Claritev Q2 FY2026 Earnings: Revenue Grows as Adjusted EBITDA Margin Narrows

Claritev (NYSE: CTEV) reported Q2 FY2026 revenue of $257.5 million, up 6.6% from $241.6 million, while its diluted GAAP loss per share narrowed to $3.49 from $3.81. Net loss improved modestly and cash generation increased, but adjusted EBITDA margin declined as service and administrative costs grew faster than revenue. The company also raised several full-year 2026 guidance ranges.

Core earnings results

Revenue growth continued for a fifth consecutive quarter on a year-over-year basis. GAAP operating income rose to $23.4 million because revenue increased faster than total expenses, while the net loss narrowed to $59.2 million.

Adjusted EBITDA increased only 1.1%, substantially slower than revenue, and its margin contracted by 3.3 percentage points. Quarterly operating cash flow and free cash flow both improved by roughly 50%, even as capital expenditures increased.

Adjusted EBITDA and free cash flow are non-GAAP measures. Claritev defines free cash flow as operating cash flow less capital expenditures.

Revenue growth outpaced adjusted EBITDA as operating costs increased

Costs of services rose approximately 11.3% to $67.7 million, while general and administrative expenses increased approximately 8.4% to $55.4 million. Both grew faster than revenue, helping explain why adjusted EBITDA margin fell despite higher sales.

GAAP operating income moved in the opposite direction because total expenses increased by about 4.0%, slower than revenue. Depreciation and amortization were broadly stable, while losses on lease disposals declined to $0.3 million from $1.7 million.

The company nevertheless remained loss-making because quarterly interest expense was $100.3 million, far above its $23.4 million of operating income. Claritev consequently recorded a pretax loss of $76.6 million and a net loss of $59.2 million.

Bookings expanded across solutions and verticals

Management reported more than $70 million of bookings during the first half of 2026. Claritev is targeting $100 million for the full year, which would represent 50% growth over 2025.

The company cited particular strength in the third-party administrator market, where it closed several seven-figure transactions. Management also said bookings were spread across multiple solutions and verticals, supporting its effort to diversify the business. The release did not disclose the timing of revenue recognition from these bookings, making conversion into reported revenue an important measure to monitor.

Claritev is one year into a transformation program focused on expanding its solution portfolio and addressable verticals, using AI in operations and product innovation, and improving company-wide execution.

Cash flow improved, but leverage remains substantial

Operating cash flow increased by $31.4 million year over year. A favorable accounts-receivable swing contributed to the improvement: receivables provided $5.3 million of quarterly cash compared with using $30.1 million in the prior-year quarter.

Capital expenditures rose by $13.5 million to $38.1 million, absorbing part of the operating cash flow improvement. Even so, free cash flow increased by $18.0 million to $54.6 million.

Claritev ended June with $14.4 million of unrestricted cash and cash equivalents, down from $16.8 million at the end of 2025. Long-term debt was $4.59 billion, compared with $4.56 billion at year-end, while borrowings under the revolving credit facility increased to $70 million from $20 million. The shareholders’ deficit widened to $287.8 million from $167.2 million.

2026 guidance

Claritev raised its full-year revenue, adjusted EBITDA, and free cash flow ranges. Capital expenditure and effective tax rate assumptions were unchanged.

Claritev did not reconcile forward-looking adjusted EBITDA to the most comparable GAAP measure, citing limited visibility and variability related to items including incentive compensation, transaction expenses, and certain fair-value measurements.

Recent insider transactions

The supplied transaction data identifies nine insider purchase entries between February 27 and June 9, 2026, with reported values totaling approximately $1.49 million. Stock awards are excluded, and the transactions alone do not establish insiders’ expectations for future performance.

Risks investors should monitor

• Adjusted EBITDA margin pressure: Service and administrative costs grew faster than revenue, reducing adjusted EBITDA margin by 3.3 percentage points.
• Interest expense and leverage: Quarterly interest expense exceeded operating income by a wide margin, keeping Claritev in a GAAP net-loss position despite revenue growth.
• Full-year cash flow execution: Q2 free cash flow improved, but the full-year range remains only $5 million to $15 million while planned capital expenditures remain $160 million to $170 million.
• Booking conversion: Management views bookings as an indicator of future growth, but the pace at which more than $70 million of first-half bookings converts into revenue remains an important operating variable.

Summary

Claritev’s Q2 FY2026 results showed continued revenue growth, higher GAAP operating income, and improved cash generation. The main counterweights were adjusted EBITDA margin compression and an interest burden that continued to produce a substantial net loss. Investors’ next focus will be whether new bookings convert into revenue, operating costs grow more slowly, and the company delivers its raised full-year guidance while managing leverage and capital spending.