Nutex Health - Earnings Call - Q3 2025

Executive Summary

• Q3 2025 delivered outsized growth and profitability: revenue rose to $267.8M (from $78.8M in Q3’24 and $244.0M in Q2’25) and diluted EPS came in at $7.76, driven by hospital division revenue and elevated collections through No Surprises Act IDR; Adjusted EBITDA was $98.5M.
• Results materially beat limited sell-side coverage: EPS $7.76 vs $1.82 consensus*, revenue $267.8M vs $213.8M consensus*, and EBITDA of $91.8M actual vs $66.6M consensus*; beats were powered by higher-acuity care and >85% IDR win rates with ~80% average collections on wins.
• Sequential acceleration despite Q2’s heavy non-cash stock-based comp (SBC): revenue rose from $244.0M (Q2) to $267.8M (Q3); Q3 SBC dropped to $13.2M (from $78.7M in Q2), supporting earnings leverage.
• Corporate clean-up progressing: company regained Nasdaq filing compliance with its 10-Q filings and plans a Dec 2 call to discuss restated FY2024 and the first three quarters of 2025; strong balance sheet with $166.0M cash at 9/30/25 is a near-term support for growth plans.

What Went Well and What Went Wrong

• What Went Well

  • Outsized top-line growth with strong profitability: Q3 revenue $267.8M (+239.9% YoY) and operating income $130.4M, with Adjusted EBITDA $98.5M; CEO cited “another successful and profitable quarter,” and CFO highlighted “record year” momentum.
  • IDR/arbitration execution: 60–70% of visits submitted to IDR; >85% legal determination win rate; ~80% average collections on wins; ~$182.1M (~70%) of Q3 hospital revenue tied to higher acuity and IDR success.
  • Liquidity improvement: operating cash flow $99.5M in Q3; cash $166.0M at quarter-end, enabling growth investments and providing a cushion while navigating payer dynamics.

• What Went Wrong

  • Elevated arbitration-related costs: approximately 24–26% of arbitration-related revenue, tempering drop-through from IDR-driven revenue.
  • SBC remains a swing factor: while Q3 SBC fell to $13.2M, it remains elevated due to one-time obligations for under-construction and ramping hospitals (99.5% of Q3 SBC), and was a large headwind in Q2 ($78.7M).
  • Mature hospital visits essentially flat: mature hospitals’ visits declined 0.6% YoY in Q3 despite revenue growth, suggesting mix/acuity and IDR rather than volume were key drivers; reliance on IDR outcomes remains an investor focus area.

Transcript

Speaker 1

Greetings and welcome to the Nutex Health 2Q and 3Q 2025 Financial Results Conference call. At this time, all participants are in a listen-only mode. Our question-and-answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Jennifer Rodriguez of Investor Relations. Please go ahead.

Speaker 2

Good morning, everyone, and welcome to Nutex Health's combined second and third quarter 2025 earnings call. I'm Jennifer Rodriguez, and I'm pleased to moderate today's discussion. Thank you for joining us as we review our performance and outline our plans for the future. This call is being recorded for future reference. With me today are our key leaders, Dr. Tom Vo, Chairman and CEO; John Bates, Chief Financial Officer; Dr. Warren Hosseinion, President; and we would like to formally welcome our new Chief Operating Officer, Wesley Bamberg. They will provide insights into our financial results, operational progress, and strategic direction, followed by a Q&A session. Before we begin, a few reminders. Today's discussion may include forward-looking statements based on management's current expectations. These are subject to risks and uncertainties that could cause actual results to differ.

For details, please refer to our press release and Form 10-Q and our other SEC filings. We'll also discuss non-GAAP measures like Adjusted EBITDA, with reconciliations available in our press release and Form 10-Q. With that, I'm pleased to turn the call over to Dr. Tom Vo, our Founder and CEO. Dr. Vo, the floor is yours.

Speaker 3

Thank you, Jen, and good morning, everyone. I am pleased to report Nutex Health's second and third quarter 2025 results, which reflect continued momentum following a strong 2024 and first quarter of this year. Our commitment to accessible, high-quality, patient-centered care remains the foundation of our growth and operational stability. We have completed the restatement of 2024 and first quarter of 2025, with only minor adjustments that did not materially impact revenue, adjusted EBITDA, or cash positions. John will further provide details. However, with these amendments finalized, our financials now benefit from independent verification by two PCAOB audit firms. Having completed a full-year audit for 2024, we expect the 2025 audit process to be significantly more efficient. Operationally, Q3 2025 shows steady progress, with total patient visits reaching 46,232, an 11% increase from 41,668 in Q3 of 2024. Financially, revenue reached $267.8 million, up $240 million from Q3 2024.

Adjusted EBITDA grew to $98.5 million from $9.7 million, and net income was $55.4 million compared to an $8.8 million loss of last year. Our balance sheet remains strong, with cash increasing to $166 million from $40.6 million at year-end 2024, and operating cash flow through the first three quarters totaling $177.8 million versus $23 million in the prior year. Our long-term debt remains low at $25.6 million. These results reflect our focus on increasing patient volume, expanding inpatient services, optimizing cost, and improving revenue cycle management. Looking ahead, we are well-positioned for 2026 and beyond. We remain on track to open three new hospitals in 2025. Red River opened last week, and Houston and St. Louis are both scheduled to be open by year-end. Our 2026 pipeline includes three to four hospitals, with planning already underway for new hospital openings in 2027 and 2028.

To provide a little bit more context for John's discussion on the share earnouts, I'd like to give a brief history of Nutex Health. We have evolved through three distinct phases since 2011. The initial growth as a freestanding management company where we were instrumental in the opening of 23 freestanding ERs, of which seven were later converted into micro-hospitals. Note that Nutex did not have any equity ownership in these early ERs. The second phase began in 2017 when Nutex expanded into micro-hospitals and where we opened 14 hospitals as a managed company, again without any equity ownership in any of these hospitals. In 2022, we successfully consolidated 21 hospitals and hospital outpatient departments transformed into a publicly traded company through a share exchange program, where former hospital owners exchanged the hospital shares for Nutex shares.

In addition to the 21 facilities at merger, there were 17 additional hospitals that were under development as of 2022. These under development hospitals were given the same considerations as the open hospital and had the right to roll their local shares up to Nutex shares at the conclusion of their second year anniversary. Note that all new future hospitals that began development after April 2022 will not and did not have the share exchange option. John will also explain this in more details later. Today, Nutex Health owns and operates 25 locations across 11 states, over 15 facilities in the pipeline under development. Building micro-hospitals requires significant capital, regulatory expertise, and operational discipline, creating a very high barrier to entry. This is one reason why our model is very unique in the marketplace and why we have so much demand around the country to develop and operate these hospitals.

Despite these challenges, we have maintained a strong track record of growth and profitability, with physician retention exceeding 95%. Our facilities have improved the lives of hundreds of physicians, thousands of healthcare workers, and hundreds of thousands of patients. Integrity and resilience define us, and we will continue to adapt and thrive amid changing conditions. I am extremely proud of everything that we have accomplished in the past 14 years, and we look forward to building on this success for years to come. I will now turn the call over to John Bates, our CFO. John?

Speaker 0

Thank you, Tom, and good morning, everyone. I'm happy to present Nutex Health's financial performance for the periods including the full year of 2024 with the restated 10-KA that we filed on Tuesday, November 18, the first quarter of 2025 with the restated 10-QA filed on Tuesday, November 18 as well, the second quarter of 2025 with the 10-Q filed on Tuesday, November 18, and then finally the third quarter of 2025 with the 10-Q that we filed on Wednesday, November 19. With the completion of these filings bringing us into full compliance with NASDAQ. First, we will discuss the full year of 2024. The good news with this filing is that the changes from the original 2024 10-K filed were non-cash in nature, with most of all the changes being just reclassifications within the balance sheet.

To highlight those, the major balance sheet accounts that were affected by these non-cash adjustments were: number one, we corrected the reclassification of non-cash stock compensation obligations totaling $16.4 million related to under-construction and ramping hospitals from equity to liability. We reclassified related party accounts payable balances of $3.5 million from liabilities to equity. Third, we reclassified $2.9 million of restricted balances out of cash and cash equivalents and into short-term investments. Finally, number four, we increased accrued income taxes by $500,000. When compared to the previously issued financial statements, the changes resulted in an overall increase to liabilities of $13.4 million, a decrease in equity of the same amount, $13.4 million, and a very nominal increase in net income of $500,000.

These adjustments, as noted before, were non-cash in nature, had no material effect on key metrics including revenue, liquidity, short and long-term debt, operating cash flow, adjusted EBITDA, or number of patients as of and for the periods presented therein, and had an immaterial impact on net income. As we mentioned when this restatement work began, we believe there was no fundamental impact to the operations of the business, and after completing the work, we confirm that belief. You can see that the 2024 year was a record year for the company with 93.8% revenue growth, adjusted EBITDA of $124.1 million, and a 464.4% increase in gross profit, which laid a really strong foundation for what we will discuss shortly for each of the first three quarters of 2025. Next, we'll go through the first quarter of 2025 relatively briefly as well.

Like discussed previously for the 2024 period, the changes from the original 10-Q that was filed were again non-cash in nature and had no fundamental impact to the operations of the business. The major balance sheet accounts that were affected by these non-cash adjustments for the first quarter of 2024, excuse me, first quarter of 2025, were number one is we corrected the classification of non-cash stock compensation obligations totaling $20.7 million related to under-construction and ramping hospitals from equity to liability, just like we did in 2024. Similarly, number two, we reclassified related party accounts payable of $3.5 million from liabilities to equity, which was the same exact line item in the 2024 work above. We were just carrying it forward into this period. Third item was the reclassification of $2.9 million of restricted balances out of cash and cash equivalents into short-term investments.

Again, same exact item in 2024. They were just carrying forward into this period. The last item was we increased the accrued income tax expense by $2.4 million. When compared to the previously issued financial statements, the changes resulted in an overall net increase to liabilities of $19.6 million with a similar decrease to equity of $19.6 million and an increase in net income of $6.6 million. These adjustments were non-cash in nature, had no material effect on key metrics including revenue, liquidity, short and long-term debt, operating cash flow, adjusted EBITDA, or number of patients as of and for the periods presented therein, and included a small positive impact on net income.

As we mentioned when this restatement work began, just like in 2024, we believe there was no fundamental impact to the operations of the business, and after completing the work, we confirm that belief. Therefore, we aren't going to spend much more time discussing the first quarter of 2025, as it was materially the same as originally reported, with a solid net income attributable to Nutex of $21.2 million, a record high gross profit of 55.9% in the quarter, a record high of $51 million in net cash from operating activities, and a record high cash balance of $84.7 million at the end of the quarter.

Now let's discuss the key financial metrics for the second quarter and year-to-date June 2025 period versus the same period in 2024, and then we'll follow that with a discussion of the third quarter and year-to-date December 2025 period versus the same period in 2024, highlighting percentage changes across revenue, adjusted EBITDA, net income, EPS, and other indicators, all that were detailed in our Form 10-Q for the quarter ended June 2025 filed on November 18 and our 10-Q for the third quarter ended September 30, 2025, filed on November 19. To start, we're going to start on the second quarter of June 2025 and compare that to the second quarter period in 2024. For the second quarter of 2025, total revenue grew 217.5% or $167.9 million to $244 million versus $76.1 million for the same period in 2024.

Of the revenue increase, mature hospitals, which are hospitals that were open prior to December 31, 2021, and therefore provided two full years of comparative results, increased their revenue by 203% for the second quarter of 2025 versus a similar period for 2024. For the hospital division visits, we saw growth as well during the quarter as they increased by 10.6% or 4,365 visits to 45,573 visits in the second quarter of 2025 versus 41,208 visits in the same period in 2024, with mature hospitals growing at 0.6% in the second quarter of 2024 versus the second quarter of 2025 versus the second quarter of 2024.

Additionally, population health division had a revenue reduction of $0.8 million to $7.7 million in the second quarter of 2025 from $8.5 million in a similar period in 2024, due mostly to the divestiture of one small entity within the division in the third quarter of 2024. Now, we discussed the growth of the hospital revenue and visits that we've seen in the second quarter of 2025. Now, let's discuss the overall facility. Yes. What was that? Okay. So we discussed the growth in the hospital revenue and visits we have seen in the second quarter of 2025. Now, let's discuss the overall facility and cost structure and improvements in that area. Total facility level operating costs and expenses represented only 48.8% or $119 million of total revenue for the second quarter of 2025 versus 70.3% or $53.5 million for the same period in 2024.

As a result of the revenue and facility cost improvement, our 2025 second quarter gross profit was $124.9 million or 51.2% of total revenue as compared to $22.6 million or 29.7% of revenue in the 2024 period. It's a 454% improvement in the second quarter of 2025 versus the second quarter of 2024. From a corporate and other cost perspective, the general administrative expenses as a percentage of total revenue for the second quarter of 2025 decreased to 5.1% compared to 14% for the second quarter of 2024. Now, additionally, on our second quarter 2025 income statement, you will see a line item for stock-based compensation expenses. The amount for the second quarter of 2025 being $78.7 million, most explained in our second quarter 2025 10-Q within note 11. In that note, we explained the impact of hospitals subject to the contribution agreement, as Tom indicated earlier before.

In connection with the merger of. On April 1 of 2022, Nutex Health Public Health entered into certain contribution agreements with holders of equity interests of subsidiaries and affiliates. These agreements were for these holders to agree to contribute certain equity interests and subsidiaries to Hold Co in exchange for equity interests in Hold Co. Included in these transactions were 17 subsidiaries that appeared to be in the position at the time of merger. Excuse me, John. Your line is breaking up.

Speaker 1

Oh, okay. Are you able to hear now or not?

Speaker 0

Yes. Please continue.

Speaker 1

Okay. As we were talking about those 17 subsidiaries considered to be under construction at the time of the merger, the under construction hospitals are hospitals that at the time of the merger had not started accepting patients and did not have any operating results to serve as a basis for valuation. Once these hospitals have opened for two full years, which we denote as the measurement period, the equity holders of these hospitals are eligible to receive a one-time additional issuance of company common stock based upon the earnings of the hospital in the second year of their operations. Of the 17 under construction hospitals, six hospitals had measurement periods that ended on or before June 30, 2025.

Four of those hospitals had measurement periods that end after June of 2025, and there were three hospitals with no defined measurement period as the three hospitals had not opened as of June 30. The remaining four hospitals have no measurement period as their hospital development plans have been abandoned. For the second quarter of 2025, the former equity holders of two hospitals are to receive an additional issuance of 602,798 common stock shares based on the trailing 12 months' results of the hospitals at the end of their measurement periods. With four of these hospitals in their measurement period currently, we are accruing for the stock issuance for each in current liabilities.

In the second quarter of 2025, that accrual amounted to $24.2 million that will be trued up each quarter until we get to the end of year two for each hospital, at which time a final calculation will be done and payment will be made 100% in company stock and recorded as non-cash stock expense, comp expense. Let's talk about operating income real quick. Operating income, including the negative impact of the $78.7 million in non-cash stock-based compensation for the second quarter of 2025, was $33.7 million compared to $5.3 million in the second quarter of 2024, representing a $28.4 million improvement quarter over quarter. Net loss attributable to Nutex was $17.7 million for the second quarter of 2025, which included the negative impact of the $78.7 million of non-cash stock comp expense noted previously.

The comparative net loss attributable to Nutex was $0.4 million for the second quarter of 2024, showing a $17.3 million decrease period over period. From an earnings per share perspective, our diluted EPS for the second quarter of 2025 was a loss of $2.95, $2.95 a share compared to a loss of $0.07 a share in the second quarter of 2024. Adjusted EBITDA attributable to Nutex, which increased $64 million from $6.8 million in the second quarter of 2024 to $71.6 million in the second quarter of 2025. Now we finished the second quarter. Let's move for the second quarter of 2025. We'll do the six months ending June of 2025 compared to the six months of 2024. Total revenue for the first six months of 2025 grew by 218% or $312 million to $455 million versus $143.5 million for the first six months of 2024.

Of the total revenue increase, mature hospitals increased their revenue by 195.2% for the first six months of 2025 versus the same period in 2024. Hospital division visits saw a similar growth as they increased by 15.5% or 12,566 visits to 93,842 visits in the first six months of 2025 versus 81,276 visits in the same period in 2024, with mature hospital visits growing at 15.5% in the six months into June versus the same period in 2024. Additionally, the population health division had a revenue decrease by 2% to $15.5 million in the first six months of 2025 from $15.9 million in the first six months of 2024. From a facility and corporate cost perspective, it also showed improvement for the first six months of 2025 relative to the same period in 2024.

Total facility level operating costs and expenses represented 46.6% or $212.5 million of total revenue for the six months into June of 2025 versus 77.2% or $110.8 million for the same period in 2024, which was a decrease of 30.6%. The gross profit for the six months into June of 2025 was $243 million or 53.4% of total revenue as compared to $32.7 million or 22.8% of total revenue in the same period in 2024, a $210 million increase for the six months into June of 2025 for the same six months of 2024. From a corporate and other cost perspective, the G&A expenses as a percentage of total revenue for the six months into 2025 decreased to 4.9% or $22.5 million from 13.5% or $19.3 million for the same period in 2024.

Operating income for the six months ended June of 2025 was $114 million compared to $6.7 million for the six months ended June of 2024. Net income attributable to Nutex improved by $4.2 million from a loss of $0.7 million for the six months of 2024 to income of $3.5 million in the first six months of 2025. Adjusted EBITDA attributable to Nutex increased $138 million or 2,144% from $6.4 million in the first six months of 2024 up to $144.4 million in the first six months of 2025. Now, lastly, let's go on to the results for the third quarter ended September 30 of 2025 and compare those results to the third quarter of 2024. For the third quarter 2025, our total revenue grew 240% or $189 million to $267 million versus $78.8 million for the third quarter of 2024.

The hospital division drove most of this growth, generating $260.2 million, up 262.8% from $71.1 million for the same quarter in 2024. Now, of the total revenue increase, mature hospitals, which are hospitals that are open prior to December 31, 2021 and therefore provided two full years of comparative results, increased their revenue by 208.9% for the third quarter of 2025 for the same quarter in 2024.

Speaker 0

Excuse me, John. Sorry, John. Your line is distorting again.

Speaker 1

Okay. Is that better or not right now? Can you hear me?

Speaker 0

No, it's still breaking up.

Speaker 1

Okay. All right. Let's see. Tell me if that's any better at this point.

Speaker 0

No.

Speaker 1

Okay. I can continue if you'd like, or would you like me to hold off? I'm not able to hear anything right now.

Speaker 0

No. Sorry, John. We still can't hear you.

Speaker 1

Okay. I can attempt to call back in if that's what needs to happen. Let's see.

Speaker 0

Can you hear me any better now?

Yep. Yep. You're clear now.

All right. Is that better now?

Yes, it is.

Can you hear me now? Okay. I'll continue from here and tell me if you can't hear me. We were just talking about the total revenue increase. This is in the third quarter of—I'll start back over for the third quarter. For the third quarter of 2025, our total revenue grew 240% or $189 million to $267.8 million versus the $78.8 million for the third quarter of 2024. The hospital division drove most of this growth, generating $260.2 million, up 262.8% from $71.7 million for the same quarter in 2024. Of the total revenue increase, mature hospitals, which are hospitals that are open prior to December 31, 2021, increased their revenue by 208.9% for the third quarter of 2025 versus the third quarter of 2024.

Of the $260.2 million in hospital revenue, $182.1 million or approximately 70% related to a combination of both higher acuity claims as well as excessive independent dispute resolution process. With regard to arbitration-related revenue, due to the continual underpayment from payers, we have continued to submit between 60-70% of our visits through the IDR process. We have a monthly determination on over 85% of the claims submitted, and we currently have an average—

Excuse me, John. Sorry. Again, it happened again. Should I just let Tom—should I hand it back to Tom?

Speaker 1

Yeah. Why don't you hand it back to Tom at this point, and we'll go from there?

Speaker 0

Okay. Dr. Vo?

Speaker 3

Apologize about technical difficulties. Joe, can you hear me okay?

Speaker 0

Yes.

Speaker 3

Okay. Perfect. Okay. I think John was talking about the—let's see here.

Speaker 0

Tom, we were talking about the—can you hear me at all? The third quarter of 2025. Were you able to hear that at all or not?

Speaker 3

Yeah. We heard a little bit. We could hear you now, John, but I'm not sure what happened there. Go ahead, John.

Speaker 0

Yeah. I'll try to log back in. I'll try to call back in through my cell phone and see if maybe that works better. Okay? Give me one second.

Speaker 3

We apologize, everyone.

Speaker 0

Ladies and gentlemen, thank you for your patience as we worked through these technical difficulties. We will resume again shortly. While we wait for John. Okay. John, are you on?

Are you there?

Yes.

Can you hear me or not?

Mm-hmm.

Can you hear me okay?

Yes.

All right. I'm back. I'm going to start back over again with this last piece. Okay. Thank you. Can you hear me? Can you hear me okay? Tom, is it able to be heard? Okay. All right. I'm almost done, so we'll go through.

Speaker 3

John, if you can go over the stock-based compensation expense because we did not hear you that. And then for the second quarter, because that is when that was shareholders, and then obviously start with.

Speaker 0

Tom, you ready for me to continue?

Speaker 3

Yes.

Speaker 0

Can you hear me okay? Okay. I'm going to continue right now. You let me know if you can hear me okay. All right. I'm going to finish with the third quarter. We were talking about just on the revenue side. We were talking about on revenue of the $260.2 million in hospital revenue, $182.1 million or 70% related to the combination of both higher acuity claims as well as success through the IDR process. With regard to the arbitration-related revenue, due to the continual underpayment from payers, we have continued to submit between 60-70% of our visits through the IDR process. We have won a legal determination on over 85% of the claims submitted. We currently have an average collection rate of over 80% of the legal determination wins. Arbitration costs approximate between 24-26% of the arbitration revenue.

Now, for hospital division visits, we saw growth as well during the quarter as they increased 11% or 4,564 visits to 46,232 visits in the third quarter of 2025 versus 41,668 visits in the same period in 2024, while mature hospitals increased by 0.6% in the third quarter or decreased by 0.6% in the third quarter of 2025 versus the third quarter of 2024. Additionally, the population health division had a revenue increase of $500,000 to $7.6 million in the third quarter of 2025 from $7.1 million in a similar period in 2024. We discussed the growth in the hospital revenue visits that we've seen in the third quarter of 2025. Now, let's discuss the overall facility and cost structure and improvements in that area.

Total facility-level operating costs and expenses represented only 42.2% or $112.9 million of total revenue for the third quarter of 2025 versus 72.2% or $56.9 million for the same period in 2024. As a result of the revenue and facility cost improvement, our 2025 third quarter gross profit was $154.9 million or 57.8% of total revenue as compared to $21.9 million or 27.8% of total revenue in 2024, which was a 606.7% improvement in the third quarter of 2025 versus the third quarter of 2024. From a corporate and other cost perspective, the G&A expenses as a percentage of total revenue for the third quarter of 2025 decreased to 4.2% compared to 12.5% for the same period in 2024.

Similar to what we talked about in the second quarter, on the third quarter income statement, you're going to see that same stock-based comp line item with the amounts for the third quarter of 2025 being $13.2 million. Most of that expense is explained in the third quarter of 2025 10-Q, again within note 11. I'm not going to read through all the specifics on it, but what I wanted to highlight was, remember we had talked about of the 17 under-construction hospitals that we started with currently as the end of September, seven hospitals had measurement periods that had ended on or before September 30, 2025. Three hospitals had measurement periods that ended after September 30, 2025. There were three hospitals with no defined measurement periods as the three hospitals have not opened yet as of September 30.

The remaining four hospitals out of that 17 have no measurement period as their hospital development plans had been abandoned. For the third quarter of 2025, the former equity holders of one hospital are to receive an additional issuance of 307,700 shares based on the trailing 12-month results of the hospitals at the end of their measurement period. With three of these hospitals in their measurement period currently, we are accruing for the stock issuance for each in our current liabilities. In the third quarter of 2025, that accrual amounted to $11.2 million that will be trued up each quarter until we get to the end of the year two for each hospital, at which time a final calculation will be done and payment will be made 100% in company stock and recorded as a non-cash stock comp expense.

Now, related to operating income for the quarter, including the negative impact of $13.1 million of non-stock-based compensation expense for the third quarter, was $130.4 million compared to $9.7 million in the third quarter of 2024, representing a $120.7 million improvement quarter over quarter. Net income attributable to Nutex Health was $55.4 million for the third quarter of 2025, including the negative impact of the $13.2 million non-cash stock-based compensation expense noted previously. The comparative net loss attributable to Nutex Health was $8.8 million for the third quarter of 2024, showing a $64.2 million increase period over period. From an earnings-per-share perspective, our diluted EPS for the third quarter was $7.76 a share compared to a loss of $1.72 per share in the third quarter of 2024, which is a $9.48 per share increase period to period.

Lastly, related to adjusted EBITDA attributed to Nutex, it increased $88.9 million from $9.7 million in the third quarter of 2024 to $98.5 million in the third quarter of 2025. The last item to discuss is going to be the nine months of September 30th of 2025 compared to the same nine months ended September 30th of 2024. Total revenue for the nine months of 2025 grew by 225%, with $501.2 million to $723.6 million versus $222.3 million for the first nine months of 2024. The hospital division drove most of this growth, generating $700.5 million, up 251.4% from $199.4 million for the same period in 2024. Of the total revenue increase, mature hospitals increased their revenue by 200% for the first nine months of 2025 versus the same period in 2024.

Of the $700 million in hospital revenue, $462.9 million or approximately 66.1% related to a combination of both higher acuity as well as success through the independent dispute resolution process. With regard to the arbitration-related costs, similar results that we discussed in the quarter. Due to the continual underpayment from payers, we have continued to submit between 60-70% of our visits through the IDR process. We have won legal determinations on over 85% of the claims, and we have an average collection rate of over 80% on those legal determination wins. Arbitration costs approximate somewhere in the 24-26% of that revenue.

When it comes to visits, hospital division visits saw similar growth as they increased by 13.9% or 17,130 visits to 140,074 visits in the first nine months of 2025 versus 122,944 visits in the same period of 2024, with mature hospital visits growing at 1.8% in the nine months ended September 2025 versus the same period in 2024. Population health had revenue increased by 1% to $23.1 million in the first nine months of 2025 from $23 million in the first nine months of 2024. Facility and corporate-level costs continued to show improvement in the first nine months of 2025 compared to the same period in 2024. Total facility-level operating costs represented about 45% or $325.4 million of total revenue for the nine months into September 2025 versus 75.4% or $167.7 million for the same period in 2024, which was a decrease of 30.4%.

The gross profit for the nine months ended September of 2025 was $398.1 million or 55% of revenue as compared to $54.6 million or 24.6% of revenue in the same period in 2024, which was a $343 million increase for the nine months of 2025 versus the same period in 2024. From a corporate and other cost perspective, the G&A expenses as a percentage of total revenue for the nine months ended September of 2025 decreased to 4.7% or $33.8 million from 13.1% or $29.2 million for the same period in 2024. Operating income for the nine months ended September 30 of 2025 was $244.7 million compared to $16.4 million in the nine months of 2024.

Net income attributable to Nutex improved by $68.5 million from a loss of $9.5 million for the first nine months of 2024 to income of $59 million in the first nine months of 2025. Adjusted EBITDA attributable to Nutex increased $226.9 million or over 1,400% from $16.1 million in the first nine months of 2024 to $243 million in the first nine months of 2025. Finally, our balance sheet remains very strong with cash and cash equivalents at September 30, 2025 at a record high of $166 million, up $125.4 million from $40.6 million as of the end of 2024. Our continued success with the collection efforts related to the independent dispute resolution process is allowing us to get paid more fairly for the services we provide and was a big part of this process.

With regard to accounts receivable, our balance at September 30 was $387.4 million, an increase of $155 million from the $232.4 million at the end of December. With regard to cash flow, net cash from operating activities was very strong at $177.7 million for the nine months of 2025, which was an increase of $154.6 million from the same period in 2024. On the liability side of our balance sheet, total bank or equity-type debt increased by $7.7 million to $49.1 million as of September 30 from $41.4 million at December 31, 2024, with the majority of this debt relating to items like equipment loans from our hospitals for MRIs, X-rays, ultrasounds, and CT machines.

Outside of this $40-plus million of bank-type debt, the only other items materially that look like debt on the balance sheet are the liabilities related to financing and operating lease liabilities, which are just future lease payments due to landlords on our hospital facilities. We've discussed these in the past, so I'm not going to belabor this now. I will say that most investors and analysts don't view these right-of-use liabilities as real operating debt, so I wanted to clarify that for you. With all of this said, our balance sheet remains very solid, and we continue to strengthen it with our positive operating performance. Our current financial position has put us in a very great spot to be able to execute on all of our initiatives in our 2025 operating plan, including the opening of the three new hospitals later this year, as Tom mentioned earlier.

With that said, I apologize for any of the technical difficulties today, but I'm now going to turn it over to Warren Hosseinion, our President. Thank you, John, and good morning, everyone. Thank you for joining us today. I'm pleased to provide an update on Nutex Health's population health division, which supports our commitment to value-based care. As a reminder, our overarching strategy at Nutex Health is to build an integrated healthcare delivery system combining hospitals and medical groups, also referred to as IPAs. Our IPAs are comprised of networks of primary care physicians and specialists located around our facilities. The IPAs enroll patients from different health plans and are responsible for the total care of these patients. By combining hospitals and IPAs, we believe we will be able to deliver care that is coordinated, cost-effective, and with better outcomes for our patients.

Our IPAs would send patients to our hospitals, and our hospitals would deliver more efficient and cost-effective care, reducing the medical loss ratios in our IPAs. This is a long-term strategy that will take several years to bear fruit, but we are in this for the long run at Nutex Health. One thing we would like to note is that the physicians in our IPAs can refer their non-IPA patients to our emergency rooms as well, and we are already starting to see this in Phoenix. We currently have over 40,000 patients enrolled in our IPAs in various risk-based arrangements. Of note, I am happy to report that we now have more than 1,900 Medicare Advantage members in our Houston Physicians IPA. In Phoenix, we now have over 30 primary care physicians and a robust specialist network.

Phoenix is now currently in its first Medicare annual enrollment period, and we will find out soon how many patients we have enrolled. Our IPA in Los Angeles is still very profitable. Houston is now profitable as well, and Florida continues to be profitable. Margins continue to be moderated by ongoing investments in our new markets such as Phoenix and Dallas, and soon San Antonio. With that, I will now turn it over to Wes Bamberg, our Chief Operating Officer. Thank you, Warren, and good morning, everyone. I'm pleased to share the company's operational results, which demonstrate our ability to deliver high-quality care while achieving steady growth in service line development.

As previously reported, our overall visits increased by 13.9% in the first nine months of 2025 compared to the same period in 2024, and our mature hospital visits increased by 1.8% in the first nine months of 2025 versus the same time period in 2024. Our continued growth reflects the successful execution of our core model. Specifically, this success is powered by our leadership team's focus on our key strategic growth objectives: increasing overall volume, developing new service lines, and expanding our observation and inpatient services to safely manage more complex patient needs. By leveraging our efficient operating model, we achieve superior patient outcomes and satisfaction, fueling our continued growth.

Having joined Nutex Health in early October and with over 20 years of experience working across the largest publicly traded healthcare companies in the U.S., I have developed a comprehensive understanding of the critical elements required for sustained outperformance in the industry. My initial observations confirm that Nutex possesses the fundamental strengths necessary to thrive in this evolving landscape. With a sound operational model, financial discipline, and uncompromising patient-centered philosophy, Nutex is exceptionally well-positioned for the future. These positive attributes are the key elements that will allow us to navigate industry challenges, expand our market share, and continue to serve as a trusted, high-value provider for the communities we support. I am confident that our best years of strategic growth and value creation lie ahead. Thank you, and back to you, Jen. Thank you, Wes. Thank you to Tom, John, and Warren for those updates.

We'll now move to the Q&A section. Operator, please provide instructions for our callers. Thank you. Ladies and gentlemen, if you would like to ask a question, please press Star 1 on your telephone keypad, and a confirmation tone will indicate your line is in the question queue. You may press Star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the Star keys. One moment, please, while we pull up the questions. The first question comes from the line of Anthony Vendetti with Maxim Group. Please proceed. Thank you. Maybe just I'll start with just a high-level question and then ask you a little bit about what happened at Red River Micro Hospital, why was it closed, and I saw you just recently reopened it.

Maybe just talk about the process there. Then just in terms of the relationships you have with the 25 facilities now that you have open in 11 states, if you could just maybe, Tom, provide an overview of how you contract with the physicians. I know, I think John mentioned on the call after the first year, they get an equity stake. Are they all pretty much follow the same template in terms of how you negotiate with the physicians that staff that hospital? Are there targets they need to reach to get that equity stake? Maybe just talk about that high level and then just talk about the situation at Red River. Thanks so much. Okay, great. Thank you very much, Anthony, for that question. I'll tackle the first question with Red River. Yes, you're correct.

Red River was one of the 21 hospitals that came with us when we merged. However, if you remember, in 2020, that was a relatively tough year for us with the introduction of the No Surprises Act, which resulted in a roughly 35% reduction in revenue. Because of the reduction in revenue at that time, Red River was not in a position to be profitable. In fact, it sustained operating losses, and so subsequently, we had to close down Red River in addition to four other hospitals in 2020. Now that our reimbursement environment is better with arbitration, and on top of that, Sherman, as a town, has grown quite a bit in the past two years. There have been multiple IT companies moving in there. As an example, just right down the street from us, there is a company that is making chips.

Not the chips, but they make the waffles that the chip sits on. Lots of economic development, a lot of new employers moving in. A combination of that and better reimbursement, we just felt that it was time to reopen the hospital. Does that answer your question, Anthony? Yes, thanks. Maybe just to follow up to that on the physicians. The physician group that you contracted with when you reopened that hospital, is that a new group? How did that come about? Okay. Can you hear me okay? You cut out just a little bit, Tom, but go ahead. Okay. I'm sorry about that. In any event, yes, the physician group is a brand new group, not the old group that was running it before.

The way that we've structured this is that Nutex Health owns 70%, the physician group owns 30%, and we also structured a physician staffing service contract with the physicians to essentially run the hospital and staff the hospital with us. When we rolled up our hospitals, Nutex Health owned an average of 80% of the hospitals. The minority shareholders owned roughly 20%. This model is very consistent with our previous structures that we contracted with the physicians. Okay. Does that sort of answer my second part of the question? Is this the template for most of the other micro-hospitals, or are there some situations where that template is different depending on the state that you're in? Excuse me. Pardon me, Anthony, but I think Tom disconnected real quick. One moment. We'll be right back. Anthony, can you hear me okay?

This is John. John, I can hear you fine. Yeah. Totally clear. Yeah. I think the answer to your last question is the structure is very similar. There are no material differences in the structure. In fact, there is not a lot that you would expect to change. State by state, I mean, certainly there are different relationships with some of the doctor groups in general, but across the board, there is not really a major change or differentiator because of a certain state when we open these up. There is a lot that has improved and changed, as Tom indicated, at the Sherman location, both with the companies that are building in and around it and just the whole structure and the way where Nutex is now versus where it was a couple of years ago.

There are a lot of positives that support the concept for reopening it, and we're pretty excited about it being opened. Okay. And then just lastly, John, in terms of the structure, like you said, the templates, most pretty similar across your micro-hospitals. Maybe just talk about the incentives the physicians have to get the profitability. Does their equity stake depend on that, or what metrics does it depend on after the first year or the second year? Maybe just give a little more color on that. That'd be helpful. Thanks. Anthony, are you talking about the non-earnout type ones, these ones that now are just opening up in position without the earnout concept? Is that what you're asking, or are you asking specifically about those? Both. If you could talk about the earnout ones versus the non-earnout, that'd be great. Correct.

By the way, John, I'm back on. I apologize about that, Anthony. Really bad technical difficulty. Okay. Tom, you can answer the question. Yes. Yeah, I answered the first part. I think he's asking now about the structure of the earnout facilities, how it's different from, say, one like Sherman or something that's opening up. Anthony, as I know we've talked about in the past, the earnouts, which we've described them pretty in detail in the queues, remember those are we calculate the number of shares at the end of that two-year period, right, to go through and value what their position would be. There is, in this scenario, if they have a 20% stake or 30% stake, which is normally the case somewhere in that arrangement, somewhere around that amount, that on the earnouts, they ultimately resolve themselves at the end of the two-year period.

Where that earning structure is at the same multiple, of course, that the original companies, when the company went public back in 2022, the same calculator and all that, that's how they get given their shares based on their defined ownership at the beginning. You talk about incentives. Certainly, they're incented to do as well as they can, not only in the first two years. That's just to get the stock. In most scenarios, they're also operators and employees of the facility. They benefit from working in the facility and seeing the profit from that as well and giving good outcomes, of course. They're tied in. In some cases, they have a relationship on the asset entity, which is the private side, and of course, they're employees and owners in the actual hospital side of it.

They are also, in a lot of cases, tied into the doctor billing side, which we do the billing for them, but the doctors own 100% of that. They have a benefit on that side. That is for the earnout ones, right? These others that are not affiliated with an earnout one, I think everything else we just described, I mean, they have an ownership in that facility. As it becomes profitable, they benefit from that, and they share in the ups and the downs of the corporate group, which is the whole idea. We want everyone to be lockstep, side by side with each other as we grow. It takes time to do that. I think we have a great partnership in place, specifically in Sherman, along with all the other facilities as well. I think that is going pretty well.

Tom, you can add to that. Yeah. Anthony, you are right. I think John has already hit the nail on the head for most. For the ones that earn out and receive Nutex share, in essence, their success is dependent on Nutex's success now. When the ocean rises, all the boat rises. I think that is a very nice privilege for physicians to have because that is very unique in healthcare. Not too many companies could offer stock like that to healthcare employees. On top of that, like John said, the physician also has an equity ownership on the professional entity, which is the physician entity. The physician makes an hourly wage when they work. If the professional entity is profitable, then they will also be profitable in addition to owning Nutex stock.

For the physicians that did not roll up their Nutex shares, they stay at the local level. If the facility is profitable, they get a minority distribution quarterly on top of their potential profitability on the physician side as well as hourly work. We treat the physicians very fairly. As you can see on our financials, we did a fair amount of minority equity distribution in the first nine months. You can see on the minority profit, the physicians also did very well. Okay. Great. No, that was very helpful. I'll jump back in the queue. Appreciate it. Thank you, Anthony. The next question comes from the line of Bill Sutherland with The Benchmark Company. Please proceed. Thank you. Good morning, guys. I think I'll just leave it at one question in the interest of time.

I'm curious, as this process moves ahead, the IDR process, are you starting to have any different kinds of discussions with some of the payers as far as just wanting to have more productive negotiation talks prior to moving to the claims process? Yeah. Bill, thank you for covering us, and thank you for being on the call. Yes, the answer is yes. Over the past, I would say, three to four months, we're hearing a lot more from payers to try to negotiate better and network rate contracts. We evaluate every single one of them, and we take these very, very seriously. If the contract is fair and reasonable, we would definitely take it. We are in the process of evaluating. All of us. That's right.

In the course of doing that, as you move a payer away from realizing these claim wins, will it really result in the same kind of financial impact in terms of the margins on that business? Yeah, I can speak to that, Tom. I mean yeah. Go ahead, John. The reality, we will see, right, as we go through. It depends on where the price points land. Remember, even when you determine a fair and reasonable payment, which hopefully we will be able to get and avoid having to go through the IDR process, one of the benefits of avoiding it is the fees related to going through it.

As we're early stage in some of these where we have been able to get a reasonable contract and avoid the necessity of going into the IDR process, so far, the perception is that the net impact when it comes to bottom line should be nominal because of the revenue. In some cases, you'll get similar revenue, maybe slightly less, but very close. You're removing 24%-26% of the cost. It ends up being, I think, in a very similar position. It's early stage. I think as we finish out the year and walk into the first part of next year with all the other activity going on from a regulatory standpoint, I think we'll start to see movement one way or the other. We're watching it very closely.

We're very interested, as Tom indicated, in having contracts if we can because we all would like to avoid the process of having to go through the time and effort and cost of going through the IDR process if we can avoid it. Yep. Sounds good. Thanks for all the color, guys. The next question comes from the line of Carl Burns with Northland Capital Markets. Please proceed. Thanks for the question, and congratulations on your success and progress. I'm just wondering, now that you've got greater history with respect to the IDR process, what are you thinking in terms of budgeting relative to timeline to break even on startups going forward? And then I have one quick follow-up. Thanks. Yeah. Carl, it's a great question. Thanks for raising it.

Yeah, no, there's no doubt that with the movement in the direction of the requirement to have to go through the IDR process, it's been a very successful process for us. Now, it does, as we mentioned before, take time to get those dollars in. It can be anywhere between, say, five to seven months to fully realize and get paid on a claim that does go through the process. You get the first payment within 30 to 60 days, and then you have to go through that process. The long answer to your short question is the break-even process is moving up, certainly, and I think we'll continue to watch that closely. We budget for something taking somewhere between 12 to 15 months normally to get to a break-even position.

It probably shifts easily by a quarter if we continue to be successful in opening these up. Remember, it still takes from day one, five to seven months for the dollars to come in at the fair and reasonable rate. As a result, you really can't see it prior to that point if you still end up having to submit 60%-70% of our claims through the process. It certainly does improve.

Actually, what it gives us probably more is it might be a little bit of an improvement on getting to break even, but the bigger impact is on the back end in year one and year two where you're at a more solid, more reasonable, what we would expect level of profitability a little bit sooner on the back end, but you still have to wait probably that first nine months to a year to get to a break-even scenario. Hopefully, that helps answer your question, Carl. No, great. Excellent. That's very helpful. Shifting gears a little bit, are you seeing other opportunities like Homer G. Phillips in St. Louis? What might we expect over the next 12-24 months there? Thanks. Yes, Carl, are you referencing our St. Louis hospital, the former Homer G. Phillips Hospital? Exactly. Yeah. Yeah.

That is on the agenda to be opened this year, and we hope to open either mid or late December. The strategy is essentially the same: providing the best customer service, providing accessibility care to that population. The location of where that hospital is is essentially very close to downtown St. Louis, which is essentially a healthcare desert. We hope to capitalize on that by providing the best care so that people can start using us. Does that answer your question, Carl? Yeah. Yeah. I'm wondering if there's other opportunities that you've presented with that are similar to that that could be opportunistic going forward. Oh, yes. The problem with micro-hospitals is that they just don't exist. Or if they do exist, they are located in areas where it is very difficult to make profitable.

That is why historically we've had to build these from the ground up. I think we mentioned this because if a hospital does not exist, then Nutex Health does not have a hospital to operate in. However, there are certain hospitals that are existing out there that we strategically look to acquire. Yes, we are essentially on the lookout to acquire any of those existing hospitals, assuming that they fit all of our criteria. Yes, there are opportunities out there, few and far between, but you just have to look. Understood. Cool. Great. Congrats again. Thanks. Thank you, Carl. The next question comes from the line of Bradford Seagraves with Northbank Capital Management. Please proceed. Hi. Thank you. Can you please provide an update on the buyback, how much you've bought, and at what price? Brad, I'm sorry.

Were you talking about buyback of the shares? It's not buyback. Is that what you're asking? Yes. Okay. No, at this point, we're in the process of putting that in place. At this point, no shares have been bought back. Okay. Understood. More broadly, can you talk about capital allocation priorities, the cash that's growing on the balance sheet? Curious to see what your thoughts are on what the uses of that cash might be. Yeah. I can start on that, and then Tom can add to it as well. Certainly, the buyback concept that you referenced is something that we've already announced. It's something that we're very serious about. We'll look at that very closely in the very short term. Certainly, there are opportunities that we try to grow and add good situations when it comes to opening up hospitals.

We talked about, yes, from time to time, we can find existing ones that we could potentially spend that money on. I think that's a big one. We will look at some other opportunities outside of investments for now. We have other opportunities to look at service line improvements. There's the IPA business, which Warren talked about as well. There are opportunities in those areas. That's kind of the direction that we're looking right now. We will watch as we finish out the year to see if cash continues to be strong and look for some of those situations to pop up and make good decisions on where we spend that money. To answer your question, Brad, excellent question, by the way. This is definitely a good problem to have. In essence, we are, the cash buyback program, as mentioned.

We may or may not increase that in the future. That is to be determined. On top of that, we are looking hard for existing facilities like Carl brought up to acquire so that we do not have to go through the build-up, ground-up process. Thirdly, as Warren mentioned, we are looking to expand our IPA business so that we can have an IPA surrounding each of the hospitals. The reason for that really is just a very good symbiotic relationship between the hospital and the IPA business, which, once again, is very unique in the healthcare industry. Fourthly, we would like to invest into our current hospital to expand additional services capabilities. As an example, I think I mentioned behavioral health.

We are investing quite a bit in upgrading our hospital so that we can see more behavioral health patients on the medical side, as an example. With those types of investments, we have to find specialists. We have to find the correct equipment. We have to find people that are skilled at handling behavioral health, as an example. Those are all essentially capital allocations that we have currently. I'm sure there will be more need for capital allocation in the future, but those are basically the existing ones that we have at this point. Does that answer your question, Brad? Yes. Last one for me, can you talk about the inpatient utilization, where it was a year ago, where it is today, and where you think it can go over the next 12 to 24 months? Yeah. Absolutely.

Over the past, actually, two years, we have begun a push to admit more patients into our own hospital. This is not an easy process or a straightforward process because in order to get more patients admitted, we need specialists. We need hospitalists. We need people that could take care of patients in the hospital. Over the past two years, we've been relatively successful at ramping more patients into our hospital and not have to transfer them out to other hospitals. We're doing very well from that standpoint. As you can see from the revenue, that partly explains why the revenue has increased substantially more than the patient visit. That's one variable and one factor. For now, as of today, I would say that we're only at roughly 25-30% inpatient capacity.

As we increase more, that number will only get better. We have a system-wide initiative to admit as many patients as we can to our hospital so that these patients do not need to go off to other hospitals. In fact, patients really love to stay at our hospital. None of them want to be transferred to all the big system hospitals because the care that they receive at our hospital is probably superior and second to none. Unfortunately, sometimes we just do not have the expertise and the specialists to take care of these patients. That is why we have to transfer them out. If we can keep them in our hospital, we will definitely do that. Great. Thank you. Yep. Thank you, Brad. The next question comes from the line of Gene Mannheimer with Freedom Capital Markets. Please proceed. Hey, thanks. Good morning.

A lot to digest here. Congrats on getting the numbers current. I wanted to just—I think that last question segues well into the revenue per visit being up so much. It sounds like you're not breaking out the arbitration revenue this quarter specifically. What is the reason for that? Maybe you can share at a minimum, was it similar to last quarter or greater or less than Q2? Yeah. I can speak to that. I mean, we're not breaking that specifically out because it's really part of our business now as the main reason. Comparatively, I think you've seen period to period to period an improvement there. It's of a similar nature.

I know that we talked about how, if you remember, back in the first quarter when the collection percentages play into this too, that we only were seeing—it was early in the process, at the end of the year and into the first quarter where the collection percentages were new. We were only in the 70% range. Now we've worked our way up into the 80% range. Some of that revenue is just the natural progression of going back and realizing, okay, instead of 70% or 75%, which we were seeing kind of in the early middle part of the year, now we're at 80%. The collection percentage is a decent amount of that uptick, which is a little bit of a cumulative impact going back and addressing that as realization continues to improve.

In the revenue discussion, we talk about how much of our revenue within the quarter and the year related to the IDR process. That is kind of the direction we plan to go with that. Outside of that, I think we will watch it closely and see if we can get more detail. We are more than happy to provide it. I think we have been pretty transparent on that piece, at least the last couple of quarters now. I think today earlier, and you saw in the releases, a discussion about the piece of our revenue that relates to that. We will watch that closely and continue to work it from there. Okay. Thanks. That is helpful, John. Appreciate it. Just going back to that inpatient utilization, I think, Tom, you are saying your occupancy is now about 25-30% across all your hospitals.

How does that compare to, say, two years ago? Two years ago, it was a lot less than that, Gene, unfortunately. I think partly because of the reduction in revenue back in 2022, we started this initiative. This initiative is a part of our normal operating procedure now. We hope to grow that inpatient volume to be much higher than that over the next few years. That's excellent. Okay. One more statistic I want to just mention. It sounds like the mature hospital visits decreased by about 0.5%. Normally, I mean, I think we'd want to see that marginally higher. Was there anything to call out that led to a decrease year over year? Yeah. We're scratching our head on that also, Gene. Nothing materially has changed in terms of operations.

Our business development, marketing, physician outreach, physician care, everything is pretty much the same. The only thing that potentially could have occurred this year versus last year was that there was a COVID spike last year around late summer, whereas we're not seeing quite a high COVID spike this year. That may have been it. I'm not sure. Yeah, it's a head-scratcher for sure. We're definitely going to continue to watch it and definitely going to focus on that so that we can continue the growth quarter over quarter. Okay. That makes a lot of sense. Okay. Last question, with respect to stock-based comp, obviously a lot of discussion around that. In terms of modeling that going forward, I realize there are a number of factors to consider. That Q3 number was relatively low.

Is that the right way to think about it going forward, or could we continue to see some big swings there? Yeah. I mean, I would say, Gene, great question. First of all, I think we're definitely through the big portion of all the earnouts. We only have a few left, as we described in the queue. I think you're referencing in the table that we've provided in note 11 where it talks about the three that are currently open and in the period where they can be calculated that run through kind of the deadline. I think that the way that calculation is done, which is all we can do is use the data that we have so far with some level of a projection on that.

If they continue to move in the direction or similar to what the others have done, it should be better than that. We did not want to be in a position to assume that at this point. I think the numbers you have there are certainly ones that you can use from a projection standpoint. We are optimistic that maybe we can do better in that case. They have a decent amount of period in all three cases left before they get to the final stage. I believe the earliest one is the end of the first quarter of next year. That is still another six months of going into prime time kind of maturity stage. The other two that are out there go all the way till the end of next year. They are very, very early stage.

I think it should improve from where you see it right now. Okay. That's terrific. Thank you and congrats again. Yeah. Thanks, Gene. Thank you, Gene. Thank you. This concludes the question and answer session. I'll hand the call back over to Jennifer Rodriguez for closing remarks. Thank you all for those valuable questions and answers. For all those joining us today, if you have more questions, please email us at [email protected], and we'll get back to you promptly. On behalf of the Nutex Management Team, thank you all for joining us for our second and third quarter 2025 earnings call. We apologize for the technical difficulties. We've covered a lot, and we appreciate your time and interest. A recording of this call will be available on our website for a limited time, so feel free to revisit it.

Take care, everyone, and we look forward to keeping you updated on our journey. Thank you. This concludes today's conference. You may disconnect your lines at this time. We thank you for your participation.