RadNet (RDNT) 9 May 242024 Q1 Earnings call transcript

Good morning, everyone, and welcome to the RadNet, Inc.

First Quarter 2024 Financial Results Conference Call. [Operator Instructions] Please also note, today's event is being recorded. At this time, I'd like to turn the floor over to Mark Stolper, Executive Vice President and Chief Financial Officer. Sir, please go ahead.

you. Thank and you ladies joining and gentlemen, morning, for thank Dr. Good discuss and quarter me Berger RadNet's today Howard to first results. XXXX financial

to to Before performance, XXXX. Act by and specifically, future of statements This the contracts technologists, to the of diagnostic of continue like contains forward-looking harbor business XXXX, adjusted with Private today, Private RadNet's the operations the radiology of and acquired presentation Litigation receiving harbor. financial for begin EBITDA safe meaning and the patient within referrals and acquired integrating Securities of safe as grow generating the reimbursement statement anticipated Securities generating remind Act statements Reform the successfully practices, U.S. ability retaining concerning imaging forward-looking statements estimated, within the meaning operating revenue for under we everyone are operations, among we'd recruiting services, third-party Litigation Reform others,

or it are or preliminary occurrence future made they time ended contained herein. the any new information, the RadNet December Forward-looking made. publicly on speaks statements the to results RadNet's year RadNet's forward-looking circumstances to performance, reflect set financial statements in materially events. of XX, to reflect the are and the and unanticipated RadNet's is from for after date guidance XXXX. obligation cause Undue report which especially from XX-K including which to date from reliance based as risks should current reports statements on Form forth not differ be actual events These the undertakes SEC were statements, placed forward-looking update only no on expectations of uncertainties, may filed to and include subject time, risks those uncertainties management's annual risks to on

that, like over Dr. the to call turn And to with I'd Berger.

this from you plan and our Good provide you Mark. you, remarks, everyone, call dedicating and highlights I open today. your with insight morning, XXXX you into conference day and results, to all the future call, give today's us After which portion Mark discuss for more our thank your performance first affected in joining for quarter Thank to and On of of prepared I'd our our participate to strategy. your this morning. questions. we thank company you a for interest like will in to our factors

company Coast on East by company's benefit our utilization the like the increasing very pleased the am I and adjusted health adversely snowstorms markets first strongest revenue rainstorms care increased revenue alternatives we our by Imaging new demand well freestanding the hospital X.X% the within XX.X%. from procedural Digital EBITDA more by revenue, revenue record ones to begin. in heavy operate. earnings. was of ambulatory to adjusted Let's virtually expensive revenue Imaging the impacted was our last shift in away year's quarter. as Nevertheless, XX.X%, performance in being of increased quarter, volumes history as quarter the driven of the with California all several Centers first continue quarter It centers the unusual from diagnostic to in imaging total and with Health first flooding. segment and and despite increased in Relative Center we

are alternative lower-priced who improved role performance from we reimbursement playing contributing of a as to recognize Also hospital-based imaging. the impact important strong and to revenue the the positive payors commercial was capitated

of enhanced including cancer just was on record. year's strong the both MRI, initiative, PET/CT, effective year's upgrades. per from we increased quarter the operational management mix top Digital line breast continuing control Driving breast CT significant adjusted revenue This quarter. of a and a Lastly, advanced Health imaging. for in In shift years few the in discussed, a first routine substantially our conjunction growth to the last business, revenue equipment trend well imaging, results, have overall first also the contributed EBCD, a focus information as I towards last with labor, care in quarter. Adjusted EBITDA, made screening scan technology XXX.X% detection, our and our advanced same is AI-powered where within efficiency, imaging the which investments from as industry utilization and company and improved XX.X% was EBITDA quarter capital cost higher growth which benefiting over an the investment the grew is AI total in which revenue is function modality last than

Another contributing factor businesses. quarter. margin growth to a adjusted Digital our with Cumulatively, these profit last as in first higher increase drove the in adjusted factors margin segment disproportionate EBITDA growth year's XXX-basis-point was EBITDA compared a Health

budget, discuss pleased that we we quarter, The to XXXX in second remain margins. combined decision the first full to detail operating ongoing into to cash improve will results and continued year adjusted increase While more in flow. strong his resulted the are in further revenue, with opportunity for expansion, this internal margin remarks. quarter ranges relative I Mark trends this with guidance convinced have have free our in our EBITDA operating prepared

X respect Upon our some Texas have into Imaging. entry We may to announcements our completed multifaceted to Medical seen of market. of X the our our continue we of approach acquisitions, end, accelerate recent Houston imaging regarding centers acquisition Houston, the With quarter the growth. you

encompassing second metropolitan in million Health the completed announced imaging entered of second the XXXX. The the United to city most the April metropolitan the about state people centers in fourth populous we and States. first X be acquisition fastest-growing X.X have Texas in American is area new we is June. Houston addition, marketplace In since

Houston. opportunity Greater clinical of for further health digital artificial other our intelligence include the desirable, and which We bringing novo de solutions partnerships of to operating expansion, referring leading-edge confident the as of means are buildouts acquisitions, and and and health system patients communities our

we first Angeles. of tuck-in centers Valley quarter, the during X north completed the of Los acquisition Antelope a Also in

the Houston like like acquisitions Valley and growth part in acquisitions in-market be tuck-in will continuing Antelope a that strategy. market of our New

the accelerate business growth. we particular the development have have in of of will the novos, of to opened These in require throughout XXXX top remainder which de are de in access additional we the lack will first facilities which of currently patient backlogs, X be on where operations facilities future where a patient stages quarter. in to These year. open novo various for are year points capacity located our or We reinvestment markets populations. serve XX currently

to and growth. be normal investments While these projects long-term capital make spending, are these material confident our to performance contributors requiring our are that above we centers us will

and to XXX businesses. XX.X%, continue are hospital system health venture partnerships. health or XXX our We centers, joint system within Currently, grow of our held

the others. imaging continue systems long-term of successful that Partners RWJBarnabas site These most lower-cost, our in Our to and care share other strategy largest around cost-effective capture and recognized Maryland, patients high-quality for as solutions include partners Adventist, alter and systems Jersey, from freestanding payors their centers and MemorialCare, outpatient New Cedars-Sinai have of geographies. will hospitals and efficient of University facilities. are in are towards Lifebridge, and Dignity some Health, seeking

their have been physician volumes instrumental in Our procedural hospital partners increasing health and with relationships. system our

the by Health joint During the close, the upon facilities, centers System and Valley Cigna's Providence Dignity in X San Furthermore, our in Care to Ventura. eastern we joint of Oxnard of a Angeles. recently Dignity imaging formed acquired Ventura new first with joint X-center Health Los and with X venture our quarter previously And quarter, Arizona Evernorth venture in which acquisition in through added owned Group. northern additional venture County we centers were Fernando

upon others, to we health venture within XXXX. joint are XX% our have these and expect expansion system working, to centers we which year-end by Including partnerships of held close

segment. in to Digital the make We Health continue progress

and owner great financial in customer you of businesses health earlier RadNet we DeepHealth of one the what has both -- a sell digital DeepHealth January financial which and formation of combines course, for this as outside solutions our XXXX, As AI businesses reporting remember, as these the segment of announced to and operating segment system software some AI RadNet of the solutions, of clinical reporting into impact OS their the customers X, Digital into was Health potential effective RadNet. of year would the eRAD XXXX. The businesses these

in segment higher margin require can than models center will particular SaaS-based significantly RadNet's and core and imaging operate businesses at less Software capital investment.

DeepHealth me, and Within excuse Dignity we -- service next-generation within OS we Health, operating focus developments AI Health, modules. the and cloud-based continue customers, ongoing system the existing and sell new to sell, Digital we to on service to continue eRAD of solutions generative while support

can management verification, in major to a in and reporting, of analytics. patient continue costs have that cycle areas believe increasing DeepHealth lowering We and efficiency scheduling, pre-authorization, insurance OS the revenue impact

OS XXXX. DeepHealth testing begin this in commercially tools aim AI-enabled year available and of in quarters third have the the some of fourth and first the will the of half of to automation solutions We

diagnostic its Breast Cancer Our mammography continues California. Central and Enhanced Northern rollout offering in

implementation are and XX%. quarter. expect the now substantially complete approaching to East the Coast rates as be We second end Adoption as of on early rise to the continue

Aidence's lung recent, are the encouraged Coast from While the the choice beginning cancer also those AI lung solutions been implementation rollout we are adoption in where and This which rates, of California for NHS Kingdom, the rollout. are United of Southern neuro Aidence than expanding has Quantib is partner base screening program. significantly lung the in X-country predominantly is East at health more in experienced initial targeted highlighted and customer prostate of check their Europe. the higher the

of continue to proceeds than approximately improve cash first a debt quarter offering Included balance in cash net were leverage. a the time. to balance $XXX Finally, stock million ratio completed with March. of net successful the we ended a of $XXX million and slightly financial we more net in from We one adjusted liquidity and

end we financing, and our million were of this able to Additionally, first cost With the capital, maturities of RadNet's reduce we extend April quarter an additional on $XXX subsequent and debt approximately completed opportunistically to balance. our add XX, facilities. to cash the refinanced

its for is accelerated financial of all this, history RadNet poised in growth. the With in and best is condition

to XXXX over turn of I I'd When performance. the make At closing he will first like this discuss highlights time, is some to to call some quarter the our finished, of back remarks. Mark

first measure. certain before full excludes levels, non-GAAP and conjunction subtracts now The A also includes review I depreciation adjusted which an earnings guidance I'm term and earnings to company loss adjusted in and is to performance noncash during in on a insights place loss equipment, other will is for extinguishments some statements highlight disposal that March. In discussion, operations unconsolidated will I into of quantitative what equity our Inc. be noncash XXXX taking and and in the first believe income also our release. With first XXXX year-end taxes, of performance. and period. to earnings, extraordinary interest, is reconciliation I'd financial update results onetime items or my allocations to I will XXXX in results. quarter as some subsidiaries our attributable briefly and or or EBITDA, and in as items. further of or metrics Adjusted included I XXXX of Thank EBITDA said, debt provide our some RadNet, quarter you, amortization common quarter like well income the to earnings to financial events adjusted attempt adjusted stockholders earnings net financial equity gains which released noncontrolling our were of drove that our defines to interest use loss, losses the EBITDA on with compensation. material some Howard. explanation provide EBITDA as the going now to give review

of or For million increased total the Revenue first million RadNet increased of compared and $XXX.X million. $XX.X revenue XX.X% or XXXX, first EBITDA reported adjusted quarter XX.X% XXXX. $XX.X and as with EBITDA the adjusted $XX.X of of company quarter million

reported increase our XX.X% segment million Breaking or down of of of same-center adjusted procedure advanced in with last adjusted performance and of million and strong or the revenue EBITDA the this $XXX impact aggregate operating million imaging X.X% were the movement an higher of from $XX.X revenue million. capitated quarter. receiving this increase and $X.X volumes, commercial segments, to compared and performance individual was reimbursement Imaging an and first $XX.X expense This control. in we are tight EBITDA gradual year's Driving payors, as towards Centers

XX,XXX% first was increased the first $XX.X of $X.X quarter XXXX. XXX.X% XXXX. or of of growth significant the adjusted quarter increase XX.X% AI reported as and climbed segment quarter. of $X.X or adjusted Health and to $X.X Digital from Revenue in million or revenue, EBITDA with million part due $X.X the Digital a during The EBITDA during $X.X million in increased compared a which Health's million million million revenue

above first quarter opened $X contingent operations; $XX with million OS diluted and for in first for of $X.XX of the as yet adjusted earnings items, related interest earnings of the for construction outstanding XXXX, with This adjusted total per to loss $X.X of number net was or $X.X onetime per million XXXX. There share average million new diluted per of XXXX our novo total the per to with consideration of loss for Total of including Net number respect the was XXXX. $X.XX $X.XX negative shares generative loss noncapitalized AI. compares and the to of first acquisitions; XXXX. Adjusting company research share based a adjusted completed a noncash XXXX. quarter, not and have first quarter in the total million share quarter XXXX unusual related quarter upon $X company items million net during development shares of gain $X.XX for of loss diluted million $X.X cloud following: under weighted adjusted with was quarter during negative million the company million XX.X XX.X leases quarter de a compared our million net first loss noncash of of $X first negative for a share loss impacting expenses and DeepHealth share increase company compared first quarter in were expense the was to from $XX facilities the swaps; and for of of the per rate XXXX shares and of million that

XXXX, over as XXXX, basis, first same-center the MRI quarters imaging taking with XX.X%. increased On year's ultrasound, prior quarter of routine part centers volume, For increased mammography increased volume, first PET/CT Overall other increased x-ray, exams, increased volume volume all all and same and XX.X%, of CT same-center including Overall the were volume taking prior exams, first X.X%, PET/CT compared into quarter, only prior increased account year's the exams, increased routine the MRI a account and X.X% of X.X% the year for XXXX into which first those quarter. and inclusive XX.X%. both X.X% volume imaging volume volume increased RadNet CT X.X% of quarter. over

or we Berger earnings consistent The was whereby broken procedure table In of were Since of following approach I through that experiencing down a with XX.X% we In performed our call a our XXXX, the want the remarks, procedures. shift volumes in but Dr. of higher-acuity first advanced by go modality the numbers, won't work multi-modality we are make by quarter now X,XXX,XXX points. imaging. all slow to total procedures aggregate our did volume have mentioned from to we his we the procedures what release, I imaging. routine

on pricing margins. Overall higher was for MRI, CT financial volumes X.X% interest advanced procedures expense, year, quarter, metric imaging was as $XX.X rate first from our $XX.X compared in were to year's interest cash XX.X%, interest term imaging. the as cash cash of which towards improves income from this swaps million. of interest quarter quarter. this as margins, cash well result with our quarter and XXXX, more The results, more and a of of GAAP this timing With balances our quarter $XX.X our million of the primarily last year's first operating XX.X% of with expense our interest first on the balance, XXXX. is interest and XXXX expense shift million procedure counterparties PET/CT. loan. quarter from $XX.X compares on income our the including of This cash the was In the first last interest during quarter In first includes advanced better our net of In first paid payments larger and of lower million

cash March as RadNet of and a million million par of is Jersey sheet, a nor borrower our had $XXX.X net with debt debt discounts, loan we XX, for Network's balance net which of New XXXX. of compares our to unadjusted neither debt debt, less is at regards million guarantor. that Note This total our Imaging XXXX, $XXX.X With includes balance. at which XX, this balance value for $XXX.X term debt March bond

March of million XXXX, XX, our As undrawn of a we $XXX had and were cash credit on balance line million. of $XXX

extraordinarily year-end equipment open update which spent imaging in part the construction, into this of the novo of that XXXX the sale are million spent year, and facilities and equipment our been the to XX an the quarter the XXXX, on increase Note remainder the This have in cyberattack accounts cash. increase year-end of million fourth deductibles includes delays the near which to from XX, capital to or we of before our first March At Healthcare The the the Despite XX, released $XX.X of each we spending guidance results. decisions revise on front-load with January. in normal our $XXX.X resulting XXXX. year million, Change and balance from XX, cash from accounts receivable low. Through XXXX, XXXX, some historic was March the effect each day result proceeds breach, is receivable we levels, and collections scheduled million. $X.X primarily Change impact sales from time, first was in outstanding, CapEx at majority total capital of year from Healthcare notes of XXXX XX.X and our under of the fund collection resetting de net our total conjunction patient year-end. At of I'd $XX.X March DSOs, financial in days our growth had expenditures like year quarter

business of and are exceed will levels we positive believe virtually we is that XXXX. financial our for Given all in our certain aspects continuing of first guidance quarter, financial into the strong quarter, revising we the in performance expectations the second trends which of are upwards experiencing the results anticipation original

revenue, top million, end low of we the $XX our level the the For both Centers increased at Imaging by the guidance segment end and range. for

for EBITDA the range. end by at high segment, of our low Also Center guidance end $X our the the Imaging and we've increased million

Our million $XXX $XXX to guidance now level million. is

for $X Centers the increased and segment, end For range end capital both we low at the the million. expenditures our the high Imaging of guidance by

and our to this due and interest, for $X end our cash of $XX much at the cash expense our be generation paid million for anticipate both cash $XX guidance range to our to by million, million, the year high balance, and cash decreased the we free paid $X level interest refinancing end cash million and transaction interest For to to $XX flow million $XX we've low larger by million. increased

For to to EBITDA guidance expenditures the R&D Digital noncapitalized all segment, Digital high to $X guidance both million, other low and increased the we range the $XX of end same Health our $X our the by million the $XX ranges platform. by $XX increased to We million. $XX million end the million remain Health for and at million

with discuss to I'll reimbursement Medicare. respect now

With respect to Medicare reimbursement time. report this for XXXX, there's nothing at to

and position provide we if typical lobbying in any, CMS proposal As feedback. At we and CMS' will CMS' to will on the release RadNet's quarter to financial second industry's future will of proposal its is a impact, results. groups our CMS a sometime preliminary or industry's schedule at which time, in be upon expecting July, our we results June each are year, rate analyze our time comment call,

eliminated as the the some of this March we scheduled part X.XX% March Medicare Act, our reduction rates. Appropriations to the on X of this fee the prospective of applies good the XXXX Medicare buildings in a cut in of receive through conversion Consolidated factor The of of did Medicare reduction regarding end X the year, X.X% Effective of However, basis. March all was from year. XXXX news schedule

to an the this of million Thus, $X $X our going our the revenue remember, and may XXXX expectations million. relative back original cut budget. million to revenue estimated was reduce by XXXX you half our mitigation increasing of some almost As $X.X amount, to gives by proposed thereby original

to make who Berger, closing will like turn remarks. call the this At point, back to I'd Dr. some

Mark. you, Thank

the the XXXX, we we we remainder As point of have move towards the of excited half year. year for the initiatives are about

encouraged Digital particularly the by are are We making Health. we in progress

help in As digital we poised revenue, health and us to improve costs core increase more our margins. business, drive growth initiatives imaging reduce continue accelerate the and center are to

imaging effectively and convinced the processes development remain platform future of and managed, driver DeepHealth OS, automate that successful is efficiency the be will any for manage processed. clinical more business data. dependent upon of delivery the be will data and patient and analyzed new the our the clinical which and automation This patients We is business heavily which which for solutions by

OS we coding, currently labor analytics. today We the generative in that further improvement marketing, automate and making In clinical AI patient of expect human areas rely are medical DeepHealth workflow this reporting, scheduling, to sales foundation processes principally vein, and models. in on investments

foundation is unique expensive to up. quickly applied and design distinct and data for models cost, use decision-making. Advances support the from to language will pretrained clinical train generation machine than solutions more to human database range information It these us When business can new of we foundation the AI enable can of data when models comprehension, giving rather learning that visual use applications and perform, broad trained and models a Tests ground models sets, on us to foundation code test cases. enormous including learning advantage sciences a diverse less in lower machine faster develop models processing, and own. available a at

DeepHealth breast, to OS, clinical grow and lung revenue cancer for prostate from we continue our screening. solutions develop AI we While

accuracy cancer screening. to in packaged the form and lower health Our be cost a that and these of diagnosis objective and can widespread create and that design is population to deploy tools the others increase initiatives

EBCD exemplifies the AI this cancer breast program opportunity. Our and

are accuracy valuable which is providing radiologists and AI willing to breast improving self-pay. a the our while productivity they Our for benefit to of patients our

and and firmly and both to and early sick. domestic similar international needs other towards that we focus We programs as health screening detection believe already for are chronic markets, prevention not diseases treating who shift prostate, patients just on care for are lung formulating

health to call. forward of the portion question-and-answer initiatives look Operator, ready for now progress the quarters. digital in coming We updating of our we the you are on further the

Our from comes from question Instructions] Tanquilut first today [Operator Jefferies. Brian

question, Congrats that seeing given are curious, can in really, strong what quarter. quarter? into the strength you strength on pricing alluded terms the maybe a we're just or here, that seems -- first my you but know, of Mark really to also I seeing what Maybe Howard, Mark, continued you or the a little bit strong.

maybe can any color with on us So well. the as pricing you share if strength

we to course, years, regards least with we have the and pricing past transform opportunity than several ourselves In the and to Medicaid. of least negotiate traditionally pricing, have, takers over various to payers to called down the being from what other sit tried RadNet at price Medicare, at

and of of now than and account particular for agree for for but contracts, have years. When that of But part in that as can last this example you stayed we're not patients year, to referring need we we with couple come backlogs as with demand capitation. I starting we're labor enormous were and they to health costs, not of been benefit rates moved that the XXXX, past maintaining prepared where the only sustaining contracts, X rates reach fee-for-service for able of at to our renewing to latter what levels incurring what the of that go pricing and have which give our the and past effectively for that fair beginning company if we believe a up capitation we physicians and our to to we have out agreement primarily the able think be increasing and a did year appropriate, over with this take for contracts happen contracts into an we are at to we've our substantially year fee-for-service higher least position, given the sustainable in at taken renewal, particularly are

can investment have payor being significant and and a costs, novo consistent a a only function you is our appropriate as not from we we of to this So to see that improving in but of us access being commitment not of the by with as we're just I for building which and models our where state-of-the-art increasing centers, technology accept the improving from isn't through pride cover top any de really CapEx think finally the business need pricing going position to industry. ourselves that

So both I have think those of well. resonated

We our successful and improved has remarks. in discussed think in virtually that are that negotiations, I of part margins all the to his in Mark contributed

by monitor continuing else to a this what health burdened we is think -- care effort also be but a on will appropriate tools part by I our the only which continually not everybody the we are are once rates collecting in and do procedure those procedures.

many and than up well we're we to every at still rates only make hand-in-hand that renewals are lower contract in remain paid the consistent far do think but work. groups, for not of that as markets procedure as with with these hospital-based So our our our we needs, we certain alternative the come we as get cycle management group that contracting for revenue

maybe there. on seeing expectation just the then, just your the for the And Howard, strength volume, continuation you're of

and will I milestones Well, more think has volume one the using this. which is to Yes. increase been like particular, as enormous demonstrate reporting imaging accelerate to achievement PET/CT. would seen out from we advanced perhaps in improves begins of Brian. routine and a the that's towards to a continue our remarkable realizes technology point procedural the as overall clearly marketplace adopt X.X% to hidden advanced in trend In I in increase A imaging to benefits the shifting imaging that we've the our both There these. here, is

been As I've has scanning XXXX discussed what they now was PET/CT our increase I treatment of providers PSMA same-store believe for calls, XXXX. scanning, cancer the between previous XX% substantial first and close of a prostate of remarks we is are call transformative quarter almost which diagnosis in and and largest it on of component the PET/CT and the

and well part increase as scanning accelerate been in who to this scanning year, becomes oversee for continue more as have prostate At that eventually think PET/CT only cancer. point, in ongoing become get latter but more criteria adopted should new demand scanning as that MRI the for national the of XXX more require as not and scale not only scanning become MR various I both that Alzheimer's backlogs far of the others or the approved, will payors. as aware by may think, than adequately reimbursed people certain these this, community and and done doing first which more we about I the seen in now but this this PET/CT quarter, of the with treatment on from that, So make exams but monitoring. I appropriately, accessible and think to similar we've also drugs of we for patients urologic the from that say, these the adopted more more

imaging will the seeing as for child cardiovascular cardiac a for more screening probably care the and to in far disease particularly health we're and human a poster good cardiac cardiovascular is future be shift We up outcomes. for very disease, as trends will in believe and preventative be hope continue will imaging procedure good standard screening, a population So near which for that managing into the I which resources advanced to I investing continue. that and and think to in building we imaging, in also imaging, time

improvements, why where benefit another on we to are us reduced our us significantly So can which our the backlog, our we're advanced to facilitate to the processing throughput time existing better which increasing reason I allows and do some business. is time technology or scanning been also systems, new allowing systems upgrade imaging has handle and or which expect advanced imaging which of from

think to you very year. subsequent I these quarters we'll on So in be happy update in second and regards our the of this our progress all

CapEx? are follow-up point. what curious for about on Awesome. philosophy And then is maintenance maybe just CapEx Just between balancing CapEx Mark. there a spend growth the you this at How your thinking question and

tell of would plate. of Brian. of be for you the worth depending More And spend. for construction to development is Thanks of that on is That what's upwards half projecting what year, $XXX but de the this the million -- going Yes. we're novo changes Yes. I question, facilities. than year-by-year that about earmarked upon and CapEx our philosophy

in are Maryland, As facilities open by first we've of in in got up XX Dr. should quarter, X year-end. X mentioned, and other facilities up stages that X completion and that opened we California, construction Berger various the in

centers of $X to Most on million these $X build. cost, million to average,

is million, $XX half XX spend talking So of spend of talking CapEx just facilities, de $X which than if on novo centers year. you're about those at this more our million we're about

into from in our we and year to shifted CapEx, fair latter contribution a this of now So centers accelerate right of have we some which seeing start growth, these and we expect XXXX. bit extraordinarily half are spending to the

can heavy significant volumes in because strategic that today, constraints that So change volumes out that we growth have we've populations had of or a able accelerate to we're there, fact have patient opportunity the today servicing. to points ourselves that that to around shift either in don't not service just got thinking we or markets currently these capacity we're of strategic just simply access CapEx exists our not there's a some because avail the due

Our next James. John from Ransom Raymond from comes question

to kind is the have XXX-basis-point obvious dropped scans, that an Just you when bottom to much pretty question. higher-cost of line? guys a But mix shift

it our does, When you talking Yes, about -- John. margin improvement, are John?

Yes.

was It Yes, Yes, XXX points, but yes. but... okay. basis

is XXX hypothetically, every every saying of bps hypothetically, this so bps XXX Well, well? I XXX am as -- bps

Yes. Yes.

that I so prior one think line, of portion of reporting on more than drops that the that, which range of substantial in this why year focused is bottom reasons the XX% we're down years. very to it a probably

but I go -- of that's shift future, the like you've out kind given sort I about know talked mean this, that is And of mix that will it this structural trend a all... seems just into

Yes. so. believe I

in contributed business, I profit think and it year, I last think was margin imaging. the by improvement of the reimbursement higher advanced shift

up and it be impacted DeepHealth of the processes. have point, years, quarters system and subsequent will by largely manual what I operating to new our implementation think in been this of automation

just Great. others X me. And for

$X it the imaging your As any million it of that curve? is mostly -- is we to track $X that for of in in of Or on profitability is -- the the AI, there acceleration sector? still kind is year on that is think is still million? eRAD, part core -- be about the Or cadence still

Yes.

X undetected I released cancer on that of was program we House morning from and one enhanced earlier EBCD of this interestingly I'll adoption our far of some use screening with is that provided and acceleration very is implementation might we're detected tool cancers Moonshot mention this fronts. the expect outstanding which XXX some notion that further have breast of pleased think have with is think we One program, which reality. gone and results, otherwise I has White so a Cancer the or that the so detection breast

and subsequent we As or further continuing on which could alter is to quarters. of up, get Coast, improve, implementation perhaps that, the patient I on as later West our think, the continue ramp guidance adoption to this, in we we

Also calling enhanced or some something are is men what a prostate in come for as which a MRI to just greater that used blood get opportunity out other with initiatives we're that routine we're are starting, tests asymptomatic at if screening, that we're even is self-pay price, prostate fairly of now one EPS, rolling and confidence an they're screening. than primarily for nominal artificial scan for looking intelligence

to like men this that some much choose we've for outcomes end to that test finding in certainly and going to had pathway. better breast more towards done cancers year. financial good We screening, of results expect something that be lead But some in are results will the who sampling apparent that probably we've the become our very on early

don't know one Great. road, do think in tuck-in then in X probability spitballing the elephants ground? last of just months But M&A. you more me And you'll your I put Or wrestle and on existing of are guide. in the deals if markets? M&A the expect one down future these you the odds the what we're we're for we just should

Okay.

a that I be a for continual East there's entered to in our but longer-term the getting pipeline opportunity. tuck-ins at further we you other targeted in they very on a If our constant that will and will, to market, markets, would just X. think represent be Houston can platform growth opportunities of than requests markets, quarter, bit much longer-term We the part those like of existing West more Coast, in Those little if Coast our and there's expensive markets a we're this do find we platform become reach. where and demonstrated look in those. existing both tuck-in good company when may a we acquisitions, expand a find April market our to a presence we build acquisition

growth. you of think continue a year's along being can the those I see novos de component very with So this as important to

Our next question comes Barclays. Mok from from Andrew

centers. to Digital the can us Health understand could would and for follow segment And and hear that efficiencies the up imaging on to I drive love Wanted DeepHealth you rate cost more One, help the AI what then the EBCD option? the this in is capability. adoption throughput savings on

of that procedure. offered adoption longest enroll East of in XX I my our I remarks, patients the had Well, the with actually on Coast, all that about Sure. experience XX% mentioned, EBCD and for are current pay is that is EBCD, -- think, we've as $XX the where

of We number number believe, East that to by least at we second though, XX%. and Coast, higher. drive hoping the perhaps, even that can this could have that We're expectations with found be consistent approach the half our year, that on

West the the the us I'm has rate XX%, Coast, that the tools. East higher comforting of And because to West the But range. the than the that's with is on what Coast. sorry, in very on also we XX% some -- started adoption off is learned Coast West Coast On

process. without a to something is -- this not an we lot But giving somebody these background I have to simply sign for and up that caution benefits them everybody It's tools. of ask of educational that this

are So learned that more are. procedures, that as more I more issues what and we've receptive our we questions in the are patients benefit the about the patients effective these more, and think, our communicating and have that -- for

these it. expect of routine period, But intelligence during would sometime and will opportunities. I relates future, there be the it you tell it my in to that to patients state the made be we as not investments would want our benefit reimbursement belief of include and the I that mammography the also and this that breast also earlier, is when work the art patients we've to to sort and some of from is artificial screening impact necessary our and the an is fewer greater through form like biopsies need detect that we for firm go is callbacks, we in intelligence diagnostic recall workups we're of on rates is artificial and be do only having breast more cancers as need and giving accurately further don't of just such to diagnostic determined, some being procedures. that to fact, so confidence other some watched further

in So the benefit is both substantial here regards.

do think more level being XX% impression mammogram our their intelligence confirms they we of that and the normal confident the as they have breast the when intelligence, we artificial and screening normal. feeling more as terms majority initial accurate can get a in now because we're artificial their a I and of productivity improvement think and XX% simply are greater as get comfortable radiologists, confidence we of use that radiologists to In much more our of scans, are perhaps the

everybody to mention mentioned, that further as artificial So have and also tools in where CT in which are only we I fact tools, than continuing new think breast, program prostate, there's remarkable which reimbursement an this to evolve on for now we our but like patients embark intelligence for accelerated give results lung for going further the scan to just and cardiovascular rather approved the benefit similar screening been again achievement a for expect win-win-win that I'd benefits. doing to not in we're itself. for we

help be DeepHealth this our of look us to And you other into both I operating we will for and our diagnostic accuracy think AI will platform. productivity forward expand can part radiologists. of improve all think about that tools talking So to I

your secondly, points And up think payer your category about sequentially. ticked then I Great. XXX mix other basis in

that uptick. EBCD behind and what's that that tied as to Is the category well? volumes to is what clarify Just want higher other

everything It's Yes. scanning. patient isn't that just

when CT, the or the certain had as So procedures. -- our that fees, when Digital MRI, it to doesn't interventional think, some x-ray do fit I Health segments do Centers those of rejiggered we the exams. mammography that it why the our over the Imaging with such segment procedures has X% part But the about business. we -- it's of it's eRAD management proportions to reason nothing changed And fundamentally with out had Imaging with and of category changed into moving operating and of business Centers quarter-over-quarter between shifted, segment

the about I category, procedure mix, talking the the was mix. not other payer actually

I'm the sorry, talked I about procedure thought mix. you Oh,

EBCD -- it's it's in yes, be that the from because -- The would category. so other that's self-pay,

and Yes, up that's double likely the follow with reports case, the Andrew. you. check I'll

but demand. and there's share Yes, that of it's there have backlog that if any just clear to sense you of can give sense sense. backdrop makes think give us And unmet are the that a strong metrics this demand with a can you anything us you patient demand? curious to or then backlog, unmet us I there's share

from and of, more away more of population, aging more imaging adoption which hospitals. growing all imaging. previously of require number population, one, I it, of use And backlogs greater are the that than shift and think think I function a determined greater

go differential facility more I to as much elect goes talked the outpatient education When even them. And the and risen the of have in have hospitals, from has be that and substantial, to an patients become not to part I about an for they services of further X they with times away to very if cash were rather to think the they yes, newer are past, and alternative how again, a products. could this more a segment numbers a scanning deductibles direct for think you on as stop hospital. is health we've to use go to of scan. through quickly about co-pay business pay and previously think patient of their if deductible or available important have important the some is there in to effective the can giving more where, payors more effort might e hospital, their X their by These that realized

are like becoming these were So these now cancer in now scanning screening use reason that coming with only I perhaps patients familiar other things that more And maybe the people of value comfortable particularly as prostate I past in think just and as were now of done more that but diagnostic the more PET/CT for general tools clinics, for think staging screening is are in Alzheimer's the things it past all together. like the are. esoteric enormous are veterinary by and things at well of as being everybody the recognized thought

from is So greater say adoption demand unique to and all for increased there's for coming greater not RadNet. sectors. also experience demand this I would that our

when in the people acquisitions in are as chain almost talk operators experiencing that the demand. we other well all talk think as to to opportunities large here, of our industry, increase we I various all

not novo our bit makes this and little only physicians, by kind a allows our de ability building of to acquisitions is our patients which or as capital RadNet communities us benefit different either of to deploying that whole. opportunities, take referring address these what by So centers advantage a but doing

health. population believe And statement. the So it and important care. imaging is of is for delivery agree as I are people more just to very believe think that right with I've coming enjoying health said now, I role a that in more previously, I gateway And

end they exam PET/CT our your to a patient matter particularly it a -- specifically for from patient in a question, when of that advanced in losing build backlogs have injury how in process, how order at matter centers, have imaging, figure and come a not is takes if for if a up or to a those an performed? to them we advanced get big what she actually scheduling serious X And we he Yes. them we look or that concerned we to into we're new can't in and takes and serious are days, and department, long the our disease whether going calling centers calls patient wait KPIs MRI get or Andrew, long business. -- or expand their invest or look it the is if imaging X how to that someone's of up And with in to standpoint determine at out of -- or cancer. if to going because around to week X some has And

we'll build We with scheduling. with software. are what we're less centralized spot some our center another patient that might much our direct that scanning try those that particularly now have we that region, can, a balance manage -- So to departments to, to try in with that as as and that scheduling that's we load open difficulties, waiting new determined centers are which faster we've equipment, scheduling these is newer and time. increase processing the But in have throughput we of right to facing capacity. The MRI, areas real post need unfortunately, days, why better

be our able scanning work business you once to we're quickly. to problem it's couple sticky, to tend are been, don't that the get we want last So patterns, to our so over the this lose technologies. do problem to hours. we to still patient which we lose amount referral is as because back, trying can of MRI to business can volume relationships why to the else, of we is nonetheless more And newer to trying and our But scanners a this hard same capacity highest-class the someone competitors. physician but expand so upgrade much And have, it's we've as in years,

from question comes next from Lance from our Securities. Riley B. And Zhi Yuan

of you great the quarter. And couple on Congrats have I thank corrections. for a the them.

good think Or what that you do you've if there? goal lack think stage, expanding reached here it are the because in different the or certain step to be So state, we higher market critical was the others? of share reason in acquisition other share lower new in even you market would some a different states market in I'm take and first, Texas in have you states. the targets? of curious way, shares back, mass what was further, criteria have In if or

Sure, Yuan.

look mind. So a have market when necessarily at don't share we a in we market,

behalf our our in operating scale are that to lot benefits tremendous have found We a are centralizing history around processes operating of on that the of perform there local centers. most of which business in at we markets,

centralization scheduling, For of things. pre-authorization, instance, we cycle among the among -- other revenue other insurance have marketing verification,

a And we business scale. really not it's grow scale share, driving how market, it market in result of so necessarily when can we about building particular a benefits the think the is regional profitably towards the using of

state want we be to And all can that you have able When where a scale. our so Coast, isn't where we we when the the there Stuart certainly a state love Florida. look that. want we look necessarily particular at lot expand those area Lucie, St. today, to where And our sites market there magic the one benefit in would in -- where share benefits of a that our achieve have opportunities. we X scale are Florida. All to are of of markets, don't centers do that's of of to right market in of But we Treasure given port at

have we mentioned that And we're yet Health, acquired Phoenix Dr. with this Berger feel his benefits in remarks. like we X not make acquisition scale there the we partner, the as getting where we Arizona, centers of quarter area. additional prepared could in the our an Dignity did possibly

from is because think better business processes efficiently assets. profitability markets answer I the that because more like to all scale we have ability to the -- your these we'd short of So question of the it in manage our and get

curious here. the very PSMA. PET/CT helpful. increase you procedures, MRI April? housekeeping related on or That's part it. Alzheimer-related questions one recently as see Got part Great well And to additional the to update volumes guys see I'm any maybe in as of XQ PET/CT the both did in

Yes.

uptick. that the area, these some ongoing We the are come these initial these MRI delay Alzheimer's drug these are of lot in as patients to starting amyloid presence patients for qualifying a seeing more to these both starting or volume caused Medicare of been on these what screen imaging down for diagnostic although these approved to go -- just PET/CT initial the passed have and in the not the on therapies. There's we thousands to you decision of to The some of patients once are by patients are that a monitoring well the to lot plaques therapies tens to of on But But call newer now. in to getting see expected starting the expect therapies, and MACs of this administrators a patients we the qualify regional we're of in, see has as that because on hundreds the thousands a patients, some we're patients. see was about would we not delay. talking or individual would

We remain that going still optimistic to this happen. is

these the these X when therapies months therapies on least PET/CT It's trials. as going as on imaging, determine prove be on XX X whether efficacious patients eligible the every therapies. I in available MRIs advanced at these ongoing -- clinical months are to go for lean these well these to patients are heavily are think to screen to their indicated that both initial for

in mean, about gives is mentioned where use us very side, new solid and Alzheimer's, of continued PET/CT example the advanced in a some is which of that imaging, tumors the growing optimism PET/CT this the down coming think tumors I of others the and are cancer the just road, lot is are area cardiac in on popularity, body. -- the tracers I these radioactive specific there particularly development encouragement targeting of imaging. So there's test PSMA another of that Dr. Berger that

ongoing unfolds So I that process think here. it's be an to going

question next Sidoti Company. from our from & And comes Jim Sidoti

long I a been it's know call.

since Just easy do entered for it find how going us you market. Texas? business while a And me. Is easy It's quick get a ones X is market? there? to you update paid? things How this on you been new in to are it do Can

to it's Yes. mean hard say I Well, a now. little

we X. first that of on April the completed centers. X acquisition So completed We

there of yet. as operating So lot have a we don't experience of whole

call think is and I what the stages. very retinization business beginning at integration of that we just the the

the scheduled we operations centers in from The of that time Health to other close frame. July that's we a kind June, at which Houston, American X to those platform integration anticipate of point. the can create announced grow acquisition further Imaging some And that of in we've

good attractive with we've that think way indication lead as novo an centers. better there. that think a good of we'll further that motivated relationships. market. continue is of of number lot to us demographics, I in -- really is feeling We de very coming questions There's a grow early and a excellent and So group have a in payor radiologists. this answering better hospital that they're market partnered of And could identified interesting acquisitions, quarters. But grow be your as through the to to that our platform relationships we

what from see So so far. I think encouraged we we're highly

All need QX right. one, you year? what Okay. give share second And updated and this us can QX just count we using to be for

to that? Could you it's hear a you. bit little repeat difficult Sorry,

the year? what's question the on a the rest of is for count it right share Sorry,

Sure.

in we -- XX the the that expect We to don't equity significantly. our speaking, shares. we acquisitions their share outstanding part any we to So I doing million using first somewhere base of of have wouldn't XX stock think remainder quarter the count go we're to up the existing million where unless for annual Generally issue year, compensation. our employee as it's typically

completed first So the quarter. already was that in

materially there's to the we our some stock. between year acquisition choose expect to where now anything end I shares the So of use wouldn't increase and unless

the time back no for turn And any and I'd at like to remarks. this questions. floor closing management gentlemen, ladies over to showing additional

be their and for great of endeavor will appropriate on to Management operator. like dedication shareholders take RadNet to thank support with next opportunity would investment the employees and for you their leader Thank you, right. I All work. continue I our all hard an to a our to its services that time Again, all of market provides look this continued call. return and Thank today, for your stakeholders. for forward

you we'll Ladies presentation. and be and conference gentlemen, call that, today's concluding with joining. thank for We

now your lines. You disconnect may