RDNT - Earnings call transcript Q2 2024

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Operator

Good morning, and welcome to the RadNet, Inc.

Second Quarter 2024 Financial Results Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Mark Stolper, Executive Vice President and Chief Financial Officer. Please go ahead.

Mark Stolper

you. Thank and you ladies joining and gentlemen, morning, for thank Dr. Good discuss and Quarter me Berger RadNet's today Howard to Second Results. XXXX Financial

Before XXXX. Reform XXXX. meaning of to Act like presentation contains harbor of Private today, U.S. within of This Litigation begin the statements Securities of safe the statement Private remind Act Reform the forward-looking the under we everyone we'd Securities Litigation

operating diagnostic successfully forward-looking as imaging estimated, patient reimbursement the performance, the within operations, for Specifically, and operations RadNet's EBITDA are others, to financial of services, statements statements generating adjusted concerning practices, revenue harbor. and grow generating among anticipated continue acquired the acquired the technologists, for radiology meaning business integrating with safe and by retaining receiving referrals future contracts to and ability recruiting third-party

RadNet's These statements uncertainties, to Forward-looking risks differ statements to future time preliminary speaks based as reliance report placed actual current made. in time, of forward-looking be date should those including results RadNet's guidance RadNet's herein. XXXX. filed management's and the are are the annual with materially reports expectations subject and the December risks set on risks which which from SEC from for uncertainties not on Form forth cause Undue include may especially statements, it is on financial year ended performance to on XX-K XX, the and only contained

Berger. with made forward-looking to that, And to turn any after information, update statements obligation of date or no to call publicly occurrence over to like unanticipated reflect the or reflect undertakes were Dr. the to circumstances RadNet I'd events the they events. new

Howard Berger

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

Let's begin.

increasing quarter increased revenue Our in last the Center within RadNet with increased company's by all from Imaging second revenue XX.X% the the by ambulatory procedural EBITDA. driven to to second in the health heavy diagnostic in XX.X%. was and strongest revenue centers Center XX.X%, highlighted quarter, performance operates. like and history growth Imaging of quarter markets, alternatives adjusted company total from the year's as demand revenue ones Health record was Relative well care imaging revenue hospital Digital increased our more benefiting expensive volumes utilization virtually imaging as the of away our freestanding of shift

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

where our is imaging, in PET/CT, imaging. is with routine per MRI, a revenue mix modality our shift benefiting towards top CT than advanced line Lastly, scan particularly higher from substantially and continuing

an in Relative cancer a initiative, capital screening grew and both of significant investment percentage the equipment within replacement. AI-powered few growth the last to EBCD intelligence, quarter our well advanced last quarter. year's over breast including AI, years revenue the imaging Health as was in for procedural last advanced volume have which businesses, our growth Driving the XXX.X% imaging XXX mix. function increased This second basis year's points Digital artificial same our a by quarter, of we as as made industry is trend overall

utilization focus on of was strong year's labor, results, discussed, total management and quarter. revenue also the which to adjusted effective contributed information from efficiency, second quarterly I increased a EBITDA, with just which in conjunction cost company EBITDA XX.X% a investments last technology our and Adjusted improved In control record. operational

Another Digital Health contributing growth factor to businesses. adjusted margin higher in profit was a EBITDA growth disproportionate the

factors increase quarter. EBITDA adjusted point in drove our last year's compared as with a XX these Cumulatively, basis second margin

increased While with margins to quarter this I this in we remain strong we are first our The EBITDA after future. financial in pleased XXXX to increase results. flow, quarter and for we have adjusted opportunity decision reporting resulted ranges the improve margin to second revenue, further convinced budget results the which free expansion, relative in guidance operating our full cash our year internal also

prepared in this remarks. discuss more in will detail Mark his

approach to Texas Houston, Health multifaceted XX completed the American Medical a and centers Imaging. Imaging of respect X continue growth. to Houston acquisitions, Center acquisitions announced we With accelerate We previously from

are We clinical of RadNet IT each on process these other the with beginning integrating acquisitions to and in now and the systems. operating

artificial are in health include We build-outs, health intelligence clinical digital operating of leading-edge de and novo the patient system physician means are for Houston confident solutions acquisitions, communities. there our and expansion, which further opportunities and to Houston and referring other bringing partnerships

System the Dignity We Memorial acquisition also of completed through venture addition County Ventura an expansion of Community of that in JV. Health in to System X RadNet second recent Health as the imaging joint a our Ventura our with partner centers and

for XX patient where we which during are intend X to Year-to-date, and additional we patient this are we of serve the have to lack opened require be business. access facilities currently de between split have open in These development, wholly-owned openings a to we joint of in which X speak. XXXX year points as additional we are we have additional or in identified and we projects scheduled novo substantial reinvestment Moreover, novo equally venture where centers de backlogs almost XXXX. year, remainder and populations. have continues in capacity facilities, located our markets construction

to our opened our are already contributors to and centers projects long-term confident as we others us performance that be spending, While will capital make these above requiring are the that growth. these investments normal we've material have

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

Cedars-Sinai include Our and Memorial Healthcare, of RWJBarnabas the successful Dignity some University health others. Adventist geographies. are our Maryland systems and Health System, Health, Partners of partners system, Medical most largest in

other and will strategies efficient outpatient continue around recognized systems These cost-effective from seeking patients hospitals capture have health and solutions. and site of to towards payers high-quality share market lower-cost, freestanding migrate imaging that centers their long-term are as and care

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

within in X anticipation the as years. And our next X that to have is will ventures indicated XX% centers our and hope joint close past, be the to in of I

to continue We make Health. in progress Digital

remember, into year RadNet the Digital was that eRAD segment reporting financial this formation DeepHealth the you of AI some our effective earlier January which announced was of clinical OS XXXX, Health As what businesses reporting the during we XXXX. software and combines segment X,

for health The course, the great customer care the both general, to space and and, businesses, which OS financial solutions as of impact RadNet. DeepHealth of the these of the customers businesses health in as and of potential RadNet has of owner sell these digital a solutions AI outside

higher less core segment than SaaS-based Software RadNet's investment. models, businesses require capital and in can operate margins and Imaging Center at particular, significantly

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

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

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

program. EBCD, mammography, East the continue Coast on virtually on with rates recently XX% exceed West to and Diagnostic newly Houston implemented Cancer exception the Our over Enhanced where to complete offering are marketplace. averaging the Breast more have Coast, the or now is we and entered Adoption XX% rise close of the

well lung solutions the AI where neuro and AI and the base, This lung customer tools Europe. prostate cancer Our X-country the lung has partner in health as highlighted national expanding our solution targeted U.K., their AI systems also for check program. predominantly of is choice AI a been care of rollout in screening health are as

quarter liquidity $XXX.X leverage. of of the ratio adjusted X. slightly net we to debt than and continue EBITDA balance second just cash a more a to improve and Finally, financial with million ended We

On cost of in our our to we debt cash extended growth. refinanced and capital, balance. opportunistically this, history the for its accelerated are we financial April facilities. and condition additional reduce best XX, able With approximately of is With add RadNet this to maturities financing, RadNet's is in poised all million $XXX

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

Mark Stolper

review explanation briefly certain some some quarter to will and believe that some be financial to our which and March items. with of quarter insights conjunction material in what XXXX guidance highlight Howard. Thank as performance in of year, XXXX now results. to in drove in going you, statements released revised I'm levels, I give I XXXX in also second metrics XXXX provide will into our I with results May an further our well quarter update financial as the first some also second our our provide to the of conjunction items performance. were year-end this attempt

interest, and subsidiaries The non-GAAP equity EBITDA, for adjusted In the and the company taking equity loss losses on extraordinary term my as of and debt during events which unconsolidated loss, EBITDA onetime operations before equipment, or or interest place of allocations is extinguishments amortization gains income financial discussion, adjusted of taxes, depreciation the other disposal noncontrolling and measure. and Adjusted period. I on will includes use excludes and to and or earnings EBITDA a adjusted earnings in defines compensation. noncash noncash earnings subtracts is

reconciliation to our second release. common like in With or included now of to to our EBITDA said, review earnings loss XXXX quantitative results. full adjusted shareholders attributable net RadNet, I'd quarter income is that A Inc.

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

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

the with $XX.X and $X.X million $X.X and due quarter EBITDA to XXXX. million. increased significant segment in or million Health $X.X a XXXX. XXX.X% as net XX.X% revenue to The compared which a adjusted XXXX increased Digital second or of million XXXX. Revenue adjusted income part second increase was reported second of $X.X during growth million of EBITDA total of Health the second from compared Digital AI of $X.X of loss $X.X quarter for the million company revenue, quarter climbed with of net $X in as was million company million quarter for Total the

of million XXXX. items per a the impacting Net million diluted shares net second weighted of of including of share 'XX quarter, with XX.X compared facilities or interest the and April based share swap; in second interest that expense related $XXX,XXX second have of related income expense swaps; in yet were quarter cloud restructuring XX.X onetime DeepHealth the other transaction; $X.XX to comprehensive development. open $X.X of outstanding for construction number for following: to to from rate refinancing income and a OS upon shares generative $X.XX novo interest under unusual noncash the related of of their loss million million of the $X.X in of leases $X.X de shares amortization; quarter number XXXX per debt negative to noncash million R&D expenses $X.X operations; AI and noncapitalized loss rate and XXXX million There XXXX average to extraordinary related expenses successful debt extinguishment the was

items, earnings per share $X.XX last adjusted million per of company of quarter and was XXXX. for of share earnings total adjusted XXXX compares during per company $X.XX total million second of This diluted diluted quarter. earnings Adjusting adjusted $X.X adjusted favorably above and share year's second the $XX earnings during was with the

exams, year increased Overall imaging of XXXX, XX.X%. prior year PET/CT of MRI the quarter compared second volume, into XX.X% increased routine inclusive the with x-ray, quarter, prior volume other CT For second taking volume the over exams, second volume mammography all increased X.X% including as ultrasound, quarter. account and XX%, and all increased

the and On into quarters PET/CT MRI both of XXXX of imaging. our a imaging and second part of multi-modality XXXX, prior Overall quarter. X,XXX,XXX consistent all increased increased with X.X% those volume procedures. routine same-center total we the quarter basis, including exams, work increased was CT centers of X.X% same which all approach, second volume only were by XX.X%. the account volume XX.X%, performed for over XXXX, were routine same-center we XX.X% did taking The from whereby year's In of the volume increased RadNet volume, procedures

experiencing I Since CT have XX.X% our our shift point. PET/CT. the make this all numbers, slow down X.X% was go metric second are Dr. In in modality a higher through In of MRI, we to a procedures earnings Berger procedures shift broken his last table mentioned quarter, the of remarks, In won't or acuity but this now procedure represents second year release, volume of volumes aggregate towards the year's my what a we of we'll from our that imaging. we XX%, advanced and our procedure call quarter, imaging. were advanced of which following

the The imaging have $XX year's advanced results, more million quarter. million. of $XX.X the procedures with XXXX second rate pricing from and expense second interest margins. as expense, of interest includes for that In swaps counterparties with million on second million compared quarter cash including of Overall GAAP the was better financial XXXX, operating balance, quarter our income our and interest $X.X our quarter in $XX.X last cash during compares the payments net was higher XXXX. which margins and from the This to second improves interest

The which par $XXX.X our on debt million of the the as of loan. net the for to unadjusted interest regards XXXX, of bond debt, and guarantor, this had neither as quarter income is loan is which June our result balance Note discounts, sheet, more term at cash term larger balances on includes as paid cash $XXX.X lower total our timing Imaging interest this cash Jersey debt primarily of well borrower significantly a of that $XX.X New cash the and debt interest includes balance With XX, cash million of balance. it value for a less balance million. NJIN's is RadNet nor Network's we

XX, XXXX. of This net debt company-wide of net $XXX.X with as debt million compares June

on $XXX.X XX, As as At and of excuse cash XXXX line, health -- from of is result of we had of our revolving of million. January. business, XXXX, XXXX, an and million the March effect $XXX each of in accounts attack me, collections $XX.X million from the year unchanged a we balance delays primarily credit XX, balance June the of $XXX.X XXXX. collection increase was our normal were million, undrawn resulting of some June increased cash XX, The increase care from deductibles cyber the year-end resetting patient accounts receivable in receivable

proceeds million of near cash notes a had June at million. outstanding, under imaging end first equipment $XX.X the and days XXXX, XX, expenditures New Through total million quarter capital of sale June $XX.X remainder of of This DSOs, of historic net XX, spent flat spent days from $X.X of from the in Our low we equipment XXXX. Jersey sales total and expenditures. Network XX.X Imaging the or capital the was and includes excludes

I'd and our of fiscal this to de to quarter first front-load we been fourth year, facilities XXXX amended in with year the each levels, conjunction the At in XXXX first our results growth have time, decisions quarter which year and that extraordinarily Note capital the novo results May. in majority into the on fund part reporting revise of construction. we year-end XXXX spending released and like after and financial our guidance update we our which CapEx

segment low of of trends we guidance expectations. and in our and Given revised higher the at that interest will follows: increased ends at capital lowered $X -- our our $X.XXX the financial the $XXX For anticipation to the million; is result the in now $XXX we exceed for low increased previously segment; increased Center also we quarters, the Imaging billion of cash the high to guidance range levels $XXX EBITDA, Imaging announced aspects we to Center expense we by our the million $XXX increased experiencing of and are million million high million as billion. in positive by upwards strong levels and amended the $X a expenditures business million flow to is We million by cash the Imaging million are of million all $XX original EBITDA guidance cash our $X the guidance segment. million ranges expense; first certain and to in as interest that by million $X.XXX $XX to results which range financial in free to virtually our $XX transaction our We lowering and performance our of to we and range $XX $X balance a increased our we cash second the refinancing million $XX and million, guidance we believe revising revenue, Center to end;

Health the track a all we few the For on XXXX update Medicare segment, minutes now reimbursement. on anticipated Digital and projections. to guidance to are the our ranges take an you same, give meet originally I'll remain

to matrix for Medicare released is represents is physician reminder, which part code, of CPT by schedule received that fee a XX% As this several respect rates we reimbursement Medicare year. typically about our weeks time ago, the proposed about proposal mix. business of reimbursement With every a

XXXX and initial compared XXXX volumes. rates to rates. procedural those We our weighted have expected analysis using volume We an completed analysis

reimbursement increased reallocate who for physician E&M these it primary physicians for CMS As specialties certain neutrality, that years who particularly CPT from budget codes. so care you which and services, bill bill doctors. moved codes, regularly to CMS doing may evaluation rarely physicians bill proposed these favor proposed reimbursement codes with to X that meaning with management for regularly for forward recall, ago,

As the reimbursement radiology reimbursement XXXX were facing congressional benefit cuts an which a reimbursement from intentional for was appears currently phasing the The being specialties result, year was pay mitigated last cuts governing avoided of cut year proposed the primary in are and phase-in In substantially experienced in most provided E&M physicians. cuts to we part year. XXXX through passed the other of XXXX, several to care to related of effectively the March weeks received reimbursement, be rule, and Act. Appropriations this as ago this that remainder in legislation Medicare of by Consolidated code we in the XXXX

The X.X% for of about the results with RVUs from XXXX certain $XX.XX, codes. fee CPT the cut decrease certain in from conversion to Medicare changes proposed a in to down $XX.XX radiology by the schedule factor along minor

initial factor million conversion RadNet next proposed for just the Because lobbying medical physicians, on ACR. of forces, proposal including in revenue approximate specialties the Quality are implies the million billion Our aggressively from American roughly $X the of year revenue groups College the $X.X an affects all Radiology, Association lobbying in the face business. that decrease from main the X Medicare its Imaging, analysis various radiologists, not AQI, many opposing XXXX in would radiology's hit $X to cut, and for there or the

our year, our could severe financial call, of proposal a quarter during later fulsome is than Medicare matter. we less a In At that to of update a be November believe payments third have this this action results hope governing experts take congressional will as this there the year's more place that on current high probability the final result this rule next time, year.

million million as make we RadNet's go remarks. and While insignificant, over effect will reduction Medicare that not like scheduled [indiscernible]. this cut now increases to will turn it who back into call the next closing mitigate capitated to have Dr. to fully commercial I'd reimbursement currently should payers to $X is the revenue $X from some year Berger,

Howard Berger

Mark. you, Thank

year, the opportunities future about we continue we be to As excited the of through half the in progress RadNet. second

hospital that continuing continue. are trends for Our from sustainable cost-effective believe more imaging expensive outpatient to should core future. business, imaging experiencing foreseeable which imaging more The the we we shift are

imaging, also to advances of applications is continue in and intelligence, drive pharmaceuticals, health driven the radioactive imaging post-processing for growing new well We software demand This for artificial advanced utilizing materials, the expect population future. all particularly in and by technology diagnostic being equipment, into the screening contrast which tools.

be are joint new expand our cardiac several advanced for will more lung screening, model health in systems partners ventures, Furthermore, coronary we to angiography, already with which engaged cancer establish work few, are to with existing to discussions imaging Prostate, and a just partnerships name traction operation. gain Alzheimer's, opportunities health we continues system to in utilization. partnership as

initiatives we drive increase Digital making While that significant progress -- are costs poised to help with are us revenue, Digital and within reduce margins. Health, more

commercial our launch and the We DeepHealth effectively experience. that of and processes will solutions sales including platform continue The DeepHealth business automate patient to medical improved delivery coding, more marketing OS technology fourth scheduling, work reporting, towards manage clinical the result of in and platform clinical patient new will an operating the be automating XXXX. be quarter system data, end clinical and patient for workflow.

to clinical we the solutions breast, system continuing lung revenue prostate for are AI from operating parallel and cancer DeepHealth grow screening. In to development,

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

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

We smarter are to in their make with working efforts and equipment manufacturers technology also more capable. imaging

Operator, question-and-answer the ready we are the now portion of call. for

Operator

Jefferies. Tanquilut Brian Our Instructions] will with first from question [Operator come

Brian Tanquilut

quarter. start, on know made lot to I AI about I as pieces there. there's a Howard, a think moving Congrats Maybe, solid of

lot on working You guys of a things. are

keep AI for on to are out that you front? for, the on next on we X are catalysts months or the the us, to we eye XX what call for developments need the need out to So working for? for that an investors What the watch

Howard Berger

the our first get is the clinical I as of margins internally adoption. Brian, to patient in the as centers. improve hopefully will improved RadNet-owned will how the in be well will drive new going better of these system the focus, And DeepHealth tools we're business. the main I that, indications think where deployment reflected experience the the to place our operating which think, results, That's probably

But make of we we the these prime unique the begin about if importance for this you external can in RadNet commercialization to is implement as and tools them likelihood the is success implementation and ready that of as will, time, improve What which XXXX. expect of single maybe much in other for further is drive to development is market. data RadNet commercial the enormous collaborate on of and recognizing new tapping the and both others tools which outside of facet RadNet we our the of of value any these into development that amount are that the these, own products, helping

of end we and with intelligence which issue the the much hope only employees our that already So margins leading not therefore, able and side improving clinical make current which not and the of continuing I all more recruiting of quarter, to end in generative reason at particularly this, but have the the in of but comfortable. we interest which will on the primary report are hiring to substantively, great addresses I efficient side, with results, early and automation be we why that more only year's this artificial address developed the opportunity, challenges to third see will the which in think more our beginning the stages was of certainly but

as at and has look internally have. margins of little So than expanding longer I where begun already investment want of wanted. to Brian, expertise we'll early continuing answer, that emphasize, results think to we it's But perhaps and think the a deployment -- you the which at RadNet, be looking see I will I

Brian Tanquilut

then obviously, That's look cash. chunk looking point. you're at And I on I'm you're as balance some deploy that to at sitting maybe, awesome. of sheet, Mark, a guessing good the

about how deployment today? curious the thinking capital you're you're I'm market So and what for just in seeing acquisitions

Howard Berger

point. [indiscernible] division Yes. that I But Health Maybe that of segments that's something deploying Center Digital as company, the as can capital carefully very well answer assessing better both this segment. in at the the Imaging we're

acquisitions, We Brian, in a tuck-in at, have we're looking we've X past as Xx EBITDA try have, constantly been in number accomplish past, the to acquisitions had the to to the which of of more as we tend -- that of most know, those you always range. in well our

there division. may stretch I the also be opportunities But the improve that that will Imaging platform. for we mindful other to would tools complement the artificial add to Digital opportunity believe we Health other intelligence larger strategic working roll in in and be division of our the that broader tools at that have we're the would we could very that on acquisitions call would we to out presence a geographic looking that that expand what investments But be need multiple Center

think any decisions as in I the they on their to side people specialty. more and end intelligence who looking artificial generative for clinical both day, their the will want important perhaps At other be the making of transformative for than think two provider. I tools radiology, be be will to the And

will one first The be adoption. cloud

avoid the kind will to the that hackers. if there's having order cloud what think protect that large-scale believe technology to will we cybersecurity operators create way with from improved and no or of terrorists, I like cyber functionality this will, along health will provide efficiencies you to require data systems only RadNet in be

care screening experiencing not be a just the going will and is health screening hundreds, mentioned parts health A of population probably in this, AI tools screening, be would also screening, to of and comfortable to various I artificial in I the cardiac intelligence part related industry. part that other there's The lot saying future. as that them, be of clinical which of be though, could a of will useful before, huge in, which already I believe growth cancer but tools, big in we're be

the that will of will on from multiple or, the the targeted than will of the other that tools side need if offer incorporated. specific burden AI breadth benefit as as say, to side either this a to the from consolidate people hospital diagnosis, different let's onto benefit both integrate AI hospital And help accuracy improve try putting of single these this the be imaging well will platform tools can sources. all to centers the outpatient But rather on they or that the

seen whether be assure we I doing for for license already integration in own of will And them that where our customers. you've simply whether some we you, that, in or about So probably marketplace kind sort there companies AI the RadNet tools basis those platform or that are the provide of of on talk pick AI.

Operator

next MacDonald will from question with Truist. Our come David

David MacDonald

A the quick volume briefly I questions. come to quarter. wanted strength couple just in the to of back

a the helpful. equipment would little activity. additional if about bit could on just on any you wondering labor that to talked development your -- de throughput, access demand also guys seeing touch remote to detail I'm what efficiency capabilities, the guys You seeing? meet be novo Just there meet these and you're you are

Howard Berger

We That on to and purchasing, product that technology, it to the both if are Dave. operations up we call which tech now developing and happy center failed have and that. I'll take that talked called technologists have. Thanks, implement are remote not shortages a Well, a we been we is the by but of we past overseen have who currently labor do beginning in have daily lot the are that live. point you a earlier, a MRs an implementation we the site. the past. to that you will, manage ourselves use mention to that in help brought technology, address And to I efficiency smart about be which product we necessarily

And and this operate. the towards quarter implemented accelerate the of begun implementation I which has of for of tools second that of and believe are same that, this imaging -- year. importance will implemented mentioned, we But here of modalities that we all designed the just as basically in the end we the capable kind being is that

existence also, improved as I've limitations are it and but just staffing. So nuclear available the in not of you particularly everybody over and of ultrasound, that but efficiencies x-ray, health again, the future, creates if will, not is MR, the band stressed care, CT, over in the because imaging and that only but for the medicine, that of PET/CT, quality,

will. OEMs working because of this, with of these technology we which kind we're is side introduce profitability. with the our the onto in flip very we you'll by it would the future other or currently from trying overnight tools, that a that enhance that a of If process. But future want one and able of of term in working in But I to the staffing smart near revenues recruiting to and not subsequently getting, and be an uniquely on large us putting if educational externally more that have equipment how equipment to for all and with on the I increase internally both partners, technology you all rooms switch this you in side about open integrating and our were the productivity are demand and is both It's the we're their their their see hearing our equipment.

into which the terms Imaging division, the in what broadened all continued future of our Health Center all area a effort Digital represents for health for of we're of other RadNet avenue will just only again, here, that it than So a a itself. in by segment of care, in but new extremely different not fall excited growth because

close I that these making. more tools announcements call up be So of think will well take as and as conferences future more our we'll

sides aggressive very bigger more the opportunity create, more market the can that in be in is tools they're better the centers because our tools, the -- there to investing we us. they have, both really of that we intend And synergistic. for develop new the they we But and really business

David MacDonald

just Okay. two And guys, then, others.

on potentially any was had just ago? or Houston then observations the can on any you other Just and just these profitability partners whether de invested are a learnings question the ramp the in years that of novos, it markets to that's early high-level or these about from just added given demand the backlogs, couple where other capital hospital incoming talk maybe feedback have I where relative from was calls And the of return Houston? you JV being practices, market, from

Mark Stolper

Yes, sure.

centers are novo the than these backlogs areas do. faster we of de are we've where in today, volume the first, patient Dave. able including So patient situations ventures, fill been can which very I'll centers historically where have development to in de the that half Because joint have new focused we de the hospital in believe of of question we have -- quickly been case the centers in portion the or heavy significant novo the take about novo we patient demand,

been that's pace our exceeds the them And Although historically, done which of of the de always in we're novos that ever pace part past. have these we've today patient at volumes. that opening because business,

de they're is could to de we a center take under our de positively expect So What ramping EBITDA. with seeing we've up start more quickly. a we're the that with what ramp to year novos that to typically, have that and much we several seen contributing novos the novo historically, and quarters construction it for currently recent up

a they're a have already within EBITDA positive X, And starting to contribution. or quarter

if back industry, X,XXX now of overcapacity imaging side point that So in has existed the existed outpatient a the decades. there you go this years was with industry a where on whole for there a X,XXX to Dave, couple centers XX XX, in as

industry overcapacity And has what industry the grown exist. has itself each overcapacity, doesn't that is the into happened that that steadily year, grown where today, as

have that to then which create service we patient need to could in order to in the has less so the that we past And ourselves. build it or us somebody to we than fill have capacity capacity today we buy that either volumes, the is available for

And much de been the what happening is in so that centers these more And we've ramp-up quickly. we're that's novo doing. seeing

comment. your Houston, to let part question, the Berger With respect Dr. second of I'll with

Howard Berger

that Okay. the fact other Yes, think market we we've I -- opportunities. itself entered already presented Houston has the with

the to there's that we this acquisition did, are closed we quarter that and other which second us. of talking then operators One

with the market de the joint So And might potentially our that de want continued Houston are at expansion novos really centers in think, novos XX% novos make ventures. with in Mark of to even just mentioned. those I that that thing is looking one that, ventures systems, amplify look doing joint are of I announcements in regard, about de we and of the about to expect X/Xth be though appropriate validation, In hospital at there.

significance as And is from of hospital's the all capacity demand issues increasing we're as that outpatient the either that I with shift experiencing are, that RadNet's to think the away of on the are that the centers the wholly-owned well for imaging. that work same is take and dealing systems outpatient

I highlighted, Mark, our same-store growth? Mark -- As X.X%? what think was our year-over-year

Mark Stolper

X.X%.

Howard Berger

the which in look X.X%, really And there, way, was somewhere about in matter almost we're which novo is a I to But of the quarter lieu centers where fact in acquisitions. believe de maybe by using as what in our was of are the decision-making the that as or even ballpark. deploying last market benchmarks at it the should we're capital. these

capacity than And paying demand. doing and in where higher these out know so we're we that rather building multiples, areas what have we is

did the imaging need are their Xx which capacity to have for partners out coming that who this same it Xx the that market, from I'll not giving this If approval not past. sense those be at half they in of to in the meaning expansion. of a hospital add point joint venture again, rate And has market, growing is our would the

Operator

James. from Ransom with Our John come next Raymond question will

John Ransom

just is margin question a getting So on I am flow-through.

you flow-through model, EBITDA I less. on $XX well a but revenue, ahead million, So on was were the mean, bit guys our about

XX was less we than the were maybe at guessed lower So even would have we margin -- bps and revenues.

it something going the the quarter? -- So novos? margin there flow-through the on? de Or with is in is Is anything there else

Mark Stolper

take that. let me John, Yes,

expansion quarter to this all, to show of First we last relative proud were in year. margin happy and

EBITDA a function about margin total points, things. a of which is was basis of XX company number Our up

On exams the away focus second relative a point acuity towards imaging XXX from imaging, higher quarter. Imaging was to call about the function imaging and it's of advanced the we in and year's Center routine what advanced last the shift basis growth side, and or there

focus cost have been in from price capitated Digital It's a as successful of well control also growth tight the and getting a much higher been And Health it's businesses SaaS-based our fact businesses. both that function Digital software the driving the as well businesses we have the as because of particularly payers. commercial promise the as in Health margins, capability of increases, our

we So are showing margin expansion.

more the retaining -- Imaging front. successful the last it hire of continued in you Center simply more and We much tell side terms on labor we that has have will and in expensive years the is segment I our although on What is recruiting of to X.X talent. point talent, become pain been retain

appropriately demand the growth salary going some of on seeing so that and is the excellent staff meet the -- benefits And our centers the and order line top have. growth wages heavy towards higher that you're we in to

allocated salary are you the wages. that seeing bigger portion being a flow-through what on benefits flow-through that's is and So is towards that of

John Ransom

likewise then for X%. the by EBITDA bumped And the I and mean, year, XX% the revenue Okay. you by

for labor absorption more just that building it's in So of incremental revenue.

Mark Stolper

is just we're significantly we budget. that we That's relative And been do meaning reported compare to at the revising and way actual have guidance quarters, guidance initial right. our if look what we -- on And at you then that philosophy budget. our the remaining and is the know, we so just and quarters the that -- add quarters already

So we've existing to guidance the and into budget, the the then that's us if ranges. we'll a now extent that new add guidance we reported -- takes quarters that when the new overachieved range, already revise

quarters. don't We the reforecast generally future

guidance beat that the So see to fourth in and quarter, -- the potentially beat third we extent adjust third the the thereafter. we that could we significantly

approach. take to a try conservative fairly we So

Howard Berger

de I believe may let be John, margin you amplify partially the novo our of thing. centers. will, just of slowing, the some of if expansion implementation attributed me one slower-than-anticipated to

radioactive out at, in Many of people These have, cetera. in regulatory compromised are I imaging the have XX who midpoint licenses, the we that building been terms that are construction approve regions we of getting the plans, material et these in X or Here, issues X We still we're the be initially, looking to have we large the year, are think, of go. centers. to centers more where added.

to will I what contribute of novo experience it better Mark significantly what know had described, can have otherwise might center the kind of kind return that because a think that of just than build de underscores we the margins centers. bunch not the really that buy So stretched we with importance we may margins the with centers we if achieved new have ourselves of the had those -- growth to we might same

John Ransom

segue. Howard, was So a that perfect

of I imagine question. know numbers you've mean If would quarter, kind point we already more the terms you're should I year are this the models? think de as margins we year this we refining But we XXXX. potentially. versus one off puts next of year than Mark, wrapping good novos cuts it a up. fuller about what have of takes start in there's Medicare at as highlighted running fourth and So in think guy I next about jumping year to our think and

Mark Stolper

quarterly results. getting third pricing be much and about we $X we'll yes, and fourth talk some that from And and That will mitigated then get commercial and based Medicare upon $X increases we're companies will to we fully capitated the million payers. quarters sure. more into produce insurance have so as Yes, a headwind. those million this But

novo will of contribution Those obviously X year. the will by additional de centers entire first XXXX. quarters year operational be X X of be the in fully for opened There of centers the that we intend year-end. de novo the this already open to We've

centers we Additionally, that in XX are novo de opening for have currently slated XXXX.

opening So or if contributing will portion thereof, in already XX factors. we're all additional some those successful be

There June integrating the really for IT from be completing in X, expect will acquisitions, And be on April acquisitions their also RadNet further financial results will systems. those that tuck-in of Additionally, we did operating into XX and onto year Houston of we clinical improvement midst those will this now. the and year-end. contributing and centers We're be now announcing beginnings the now or in the XXXX. those X and which the RadNet systems between the right and integrating operations entire year

next the with of of contributors significant that Quantib obviously, of with addition new currently will then that, existing to in progress the And announce on Digital be lung Health we're and will maturity well the Coast, to ventures side. new to further we will -- on side, expect AI joint out, growth greater rolls front by prostate growth both see in in on particularly program that further program, with and Houston expansions that the the NHS be hopefully that EBCD for terms haven't penetration marketplace, and system the year-end and Aidence there And both in and joint getting health as lung the U.K. bringing licensing, growth on both working and EBCD that the West implementing, partners East the additional program targeted partnerships we Coast year. started ventures major there as -- health on check the as lung will which

the a OS the XXXX. launch launching intending program. scale to we're in DeepHealth commercial the self-pay then to prostate EBCD breast screening launch with also a program in doing which are along what lines the customers as of seeds Howard and cancer, We selling started we've mentioned, external full for And America, doing here

list laundry years. in but coming all on we all big they're that very I of things and having our have a they're that's the So plate, for growth significant exciting, potential think

John Ransom

that? XX% that you'll you permanent asked that that structural revenue margin higher mean, see I've basis XXX the is your maybe just dropping about for but just we to me. And of like of opinion, mix in point lastly line. feature I before, think to you this about a to of -- should sort shift talked continue And the that Is scans. kind

it's XXX, So margin, else that's equal? if points up all then being XXX of maybe

Howard Berger

that's that's fairly think substantially. continue I something going to

growth of have, as ones, growth I of put PET/CT of well PET/CT it's to in which finally dwarfed the now the MR combination replace the to our very we've a more of -- to a day, CT, is we're but really scanning own, into that ability scanners proudly and is demand continue capable point will, quality seeing well think and by you but at its it's improved the I a are shift. would just in end which if of function use so -- applications. demand demand much seen the that and the coming PET/CT, it's current new as we which maybe I going as older a as grow, remarkable that not and throughput is believe time to

and the area. first X is service that new X much the rapid our be I over PET/CT PET prostate transformative we somewhere will from should I us coming Alzheimer's the time of now I at for last almost this disease. memory, that this note or systems, for And more I That make by of in a applications also PET/CT will additional believe in only and about will from X end quarter-over-quarter XX% which and but MR quarters diseases this. largest of I'm in organic adoption all adoption growth, that the combine quarters, looking we're future if is it's of year, capabilities, for doing which I place that adding today, believe of provider have in in is this think for volume the not

be So imaging the cannot technology of underestimated. notion driving

as PET new developing which particularly accomplish artificial be accelerating in the as now producing tools something of improved all it's OEMs is area. to equipment to think both well intelligence I because the these, that able are and

just Those they unit that in we're revenue can now efficiently, -- able exams more all margins the I come per expensive because that So put we to we've do number because think with but more more can with a of are reasons, in build those. equipment should you these test, time. drive higher not for

John Ransom

and payer I one, The large-scale looking for up the and I and stepping keep saying being M&A; lying. for: a I secondly, think major things So paying being lastly, me, people are lastly for keep AI. two

if those a person, or were there end would XX-XX one greater those year? chance -- the of either of is the than a by betting either occur you of a So both that might

Howard Berger

I Well, person. fortunately betting for a you, am John,

John. I've XX been for I So good. this years, it's think a doing very

on time that long longer So very good occur time, that as those both it a next to there's believe within for reimbursed. would the will of would well say But X chance know. you I I imaging, XX the AI to betting At I've a months. take been get one

focus or are X perhaps the to results we're is aware proposition CMS, the our right because well intelligence, but payers now, primarily them that maybe X in positive showing are major point, of, for necessarily talking of not the artificial obvious even this and right it or you now. X who but At is as breast us value overwhelmingly for

are So place. those taking discussions

great that's a compelling business able team from arguments. scientifically standpoint as a I think as made well we both have to

as We're we're incorporated early ourselves. bellwether MR prostate think efficacy the an which radiology become out, of also own showed Mark with as better although pointed going done demonstrate prostate further see which cancer a be to pilot we anything as AI, Mayo there for prostate have projects on [indiscernible] tool detection, by that even screening will that, study far I working to the pilot MR a than today, the early that in else. as with Clinic tool to was

good think these to accelerating. And and be I'm man, all seem a RadNet So I of betting is bet. things a

Operator

Mok Barclays. will Our with question come Andrew next from

Andrew Mok

segment Wanted EBITDA to Digital better the understand composition the the for of Health expectations year.

of revenue the Digital Health think about within makes non-AI up the I revenue today. X/X

relatedly, program then EBITDA rate so the of think that does through standpoint? What's procedure So far the program? And latest the we should from is adoption a net for translate actually what runway here? contribution? impact similar how that have the the a from EBCD in And into

of how instance, able out first you're XXX,XXX done are for half that, incremental an the that on? within if procedures year, pocket you've of this So in to actually $XX Saige-Dx collect many mammograms

Mark Stolper

of first answer of regarding the Digital I'll the Health the Mark. question composition it's Andrew, the EBITDA Sure. business.

the correctly is So there's the you Digital Health which, of one businesses out, in AI segment, X as business. pointed

That other business, software eRAD software The last being DeepHealth business. morphed last is $XX been million of and eRAD revenue what business. very $XX year million year, the The business which now profitable a into OS. we about EBITDA. historically of did business And call, that has is

that the operating that move Health driving certainly when Digital Health business segment. Health profitability So or we of Digital into the in business segment, -- the very the more Digital is and revenue profitable

the -- will say, And million We be, are I be again, of it, operating $XX $XX revenue. give million to $XX take, software expecting revenue. this would will to the do year Health of $XX segment Digital call will to close or licensing sales then software about million-ish, be sales of million remainder which, AI eRAD. let's

AI DeepHealth, structure cost developers, running FDA all folks, AI, the -- at you machine at is to name not it, the million, now our people, little Quanta, the given learning if AI bit the close runs scientists, $XX right teams marketing, Aidence, that. the more a about than sales,

our quarterly somewhere exiting revenue north the We $X we're million as DeepHealth this are of be business expecting of to year.

business AI by fourth so will quarter this the sometime in turn of year. And our profitable itself

XXXX, to we're Digital forward we have of profitable X So as Health. look that to going part when businesses

bifurcate to then on their currently AI scan What And of rates expecting electing read XXXX. EBCD your be program, and Coast part adoption West that because XX% by which and East into East of it growth a adoption the the means fourth have East have and the we're business desiring quarter Coast about going initial by for to going -- EBCD. of women second software AI. we I'm to rate for back leads rates the in which course, to being the scan of seeing, the Bulk on to We're seeing implementation between the EBCD AI read they're Coast the rates about we're question business. started business, the Coast

XX%. Coast, West in was we're which rate report, all a adoption. close more terms have XX% recently on And And about to much adopted, the last we received of the we

-- rate. learnings And we're office on that and as to near on really many to it get we what schedulers we've the East pricing, Coast is that the the benefits anywhere encouraged the about how what such done services. our the lot of So collateral, marketing of West Coast taken XX% front Coast, the a train people East from a months we've the adoption took communicate is the

West West ultimately, adoption any Coast be and why rates the Coast. I don't the benefit go rate. we're that Coast adoption be best to should on to the able rates still East adoption pain seeing growing the any we the see reason and much of we've the on on on as different, Coast East adoption than that been rates, adopt East to All a Coast adoption, through drive to had practices higher able

we terms into come So to think on more as into do year move we that don't and anything you the success have add? more later there's XXXX. to of in this know, of this I program Howard,

Howard Berger

portion Yes. the slower be adoption rate point the the of I would the that is we volumes would West on to West reasons on out subcapitate that therefore, speaking, Coast our intelligence discussing of are we our this a just Coast without want come contracts. with the -- anticipated one substantial from that and the do And patients essentially groups and the with. revenue capitated artificial for medical our generally capitated do EBCD who we this cannot that and on not

artificial improving intelligence will. and for you which become or have readily to the reducing payer, they in with some conversations outcomes, high of benefit long-term their responsible even beginning want plan breast them to program, that design their are they because the include more if and change already see may a to We the costs interest of they degree of that those there's the

we've this implemented. not the We had done haven't Coast East yet because

rule that I on But out lives, don't discretion would we out offering imagine pay-for-service lives. which we if that a basis our those our reassessed, right I interesting will of and fee-for-service to instruct I If that think capitated exercise. have XXs do take And fact, mid- would in on we the that in for it's to be those West an the capitated we Coast. teams high the because now to patients

opinion or results particularly in be and to science breast the think underscore the our breast the to and tomorrow -- is I happens people imaging thing behind cancer, way these and here seen and want intelligence, for most it outcome will that next year whether significantly artificial who understand cost. have of care -- it it's the standard just for one I this after, And doing that year the or But is mammography. improve reduce

that taken and radiology of driven to very to kind teams years. over stages of the decisions ones scale. larger here X our ball think care sophisticated the game, way of in we're future proud with made XX commit something to in So just this happy the leading of we're have early is tools. on these and I'm becoming to our the the being imaging years could initiative, adopted I'm that we've say by health the into much this but a And I this

Andrew Mok

it. Got

offering Okay. And when that is are say so, within what adoption coverage kind of rate you the that rate And do have just the then an you offer clarify, program? rate, facilities if or the is? to

Mark Stolper

Yes.

So screening the exams adoption rate is the the -- that is of based that denominator do. mammography we number of upon

exams. about per X screening X.X rate, our current of about are mammography exams run mammography million million little year. That's we which do a kind over of So

And we offer that on. so those the this are exams service

program. us to extent So schedules now to upsell screening someone a eligible the the she's mammography for that EBCD exam,

XX% clear? to this their mammography Is screening on to exam XX And elect -- East who so on Coast. women into all Coast West XX the are of scheduling program the we're seeing in that

Andrew Mok

Got it.

one if Okay. with up follow I And just that Yes, more. sense. could makes

that volumes imaging I between looks advanced actually sequentially. in digits, think very double to revenue procedural the advanced were strong same the routine quarter, mix continued shift mix flat talked the up But you leading center about. the relatively

the So just or to mix else going volume keeping anything the with respect pricing that's underneath on flat curious revenue what's mix sequentially.

Mark Stolper

not in the payments accrued based net seeing it's received, revenue The that revenue. report, upon mix Yes. you're

revenue forth. payments the and and is do so we XX% So revenue current what to say, or we the is apply MRI those our on and XX% differential of in accrued hey, so

So you'll lag. see a

in towards the higher percentages quarters well. as I coming we the as see actually in would the continue expect expect to exams, of So see increase I shift those that revenue terms would to acute will

Andrew Mok

of because What's bad the And that? assumptions it. that why different? debt are Got driver is

Mark Stolper

the received lag Accrued revenue Payments accrued DSO Just you of exams in versus quarter. revenue. upon prior difference that you're between many payments terms net in how upon based based collecting quarters. payments an net the the from the estimate of do is are

Howard Berger

authorization putting do the as on all paid, of slower and advanced case the the bills. the those submitting an that it's be we paid get authorization of bills those getting -- of present might imaging quickly authorization whereas and with the mammography in a getting process therefore, imaging, It not can done, payer. also And require out, as from ultimately routine require those worth those patients Mark, procedures the

Operator

question come will next Solow with from Our Larry Securities. CJS

Lawrence Solow

kind of I A guess DeepHealth have exciting. expect I operating would of you getting the this system next my year? on incorporate couple takes to Is benefit do start questions little of systems some on think learning feel to just across Mark, it you a follow-ups. year maybe sounds margins, guess, I'm or been in most like the out, while? you as even really you curious, some roll answered. first there just Or internally? curve

do actually external AI externalize then you opportunity the -- have to think also then there the well internal bigger, go opportunity? And you thoughts greater external third on -- have is, parties? the is is, have external, been you when EBCD than eventually, you there approached the been do question from test And question second or you as

Mark Stolper

Sure.

Okay.

Let me rollout... take the in the first part with see question we respect which the of do with XXXX benefits to first, -- to is, any expect

Lawrence Solow

Rollout, right?

Mark Stolper

that rely we're yes, to answer is -- kind OS. of are is is human for. relative a it to aspects that heavily DeepHealth aspect on [indiscernible] capital today currently our behalf What the that centers which to the number of focused perform DeepHealth modules OS and the own DeepHealth business is we technology of of functions the as the what order business eRAD in using, on that automating on AI-powered absolutely. platform we generative of that unique our automate question yes, OS part of of And has labor

scheduling, as centers patient the around certain cycle insurance functions. call as revenue in call or are these verification, customer patient automating And centers preauthorization, areas well

these able their more We're be and on a full-scale from take exams an collections be, authorizations benefits. more testing to to will company. here, efficient insurance payments more expeditiously. standpoint, from the internally. a efficiently that from more will -- to have more more They're X patients. get it's AR more going So couple But able a to automation basis automated I able be to going to tools think, standpoint. going be efficient a be and and which schedule faster to when efficient, modules much make better We'll we're they these expect rollout already patient-facing and our we business of have One will

So all of expensive of reducing intended these the effect things our reliance have capital. human on should

commercialized is to do just and expect industry, expect got of a AI successful. to product that be we mean and existing generative it's modules. I RadNet going product these It's both and cloud-based course, that we eRAD including as of new well And product product. licensing this the whistles, it fully bells So of advanced and very rest intend then, the benefits as as the all see and internally. start from the launch XXX-plus customers adopting we our selling to

RSNA, existing November radiology already show big last a We're at its doing outreach this and that in We're same capabilities of America kind of of number previewed We to of to the called Show the customer our a last November year this going be year the base. Society Radiological the North talking customer year. demo in in Chicago. show

particularly it work freestanding we've excited this workflow we've centers, it built else for marketplace, on to best very and think this internally, that's going the where outpatient or we're the than make the RadNet had the as for the think So that because into we good product imaging product is is be industry. that anything and and of scalable scalability in to better

can't third remember. a was I part your question that There of

Lawrence Solow

thoughts on Enhanced approached been about, are Detection Cancer Just tool? the Breast you've all the about at externalizing

Mark Stolper

even discussions and So potentially of like to program with yes, and creating we're other third this drive having are internally, going EBCD adoption we rates an continue technology customers. kind parties about for to providing

part a I the because for one basis that yet any the of we're main solutions radiologists to as headed. We focus. use the why our of these collect bill in the adopted customer on hasn't tools. find AI reason been And Dr. the lack have and Berger or industry where probably But AI the is big that haven't certainly that's been think -- not reimbursement of ability of widespread is a for mentioned,

but the introduced a had doing Hologic the service actually when collect technology because that didn't bill adopted and many they there these once years a the couldn't couldn't where capital We basis then from to can on and charge XD what widespread shifting adopt therefore, make for for. Very whole world, tomosynthesis, and believe to use investment that being years is a the several they to anything technology was equipment to tools. bill XD more technology it going with ago collect radiologists a exam want the of period to happened similar these radiologists to of wasn't industry for mammography tools, want provide XD was to

successful then business. to time And just with And once believe We be that's there AI time. licensing AI we're the right to more have reimbursement, is adoption a a for AI that's the now. do that, widespread matter that's problem of that going able

Lawrence Solow

last guess question. one appreciate I just that it. Got color. I

all? impact salaries, minimum California in with wage in guys that Mark, Just, you at did the increase and

Mark Stolper

It And effect, you does. I it supposed The X X. minimum to, $XX.XX think, wage I into from or Howard? was built delayed. The It or that is go $XX. our Do that is July was into remember, it's budget being increased remember. to year. either June of I can't implementation $XX this was think

Howard Berger

Yes, June X.

Mark Stolper

because of budget, impact and -- the facilities health reasons budgetary workers all year. the hospitals, to care delayed that that later from they've And that the this employ, Yes. the and particularly on implementation county they

think did Is that into right, August it X. Howard? go effect I

Howard Berger

not but October that X this to road as or doubt go there's kick X, it's of believe, in place, still I they're scheduled can whether January currently, -- it's some the next to or do year it year. down No, to to going

Mark Stolper

Yes.

built guy our anticipated cushion So a there's a on of bit earlier effect little we that guidance had into the into or good because a going in year.

Operator

will come question Zhi from next B.Riley. with Our Yuan

Brandon Carney

on on strong Carney Congrats another Yuan. quarter. for Brandon is This

update outpatient setting scans scan like on CMS favorable your the affect The freestanding department for rather the than First, that mean to about was and would reimbursement update volume? curious Does in those how that proposed to those recent has the centers PET hospital more change reimbursement. we're for keep the and was diagnostic outpatient that within sending hospital the a yours? the more incentive radiopharmaceuticals patients

Mark Stolper

Yes, sure.

a the as So much are us. the continue Look, hospitals and business that impacts, as try that PET/CT big you and in rightfully said, business hospitals not to they're player today keep to going to in-house. of

an anyone on think of PSMA on time. XX,XXX we've -- about I of -- And done hospital PSMA I we prostate more done that beginning modalities, move the the we've else side, think it's PET/CT already imaging this growth business of or imaging more side, that and we're other with where inevitability going and since it's are more the into Alzheimer's than to side tests like all is the whether the and test the centers. outpatient demonstrating the outpatient the

quarter we quarters. last X,XXX XXX thing over we've PET/CT growth the over of these of tests. X,XXX we've of over is did excuse we're We big the tests Alzheimer's, that -- amyloid the way alone. you're which leading is tests And this did same last seeing in done several done July, me, tests. these X,XXX the of area alone, In PSMA -- that done kind over -- in these of We've other

matter that think doing these I fact for than the the the regardless hospitals So tracers, is are radioactive of more paying they're charging component technical how of the PET/CT of and regardless significantly the they're we for what of are.

Generally, we're seeing that in the to range what Xx Xx of we're charging.

be in outpatient that more will hospitals imaging think -- be to the going of So business although always in business captured that landscape. and is I more the this the

Brandon Carney

what that you've the were given, like right another of just some same-center on Great. you numbers growth seeing can Alzheimer's, amyloid very volume. see give up the Especially approval about saw the you on now? XX% scan It's follow to increase on agent. is context the great going the We PET to how And helpful.

sales amyloid their think to that as it a I tripling on Alzheimer's guys quarter-to-quarter? are relates seeing growth for specifically you agent. the mentioned they What imaging you of saw their

Mark Stolper

Yes.

start. I'll So

of X the I X,XXX over growing look last prior we mentioned, did so the XXX studies And thus June, I fast. we that, July, little these far. as In of to done XXX studies. if It's in these over these only at we've studies. So months, a of month did

increase of are small on month-to-month or talking relatively given we're north least rate run that These that's PET/CTs we of seeing basis. growth. we're our a about year. lot current do the But a still XX% So numbers, XX,XXX a in fact over a at

we We them, MAX are are these seeing administrators, Medicare freely that the that more starting call regional to initial are authorize studies. these the

competitive, on would mentioned, the as MRI on We've more that down more on going cost that cost as going that's perhaps Alzheimer's and that radioactive these you is a tracer. of will that, down, side. goes opportunity initial PET/CT to the which exciting think We more studies. the make mention continue. to as as And radioactive of ultimately it's to also seen others, I an opportunity as contrast the side, the drive exciting more in the drive come the that's -- side

the of months X terms the effects baseline to need these therapies. Biogen or to in and initial whether all the Lilly going Most MRIs they're through patients every initial additional therapy to it's monitor X adverse these on or patients potential others X MRI of to every these Eli an a treatments, of need side then therapies X to these go establish once months these therapies,

So PET/CT and just the driver because of remain the we about it's another Alzheimer's going MRI be opportunity, excited advanced to both side. imaging, on the

Brandon Carney

one. then one Very And Great. last helpful.

really of you some to the measurement other on -- is by plans if kind Or are does this wondering patients expanding it that calendar? of these patient you appointments help backlog incoming Is can on And the capacity? Just have clarify how that inform mean what then volume? backlog?

Howard Berger

Yes. probably And if are urgent our need, more ourselves for do to asked to those calls it current capacity currently exam that we being time earliest takes monitor for a The that easily if circumstances available is in today, certain keep we're the to we days the more into of have we by, said, an number we schedule them the a what we defined we of have the But patient. what being provide. fit find schedule. is that somebody is That number there by a the can backlogs a lot that that add-ons. slots do of call we in demand

the is it is But in that much not do need we staff, the the so limitation to facilities that. our equipment technologists to as order

fundamentally our backlogs capacity So more -- and better gives ourselves things trying the recruiting even we're we equipment to that find having address really technologies just backlog. and closed upgrade throughput only lower would not These then but that and to pushes which are by us hiring hiring, with aggressive rooms, really or which higher.

best to. nice is of But a one of in otherwise providing that care not have, this that is it to that level is So but would the problem like the better potentially we're challenge interest faced we than the requests accommodate can to the waiting with, being around and aspect for we every getting and we're that what phone the ring. are But it's to sitting of do pursued. optimally

Operator

conference turn would back This like Dr. concludes our to the for question-and-answer I closing Berger session. remarks. over to any

Howard Berger

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

Operator

The today's you conference for presentation. Thank now concluded. has attending

may disconnect. You now

RadNet (RDNT) 8 Aug 242024 Q2 Earnings call transcript