efforts, operational rigor, sales execution focus, and strategic investments in technology and new products designed to strengthen its market position and diversify its revenue base.

Conclusion

Claritev Corporation stands at a pivotal juncture, actively engaged in a multi-year transformation to leverage its foundational strengths in data, analytics, and networks to become a more dynamic, technology-driven leader in healthcare affordability and transparency. The recent rebranding and successful debt refinancing underscore management's commitment to this strategic pivot and provide the necessary financial stability to pursue Vision 2030.

While the company faces headwinds, including ongoing litigation, customer concentration risk, and the challenge of accelerating growth in new markets, the Q1 2025 results and the 2025 guidance signal a period of transition ("the turn") where management expects the impact of past attrition to normalize and new growth initiatives to gain traction. The focus on technology modernization, operational efficiency, and targeted market expansion, particularly in Data and Decision Science and the provider segment, represents a clear path to diversify revenue and expand the total addressable market. For investors, the story of Claritev is one of a company confronting its challenges head-on, investing in its future, and aiming to translate its deep industry expertise and technological evolution into sustainable, profitable growth within a complex but essential sector of the healthcare economy.