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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2025

or

☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to x

Commission file number 000-19291

CORVEL CORPORATION

(Exact Name of Registrant as Specified in its Charter)

Delaware |  | 33-0282651
(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)

5128 Apache Plume Road, Suite 400 |  |
Fort Worth, TX |  | 76109
(Address of principal executive offices) |  | (Zip Code)

(817) 390-1416
(Registrant’s telephone number, including area code)

Not Applicable

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class |  | Trading Symbol(s) |  | Name of each exchange on which registered
Common Stock, Par Value $0.0001 Per Share |  | CRVL |  | The Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer |  | ☑ |  | Accelerated filer |  |  | ☐
Non-accelerated filer |  | ☐ |  | Smaller reporting company |  |  | ☐
|  |  |  | Emerging growth company |  |  | ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

The number of shares outstanding of the registrant’s Common Stock, $0.0001 par value per share, as of November 3, 2025, w as 51,246,949.

CORVEL CORPORATION

QUARTERLY REPORT ON FORM 10-Q

TABLE OF CONTENTS

|  | Page
PART I - FINANCIAL INFORMATION |  |
Item 1. | Financial Statements |  | 3
| Consolidated Balance Sheets – September 30, 2025 (unaudited) and March 31, 2025 |  | 3
| Consolidated Income Statements (unaudited) – Three months ended September 30, 2025 and 2024 |  | 4
| Consolidated Income Statements (unaudited) – Six months ended September 30, 2025 and 2024 |  | 5
| Consolidated Statements of Stockholders’ Equity (unaudited) – Three and six months ended September 30, 2025 and 202 4 |  | 6
| Consolidated Statements of Cash Flows (unaudited) – Six months ended September 30, 2025 and 2024 |  | 7
| Notes to Consolidated Financial Statements |  | 8
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations |  | 19
Item 3. | Quantitative and Qualitative Disclosures About Market Risk |  | 26
Item 4. | Controls and Procedures |  | 26
PART II - OTHER INFORMATION |  |
Item 1. | Legal Proceedings |  | 27
Item 1A. | Risk Factors |  | 27
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |  | 36
Item 3. | Defaults Upon Senior Securities |  | 36
Item 4. | Mine Safety Disclosures |  | 36
Item 5. | Other Information |  | 36
Item 6. | Exhibits |  | 37
| Signatures |  | 38

Page 2

PART I – FINANC IAL INFORMATION

ITEM 1 – F I NANCIAL STATEMENTS

CORVEL CORPORATION

Consolidated B alance Sheets

|  | September 30, 2025 |  |  | March 31, 2025 |
|  | (Unaudited) |  |  |  |
Assets |  |  |  |  |  |
Current Assets |  |  |  |  |  |
Cash and cash equivalents |  | $ | 207,453,000 |  |  | $ | 170,584,000 |
Customer deposits |  |  | 112,302,000 |  |  |  | 101,472,000 |
Accounts receivable, net |  |  | 104,919,000 |  |  |  | 104,126,000 |
Prepaid taxes and expenses |  |  | 9,593,000 |  |  |  | 10,507,000 |
Total current assets |  |  | 434,267,000 |  |  |  | 386,689,000 |
Property and equipment, net |  |  | 111,174,000 |  |  |  | 92,052,000 |
Goodwill |  |  | 36,814,000 |  |  |  | 36,814,000 |
Other intangibles, net |  |  | 350,000 |  |  |  | 438,000 |
Right-of-use asset, net |  |  | 19,178,000 |  |  |  | 20,825,000 |
Deferred tax asset, net |  |  | 9,408,000 |  |  |  | 8,704,000 |
Other assets |  |  | 490,000 |  |  |  | 454,000 |
TOTAL ASSETS |  | $ | 611,681,000 |  |  | $ | 545,976,000 |
Liabilities and Stockholders' Equity |  |  |  |  |  |
Current Liabilities |  |  |  |  |  |
Accounts and taxes payable |  | $ | 23,110,000 |  |  | $ | 16,792,000 |
Accrued liabilities |  |  | 207,219,000 |  |  |  | 187,244,000 |
Total current liabilities |  |  | 230,329,000 |  |  |  | 204,036,000 |
Long-term lease liabilities |  |  | 18,575,000 |  |  |  | 19,953,000 |
Total liabilities |  |  | 248,904,000 |  |  |  | 223,989,000 |
Commitments and contingencies |  |  |  |  |  |
Stockholders' Equity |  |  |  |  |  |
Common stock, $.0001 par value: 360,000,000 shares authorized at September 30, 2025 and March 31, 2025; 166,000,944 shares issued (51,293,374 shares outstanding, net of Treasury shares) and 165,836,235 shares issued (51,359,544 shares outstanding, net of Treasury shares) at September 30, 2025 and March 31, 2025, respectively |  |  | 5,000 |  |  |  | 5,000 |
Paid-in capital |  |  | 258,511,000 |  |  |  | 250,407,000 |
Treasury stock (114,707,570 shares at September 30, 2025 and 114,476,691 shares at March 31, 2025) |  |  | (853,965,000 | ) |  |  | (831,510,000 | )
Retained earnings |  |  | 958,226,000 |  |  |  | 903,085,000 |
Total stockholders' equity |  |  | 362,777,000 |  |  |  | 321,987,000 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |  | $ | 611,681,000 |  |  | $ | 545,976,000 |

See accompanying notes to unaudited consolidated financial statements.

Page 3

CORVEL CORPORATION

Consolidated Income S t atements – (Unaudited)

|  | Three Months Ended |
|  | September 30, 2025 |  |  | September 30, 2024 |
REVENUES |  | $ | 239,643,000 |  |  | $ | 224,380,000 |
Cost of revenues |  |  | 181,466,000 |  |  |  | 173,632,000 |
Gross profit |  |  | 58,177,000 |  |  |  | 50,748,000 |
General and administrative expenses |  |  | 22,277,000 |  |  |  | 22,078,000 |
Income before income tax provision |  |  | 35,900,000 |  |  |  | 28,670,000 |
Income tax provision |  |  | 7,994,000 |  |  |  | 5,272,000 |
NET INCOME |  | $ | 27,906,000 |  |  | $ | 23,398,000 |
Net income per common and common equivalent share |  |  |  |  |  |
Basic |  | $ | 0.54 |  |  | $ | 0.46 |
Diluted |  | $ | 0.54 |  |  | $ | 0.45 |
Weighted average common and common equivalent shares |  |  |  |  |  |
Basic |  |  | 51,314,000 |  |  |  | 51,399,000 |
Diluted |  |  | 51,723,000 |  |  |  | 52,023,000 |

See accompanying notes to unaudited consolidated financial statements.

Page 4

CORVEL CORPORATION

Consolidate d Income Statements – (Unaudited)

|  | Six Months Ended |
|  | September 30, 2025 |  |  | September 30, 2024 |
REVENUES |  | $ | 474,354,000 |  |  | $ | 436,102,000 |
Cost of revenues |  |  | 359,552,000 |  |  |  | 337,200,000 |
Gross profit |  |  | 114,802,000 |  |  |  | 98,902,000 |
General and administrative expenses |  |  | 43,619,000 |  |  |  | 42,198,000 |
Income before income tax provision |  |  | 71,183,000 |  |  |  | 56,704,000 |
Income tax provision |  |  | 16,042,000 |  |  |  | 11,729,000 |
NET INCOME |  | $ | 55,141,000 |  |  | $ | 44,975,000 |
Net income per common and common equivalent share |  |  |  |  |  |
Basic |  | $ | 1.07 |  |  | $ | 0.88 |
Diluted |  | $ | 1.06 |  |  | $ | 0.87 |
Weighted average common and common equivalent shares |  |  |  |  |  |
Basic |  |  | 51,333,000 |  |  |  | 51,381,000 |
Diluted |  |  | 51,817,000 |  |  |  | 51,981,000 |

See accompanying notes to unaudited consolidated financial statements.

Page 5

CORVEL CORPORATION

Consolidated Statements of St o ckholders’ Equity – (Unaudited)

|  | Three Months Ended September 30, 2025 |
|  | Common Shares |  |  | Stock Amount |  |  | Paid-in- Capital |  |  | Treasury Shares |  |  | Treasury Stock |  |  | Retained Earnings |  |  | Total Stockholders' Equity |
Balance – June 30, 2025 |  |  | 165,889,159 |  |  | $ | 5,000 |  |  | $ | 253,334,000 |  |  |  | (114,563,796 | ) |  | $ | (841,127,000 | ) |  | $ | 930,320,000 |  |  | $ | 342,532,000 |
Stock issued under employee stock purchase plan |  |  | 5,682 |  |  |  | — |  |  |  | 418,000 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 418,000 |
Stock issued under stock option plan, net of shares repurchased |  |  | 98,492 |  |  |  | — |  |  |  | 2,577,000 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 2,577,000 |
Stock-based compensation expense |  |  | — |  |  |  | — |  |  |  | 1,398,000 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1,398,000 |
Stock issuance for asset acquisition |  |  | 7,611 |  |  |  | — |  |  |  | 784,000 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 784,000 |
Purchase of treasury stock |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (143,774 | ) |  |  | (12,838,000 | ) |  |  | — |  |  |  | (12,838,000 | )
Net income |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 27,906,000 |  |  |  | 27,906,000 |
Balance – September 30, 2025 |  |  | 166,000,944 |  |  | $ | 5,000 |  |  | $ | 258,511,000 |  |  |  | (114,707,570 | ) |  | $ | (853,965,000 | ) |  | $ | 958,226,000 |  |  | $ | 362,777,000 |
|  | Three Months Ended September 30, 2024 |
|  | Common Shares |  |  | Stock Amount |  |  | Paid-in- Capital |  |  | Treasury Shares |  |  | Treasury Stock |  |  | Retained Earnings |  |  | Total Stockholders' Equity |
Balance – June 30, 2024 |  |  | 165,584,634 |  |  | $ | 3,000 |  |  | $ | 237,804,000 |  |  |  | (114,213,951 | ) |  | $ | (803,431,000 | ) |  | $ | 829,497,000 |  |  | $ | 263,873,000 |
Stock issued under employee stock purchase plan |  |  | 3,306 |  |  |  | — |  |  |  | 342,000 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 342,000 |
Stock issued under stock option plan, net of shares repurchased |  |  | 127,860 |  |  |  | — |  |  |  | 3,266,000 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 3,266,000 |
Stock-based compensation expense |  |  | — |  |  |  | — |  |  |  | 1,482,000 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1,482,000 |
Purchase of treasury stock |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (96,369 | ) |  |  | (9,589,000 | ) |  |  | — |  |  |  | (9,589,000 | )
Net income |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 23,398,000 |  |  |  | 23,398,000 |
Balance – September 30, 2024 |  |  | 165,715,800 |  |  | $ | 3,000 |  |  | $ | 242,894,000 |  |  |  | (114,310,320 | ) |  | $ | (813,020,000 | ) |  | $ | 852,895,000 |  |  | $ | 282,772,000 |

|  | Six Months Ended September 30, 2025 |
|  | Common Shares |  |  | Stock Amount |  |  | Paid-in- Capital |  |  | Treasury Shares |  |  | Treasury Stock |  |  | Retained Earnings |  |  | Total Stockholders' Equity |
Balance – March 31, 2025 |  |  | 165,836,235 |  |  | $ | 5,000 |  |  | $ | 250,407,000 |  |  |  | (114,476,691 | ) |  | $ | (831,510,000 | ) |  | $ | 903,085,000 |  |  | $ | 321,987,000 |
Stock issued under employee stock purchase plan |  |  | 5,682 |  |  |  | — |  |  |  | 418,000 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 418,000 |
Stock issued under stock option plan, net of shares repurchased |  |  | 151,416 |  |  |  | — |  |  |  | 4,087,000 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 4,087,000 |
Stock-based compensation expense |  |  | — |  |  |  | — |  |  |  | 2,815,000 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 2,815,000 |
Stock issuance for asset acquisition |  |  | 7,611 |  |  |  | — |  |  |  | 784,000 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 784,000 |
Purchase of treasury stock |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (230,879 | ) |  |  | (22,455,000 | ) |  |  | — |  |  |  | (22,455,000 | )
Net income |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 55,141,000 |  |  |  | 55,141,000 |
Balance – September 30, 2025 |  |  | 166,000,944 |  |  | $ | 5,000 |  |  | $ | 258,511,000 |  |  |  | (114,707,570 | ) |  | $ | (853,965,000 | ) |  | $ | 958,226,000 |  |  | $ | 362,777,000 |
|  | Six Months Ended September 30, 2024 |
|  | Common Shares |  |  | Stock Amount |  |  | Paid-in- Capital |  |  | Treasury Shares |  |  | Treasury Stock |  |  | Retained Earnings |  |  | Total Stockholders' Equity |
Balance – March 31, 2024 |  |  | 165,486,225 |  |  | $ | 3,000 |  |  | $ | 233,629,000 |  |  |  | (114,099,537 | ) |  | $ | (793,905,000 | ) |  | $ | 807,920,000 |  |  | $ | 247,647,000 |
Stock issued under employee stock purchase plan |  |  | 3,306 |  |  |  | — |  |  |  | 342,000 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 342,000 |
Stock issued under stock option plan, net of shares repurchased |  |  | 226,269 |  |  |  | — |  |  |  | 6,371,000 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 6,371,000 |
Stock-based compensation expense |  |  | — |  |  |  | — |  |  |  | 2,552,000 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 2,552,000 |
Purchase of treasury stock |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (210,783 | ) |  |  | (19,115,000 | ) |  |  | — |  |  |  | (19,115,000 | )
Net income |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 44,975,000 |  |  |  | 44,975,000 |
Balance – September 30, 2024 |  |  | 165,715,800 |  |  | $ | 3,000 |  |  | $ | 242,894,000 |  |  |  | (114,310,320 | ) |  | $ | (813,020,000 | ) |  | $ | 852,895,000 |  |  | $ | 282,772,000 |

See accompanying notes to unaudited consolidated financial statements.

Page 6

CORVEL CORPORATION

Consolidated Statements o f Cash Flows – (Unaudited)

|  | Six Months Ended |
|  | September 30, 2025 |  |  | September 30, 2024 |
Cash Flows from Operating Activities |  |  |  |  |  |
NET INCOME |  | $ | 55,141,000 |  |  | $ | 44,975,000 |
Adjustments to reconcile net income to net cash provided by operating activities: |  |  |  |  |  |
Depreciation and amortization |  |  | 15,431,000 |  |  |  | 14,438,000 |
Loss on write down or disposal of property, capitalized software or investment |  |  | 19,000 |  |  |  | 109,000 |
Stock-based compensation expense |  |  | 2,815,000 |  |  |  | 2,552,000 |
Provision for expected credit losses |  |  | 574,000 |  |  |  | 1,764,000 |
Deferred income tax |  |  | (704,000 | ) |  |  | (638,000 | )
Changes in operating assets and liabilities |  |  |  |  |  |
Accounts receivable |  |  | (1,368,000 | ) |  |  | (7,049,000 | )
Customer deposits |  |  | (10,830,000 | ) |  |  | (20,968,000 | )
Prepaid taxes and expenses |  |  | 915,000 |  |  |  | (2,064,000 | )
Other assets |  |  | (34,000 | ) |  |  | 639,000 |
Accounts and taxes payable |  |  | (2,168,000 | ) |  |  | (2,458,000 | )
Accrued liabilities |  |  | 19,975,000 |  |  |  | 30,817,000 |
Operating leases, net |  |  | 269,000 |  |  |  | 630,000 |
Net cash provided by operating activities |  |  | 80,035,000 |  |  |  | 62,747,000 |
Cash Flows from Investing Activities |  |  |  |  |  |
Purchase of property and equipment |  |  | (25,216,000 | ) |  |  | (17,559,000 | )
Net cash used in investing activities |  |  | (25,216,000 | ) |  |  | (17,559,000 | )
Cash Flows from Financing Activities |  |  |  |  |  |
Purchase of treasury stock |  |  | (22,455,000 | ) |  |  | (19,115,000 | )
Proceeds from exercise of common stock options |  |  | 4,087,000 |  |  |  | 6,371,000 |
Proceeds from purchases under employee stock purchase plan |  |  | 418,000 |  |  |  | 342,000 |
Net cash used in financing activities |  |  | (17,950,000 | ) |  |  | (12,402,000 | )
Increase in cash and cash equivalents |  |  | 36,869,000 |  |  |  | 32,786,000 |
Cash and cash equivalents at beginning of period |  |  | 170,584,000 |  |  |  | 105,563,000 |
Cash and cash equivalents at end of period |  | $ | 207,453,000 |  |  | $ | 138,349,000 |
Supplemental Cash Flow Information: |  |  |  |  |  |
Income taxes paid |  | $ | 15,992,000 |  |  | $ | 14,501,000 |
Purchase of software license under finance agreement |  | $ | 8,485,000 |  |  | $ | — |
Asset acquisition |  | $ | 784,000 |  |  | $ | — |

See accompanying notes to unaudited consolidated financial statements.

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CORVEL CORPORATION

Notes to Consolidated Financial Statements

September 30, 2025

Note 1 — Summary of Significant Accounting Policies

Basis of Presentation: The unaudited consolidated financial statements include the accounts of CorVel Corporation (the “Company,” “we”, “our”, or “us”) and its consolidated subsidiaries. Significant intercompany accounts and transactions have been eliminated in consolidation.

The unaudited consolidated financial statements herein have been prepared by the Company pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”). The accompanying interim unaudited consolidated financial statements have been prepared under the presumption that users of the interim financial information have either read or have access to the audited consolidated financial statements for the latest fiscal year ended March 31, 2025. Accordingly, note disclosures which would substantially duplicate the disclosures contained in the March 31, 2025 audited consolidated financial statements have been omitted from these interim unaudited consolidated financial statements.

The Company evaluated all subsequent events and transactions through the date of filing this report.

Certain information and note disclosures normally included in financial statements prepared in accordance with United States generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the three and six months ended September 30, 2025, are not necessarily indicative of the results that may be expected for the fiscal year ending March 31, 2026 or any other period. For further information, refer to the audited consolidated financial statements and notes thereto for the fiscal year ended March 31, 2025, included in the Company’s Annual Report on Form 10-K filed with the SEC on May 23, 2025 (the “2025 Annual Report”).

Forward Stock Split and Authorized Share Increase: On December 24, 2024, the Company (i) effected a three-for-one forward stock split (the “Stock Split”) of its common stock, par value $0.0001 (the “common stock”), and (ii) proportionately increased the number of authorized shares of common stock from 120,000,000 shares to 360,000,000 shares. As a result of the Stock Split, every one share of common stock outstanding or held as treasury shares on December 23, 2024, was automatically split into three shares of common stock. All prior period share, equity award and per share amounts and calculations in these consolidated financial statements and elsewhere in this report have been retroactively adjusted to reflect the Stock Split.

Recent Accounting Pronouncements: New accounting pronouncements are issued periodically by the FASB and are adopted by the Company as of the specified effective dates. Unless otherwise disclosed below, the Company believes that recently issued and adopted pronouncements will not have a material impact on the Company’s financial position, results of operations and cash flows or do not apply to the Company’s operations.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures, to require disaggregated disclosure of certain income statement expense line items, such as purchases of inventory, employee compensation, and, depreciation and amortization. The new standard is effective for fiscal years beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The amendments should be applied prospectively, but retrospective application is permitted. The Company is currently evaluating the impact of this guidance on its consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, a new accounting standard to enhance the transparency and decision usefulness of income tax disclosures. The new standard is effective for fiscal years beginning after December 15, 2024, with retrospective application permitted. The Company is currently evaluating the impact of this guidance on its consolidated financial statements.

Note 2 – Revenue Recognition

Revenue from Contracts with Customers

The Company operates in one reportable operating segment: managed care. The Company generates revenue through its patient management and network solutions service lines. Revenue generated from patient management service line is recognized over time as services are provided and performance obligations are satisfied. Revenue generated from network solutions service line is recognized

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when control of the promised services is transferred to the Company’s customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services. As the Company completes its performance obligations, which are described in greater detail below, it has an unconditional right to consideration pursuant to the Company’s contracts. Generally, the Company’s accounts receivable are expected to be collected within 30 days, in accordance with the underlying payment terms.

Patient Management Service Line

The patient management service line provides services primarily related to workers’ compensation claims management and case management. This service line also includes additional services such as accident and health claims programs. Each claim referred by the customer is considered an additional optional purchase of claims management services under the agreement with the customer. The transaction price is readily available from the contract and is fixed for each service. Revenue is recognized over time as services are provided and performance obligations are satisfied through efforts expended to research, investigate, evaluate, document, and report the claim and control of these services is transferred to the customer. Revenue is recognized based on historical claim closure rates and claim type by utilizing a portfolio approach based on time elapsed for these claims, which is generally between three and fifteen months. The Company believes this approach reasonably reflects the transfer of the claims management services to its customers.

The Company’s obligation to manage claims and cases under patient management service line contracts range from less than one year to multiple years. The term of these contracts is typically one year; however, many of these contracts contain auto-renewal provisions leading the Company’s customer relationships to span multiple years. Under certain claims management agreements, the Company receives consideration from a customer at contract inception prior to transferring services to the customer, however, the Company would begin performing services immediately. The period between a customer’s payment of consideration and the completion of the promised services is generally less than one year. There is no difference between the amount of promised consideration and the cash selling price of the promised services. The fee is billed upfront by the Company in order to provide customers with simplified and predictable ways of purchasing the Company’s services.

The patient management service line also offers the services of case managers who provide administration services by proactively managing medical treatment for claimants while also facilitating an understanding of, and participation in, their rehabilitation process. Revenue for case management services is recognized over time as the performance obligations are satisfied through the effort expended to manage the medical treatment for claimants and control of these services is transferred to the customer. Case management services are generally billed based on time incurred, are considered variable consideration, and revenue is recognized for the amount in which the Company has the right to invoice for services performed. The Company believes this approach reasonably reflects the transfer of the case management service to the customer.

Network Solutions Service Line

The network solutions service line consists primarily of medical bill review and third-party services. Medical bill review services provide an analysis of medical charges for customers’ claims to identify opportunities for savings. Revenue from medical bill review services is recognized at a point in time when control of the service is transferred to the customer, based upon the transfer of the results of the medical bill review service to the customer as this is the most accurate depiction of the transfer of the service to the customer. Medical bill review revenue is variable, generally based on performance metrics set forth in the underlying contracts. Each period, the Company bases its revenue estimates on a contract-by-contract basis. The Company makes its best estimate using amounts the Company has earned and expects to be collected using historical averages and other factors to project such revenues. Variable consideration is recognized when the Company concludes it is probable that a significant revenue reversal will not occur in future periods.

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Third-party services revenue includes pharmacy, directed care services and other services, and includes amounts received from customers compensating the Company for certain third-party costs associated with providing its integrated network solutions services. The Company is considered the principal in these transactions as it directs the third-party, controls the specified service and pricing, performs program utilization review, directs payment to the provider, assumes the financial risk of loss associated with services rendered, and combines the services provided into an integrated solution, as specified within its customer contracts. The Company has the ability to influence contractual fees with customers and assumes the financial risk of loss in certain contractual obligations. These factors indicate that the Company is the principal and therefore required to recognize gross revenue and operating expense from service-partner fees within its consolidated statements of income.

The following table presents revenues disaggregated by service line for the three and six months ended September 30, 2025 and 2024:

|  | Three Months Ended |
|  | September 30, 2025 |  |  | September 30, 2024 |
Patient management services |  | $ | 150,795,000 |  |  | $ | 147,173,000 |
Network solutions services |  |  | 88,848,000 |  |  |  | 77,207,000 |
Total services |  | $ | 239,643,000 |  |  | $ | 224,380,000 |

|  | Six Months Ended |
|  | September 30, 2025 |  |  | September 30, 2024 |
Patient management services |  | $ | 297,563,000 |  |  | $ | 286,345,000 |
Network solutions services |  |  | 176,791,000 |  |  |  | 149,757,000 |
Total services |  | $ | 474,354,000 |  |  | $ | 436,102,000 |

Arrangements with Multiple Performance Obligations

The Company offers a suite of services under its patient management and network solutions service lines. Although customers can select from a variety of services, the Company typically has one performance obligation per customer. The Company always provides its customers with an option to contract additional services. The price of each service is separate and distinct to each customer. Pricing is generally consistent for each service irrespective of the other services or quantities requested by the customer.

Contract Balances

Due to the timing of revenue recognition, billings and cash collections, the Company’s consolidated balance sheets include billed accounts receivables, unbilled receivables, and contract liabilities (reported as deferred revenues). Unbilled receivables are due to the Company for services already rendered, except for physical invoicing and the passage of time. Invoicing requirements vary by customer contract, but substantially all unbilled revenues are billed within one year.

|  | September 30, 2025 |  |  | March 31, 2025 |
Billed receivables |  | $ | 69,065,000 |  |  | $ | 65,323,000 |
Allowance for expected credit losses |  |  | (4,662,000 | ) |  |  | (7,690,000 | )
Unbilled receivables |  |  | 40,516,000 |  |  |  | 46,493,000 |
Accounts receivable, net |  | $ | 104,919,000 |  |  | $ | 104,126,000 |

When the Company receives consideration from a customer prior to transferring services to the customer under the terms of certain claims management agreements, it records deferred revenues on the consolidated balance sheets, which represents a contract liability.

Certain services, such as claims management, are provided under fixed-fee service agreements and require the Company to manage claims over a contract period, typically for one year with the option for auto renewal, with the fixed fee renewing on the anniversary date of such contract. The Company recognizes deferred revenues as revenues when it performs services and transfers control of the services to the customer and satisfies the performance obligation, which it determines utilizing a portfolio approach. For all fixed fee service agreements, revenues are straight-lined and recognized over the expected service periods by type of claim.

Page 10

The table below presents the deferred revenues balance and the significant activity affecting deferred revenues during the six months ended September 30, 2025:

|  | Six Months Ended |
|  | September 30, 2025 |
Beginning balance at April 1, 2025 |  | $ | 30,809,000 |
Additions |  |  | 39,707,000 |
Revenue recognized from beginning of period |  |  | (20,489,000 | )
Revenue recognized from additions |  |  | (19,118,000 | )
Ending balance at September 30, 2025 |  | $ | 30,909,000 |

Remaining Performance Obligations

As of September 30, 2025, the Company has approximately $30.9 million of remaining performance obligations related to claims and non-claims services for which the price is fixed. Remaining performance obligations consist of deferred revenues. The Company expects to recognize approximately 99% of its remaining performance obligations as revenues within the current fiscal year and expects to recognize the remaining balance as revenue thereafter. See the discussion below regarding the practical expedients elected for the disclosure of remaining performance obligations.

Costs to Obtain a Contract

The Company has an internal sales force compensation program where remuneration is based solely on the revenues recognized in the period and does not represent an incremental cost to the Company, which provides a future benefit expected to be longer than one year and would meet the criteria to be capitalized and presented on the consolidated balance sheets.

Practical Expedients Elected

As a practical expedient, the Company does not adjust the consideration in a contract for the effects of a significant financing component. It expects, at contract inception, that the period between a customer’s payment of consideration and the transfer of promised services to the customer will be one year or less.

For patient management services that are billed on a time-and-expense incurred or per unit basis and for which revenue is recognized over time, the Company recognizes revenue at the amount to which it has the right to invoice for services performed.

The Company does not disclose the value of remaining performance obligations for (i) contracts where revenue is recognized for the amount the Company has the right to invoice for services performed, and (ii) contracts with variable consideration allocated entirely to a single performance obligation.

Note 3 — Stock-Based Compensation and Stock Options

Under the Company’s Restated Omnibus Incentive Plan (formerly the Restated 1988 Executive Stock Option Plan) (the “Omnibus Plan”) as of September 30, 2025, there were 1,185,727 stock options outstanding and 1,775,459 shares available for issuance. Under the Omnibus Plan, shares of common stock were granted to key employees, non-employee directors, and consultants at exercise prices not less than the fair market value of the common stock on the date of grant. Options granted under the Plan generally vest as to 25% of the shares one year from the date of grant, and as to the remaining 75% of the shares ratably each month over the following 36 months. The options granted to employees and directors expire at the end of five years and ten years from the date of grant, respectively. All options granted in the three months ended September 30, 2025 and 2024 were granted with an exercise price equal to the fair value of the Company’s common stock on the grant date and are non-statutory stock options. After August 7, 2025, no further grants may be under the Omnibus Plan.

On August 7, 2025, the Company’s stockholders approved the 2025 Stock Incentive Plan (the “2025 SIP”) replacing the Omnibus Plan, which expires on June 30, 2026. Consistent with the Omnibus Plan, the primary purpose of the 2025 SIP is to continue to attract and retain qualified personnel. The 2025 SIP initially reserves 1,775,459 shares of common stock for issuance to employees, directors, consultants, independent contractors and advisors. The 2025 SIP permits the issuance of stock options, restricted stock, stock appreciation rights, restricted stock units and performance awards.

The Company will not grant any further equity awards under the Omnibus Plan. Outstanding awards under the Omnibus Plan will remain outstanding, unchanged and subject to the terms of the Omnibus Plan and their respective award agreements. Shares subject to awards that are forfeited, expire or are otherwise terminated without shares being issued, or shares withheld to pay the exercise price of

Page 11

an award or to satisfy tax withholding obligations, including shares subject to awards granted under the Omnibus Plan that are outstanding after June 30, 2026, will be returned to the pool of shares available for grant and issuance under the 2025 SIP. As of September 30, 2025, 1,775,459 shares of common stock remained available for future issuance under the 2025 SIP, subject to adjustment for future stock splits, stock dividends, and similar changes in capitalization.

The Company records compensation expense for employee stock options based on the estimated fair value of the options on the date of grant using the Black-Scholes option-pricing model based on the assumptions included in the table below. The risk-free rate is based on the interest rate paid on a U.S. Treasury issue with a term similar to the estimated life of the option. The Company uses historical data, among other factors, to estimate the expected volatility, dividend yield and option life. The Company accounts for forfeitures as they occur, rather than estimating expected forfeitures. The following assumptions were used to estimate the fair value of stock options granted during the three months ended September 30, 2025 and 2024, using the Black-Scholes option-pricing model:

|  | Three Months Ended
|  | September 30, 2025 |  | September 30, 2024
Risk-free interest rate |  | 4.23% |  | 3.89%
Expected volatility |  | 31% |  | 35%
Expected dividend yield |  | 0.00% |  | 0.00%
Expected weighted average life of option in years |  | 9.2 years |  | 9.2 years

For the three months ended September 30, 2025 and 2024, the Company recorded stock-based compensation expense of $1,398,000 and $1,482,000, respectively. For the six months ended September 30, 2025 and 2024, the Company recorded stock-based compensation expense of $2,815,000 and $2,552,000, respectively. The table below shows the amounts recognized in the unaudited consolidated financial statements for stock-based compensation expense for all stock options during the three and six months ended September 30, 2025 and 2024, respectively.

|  | Three Months Ended |
|  | September 30, 2025 |  |  | September 30, 2024 |
Cost of revenues |  | $ | 667,000 |  |  | $ | 723,000 |
General and administrative |  |  | 731,000 |  |  |  | 759,000 |
Total cost of stock-based compensation included in income before income tax provision |  |  | 1,398,000 |  |  |  | 1,482,000 |
Amount of income tax benefit recognized |  |  | (311,000 | ) |  |  | (273,000 | )
Amount charged against net income |  | $ | 1,087,000 |  |  | $ | 1,209,000 |
Effect on basic earnings per share |  | $ | (0.02 | ) |  | $ | (0.02 | )
Effect on diluted earnings per share |  | $ | (0.02 | ) |  | $ | (0.02 | )

|  | Six Months Ended |
|  | September 30, 2025 |  |  | September 30, 2024 |
Cost of revenues |  | $ | 1,349,000 |  |  | $ | 1,438,000 |
General and administrative |  |  | 1,466,000 |  |  |  | 1,114,000 |
Total cost of stock-based compensation included in income before income tax provision |  |  | 2,815,000 |  |  |  | 2,552,000 |
Amount of income tax benefit recognized |  |  | (635,000 | ) |  |  | (528,000 | )
Amount charged against net income |  | $ | 2,180,000 |  |  | $ | 2,024,000 |
Effect on basic earnings per share |  | $ | (0.04 | ) |  | $ | (0.04 | )
Effect on diluted earnings per share |  | $ | (0.04 | ) |  | $ | (0.04 | )

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The following table provides a summary of information for all stock option activity for the three and six months ended September 30, 2025 and 2024:

|  | Three Months Ended |
|  | September 30, 2025 |  |  | September 30, 2024 |
|  | Shares |  |  | Weighted Average Exercise Price |  |  | Shares |  |  | Weighted Average Exercise Price |
Options outstanding, beginning |  |  | 1,174,393 |  |  | $ | 54.23 |  |  |  | 1,407,501 |  |  | $ | 45.34 |
Options granted |  |  | 7,500 |  |  |  | 85.56 |  |  |  | 18,750 |  |  |  | 102.27 |
Options exercised |  |  | (103,482 | ) |  |  | 29.49 |  |  |  | (139,215 | ) |  |  | 31.01 |
Options cancelled/forfeited |  |  | (6,925 | ) |  |  | 70.09 |  |  |  | (1,209 | ) |  |  | 55.95 |
Options outstanding, ending |  |  | 1,071,486 |  |  | $ | 56.73 |  |  |  | 1,285,827 |  |  | $ | 47.71 |

|  | Six Months Ended |
|  | September 30, 2025 |  |  | September 30, 2024 |
|  | Shares |  |  | Weighted Average Exercise Price |  |  | Shares |  |  | Weighted Average Exercise Price |
Options outstanding, beginning |  |  | 1,185,727 |  |  | $ | 51.07 |  |  |  | 1,469,181 |  |  | $ | 43.13 |
Options granted |  |  | 53,000 |  |  |  | 106.57 |  |  |  | 63,000 |  |  |  | 93.71 |
Options exercised |  |  | (158,371 | ) |  |  | 30.21 |  |  |  | (238,050 | ) |  |  | 31.34 |
Options cancelled/forfeited |  |  | (8,870 | ) |  |  | 71.54 |  |  |  | (8,304 | ) |  |  | 55.25 |
Options outstanding, ending |  |  | 1,071,486 |  |  | $ | 56.73 |  |  |  | 1,285,827 |  |  | $ | 47.71 |

The following table provides summary information for all stock options outstanding and exercisable at September 30, 2025:

Range of Exercise Price |  | Outstanding Options – Number of Outstanding Options |  |  | Outstanding Options – Weighted Average Remaining Contractual Life |  |  | Outstanding Options – Weighted Average Exercise Price |  |  | Exercisable Options – Number of Exercisable Options |  |  | Exercisable Options – Weighted Average Exercise Price |
$14.44 to $39.83 |  |  | 269,513 |  |  |  | 2.17 |  |  | $ | 25.39 |  |  |  | 269,513 |  |  | $ | 25.39 |
$39.84 to $52.00 |  |  | 282,940 |  |  |  | 2.37 |  |  |  | 50.99 |  |  |  | 190,093 |  |  |  | 50.77 |
$52.01 to $66.85 |  |  | 312,864 |  |  |  | 2.76 |  |  |  | 62.37 |  |  |  | 191,808 |  |  |  | 61.39 |
$66.86 to $110.18 |  |  | 206,169 |  |  |  | 4.78 |  |  |  | 97.04 |  |  |  | 37,556 |  |  |  | 83.05 |
Total |  |  | 1,071,486 |  |  |  | 2.90 |  |  | $ | 56.73 |  |  |  | 688,970 |  |  | $ | 45.56 |

The following table provides summary information regarding all stock options outstanding at September 30, 2025, and changes during the three months then ended:

|  | Number of Options |  |  | Weighted Average Exercise Price Per Share |  |  | Weighted Average Remaining Contractual Life (Years) |  |  | Aggregate Intrinsic Value as of September 30, 2025 |
Options outstanding at July 1, 2025 |  |  | 1,174,393 |  |  | $ | 54.23 |  |  |  |  |  |  |
Granted |  |  | 7,500 |  |  |  | 85.56 |  |  |  |  |  |  |
Exercised |  |  | (103,482 | ) |  |  | 29.49 |  |  |  |  |  |  |
Cancelled – forfeited |  |  | (6,775 | ) |  |  | 69.65 |  |  |  |  |  |  |
Cancelled – expired |  |  | (150 | ) |  |  | 90.08 |  |  |  |  |  |  |
Ending outstanding |  |  | 1,071,486 |  |  | $ | 56.73 |  |  |  | 2.90 |  |  | $ | 26,352,436 |
Ending vested and expected to vest |  |  | 978,489 |  |  | $ | 56.19 |  |  |  | 2.93 |  |  | $ | 24,598,698 |
Ending exercisable at September 30, 2025 |  |  | 688,970 |  |  | $ | 45.56 |  |  |  | 2.51 |  |  | $ | 22,230,281 |

Page 13

The weighted-average grant-date fair value of stock options granted during the three months ended September 30, 2025 and 2024, was $43.31 and $51.91, respectively.

The stock option grants and stock-based compensation expense reflected above include time-based stock options, which vest based on the satisfaction of time-based service conditions, and performance-based stock options, which vest based on the Company’s achievement of certain pre-determined earnings per share targets that are assessed on a calendar year basis by the Company’s Board of Directors (the “Board”). Performance-based stock options are generally valued in the same manner as the time-based stock options except the Company only recognizes stock-based compensation expense to the extent that the targets are determined to be probable of being achieved. The Company recognized $427,000 and $454,000 of stock-based compensation expense for the three months ended September 30, 2025 and 2024, respectively, for performance-based stock options.

Note 4 — Treasury Stock

The Board initially approved the commencement of a stock repurchase program in 1996 (the “stock repurchase program”). In 2022, the Board authorized the repurchase of additional shares under the stock repurchase program, thereby increasing the total number of shares of common stock approved for repurchase under the program to 117,000,000. The stock repurchase program does not obligate the Company to acquire any amount of its common stock and may be suspended or discontinued at any time at its discretion.

Since the commencement of the stock repurchase program, the Company has used approximately $854 million to repurchase 114,707,570 shares of its common stock, which equals approximately 69% of the shares of common stock that would have been outstanding had there been no repurchases. The average price at which shares have been repurchased under the program is $7.44 per share. These repurchases were funded primarily by the net income of the Company, along with proceeds from the exercise of stock options.

During the three and six months ended September 30, 2025, the Company repurchased 143,774 shares of its common stock for approximately $12.8 million at an average price of $89.06 per share and 230,879 shares of its common stock for approximately $22.4 million at an average price of $97.11 per share, respectively. The Company had 51,293,374 shares of common stock outstanding as of September 30, 2025, net of the 114,707,570 shares of common stock held in treasury.

During the period subsequent to the quarter ended September 30, 2025, the Company repurchas ed 65,104 shares of its common stock for $4.8 million at an av erage price of $73.71 per share.

Note 5 — Weighted Average Shares and Net Income Per Share

Net income per common and common equivalent share was computed by dividing net income by the weighted average number of common and common share equivalents outstanding during the period. During the quarter ended December 31, 2024, the Company effected the Stock Split. All prior period share, equity award and per share amounts and calculations in these consolidated financial statements and elsewhere in this report have been retroactively adjusted to reflect Stock Split. The following table sets forth the calculations of the basic and diluted weighted average common shares for the three and six months ended September 30, 2025 and 2024:

|  | Three Months Ended |
|  | September 30, 2025 |  |  | September 30, 2024 |
Net Income |  | $ | 27,906,000 |  |  | $ | 23,398,000 |
Basic: |  |  |  |  |  |
Weighted average common shares outstanding |  |  | 51,314,000 |  |  |  | 51,399,000 |
Net Income per share |  | $ | 0.54 |  |  | $ | 0.46 |
Diluted: |  |  |  |  |  |
Weighted average common shares outstanding |  |  | 51,314,000 |  |  |  | 51,399,000 |
Treasury stock impact of stock options |  |  | 409,000 |  |  |  | 624,000 |
Total common and common equivalent shares |  |  | 51,723,000 |  |  |  | 52,023,000 |
Net Income per share |  | $ | 0.54 |  |  | $ | 0.45 |

Page 14

|  | Six Months Ended |
|  | September 30, 2025 |  |  | September 30, 2024 |
Net Income |  | $ | 55,141,000 |  |  | $ | 44,975,000 |
Basic: |  |  |  |  |  |
Weighted average common shares outstanding |  |  | 51,333,000 |  |  |  | 51,381,000 |
Net Income per share |  | $ | 1.07 |  |  | $ | 0.88 |
Diluted: |  |  |  |  |  |
Weighted average common shares outstanding |  |  | 51,333,000 |  |  |  | 51,381,000 |
Treasury stock impact of stock options |  |  | 484,000 |  |  |  | 600,000 |
Total common and common equivalent shares |  |  | 51,817,000 |  |  |  | 51,981,000 |
Net Income per share |  | $ | 1.06 |  |  | $ | 0.87 |

Note 6 — Contingencies and Legal Proceedings

From time to time, the Company is involved in various legal proceedings, disputes, and other claims arising in the ordinary course of business. Although the results of these matters cannot be predicted with certainty, the Company believes it is not currently a party to any legal proceedings, disputes, or other claims for which a material loss is considered probable and for which the amount (or range) of loss is reasonably estimable. With the Company’s recent asset acquisition, there are contingent shares based on contractual milestones achieved. The maximum number of shares that can be earned is 96,973.

Note 7 — Accounts and Income Taxes Payable and Accrued Liabilities

The following tables set forth accounts payable, income taxes payable, and accrued liabilities at September 30, 2025 and March 31, 2025:

|  | September 30, 2025 |  |  | March 31, 2025 |
Accounts payable |  | $ | 19,144,000 |  |  | $ | 15,422,000 |
Income taxes payable and uncertain tax positions |  |  | 3,966,000 |  |  |  | 1,370,000 |
Total accounts and taxes payable |  | $ | 23,110,000 |  |  | $ | 16,792,000 |

|  | September 30, 2025 |  |  | March 31, 2025 |
Payroll, payroll taxes and employee benefits |  | $ | 39,817,000 |  |  | $ | 30,971,000 |
Customer deposits |  |  | 112,302,000 |  |  |  | 101,472,000 |
Accrued professional service fees |  |  | 10,879,000 |  |  |  | 11,004,000 |
Self-insurance accruals |  |  | 3,561,000 |  |  |  | 3,276,000 |
Deferred revenue |  |  | 30,909,000 |  |  |  | 30,809,000 |
Operating lease liabilities |  |  | 7,317,000 |  |  |  | 8,126,000 |
Other |  |  | 2,434,000 |  |  |  | 1,586,000 |
Total accrued liabilities |  | $ | 207,219,000 |  |  | $ | 187,244,000 |

Note 8 — Leases

The Company determines if an arrangement contains a lease at contract inception. The Company’s current lease agreements have remaining lease terms between one and seven years. The Company recognizes a right-of-use (“ROU”) asset and a lease liability at the lease commencement date. The lease liability is initially measured based on the present value of the unpaid lease payments as of the lease commencement date. Key estimates and judgments used in determining the liability include the (1) discount rate the Company uses to discount the unpaid lease payments to present value, (2) lease term, and (3) lease payments.

ASC 842 requires a lessee to discount its unpaid lease payments using the interest rate implicit in the lease or, if that rate cannot be readily determined, its incremental borrowing rate. Generally, the Company cannot determine the interest rate implicit in the lease because it does not have access to the lessor’s estimated residual value or the amount of the lessor’s deferred initial direct costs. Therefore, the Company generally uses its incremental borrowing rate as the discount rate for the lease. The Company’s incremental borrowing rate for a lease is the rate of interest it would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms. Because the Company does not generally borrow on a collateralized basis, it uses quoted interest rates obtained from financial institutions as an input to derive an appropriate incremental borrowing rate, adjusted for the amount of the lease payments, the lease term, and the effect on that rate of designating specific collateral with a value equal to the unpaid lease payments for that lease.

Page 15

The Company’s lease agreements may include options to extend the lease following the initial term. At the time of adopting ASC 842, the Company initially determined it was reasonably certain it would exercise the options to renew; accordingly, these options were considered in determining the initial lease term. The Company elected the practical expedient of hindsight in determining the option to renew. The Company has since reassessed the assumption of the renewal term and determined that due to the aftermath of the COVID-19 pandemic, the Company expects more of its workforce to be working from home permanently.

Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheets. The Company recognizes lease expense for these leases on a straight-line basis over the lease term.

For lease agreements entered into or reassessed after the adoption of ASC 842, the Company has elected a practical expedient to account for the lease and non-lease components as a single lease component. Therefore, for those leases, the lease payments used to measure the lease liability include all of the fixed consideration in the contract.

Variable lease payments are recognized upon occurrence of the event, activity, or circumstance in the lease agreement on which those payments are assessed.

The components of lease expense are as follows:

|  | Three Months Ended |
|  | September 30, 2025 |  |  | September 30, 2024 |
Operating lease expense |  | $ | 2,088,000 |  |  | $ | 2,304,000 |
Finance lease expense |  |  | — |  |  |  | 20,000 |
Short-term lease expense |  |  | — |  |  |  | 13,000 |
Variable lease expense |  |  | 98,000 |  |  |  | 151,000 |
Total lease expenses |  | $ | 2,186,000 |  |  | $ | 2,488,000 |

|  | Six Months Ended |
|  | September 30, 2025 |  |  | September 30, 2024 |
Operating lease expense |  | $ | 4,197,000 |  |  | $ | 4,541,000 |
Finance lease expense |  |  | 19,000 |  |  |  | 41,000 |
Short-term lease expense |  |  | — |  |  |  | 109,000 |
Variable lease expense |  |  | 306,000 |  |  |  | 287,000 |
Total lease expenses |  | $ | 4,522,000 |  |  | $ | 4,978,000 |

The following table presents the lease related assets and liabilities recorded on the Company’s consolidated balance sheets related to its operating leases at September 30, 2025 and March 31, 2025:

|  | September 30, 2025 |  |  | March 31, 2025 |
Right-of-use asset, net |  | $ | 19,178,000 |  |  | $ | 20,825,000 |
Short-term lease liability |  | $ | 7,317,000 |  |  | $ | 8,126,000 |
Long-term lease liability |  |  | 18,575,000 |  |  |  | 19,953,000 |
Total lease liabilities |  | $ | 25,892,000 |  |  | $ | 28,079,000 |
Weighted average remaining operating lease term |  | 3.91 years |  |  | 4.01 years |
Weighted average remaining finance lease term |  |  | — |  |  | 0.25 years |
Weighted average discount rate |  |  | 4.8 | % |  |  | 4.5 | %

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Supplemental cash flow information related to operating leases for the six months ended September 30, 2025 and 2024 was as follows:

|  | Six Months Ended |
|  | September 30, 2025 |  |  | September 30, 2024 |
Cash paid for amounts included in the measurement of operating lease liabilities |  | $ | 4,699,000 |  |  | $ | 3,996,000 |
Operating lease liabilities arising from obtaining ROU assets |  | $ | 45,629,000 |  |  | $ | 51,648,000 |
Finance lease liabilities arising from obtaining ROU assets |  | $ | — |  |  | $ | 358,000 |
Additions to ROU assets resulting from additions to operating lease liabilities |  | $ | 1,389,000 |  |  | $ | 1,672,000 |

As of September 30, 2025, maturities of operating lease liabilities for each of the next five years and thereafter are as follows:

2026 |  | $ | 4,438,000 |
2027 |  |  | 7,711,000 |
2028 |  |  | 6,933,000 |
2029 |  |  | 4,742,000 |
2030 |  |  | 2,823,000 |
Thereafter |  |  | 1,905,000 |
Total lease payments |  |  | 28,552,000 |
Less interest |  |  | (2,660,000 | )
Total lease liabilities |  | $ | 25,892,000 |

As of September 30, 2025, the Company has an additional operating lease commitment that has not yet commenced of approximately $650,000. These leases will commence in 2025 and have lease terms between 3 and 6 years.

Note 9 — Segment Reporting

The Company operates within one operating segment. The Company’s Chief Operating Decision Maker (“CODM”) is its Chief Executive Officer. The CODM reviews segment financial information presented on a consolidated basis, including revenue, gross profit and operating expenses, and considers budget-to-actual variances for the purposes of making operating decisions, assessing financial performance and allocating resources.

The Company derives its revenues from providing patient management and network solutions services. Network solutions services include fee schedule auditing, hospital bill auditing, coordination of independent medical examinations, diagnostic imaging review services and preferred provider referral services. The percentages of revenues attributable to patient management and network solutions services for the three and six months ended September 30, 2025 and 2024 are listed below.

|  | Three Months Ended |
|  | September 30, 2025 |  |  | September 30, 2024 |
Patient management services |  |  | 62.9 | % |  |  | 65.6 | %
Network solutions services |  |  | 37.1 | % |  |  | 34.4 | %
|  |  | 100.0 | % |  |  | 100.0 | %

|  | Six Months Ended |
|  | September 30, 2025 |  |  | September 30, 2024 |
Patient management services |  |  | 62.7 | % |  |  | 65.7 | %
Network solutions services |  |  | 37.3 | % |  |  | 34.3 | %
|  |  | 100.0 | % |  |  | 100.0 | %

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The Company’s management is structured geographically with regional vice presidents who are responsible for all services provided by and operating results of the Company in their particular region. These regional vice presidents have area and district managers who are also responsible for all services provided by the Company in their given area and district. All revenues are derived from customers within the United States, and all long-lived assets are located in the United States.

Under ASC 280-10, two or more operating segments may be aggregated into a single operating segment for financial reporting purposes if aggregation is consistent with the objective and basic principles of the accounting guidance, if the segments have similar economic characteristics, and if the segments are similar in each of the following areas: (i) the nature of products and services, (ii) the nature of the production processes, (iii) the type or class of customer for their products and services, and (iv) the methods used to distribute their products or provide their services. The Company believes its patient management and network solutions services meet these criteria as they provide similar managed care services to similar customers using similar methods of production and distribution. All of the Company’s regions perform both patient management and network solutions services.

The following table presents the financial information for the Company’s one reportable and operating segment for the three and six months ended September 30, 2025 and 2024:

|  | Three Months Ended |
|  | September 30, 2025 |  |  | September 30, 2024 |
Revenues |  | $ | 239,643,000 |  |  | $ | 224,380,000 |
Less: |  |  |  |  |  |
Labor expenses |  |  | 113,934,000 |  |  |  | 111,267,000 |
Direct product expenses |  |  | 54,900,000 |  |  |  | 51,094,000 |
Depreciation and amortization expenses |  |  | 7,844,000 |  |  |  | 7,711,000 |
Income tax provision |  |  | 7,994,000 |  |  |  | 5,272,000 |
Occupancy expenses |  |  | 5,049,000 |  |  |  | 5,249,000 |
Other items (1) |  |  | 22,016,000 |  |  |  | 20,389,000 |
Net income |  | $ | 27,906,000 |  |  | $ | 23,398,000 |

(1) | Includes other operating costs (such as marketing and maintenance expenses), net gain (loss) on asset sales and disposals and other costs.

|  | Six Months Ended |
|  | September 30, 2025 |  |  | September 30, 2024 |
Revenues |  | $ | 474,354,000 |  |  | $ | 436,102,000 |
Less: |  |  |  |  |  |
Labor expenses |  |  | 226,975,000 |  |  |  | 219,202,000 |
Direct product expenses |  |  | 107,765,000 |  |  |  | 95,067,000 |
Depreciation and amortization expenses |  |  | 15,431,000 |  |  |  | 14,438,000 |
Income tax provision |  |  | 16,042,000 |  |  |  | 11,729,000 |
Occupancy expenses |  |  | 10,203,000 |  |  |  | 10,644,000 |
Other items (1) |  |  | 42,797,000 |  |  |  | 40,047,000 |
Net income |  | $ | 55,141,000 |  |  | $ | 44,975,000 |

(1) | Includes other operating costs (such as marketing and maintenance expenses), net gain (loss) on asset sales and disposals and other costs.

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Item 2 – Management’s Discussion and Analysis o f Financial Condition and Results of Operations

This report may include certain forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including (without limitation) statements with respect to anticipated future operating and financial performance, growth and acquisition opportunities and other similar forecasts and statements of expectation. Words such as “expects,” “anticipates,” “intends,” “plans,” “predicts,” “believes,” “seeks,” “estimates,” “potential,” “continue,” “strive,” “ongoing,” “may,” “will,” “would,” “could,” “should,” as well as variations of these words and similar expressions, are intended to identify these forward-looking statements. Forward-looking statements made by the Company and its management are based on estimates, projections, beliefs and assumptions of management at the time of such statements and are not guarantees of future performance.

The Company disclaims any obligations to update or revise any forward-looking statement based on the occurrence of future events, the receipt of new information or otherwise. Actual future performance, outcomes, and results may differ materially from those expressed in forward-looking statements made by the Company and its management as a result of a number of risks, uncertainties and assumptions. Representative examples of these factors include (without limitation): general industry and economic conditions, including fluctuations in the number of national claims based on the number of injured workers; competition from other managed care companies and third party administrators; the Company’s ability to renew or maintain contracts with its customers on favorable terms or at all; the ability to expand certain areas of the Company’s business; growth in the Company’s sale of third-party administrator (“TPA”) services; shifts in customer demands; increases in operating expenses, including employee wages, benefits and medical inflation; the ability of the Company to produce market-competitive software; cost of capital and capital requirements; the Company’s ability to attract and retain key personnel; the impact of possible cybersecurity incidents on the Company’s business; existing and possible litigation and legal liability in the course of operations and the Company’s ability to resolve such litigation; governmental and public policy changes, including but not limited to legislative and administrative law and rule implementation or change; the impact of recently issued accounting standards on the Company’s consolidated financial statements; the availability of financing in the amounts, at the times, and on the terms necessary to support the Company’s future business; and the other risks identified in Part II, Item 1A of this report, under the heading “Risk Factors.”

Overview

The Company is an independent nationwide provider of medical cost containment and managed care services designed to address the escalating medical costs of workers’ compensation benefits, automobile insurance claims, and group health insurance benefits. The Company’s services are provided to insurance companies, TPAs, governmental entities, and self-administered employers to assist them in managing the medical costs and monitoring the quality of care associated with healthcare claims. In November 2024, the Bureau of Labor Statistics reported that the occupational injury count for 2023 was 2.37 million compared to 2.34 million in 2022, 2.24 million in 2021, 2.11 million in 2020, and 2.69 million in 2019. While there was an increase in the injury count for 2023 compared to 2022, the count has not returned to pre-pandemic levels. Although there were fewer claims to administrate in each of 2023, 2022, 2021 and 2020 as compared to 2019, the Company was able to offset this decrease with an increase in market share.

Patient Management Services

In addition to its network solutions services, the Company offers a range of patient management services, which involve working one-on-one with injured employees and their various healthcare professionals, employers and insurance company adjusters. Patient management services include claims management and all services sold to claims management customers, case management, 24/7 nurse triage, utilization management, vocational rehabilitation, and life care planning. The services are designed to monitor the medical necessity and appropriateness of healthcare services provided to workers’ compensation and other healthcare claimants and to expedite return to work. The Company offers these services on a stand-alone basis, or as an integrated component of its medical cost containment services. Patient management services include the processing of claims for self-insured payors with respect to property and casualty insurance.

Network Solutions Services

The Company’s network solutions services are designed to reduce the price paid by its customers for medical services rendered in workers’ compensation cases, automobile insurance policies, and group health insurance policies. The network solutions services offered by the Company include automated medical fee auditing, preferred provider management and reimbursement services, retrospective utilization review, facility claim review, professional review, pharmacy services, directed care services, Medicare solutions, clearinghouse services, independent medical examinations, and inpatient medical bill review. Network solutions services also include revenue from the Company’s directed care network (known as CareIQ), including imaging, physical therapy, durable medical equipment, and translation and transportation.

Page 19

Organizational Structure

The Company’s management is structured geographically with regional vice presidents who are responsible for all services provided by the Company within his or her particular region and the operating results of the Company in multiple states. In addition, the regional vice presidents oversee area and district managers who are also responsible for all services provided by the Company in their given area and district.

Business Enterprise Segments

The Company operates in one reportable operating segment: managed care. The Company’s services are delivered to its customers through its local offices in each region and financial information for the Company’s operations follows this service delivery model. All regions offer the Company’s patient management and network solutions services to customers. Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) 280-10, “Segment Reporting,” establishes standards for the way that public business enterprises report information about operating segments in annual and interim consolidated financial statements. The Company’s internal financial reporting is segmented geographically and managed on a geographic rather than service line basis, with virtually all of the Company’s operating revenue generated within the United States.

Under FASB ASC 280-10, two or more operating segments may be aggregated into a single operating segment for financial reporting purposes if aggregation is consistent with the objective and basic principles, if the segments have similar economic characteristics, and if the segments are similar in each of the following areas: (i) the nature of products and services; (ii) the nature of the production processes; (iii) the type or class of customer for their products and services; and (iv) the methods used to distribute their products or provide their services. The Company believes its patient management and network solutions services meet these criteria as each provides similar services and products to similar customers using similar methods of production and distribution.

Because we believe we meet each of the criteria set forth above and each of our regions have similar economic characteristics, we aggregate our results of operations in one reportable operating segment: managed care.

Seasonality

While we are not directly impacted by seasonal shifts, we are affected by the change in working days in a given quarter. There are generally fewer working days for our employees to generate revenue in the third fiscal quarter due to employee vacations, inclement weather, and holidays.

Recent Acquisition

During the quarter ended September 30, 2025, the Company acquired a privately held technology firm adding proprietary tools and intellectual property for our enhanced bill review process.

Summary of Quarterly Results

The Company’s revenues increased to $239.6 million in the quarter ended September 30, 2025, from $224.4 million in the quarter ended September 30, 2024, an increase of $15.3 million, or 7%. This increase resulted primarily from an increase in network solutions activity with existing customers.

Cost of revenues increased to $181.5 million in the quarter ended September 30, 2025, from $173.6 million in the quarter ended September 30, 2024, an increase of $7.8 million, or 5%. This increase was primarily due to the increase of 7% in revenue mentioned above.

General and administrative expense increased to $22.3 million in the quarter ended September 30, 2025, from $22.1 million in the quarter ended September 30, 2024, an increase of $0.2 million, or 1%. General and administrative expense in the quarter ended September 30, 2025 consisted of approximately 9% of revenues. The Company expects proportion of general and administrative expense in future quarters to remain between 9% and 11% of revenues.

Income tax provision increased to $8.0 million in the quarter ended September 30, 2025, from $5.3 million in the quarter ended September 30, 2024, an increase of $2.7 million, or 52%. Income before income tax provision increased to $35.9 million in the quarter ended September 30, 2025, from $28.7 million in the quarter ended September 30, 2024, an increase of $7.2 million, or 25%. The effective tax rate was 22% for the quarter ended September 30, 2025 and 18% for the quarter ended September 30, 2024.

Diluted weighted average common and common equivalent shares decreased to 51.7 million shares for the quarter ended September 30, 2025 from 52.0 million shares for the quarter ended September 30, 2024, a decrease of 300,000 shares, or 0.6%, due to the weighted impact of shares repurchased partially offset by the weighted impact of options exercised.

Page 20

Diluted earnings per share increased to $0.54 per share in the quarter ended September 30, 2025, from $0.45 per share in the quarter ended September 30, 2024, an increase of $0.09 per share, or 20%. The increase in diluted earnings per share was primarily due to an increase in net income.

During the quarter ended December 31, 2024, the Company effected a three-for-one forward stock split of its common stock (the “Stock Split”). All prior period share, equity award and per share amounts and calculations in this report and in the consolidated financial statements contained in this report have been retroactively adjusted to reflect the Stock Split.

Results of Operations for the three months ended September 30, 2025 and 2024

The Company generates revenues from providing patient management and network solutions services to payors of workers’ compensation benefits, automobile insurance claims, and group health insurance benefits.

The following table sets forth, for the periods indicated, the dollar amounts, dollar and percent changes, share changes, and the percentage of revenues represented by certain items reflected in the Company’s unaudited consolidated income statements for the three months ended September 30, 2025 and 2024. The Company’s past operating results are not necessarily indicative of future operating results.

|  | Three Months Ended |  |  |  |  |  | Percentage |
|  | September 30, 2025 |  |  | September 30, 2024 |  |  | Change |  |  | Change |
Revenue |  | $ | 239,643,000 |  |  | $ | 224,380,000 |  |  | $ | 15,263,000 |  |  |  | 6.8 | %
Cost of revenues |  |  | 181,466,000 |  |  |  | 173,632,000 |  |  |  | 7,834,000 |  |  |  | 4.5 | %
Gross profit |  |  | 58,177,000 |  |  |  | 50,748,000 |  |  |  | 7,429,000 |  |  |  | 14.6 | %
Gross profit as percentage of revenue |  |  | 24.3 | % |  |  | 22.6 | % |  |  |  |  |  |
General and administrative expenses |  |  | 22,277,000 |  |  |  | 22,078,000 |  |  |  | 199,000 |  |  |  | 0.9 | %
General and administrative as percentage of revenue |  |  | 9.3 | % |  |  | 9.8 | % |  |  |  |  |  |
Income before income tax provision |  |  | 35,900,000 |  |  |  | 28,670,000 |  |  |  | 7,230,000 |  |  |  | 25.2 | %
Income before income tax provision as percentage of revenue |  |  | 15.0 | % |  |  | 12.8 | % |  |  |  |  |  |
Income tax provision |  |  | 7,994,000 |  |  |  | 5,272,000 |  |  |  | 2,722,000 |  |  |  | 51.6 | %
Net income |  | $ | 27,906,000 |  |  | $ | 23,398,000 |  |  | $ | 4,508,000 |  |  |  | 19.3 | %
Weighted average common and common equivalent shares |  |  |  |  |  |  |  |  |  |  |  |
Basic |  |  | 51,314,000 |  |  |  | 51,399,000 |  |  |  | (85,000 | ) |  |  | (0.2 | %)
Diluted |  |  | 51,723,000 |  |  |  | 52,023,000 |  |  |  | (300,000 | ) |  |  | (0.6 | %)
Net income per common and common equivalent shares |  |  |  |  |  |  |  |  |  |  |  |
Basic |  | $ | 0.54 |  |  | $ | 0.46 |  |  | $ | 0.08 |  |  |  | 17.4 | %
Diluted |  | $ | 0.54 |  |  | $ | 0.45 |  |  | $ | 0.09 |  |  |  | 20.0 | %

Revenues

Change in revenue for the three months ended September 30, 2025 from the three months ended September 30, 2024

Revenues increased to $239.6 million in the three months ended September 30, 2025, from $224.4 million in the three months ended September 30, 2024, an increase of $15.3 million, or 7%. Network solutions services revenues increased to $88.8 million from $77.2 million, an increase of $11.6 million, or 15%. The increase in revenue was primarily with existing customers in network solutions, as well as an increase in enhanced billed review due to a growth with existing customers.

Page 21

Cost of Revenues

Cost of revenues consists of direct expenses, which are expenses directly attributable to the generation of revenue, and indirect costs, which are costs incurred to support the operations in the field offices that generate the revenue. Direct expenses primarily include (i) case manager and bill review analysts’ salaries, along with related payroll taxes and fringe benefits, and (ii) expenses associated with independent medical examinations, prescription drugs, MRIs, physical therapy, and durable medical equipment providers. Most of the Company’s revenue is generated in offices that provide both patient management services and network solutions services. The remaining revenue is generated in the field. Approximately 30% of the costs incurred in the field are considered field indirect costs. The largest of the field indirect costs are (i) manager salaries and bonuses, (ii) account executive base pay and commissions, (iii) salaries of administrative and clerical support, field systems personnel and PPO network developers, along with related payroll taxes and fringe benefits, and (iv) office rent.

Change in cost of revenues for the three months ended September 30, 2025 from the three months ended September 30, 2024

Cost of revenues increased to $181.5 million in the three months ended September 30, 2025, from $173.6 million in the three months ended September 30, 2024, an increase of $7.8 million, or 5%. The increase in cost of revenues was primarily due to the increase in total revenues of 7%. Additionally, there was an increase in salaries of 3% resulting from increased average headcount of 3%. Headcount increased to help manage the increase in business volume from existing customers.

General and Administrative Expense

For the three months ended September 30, 2025, general and administrative expense consisted of approximately 44% of corporate systems costs, which include the corporate systems support, implementation and training, rules engine development, national IT strategy and planning, depreciation of hardware costs in the Company’s corporate offices and backup data center, the Company’s nationwide area network, and other systems related costs. All IT-related costs managed by the corporate office are recorded under general and administrative expense whereas the field IT-related costs are included in the cost of revenues. The remaining general and administrative expense consists of national marketing, national sales support, corporate legal, corporate insurance, human resources, accounting, product management, new business development, and other general corporate expenses.

Change in general and administrative expense for the three months ended September 30, 2025 from the three months ended September 30, 2024

General and administrative expense increased to $22.3 million in the three months ended September 30, 2025, from $22.1 million in the three months ended September 30, 2024, an increase of $0.2 million, or 1%. General and administrative expense in the quarter ended September 30, 2025, equaled approximately 9% of revenues. The Company expects future quarters of general and administrative expense will remain at approximately 9% to 11% of revenues.

Income Tax Provision

Change in income tax provision for the three months ended September 30, 2025 from the three months ended September 30, 2024

Income tax provision increased to $8.0 million in the three months ended September 30, 2025, from $5.3 million in the three months ended September 30, 2024, an increase of $2.7 million, or 52%. Income before income tax provision increased to $35.9 million in the three months ended September 30, 2025 from $28.7 million in the same period in the prior year, an increase of $7.2 million, or 25%. The effective tax rate was 22% for the quarter ended September 30, 2025 and 18% for the quarter ended September 30, 2024. The effective tax rate was less than the statutory tax rate primarily due to the impact of stock option exercises.

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Results of Operations for the six months ended September 30, 2025 and 2024

The following table sets forth, for the periods indicated, the dollar amounts, dollar and percent changes, share changes, and the percentage of revenues represented by certain items reflected in the Company’s unaudited consolidated income statements for the six months ended September 30, 2025 and 2024. The Company’s past operating results are not necessarily indicative of future operating results.

|  | Six Months Ended |  |  |  |  |  | Percentage |
|  | September 30, 2025 |  |  | September 30, 2024 |  |  | Change |  |  | Change |
Revenue |  | $ | 474,354,000 |  |  | $ | 436,102,000 |  |  | $ | 38,252,000 |  |  |  | 8.8 | %
Cost of revenues |  |  | 359,552,000 |  |  |  | 337,200,000 |  |  |  | 22,352,000 |  |  |  | 6.6 | %
Gross profit |  |  | 114,802,000 |  |  |  | 98,902,000 |  |  |  | 15,900,000 |  |  |  | 16.1 | %
Gross profit as percentage of revenue |  |  | 24.2 | % |  |  | 22.7 | % |  |  |  |  |  |
General and administrative expenses |  |  | 43,619,000 |  |  |  | 42,198,000 |  |  |  | 1,421,000 |  |  |  | 3.4 | %
General and administrative as percentage of revenue |  |  | 9.2 | % |  |  | 9.7 | % |  |  |  |  |  |
Income before income tax provision |  |  | 71,183,000 |  |  |  | 56,704,000 |  |  |  | 14,479,000 |  |  |  | 25.5 | %
Income before income tax provision as percentage of revenue |  |  | 15.0 | % |  |  | 13.0 | % |  |  |  |  |  |
Income tax provision |  |  | 16,042,000 |  |  |  | 11,729,000 |  |  |  | 4,313,000 |  |  |  | 36.8 | %
Net income |  | $ | 55,141,000 |  |  | $ | 44,975,000 |  |  | $ | 10,166,000 |  |  |  | 22.6 | %
Weighted average common and common equivalent shares |  |  |  |  |  |  |  |  |  |  |  |
Basic |  |  | 51,333,000 |  |  |  | 51,381,000 |  |  |  | (48,000 | ) |  |  | (0.1 | %)
Diluted |  |  | 51,817,000 |  |  |  | 51,981,000 |  |  |  | (164,000 | ) |  |  | (0.3 | %)
Net income per common and common equivalent shares |  |  |  |  |  |  |  |  |  |  |  |
Basic |  | $ | 1.07 |  |  | $ | 0.88 |  |  | $ | 0.19 |  |  |  | 21.6 | %
Diluted |  | $ | 1.06 |  |  | $ | 0.87 |  |  | $ | 0.19 |  |  |  | 21.8 | %

Revenues

Change in revenue to the six months ended September 30, 2025 from the six months ended September 30, 2024

Revenues increased to $474.4 million for the six months ended September 30, 2025 from $436.1 million for the six months ended September 30, 2024, an increase of $38.3 million, or 9%. Patient management services revenues increased to $297.6 million from $286.3 million, an increase of $11.2 million, or 4%. Network solutions services revenues increased to $176.8 million from $149.8 million, an increase of $27.0 million, or 18%. This increase is primarily due to increases in enhanced bill review programs services, which resulted in higher revenue per bill. The increase was attributable to growth with both existing and new customers.

Cost of Revenues

Change in cost of revenues to the six months ended September 30, 2025 from the six months ended September 30, 2024

Cost of revenues increased to $359.6 million in the six months ended September 30, 2025 from $337.2 million in the six months ended September 30, 2024, an increase of $22.4 million, or 7%. The increase in cost of revenues was primarily due to the increase in total revenues of 9%. Additionally, there was an increase in salaries of 4% resulting from increased average headcount to 3%. Headcount increased due to an increase in new and existing business volume.

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General and Administrative Expense

Change in general and administrative expense to the six months ended September 30, 2025 from the six months ended September 30, 2024

General and administrative expense increased to $43.6 million in the six months ended September 30, 2025 from $42.2 million in the six months ended September 30, 2024, an increase of $1.4 million, or 3%. The increase in general and administrative expense was primarily related to legal expenses. General and administrative expense in the six months ended September 30, 2025, equaled approximately 9% of revenues.

Income Tax Provision

Change in income tax provision to the six months ended September 30, 2025 from the six months ended September 30, 2024

Income tax expense increased to $16.0 million for the six months ended September 30, 2025 from $11.7 million for the six months ended September 30, 2024, an increase of $4.3 million, or 37%. Income before income tax provision increased to $71.2 million in the six months ended September 30, 2025 from $56.7 million in the same period in the prior year, an increase of $14.5 million, or 26%. The income tax expense as a percentage of income before income taxes, also known as the effective tax rate, was 23% for the six months ended September 30, 2025 and 21% for the six months ended September 30, 2024. The effective tax rate is less than the statutory tax rate primarily because of the impact of the stock option exercises.

Inflation

The Company faces pricing pressures due to the competitive pricing of its competitors. The Company is also impacted by rising costs for certain inflation-sensitive operating expenses such as labor, employee benefits, and facility leases. The Company believes inflation could have a material impact to pricing and operating expenses in future periods due to the state of the economy and current inflation rates.

Liquidity and Capital Resources

The Company has historically funded its operations and capital expenditures primarily from cash flow from operations, and to a lesser extent, proceeds from stock option exercises. Working capital increased to $203.9 million as of September 30, 2025 from $182.7 million as of March 31, 2025, an increase of $21.3 million. Cash and cash equivalents increased to $207.5 million as of September 30, 2025 from $170.6 million as of March 31, 2025, an increase of $36.9 million. This was primarily due to the increase in net income.

The Company is not currently party to off-balance sheet arrangements as defined by SEC rules. However, from time to time the Company enters into certain types of contracts that contingently require the Company to indemnify parties against third-party claims. The contracts primarily relate to: (i) certain contracts to perform services, under which the Company may provide customary indemnification for the purchases of such services, (ii) certain real estate leases, under which the Company may be required to indemnify property owners for environmental and other liabilities, and other claims arising from the Company’s use of the applicable premises, and (iii) certain agreements with the Company’s officers, directors and employees, under which the Company may be required to indemnify such persons for liabilities arising out of certain actions taken by such persons, acting in their respective capacities within the Company. The terms of such customary obligations vary by contract and in most instances a specific or maximum dollar amount is not explicitly stated therein. Generally, amounts under these contracts cannot be reasonably estimated until a specific claim is asserted. Consequently, no material liabilities have been recorded for these obligations on the Company’s balance sheets for any of the periods presented.

As of September 30, 2025, the Company had $207.5 million in cash and cash equivalents, invested primarily in short-term, interest-bearing, highly liquid investment grade securities with maturities of 90 days or less.

The Company believes its cash and cash equivalents, cash generated from ongoing operations and funds received from exercises of employee stock options will be sufficient to satisfy its cash requirements for the next 12 months and beyond, including its existing obligations, repurchase shares of the Company’s common stock under its current stock repurchase program, introduce new services, and continue to develop the Company’s healthcare related services for at least the next 12 months. Should the Company experience lower income or cash flows, repurchases under the stock repurchase program may be reduced or eliminated until earnings and cash flow return to comfortable levels. The Company regularly evaluates its cash requirements for current operations, commitments, capital acquisitions, and other strategic transactions. The Company may elect to raise additional funds for these purposes, through debt or equity financings or otherwise, as appropriate. However, additional equity or debt financing may not be available, with terms favorable to the Company, or at all, when needed.

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Operating Activities

Six months ended September 30, 2025 compared to six months ended September 30, 2024

Net cash provided by operating activities increased to $80.0 million in the six months ended September 30, 2025, from $62.7 million in the six months ended September 30, 2024, an increase of $17.3 million. The increase in cash flow from operating activities was primarily due to the increase in net income and an improvement in accounts receivable.

Investing Activities

Six months ended September 30, 2025 compared to six months ended September 30, 2024

Net cash flow used in investing activities increased to $25.2 million in the six months ended September 30, 2025, from $17.6 million in the six months ended September 30, 2024, an increase of $7.7 million. The Company increased its spending primarily on developed software and on the purchase of software licenses under a finance agreement.

Financing Activities

Six months ended September 30, 2025 compared to six months ended September 30, 2024

Net cash flow used in financing activities increased to $18.0 million for the six months ended September 30, 2025, from $12.4 million for the six months ended September 30, 2024, an increase of $5.5 million. The increase in net cash used in financing activities was due to stock option exercises decreasing to $4.1 million for the six months ended September 30, 2025, from $6.4 million for the six months ended September 30, 2024. Additionally, the increase in net cash used in financing activities was primarily due to an increase in spending on share repurchases to $22.5 million for the six months ended September 30, 2025 from $19.1 million for the six months ended September 30, 2024. The Company has historically used cash provided by operating activities and from the exercise of stock options to repurchase stock. The Company expects that it may use a portion of its cash balance to repurchase additional shares of its common stock under its stock repurchase program in the future; however, there can be no assurance that any further stock repurchases will be made.

Critical Accounting Policies and Estimates

Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America. In connection with the preparation of our consolidated financial statements, we are required to make certain assumptions and estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

The Company’s significant accounting policies and estimates which have the greatest potential impact on its consolidated financial statements are more fully described in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of its Annual Report on Form 10-K for the fiscal year ended March 31, 2025 (the “Annual Report”), filed with the SEC on May 23, 2025. There have been no material changes to the critical accounting policies and estimates disclosed in that certain Annual Report. In many cases, the accounting treatment of a particular transaction is specifically dictated by accounting principles generally accepted in the United States of America (“GAAP”), with no need for management’s judgment in their application. There are also areas in which management’s judgment in selecting an available alternative would not produce a materially different result. Actual results could differ from the estimates we use in applying our critical accounting policies. We are not currently aware of any reasonably likely events or circumstances that would result in materially different amounts being reported.

Recent Accounting Standards Update

See Note 1 – Summary of Significant Accounting Policies to the accompanying unaudited consolidated financial statements contained in this report for information about recently issued and adopted accounting pronouncements.

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Item 3 – Quantitative and Qualitat ive Disclosures about Market Risk

There have been no material changes in market risk from those addressed in the Annual Report during the three months ended September 30, 2025. See the information set forth in Part II, Item 7A, Quantitative and Qualitative Disclosures About Market Risk, in the Annual Report.

Item 4 – Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this report. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of September 30, 2025, our disclosure controls and procedures were effective in ensuring that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is (i) recorded, processed, summarized, and reported, within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our management, including our principal executive and principal accounting officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

Effective September 10, 2025, Brian S. Nichols replaced Brandon T. O’Brien as the Company’s Chief Financial Officer, and a Form 8-K was filed to announce this change. Certain control responsibilities have been reassigned to certain key personnel within the Company. We have reviewed and will continue to monitor our internal controls to make sure there is no adverse impact. There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934) during the three months ended September 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHE R INFORMATION

Item 1 – Legal Proceedings

From time to time, the Company is involved in various legal proceedings, disputes, and other claims arising in the ordinary course of business. Although the results of these ordinary course matters cannot be predicted with certainty, the Company believes it is not currently a party to any legal proceedings, disputes, or other claims for which a material loss is considered probable and for which the amount (or range) of loss is reasonably estimable.

Item 1A – Ri sk Factors

A restated description of the risk factors associated with our business is set forth below. This description includes any and all changes (whether or not material) to, and supersedes, the description of the risk factors associated with our business previously disclosed in Part I, Item 1A of our Annual Report.

Past financial performance is not necessarily a reliable indicator of future performance, and investors in our common stock should not use historical performance to anticipate results or future period trends. Investing in our common stock involves a high degree of risk. Investors should consider carefully the following risk factors, as well as the other information in this report and our other filings with the SEC, including our consolidated financial statements and the related notes, before deciding whether to invest or maintain an investment in shares of our common stock. If any of the following risks actually occurs, our business, financial condition, and results of operations would suffer. In this case, the trading price of our common stock would likely decline. The risks described below are not the only ones we face. Additional risks that we currently do not know about or that we currently believe to be immaterial may also impair our business operations.

Risks Related to Our Business and Industry

Our sequential revenue may not increase and may decline. As a result, we may fail to meet or exceed the expectations of investors or analysts which could cause our common stock price to decline.

Our sequential revenue growth may not increase and may decline in the future as a result of a variety of factors, many of which are outside of our control. If changes in our sequential revenue fall below the expectations of investors or analysts, the price of our common stock could decline substantially. Fluctuations or declines in sequential revenue growth may be due to a number of factors, including, but not limited to, those listed below and identified throughout this “Risk Factors” section: the decline in manufacturing employment, the decline in workers’ compensation claims, the decline in healthcare expenditures, the considerable price competition in a flat-to-declining workers’ compensation market, litigation, the increase in competition, and the changes and the potential changes in state workers’ compensation and automobile-managed care laws which can reduce demand for our services. These factors create an environment where revenue and margin growth is more difficult to attain and where revenue growth is less certain than historically experienced. Additionally, our technology and preferred provider network face competition from companies that have more resources available to them than we do. Also, some customers may handle their managed care services in-house and may reduce the amount of services which are outsourced to managed care companies such as us. These factors could cause the market price of our common stock to fluctuate substantially. There can be no assurance that our growth rate in the future, if any, will be at or near historical levels.

If we fail to grow our business internally or through strategic acquisitions we may be unable to execute our business plan, maintain high levels of service, or adequately address competitive challenges.

Our strategy is to continue internal growth and, as strategic opportunities arise in the workers’ compensation managed care industry, to consider acquisitions of, or relationships with, other companies in related lines of business. As a result, we are subject to certain growth-related risks, including the risk that we will be unable to retain personnel or acquire other resources necessary to service such growth adequately. Expenses arising from our efforts to increase our market penetration may have a negative impact on operating results. In addition, there can be no assurance that any suitable opportunities for strategic acquisitions or relationships will arise or, if they do arise, that the transactions contemplated could be completed. If such a transaction does occur, there can be no assurance that we will be able to integrate effectively any acquired business. In addition, any such transaction would be subject to various risks associated with the acquisition of businesses, including, but not limited to, the following:

•
an acquisition may (i) negatively impact our results of operations because it may require incurring large one-time charges, substantial debt or liabilities; (ii) require the amortization or write down of amounts related to deferred compensation, goodwill and other intangible assets; or (iii) cause adverse tax consequences, substantial depreciation or deferred compensation charges;
•
we may encounter difficulties in assimilating and integrating the business, technologies, products, services, personnel, or operations of companies that are acquired, particularly if key personnel of the acquired company decide not to work for us;

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•
an acquisition may disrupt ongoing business, divert resources, increase expenses, and distract management;
•
the acquired businesses, products, services, or technologies may not generate sufficient revenue to offset acquisition costs;
•
we may have to issue equity or debt securities to complete an acquisition, which would dilute the position of stockholders and could adversely affect the market price of our common stock; and
•
the acquisitions may involve the entry into a geographic or business market in which we have little or no prior experience.

There can be no assurance that we will be able to identify or consummate any future acquisitions or other strategic relationships on favorable terms, or at all, or that any future acquisition or other strategic relationship will not have an adverse impact on our business or results of operations. If suitable opportunities arise, we may finance such transactions, as well as internal growth, through debt or equity financing. There can be no assurance, however, that such debt or equity financing would be available to us on acceptable terms when, and if, suitable strategic opportunities arise.

If we are unable to increase our market share among national and regional insurance carriers and large, self-funded employers, our results may be adversely affected.

Our business strategy and future success depend in part on our ability to capture market share with our cost containment services as national and regional insurance carriers and large, self-funded employers look for ways to achieve cost savings. There can be no assurance that we will successfully market our services to these insurance carriers and employers or that they will not resort to other means to achieve cost savings. Additionally, our ability to capture additional market share may be adversely affected by the decision of potential customers to perform services internally instead of outsourcing the provision of such services to us. Furthermore, we may not be able to demonstrate sufficient cost savings to potential or current customers to induce them not to provide comparable services internally or to accelerate efforts to provide such services internally.

If competition increases, our growth and profits may decline.

The markets for our network services and patient management services are fragmented and competitive. Our competitors include national managed care providers, preferred provider networks, smaller independent providers, and insurance companies. Companies that offer one or more workers’ compensation managed care services on a national basis are our primary competitors. We also compete with many smaller vendors who generally provide unbundled services on a local level, particularly companies with an established relationship with a local insurance company adjuster. In addition, several large workers’ compensation insurance carriers offer managed care services for their customers, either by performance of the services in-house or by outsourcing to organizations like ours. If these carriers increase their performance of these services in-house, our business may be adversely affected. In addition, consolidation in the industry may result in carriers performing more of such services in-house.

If the referrals for our patient management services decline, our business, financial condition and results of operations would be materially adversely affected.

In some years, we have experienced a general decline in the revenue and operating performance of patient management services. We believe that the performance decline has been due to the following factors: the decrease of the number of workplace injuries that have become longer-term disability cases; increased regional and local competition from providers of managed care services; a possible reduction by insurers on the types of services provided by our patient management business; the closure of offices and continuing consolidation of our patient management operations; and employee turnover, including management personnel, in our patient management business. In the past, these factors have all contributed to the lowering of our long-term outlook for our patient management services. If some or all of these conditions continue, we believe that revenues from our patient management services could decrease.

Declines in workers’ compensation claims may materially harm our results of operations.

Historically, because the labor market has become less labor intensive and more service oriented, there are declining work-related injuries. Additionally, employers are being more proactive to prevent injuries. If declines in workers’ compensation costs occur in many states and persist over the long-term, it would have a material adverse impact on our business, financial condition and results of operations.

We provide an outsource service to payors of workers’ compensation benefits, automobile insurance claims, and group health insurance benefits. These payors include insurance companies, TPAs, municipalities, state funds, and self-insured, self-administered employers. If these payors reduce the amount of work they outsource, our results of operations would be materially adversely affected.

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Healthcare providers are becoming increasingly resistant to the application of certain healthcare cost containment techniques; this may cause revenue from our cost containment operations to decrease.

Healthcare providers have become more active in their efforts to minimize the use of certain cost containment techniques and are engaging in litigation to avoid application of certain cost containment practices. Recent litigation between healthcare providers and insurers has challenged certain insurers’ claims adjudication and reimbursement decisions. These cases may affect the use by insurers of certain cost containment services that we provide and may result in a decrease in revenue from our cost containment business.

Our failure to compete successfully could make it difficult for us to add and retain customers and could reduce or impede the growth of our business.

We face competition from PPOs, TPAs, and other managed healthcare companies. We believe that as managed care techniques continue to gain acceptance in the workers’ compensation marketplace, our competitors will increasingly consist of nationally-focused workers’ compensation managed care service companies, insurance companies, HMOs and other significant providers of managed care products. Legislative reform in some states has been considered, but not enacted, to permit employers to designate health plans such as HMOs and PPOs to cover workers’ compensation claimants. Because many health plans have the ability to manage medical costs for workers’ compensation claimants, such legislation may intensify competition in the markets served by us. Many of our current and potential competitors are significantly larger and have greater financial and marketing resources than we do, and there can be no assurance that we will continue to maintain our existing customers, maintain our past level of operating performance, or be successful with any new products or in any new geographical markets we may enter.

If the utilization by healthcare payors of early intervention services continues to increase, the revenue from our later-stage network and healthcare management services could be negatively affected.

The performance of early intervention services, including injury occupational healthcare, first notice of loss, and telephonic case management services, often result in a decrease in the average length of, and the total costs associated with, a healthcare claim. By successfully intervening at an early stage in a claim, the need for additional cost containment services for that claim often can be reduced or even eliminated. As healthcare payors continue to increase their utilization of early intervention services, the revenue from our later stage network and healthcare management services will decrease.

We face competition for staffing, which may increase our labor costs and reduce profitability.

We compete with other healthcare providers in recruiting qualified management and staff personnel for the day-to-day operations of our business, including nurses and other case management professionals. In some markets, the scarcity of nurses and other medical support personnel has become a significant operating issue to healthcare providers. This shortage may require us to enhance wages to recruit and retain qualified nurses and other healthcare professionals. Our failure to recruit and retain qualified management, nurses, and other healthcare professionals, or to control labor costs could have a material adverse effect on profitability.

We are subject to inflation risks which could increase our wages, benefits, and other costs which may result in decreased profitability.

We are impacted by inflationary increases in wages, benefits and other costs. Wage and benefit inflation, whether driven by competition for talent or ordinary course pay increases and other inflationary pressure, may increase our cost of providing services and reduce our profitability. If we are not able to pass increased wage and other costs resulting from inflation onto our clients or charge premium prices when justified by market demand, our profitability could decline.

Sustained increases in the cost of our employee benefits could materially reduce our profitability.

The cost of our current employees’ medical and other benefits substantially affects our profitability. In the past, we have occasionally experienced significant increases in these costs as a result of macro-economic factors beyond our control, including increases in healthcare costs. There can be no assurance that we will succeed in limiting future cost increases, and continued upward pressure in these costs could materially reduce our profitability.

The introduction of software products incorporating new technologies and the emergence of new industry standards could render our existing software products less competitive, obsolete, or unmarketable.

There can be no assurance that we will be successful in developing and marketing new software products that respond to technological changes or evolving industry standards. If we are unable, for technological or other reasons, to develop and introduce new software products cost-effectively, in a timely manner and in response to changing market conditions or customer requirements, our business, results of operations, and financial condition may be adversely affected.

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Developing or implementing new or updated software products and services may take longer and cost more than expected. We rely on a combination of internal development, strategic relationships, licensing and acquisitions to develop our software products and services. The cost of developing new healthcare information services and technology solutions is inherently difficult to estimate. Our development and implementation of proposed software products and services may take longer than originally expected, require more testing than originally anticipated and require the acquisition of additional personnel and other resources. If we are unable to develop new or updated software products and services cost-effectively on a timely basis and implement them without significant disruptions to the existing systems and processes of our customers, we may lose potential sales and harm our relationships with current or potential customers.

We may not be able to develop or acquire necessary IT resources to support and grow our business, and disruptive technologies could impact the volume and pricing of our products, which could materially adversely affect our business, results of operations, and financial condition.

We have made substantial investments in software and related technologies that are critical to the core operations of our business. These IT resources will require future maintenance and enhancements, potentially at substantial costs. Additionally, these IT resources may become obsolete in the future and require replacement, potentially at substantial costs. We may not be able to develop, acquire replacement resources or identify new technology resources necessary to support and grow our business.

In addition, we could face changes in our markets due to disruptive technologies that could impact the volume and pricing of our products, or introduce changes to the claims management processes which could negatively impact our volume of case referrals. Our failure to address these risks, or to do so in a timely manner, or at a cost considered reasonable by us, could materially adversely affect our business, results of operations, and financial condition.

If we are unable to apply technology and data analytics effectively in driving value for our clients through technology-based solutions or gain internal efficiencies and maintain effective internal controls through the application of technology and related tools, our operating results, client relationships, growth and compliance programs could be adversely affected.

Our future success depends, in part, on our ability to anticipate and respond effectively to the risk of, and conversely, the opportunity presented by digital disruption, “big data” and data analytics, and other developments in technology. These may include new applications or insurance-related services based on artificial intelligence, machine learning, robotics, blockchain, the metaverse or new approaches to data mining that impact the nature of how we generate revenue. We may be exposed to competitive risks related to the adoption and application of new technologies by established market participants or new entrants such as technology companies, start-up companies and others. These new entrants are focused on using technology and innovation, including artificial intelligence and blockchain, in an attempt to simplify and improve the client experience, increase efficiencies, alter business models and effect other potentially disruptive changes in the industries in which we operate. We must also develop and implement technology solutions and technical expertise among our employees that anticipate and keep pace with rapid and continuing changes in technology, industry standards, client preferences and internal control standards. We may not be successful in anticipating or responding to these developments on a timely and cost-effective basis and our ideas may not be accepted in the marketplace. Data produced by or contained in technology that uses artificial intelligence may contain a degree of inaccuracy and error. Additionally, the effort to gain technological expertise, make use of data analytics, and develop new technologies in our business requires us to incur significant expenses. Investments in technology systems and data analytics capabilities may not deliver the benefits or perform as expected, or may be replaced or become obsolete more quickly than expected, which could result in operational difficulties or additional costs. If we or our third-party vendors fail to effectively implement these new technologies, including, artificial intelligence, we could be subject to additional risks that we do not understand or cannot adequately mitigate, which could have a material adverse effect on our results of operations and financial condition. Further, if we cannot offer new technologies or data analytics solutions as quickly as our competitors, or if our competitors develop more cost-effective technologies, data analytics solutions or other product offerings, we could experience a material adverse effect on our operating results, client relationships, growth and compliance programs.

In some cases, we depend on key third-party vendors and partners to provide technology and other support for our strategic initiatives. If these third parties fail to perform their obligations or cease to work with us, our ability to execute on our strategic initiatives could be adversely affected.

The failure to attract and retain qualified or key personnel may prevent us from effectively developing, marketing, selling, integrating, and supporting our services.

We are dependent, to a substantial extent, upon the continuing efforts and abilities of certain key management personnel. In addition, we face competition for experienced employees with professional expertise in the workers’ compensation managed care area. The loss of key personnel, especially Michael Combs, our Chairman, Chief Executive Officer and President, or the inability to attract qualified employees, could have a material adverse effect on our business, financial condition, and results of operations.

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If we lose several customers in a short period, our results may be materially adversely affected.

Our results may decline if we lose several customers during a short period. Most of our customer contracts permit either party to terminate without cause. If several customers terminate, or do not renew or extend their contracts with us, our results could be materially and adversely affected. Many organizations in the insurance industry have consolidated and this could result in the loss of one or more of our customers through a merger or acquisition. Additionally, we could lose customers due to competitive pricing pressures or other reasons.

We are subject to risks associated with acquisitions of intangible assets.

Our acquisition of other businesses may result in significant increases in our intangible assets and goodwill. We regularly evaluate whether events and circumstances have occurred indicating that any portion of our intangible assets and goodwill may not be recoverable. When factors indicate that intangible assets and goodwill should be evaluated for possible impairment, we may be required to reduce the carrying value of these assets. We cannot currently estimate the timing and amount of any such charges.

Natural and other disasters may adversely affect our business.

We may be vulnerable to damage from severe weather conditions or natural disasters, including hurricanes, fires, floods, earthquakes, power loss, communications failures, and similar events, including the effects of pandemics, war or acts of terrorism. If a disaster were to occur, our ability to operate our business could be seriously or completely impaired or destroyed. The insurance we maintain may not be adequate to cover our losses resulting from disasters or other business interruptions. If there is a resurgence in the COVID-19 pandemic, or if any other pandemic arises, it could materially adversely impact our business operations, financial position and results of operations in unpredictable ways that depend on highly-uncertain future developments, such as determining the effectiveness of current or future government actions to address the public health or economic impacts of the pandemic. Any of these risks might have a materially adverse effect on our business operations and our financial position or results of operations.

Risks Related to Cybersecurity and Our Information Systems

A cybersecurity attack or other disruption to our information technology systems could result in the loss, theft, misuse, unauthorized disclosure, unauthorized access of sensitive customer or Company information, or disruption of our operations, which could damage our relationships with customers or employees, expose us to litigation or regulatory proceedings, or harm our reputation, any of which could materially adversely affect our business, financial condition or results of operations.

We rely on information technology to support our business activities. Our business involves the storage and transmission of a significant amount of personal, confidential, or sensitive information, including the personal information of our customers and employees, and our Company’s financial, operational and strategic information. As with many businesses, we are subject to numerous data privacy and security risks. These risks may prevent us from maintaining the confidentiality of this information, result in the disruption of our business and online systems, and require us to expend significant resources to attempt to secure and protect such information and respond to incidents, any of which could materially adversely affect our business, financial condition or results of operations. The loss, theft, misuse, unauthorized disclosure, or unauthorized access of such sensitive information could lead to significant reputational or competitive harm, result in litigation or regulatory proceedings, or cause us to incur substantial liabilities, fines, penalties or expenses.

Cybersecurity incidents of any of the systems on which we rely may result from circumvention of security measures, denial-of-service attacks or other cyber-attacks, hacking, “phishing” attacks, computer viruses, ransomware, malware, employee or insider error, malfeasance, social engineering, physical breaches or other actions. According to media reports, the frequency, intensity, and sophistication of cyber-attacks, ransomware attacks, and other data security incidents has significantly increased worldwide in recent years. As with many other businesses, we have experienced, and are continually at risk of being subject to, attacks that result in cybersecurity incidents caused by computer viruses, unauthorized parties gaining access to our information technology systems, and other similar threats. In some cases, cybersecurity incidents could cause reputational harm, loss of customers, loss and/or delay of revenue, loss of proprietary data, loss of licenses, regulatory actions and scrutiny, sanctions or other statutory penalties, litigation, liability for failure to safeguard customers’ information, financial losses, or a drop in our stock price. We have invested in and continue to expend significant resources on information technology and information security tools, measures, processes, initiatives, policies and employee training designed to protect our information technology systems, as well as the personal, confidential or sensitive information stored on or transmitted through those systems, and to ensure an effective response to any cyber-attack or security incident. These expenditures could have an adverse impact on our financial condition and results of operations, and divert management’s attention from pursuing our strategic objectives. In addition, the cost and operational consequences of implementing, maintaining and further enhancing our system’s protective measures could increase significantly as cybersecurity threats increase. There can be no assurance that the

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security measures we employ will effectively prevent cybersecurity incidents or otherwise prevent malicious actors from obtaining access to our systems and information.

As these threats evolve, cybersecurity incidents could be more difficult to detect, prevent, and remediate. Cybersecurity-attacks or data handling incidents could remain undetected for some period of time, which could not only result in significant harm to our systems, but also lead to unauthorized access to the information stored on and transmitted by our systems. Further, despite our security efforts and training, our employees may purposefully or inadvertently cause cybersecurity incidents. Any occurence of cybersecurity incidents, whether caused by employees or third parties, could have the potential to impact our relationships with our customers or restrict our ability to meet our customers’ expectations.

Additionally, as artificial intelligence technologies continue to develop and become more accessible, malicious actors are increasingly leveraging it to carry out advanced cyber-attacks. These artificial intelligence tools can be used to automate and scale attacks, generate phishing or social engineering schemes, employ deepfakes, identity system vulnerabilities, or evade transitional detection methods. Consequently, the use of artificial intelligence by malicious actors may result in an increase in the frequency, speed, and severity of cyber threats targeting our systems, networks, and employees.

If a cyber-attack or other data incident results in the loss, theft, misuse, unauthorized disclosure, or unauthorized access of personal, confidential, or sensitive information belonging to our customers or employees, it could put us at a competitive disadvantage, result in the deterioration of our customers’ confidence in our services, cause our customers to reconsider their relationship with us, impose more onerous contractual provisions, cause us to lose our regulatory licenses, or subject us to potential litigation, liability, fines and penalties. For example, we could become subject to regulatory or other actions pursuant to privacy laws. This could result in costly investigations and litigation, civil or criminal penalties, operational changes, and negative publicity that could adversely affect our reputation, as well as our results of operations and financial condition.

A cyber-attack resulting in a cybersecurity incident could have a significant impact on our business for a prolonged period of time, including:

•
critical business systems becoming inoperable or requiring a significant amount of time or cost to restore;
•
key personnel being unable to perform their duties or communicate with employees, customers or other third-parties;
•
the loss, theft, misuse, unauthorized disclosure, or unauthorized access of customer or Company information;
•
the inability to access information necessary to conduct our business;
•
the requirement to make unanticipated investments in equipment, technology or security measures;
•
our customers losing the ability to access our websites and online systems; or
•
becoming subject to other unanticipated liabilities, costs, or claims.

Any of the foregoing could have a material adverse effect on our business, financial condition and results of operations, and result in harm to our reputation. While we maintain insurance coverage that may, subject to policy terms and conditions, cover certain aspects of the losses and costs associated with cyber-attacks and data incidents, such insurance coverage may be insufficient to cover all losses and would not, in any event, remedy damage to our reputation. In addition, we may face difficulties in recovering any losses from our provider and any losses we recover may be lower than we initially expect.

A security breach may cause our customers to curtail or stop using our services.

We rely on industry standard security solutions, confidentiality procedures, and employee nondisclosure agreements to maintain the privacy and security of our and our customers’ proprietary information. Intentional or unintentional incidents, like unauthorized access by third parties to our information systems, the infection of our systems or software with malware, and misappropriation of our proprietary information could expose us to a risk of information loss, litigation, and other possible liabilities which may have a material adverse effect on our business, financial condition, and results of operations. If third-party actions, employee errors, malfeasance, or otherwise, or if design flaws in our software are exposed and exploited, and, as a result, a third party obtains unauthorized access to any customer data, our relationships with our customers and our reputation could be significantly be damaged, our business may suffer, and we could incur significant liability. Because techniques used to obtain unauthorized access or to sabotage systems change frequently and generally are not recognized until launched against a target, we may be unable to anticipate these techniques or to implement adequate preventative measures.

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An interruption in our ability to access critical data may cause customers to cancel their service and/or may reduce our ability to effectively compete.

Certain aspects of our business are dependent upon our ability to store, retrieve, process, and manage data and to maintain and upgrade our data processing capabilities. Interruption of data processing capabilities for any extended length of time, loss of stored data, programming errors or other system failures could cause customers to cancel their service and could have a material adverse effect on our business, financial condition, and results of operations.

In addition, we expect that a considerable amount of our future growth will depend on our ability to process and manage claims data more efficiently and to provide more meaningful healthcare information to customers and payors of healthcare. There can be no assurance that our current data processing capabilities will be adequate for our future growth, that we will be able to efficiently upgrade our systems to meet future demands, or that we will be able to develop, license or otherwise acquire software to address these market demands as well or as timely as our competitors.

If we are unable to leverage our information systems to enhance our outcome-driven service model, our results may be adversely affected.

To leverage our knowledge of workplace injuries, treatment protocols, outcomes data, and complex regulatory provisions related to the workers’ compensation market, we must continue to implement and enhance information systems that can analyze our data related to the workers’ compensation industry. We frequently upgrade existing operating systems and are updating other information systems that we rely upon in providing our services and financial reporting. We have detailed implementation schedules for these projects that require extensive involvement from our operational, technological, and financial personnel. Delays or other problems we might encounter in implementing these projects could adversely affect our ability to deliver streamlined patient care and outcome reporting to our customers.

Risks Related to Potential Litigation

Exposure to possible litigation and legal liability may adversely affect our business, financial condition, and results of operations.

We, through our utilization management services, make recommendations concerning the appropriateness of providers’ medical treatment plans for patients throughout the country, and as a result, could be exposed to claims for adverse medical consequences. We do not grant or deny claims for payment of benefits and we do not believe that we engage in the practice of medicine or the delivery of medical services. There can be no assurance, however, that we will not be subject to claims or litigation related to the authorization or denial of claims for payment of benefits or allegations that we engage in the practice of medicine or the delivery of medical services.

In addition, there can be no assurance that we will not be subject to other litigation that may adversely affect our business, financial condition or results of operations, including but not limited to being joined in litigation brought against our customers in the managed care industry. We maintain professional liability insurance and such other coverages as we believe are reasonable in light of our experience to date. If such insurance is insufficient or unavailable in the future at reasonable cost to protect us from liability, our business, financial condition, or results of operations could be adversely affected.

If lawsuits against us are successful, we may incur significant liabilities.

We provide to insurers and other payors of healthcare costs managed care programs that utilize preferred provider organizations and computerized bill review programs. Healthcare providers have brought, against us and our customers, individual and class action lawsuits challenging such programs. If such lawsuits are successful, we may incur significant liabilities.

We make recommendations about the appropriateness of providers’ proposed medical treatment plans for patients throughout the country. As a result, we could be subject to claims arising from any adverse medical consequences. Although plaintiffs have not, to date, subjected us to any claims or litigation relating to the granting or denial of claims for payment of benefits or allegations that we engage in the practice of medicine or the delivery of medical services, we cannot assure you that plaintiffs will not make such claims in future litigation. We also cannot assure you that our insurance will provide sufficient coverage or that insurance companies will make insurance available at a reasonable cost to protect us from significant future liability.

The increased costs of professional and general liability insurance may have an adverse effect on our profitability.

The cost of commercial professional and general liability insurance coverage has risen significantly for us in the past several years, and this trend may continue. In addition, if we were to suffer a material loss, our costs may increase over and above the general increases in the industry. If the costs associated with insuring our business continue to increase, it may adversely affect our business. We believe

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our current level of insurance coverage is adequate for a company of our size engaged in our business. Additionally, we may have difficulty getting carriers to pay under coverage in certain circumstances.

Risks Related to Our Regulatory Environment

Changes in government regulations could increase our costs of operations and/or reduce the demand for our services.

Many states, including a number of those in which we transact business, have licensing and other regulatory requirements applicable to our business. Approximately half of the states have enacted laws that require licensing of businesses which provide medical review services such as ours. Some of these laws apply to medical review of care covered by workers’ compensation. These laws typically establish minimum standards for qualifications of personnel, confidentiality, internal quality control, and dispute resolution procedures. These regulatory programs may result in increased costs of operation for us, which may have an adverse impact upon our ability to compete with other available alternatives for healthcare cost control. In addition, new laws regulating the operation of managed care provider networks have been adopted by a number of states. These laws may apply to managed care provider networks we have contracts with or to provider networks which we may organize. To the extent we are governed by these regulations, we may be subject to additional licensing requirements, financial and operational oversight and procedural standards for beneficiaries and providers.

Regulation in the healthcare and workers’ compensation fields is constantly evolving. We are unable to predict what additional government initiatives, if any, affecting our business may be promulgated in the future. Our business may be adversely affected by failure to comply with existing laws and regulations, failure to obtain necessary licenses and government approvals, or failure to adapt to new or modified regulatory requirements. Proposals for healthcare legislative reforms are regularly considered at the federal and state levels. To the extent that such proposals affect workers’ compensation, such proposals may adversely affect our business, financial condition, and results of operations.

In addition, changes in workers’ compensation, automobile insurance, and group healthcare laws or regulations may reduce demand for our services, which would require us to develop new or modified services to meet the demands of the marketplace, or reduce the fees that we may charge for our services.

Increasing regulatory focus on privacy issues and expanding privacy laws could impact our business models and expose us to increased liability.

U.S. privacy and data security laws apply to our various businesses. Governments, privacy advocates and class action attorneys are increasingly scrutinizing how companies collect, process, use, store, share and transmit personal data. Globally, new laws, such as the General Data Protection Regulation in Europe, the California Consumer Privacy Act in California, and industry self-regulatory codes have been enacted and more are being considered that may affect our ability to respond to customer requests under the laws, and to implement our business models effectively. These requirements, among others, may force us to bear the burden of more onerous obligations in our contracts. Any perception of our practices, products or services as a violation of individual privacy rights may subject us to public criticism, class action lawsuits, reputational harm, or investigations or claims by regulators, industry groups or other third parties, all of which could disrupt our business and expose us to increased liability. Additionally, we store information on behalf of our customers and if our customers fail to comply with contractual obligations or applicable laws, it could result in litigation or reputational harm to us.

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Increased regulatory scrutiny on use of “big data” techniques, machine learning, and artificial intelligence could impact our business and expose us to increased liability.

There has also been increased regulatory scrutiny of the use of “big data” techniques, machine learning, and artificial intelligence. It is likely that we will be subject to new regulations that could materially adversely affect our operations or ability to write business profitably in one or more jurisdictions. The legal and regulatory framework governing artificial intelligence is evolving rapidly and remains highly uncertain. Federal and state agencies are actively proposing or implementing new regulations and guidelines targeting artificial intelligence. With many of these artificial intelligence regulations still in the early stages of development, it is difficult to predict the impact they will have on our business. These regulations may require changes to our implementation of artificial intelligence technology, increase compliance costs, or increase the risk of non-compliance. Any failure to comply with applicable laws or regulations related to artificial intelligence could expose us to investigations, enforcement actions, lawsuits, fines, or other penalties, which could have a material adverse effect on our business and results of operation. In addition, regulators have recently requested information from insurers on their use of algorithms, artificial intelligence and machine learning. We have internal policies governing the use of artificial intelligence by our employees designed to protect the Company from breaches of data privacy, liability and regulatory enforcement risk; however, if our employees violate these policies, it could expose us to such risks. Our exposure to these risks also could increase if our vendors, suppliers, or other third-party providers employ artificial intelligence in relation to the products or services they provide to us, as we have limited control over such use in third-party products or services. These risks include, among others, the input of confidential information, including material non-public information, in contravention of our policies or contractual restrictions to which any of the foregoing are subject, or in violation of applicable laws or regulations, including those relating to data protection. We cannot predict what, if any, regulatory actions may be taken with regard to “big data,” but any limitations could have a material impact on our business, business processes, financial condition, and results of operations.

The costs of compliance with sustainability or other environmental, social responsibility or governance laws, regulations, or policies, including investor and client-driven policies and standards, could adversely affect our business.

As a non–manufacturing service business, we have to date been less impacted from laws and regulations related to sustainability concerns or other environmental, social responsibility or governance (“ESG”) laws, regulations, or policies. However, we may need to incur ESG-related costs in response to our customers or shareholders. Increasingly our customers and shareholders expect that we meet environmental, social responsibility, sustainability or other business policies or standards, which may be more restrictive than current laws and regulations, before our customers commence, or continue, doing business with us or before shareholders invest in our common stock. Our compliance with these policies and related requirements could be costly, and our failure to comply could adversely affect our business relationships or reputation.

Risks Related to Ownership of Our Common Stock

The market price and trading volume of our common stock may be volatile, which could result in rapid and substantial losses for our stockholders.

The market price of our common stock may be highly volatile and could be subject to wide fluctuations. In addition, the trading volume in our common stock may fluctuate and cause significant price variations to occur. The stock market has in the past experienced price and volume fluctuations that have particularly affected companies in the healthcare and managed care markets resulting in changes in the market price of the stock of many companies, which may not have been directly related to the operating performance of those companies. There can be no assurance that the market price of our common stock will not fluctuate or decline significantly in the future.

We cannot assure our stockholders that our stock repurchase program will enhance long-term stockholder value, and stock repurchases, if any, could increase the volatility of the price of our common stock, and will diminish our cash reserves.

In 1996, the Board of Directors (the “Board”) authorized a stock repurchase program (the “stock repurchase program”) and, since then, has periodically increased the number of shares authorized for repurchase under the program. In 2022, the Board authorized the repurchase of additional shares under the stock repurchase program, thereby increasing the total number of shares of common stock approved for repurchase under the program to 117,000,000. There is no expiration date for the repurchase program. The timing and actual number of shares repurchased, if any, will depend on a variety of factors including the timing of open trading windows, trading price, corporate and regulatory requirements, and market conditions. The stock repurchase program does not obligate us to acquire any amount of common stock and may be suspended or discontinued at any time at our discretion. Repurchases pursuant to our stock repurchase program could affect our stock price, increase the volatility of the price of our common stock and reduce the market liquidity for our common stock. Additionally, repurchases under our stock repurchase program will diminish our cash reserves, which could strain our liquidity, impact our ability to pursue future strategic opportunities and acquisitions, and result in lower overall returns on our cash balances. There can be no assurance that any further stock repurchases will enhance stockholder value because the market price of our common stock may decline below the levels at which we repurchased shares of common stock. Although our stock repurchase program is intended to enhance long-term stockholder value, there is no guarantee we will be successful in achieving this objective.

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Item 2 – Unregistered Sales of Equ ity Securities and Use of Proceeds

Unregistered Sales of Equity Securities

None.

Use of Proceeds

Not Applicable.

Issuer Purchases of Equity Securities

The following table sets forth the repurchases of our common stock made by or on behalf of the Company during the three months ended September 30, 2025, all of which were made in open-market purchases pursuant to our publicly announced stock repurchase plan.

|  |  |  |  |  |  |  | Total Number of |  |  | Maximum Number |
|  |  |  |  |  |  |  | Shares Purchased |  |  | of Shares Remaining |
|  |  |  |  |  |  |  | as Part of Publicly |  |  | Available to |
|  | Total Number of |  |  | Average Price Paid |  |  | Announced |  |  | be Purchased |
Period |  | Shares Purchased |  |  | Per Share |  |  | Program |  |  | Under the Program |
July 1 to July 31, 2025 |  |  | 45,992 |  |  | $ | 95.64 |  |  |  | 45,992 |  |  |  | 2,390,212 |
August 1 to August 31, 2025 |  |  | 47,308 |  |  | $ | 88.92 |  |  |  | 47,308 |  |  |  | 2,342,904 |
September 1 to September 30, 2025 |  |  | 50,474 |  |  | $ | 83.19 |  |  |  | 50,474 |  |  |  | 2,292,430 |
Total |  |  | 143,774 |  |  | $ | 89.06 |  |  |  | 143,774 |  |  |  | 2,292,430 |

In 1996, the Board authorized a stock repurchase program for up to 100,000 original shares (not adjusted for historical stock splits) of our common stock. The Board has periodically increased the number of shares authorized for repurchase under the repurchase program. In 2022, the Board authorized the repurchase of additional shares under the stock repurchase program, thereby increasing the total number of shares of common stock approved for repurchased under the program to 117,000,000. There is no expiration date for the program. The program does not obligate us to acquire any amount of common stock and may be suspended or discontinued at any time at our discretion.

During the three months ended September 30, 2025, the Company repurchased 143,774 shares of its common stock for $12.8 million under the program, reflecting an average price of $89.06 per share. As of September 30, 2025, the Company repurchased 114,707,570 shares of its common stock over the life of the program.

Item 3 – Defaults Upon S enior Securities

None.

Item 4 – Mine Safety Disc losures

Not applicable.

Item 5 – Other Inf ormation

The Company’s directors and officers (as defined in Rule 16a-1 under the Exchange Act) may enter into trading plans or other arrangements with financial institutions to purchase or sell shares of the Company’s common stock. These plans or arrangements may be intended to comply with the affirmative defense provisions of Rule 10b5-1 of the Exchange Act, which are referred to as Rule 10b5-1 trading arrangements, or they may represent non-Rule 10b5-1 trading arrangements.

During the three months ended September 30, 2025, none of our directors or officers adopted, modified or terminated a Rule 10b5-1 trading arrangement or "non-Rule 10b5-1 trading arrangement" (as those terms are defined in Item 408 of Regulation S-K).

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Item 6 – Exhibits

10.1# |  | CorVel Corporation 2025 Stock Incentive Plan (Appendix A to the Company’s Definitive Proxy Statement filed with the Securities and Exchange Commission on June 24, 2025).
31.1 |  | Certification of the Chief Executive Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a) Promulgated under the Securities Exchange Act of 1934, as amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2 |  | Certification of the Chief Financial Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a) Promulgated under the Securities Exchange Act of 1934, as amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.3 |  | Second Amended and Restated Bylaws of CorVel Corporation. Incorporated herein by reference to Exhibit 3.2 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2020 filed on August 6, 2020 (File No. 000-19291).
32.1* |  | Certification of the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).
32.2* |  | Certification of the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).
101.INS |  | Inline XBRL Instance Document.
101.SCH |  | Inline XBRL Taxonomy Extension Schema With Embedded Linkbases Document.
104 |  | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
* |  | The certifications attached as Exhibit 32.1 and Exhibit 32.2 accompany this Quarterly Report pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and shall not be deemed “filed” by the registrant for purposes of Section 18 of the Exchange Act and are not to be incorporated by reference into any of the registrant’s filings under the Securities Act or the Exchange Act, irrespective of any general incorporation language contained in any such filing.
# |  | Management contract or compensatory plan or arrangement.

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SIGNAT URES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

| CORVEL CORPORATION
Dated: November 6, 2025 | By: |  | /s/ Michael G. Combs
| Michael G. Combs, Chairman of the Board, Chief Executive Officer and President (Principal Executive Officer)
Dated: November 6, 2025 | By: |  | /s/ Brian S. Nichols
| Brian S. Nichols,
| Chief Financial Officer (Principal Financial Officer)

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