Sign in
NH

Nutex Health, Inc. (NUTX)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 revenue surged to $257.6M (+269.6% y/y), driven primarily by ~$169.7M of Independent Dispute Resolution (IDR) arbitration-related revenue; Adjusted EBITDA rose to $93.6M from $3.1M in Q4’23, and diluted EPS was $11.12 versus $(7.47) a year ago .
  • Massive beats vs S&P Global consensus: revenue $257.6M vs $81.1M*, EBITDA $93.6M vs $8.4M*, and diluted EPS $11.12 vs $(0.12), as the company accrued arbitration wins and improved reimbursement per visit (particularly in mature hospitals) .
  • Operationally, hospital visits rose 9.8% y/y to 45,444, while mature-hospital revenue grew 175.6% y/y in Q4; G&A ratio fell to 4.9% of revenue in Q4 as scale and cost discipline improved .
  • Sustainability/quality of earnings in focus: accounts receivable expanded to $232.4M as recognition moves ahead of cash; management expects to submit 60–70% of billable visits into IDR, has >80% win rate, typical cash realization lags 3–5 months, and will transition to monthly accrual updates in 2025 .

Note: * Values retrieved from S&P Global.

What Went Well and What Went Wrong

  • What Went Well

    • Arbitration materially lifted reimbursement and mix: “The arbitration initiative that we began in July 2024 is generating higher reimbursement amounts per visit… more in line with a fair market rate.” – CEO .
    • Margin expansion and scale efficiency: gross profit was $141.6M (55% of revenue) vs $13.2M in Q4’23; CFO highlighted “impressive margin expansion” with G&A down to 4.9% of revenue in Q4 .
    • Volume and acuity mix improved: hospital visits +9.8% y/y; COO cited “higher ER acuity and an enhanced service mix, with greater focus on observation patients and inpatients” .

  • What Went Wrong

    • Heavy reliance on IDR accruals and cash timing: $169.7M of Q4 revenue was arbitration-related (spanning Q3/Q4 dates of service) and carries costs ($57.6M tied to Q3/Q4 IDR), with cash collection typically 3–5 months after award .
    • Non-cash items and accounting complexity: Q4 included $14.7M non-cash stock-based comp; finance lease liabilities are large (related to long-term facility leases), adding complexity to leverage optics .
    • Regulatory and process risk: company warned outcomes could change with NSA/IDR revisions or payer behavior; success may not persist at current levels .

Financial Results

MetricQ4 2023Q3 2024Q4 2024 (Actual)Q4 2024 (Consensus*)
Revenue ($)$69.67M $78.79M $257.62M $81.13M*
Net Income Attributable to NUTX ($)$(31.62)M $(8.79)M $61.70M —
Diluted EPS ($)$(7.47) $(1.72) $11.12 $(0.12)*
EBITDA ($)$(27.74)M $4.34M $78.44M $8.41M*
Adjusted EBITDA ($)$3.12M $13.46M $93.65M —
Gross Profit ($)$13.21M $21.92M $141.63M —
  • Arbitration mix detail (Q4): Of the ~$169.7M arbitration revenue recognized in Q4, ~$68.9M related to Q4 dates of service, ~$70.5M to Q3, and ~$30.3M pre-Q3 .
  • Key cost items: Q4 included $14.7M non-cash stock-based comp; facility-level operating costs were ~$116.0M (≈45% of revenue) in Q4 vs 81.1% in Q4’23; arbitration costs contributed ~$57.6M over the period .

Segment revenue (quarterly)

SegmentQ4 2023Q3 2024Q4 2024
Hospital Division Revenue ($)$62.59M $71.73M $249.70M
Population Health Mgmt Revenue ($)$7.08M $7.06M $7.92M

KPIs and balance sheet indicators

KPIQ4 2023Q3 2024Q4 2024
Hospital Division Visits (units)41,381 41,668 45,444
Cash & Cash Equivalents ($)$22.00M $46.91M $43.58M
Accounts Receivable ($)$58.62M $62.75M $232.45M
% of Billable Visits Submitted to IDR——~60–70%
IDR Win Rate——>80%

Note: * Values retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Financial guidance (revenue, EPS, margins)2025/forward—None provided in press release or discussed as formal guidance on the call— –

Earnings Call Themes & Trends

TopicQ2 2024 (prior)Q3 2024 (prior)Q4 2024 (current)Trend
NSA/IDR arbitrationInitiated IDR in July; cited industry 70–80% provider win rates; expected more data by Q4 .Continued IDR; expected clearer view by Q4/FY; 60–80% of claims could enter IDR .~60–70% of billable visits submitted; >80% win rate; accruals based on latest realization; 3–5 month cash lag .Strengthening process; scaling throughput; earlier cash conversion visibility
Cost disciplineGPO alignment and national contracts; focus on labor, supplies, services .Ongoing cost control; planning capex cadence and labor tools .G&A to 4.9% of revenue in Q4; arbitration costs recognized; continued tech/AI for efficiency .Efficiency gains with scale; tech/AI adoption increasing
Service mix/acuityShift to more observation/inpatient volumes; bus dev and CRM .Mature hospitals growing; new service lines piloted .Higher ER acuity; enhanced mix; observation/inpatient focus reiterated .Persistently improving mix and acuity
AI/technologyPlanning labor mgmt, analytics; EMR/digital tools .New CRM; software rollout plan .Evaluating AI agents for admin/clinical workflows (check-in, staffing, note-writing, coding) .Expanding pilots to drive productivity
Expansion4 de novo hospitals under construction pipeline .2 openings in Nov/Dec; 4 in 2025 planned cadence .4 opened in 2024; three under construction for late 2025; pipeline through 2028 .Continued multi-year pipeline
Regulatory/legalAcknowledged NSA risks and payer behavior .Monitoring IDR outcomes, insurer responses .Explicit caution that IDR success may not persist; regulatory changes could impact recovery .Elevated disclosure of policy risk

Management Commentary

  • “We are pleased to report record annual revenues, net income and solid free cash flows, as well as impressive margin expansion…” – CFO Jon Bates .
  • “The arbitration initiative… is generating higher reimbursement amounts per visit this year and is more in line with a fair market rate.” – CEO Dr. Tom Vo .
  • “Total hospital division visits increased by 16.9%, driven by higher ER acuity and an enhanced service mix, with greater focus on observation patients and inpatients.” – COO Josh DeTillio .
  • CFO detail on accrual approach: estimating realizable amounts by location, acuity, payer, based on latest IDR data; moving to monthly updates in 2025 .

Q&A Highlights

  • IDR sustainability and cadence: Management continues to push 60–70% of billable visits through IDR, expecting similar cadence barring payer behavior change; win rate >80% to date .
  • Revenue recognition mechanics: Accrued using latest IDR outcomes by facility/acuity/payer; recognition broadened in Q4 as data matured; plan to spread recognition monthly in 2025 (not back-loaded) .
  • Magnitude/timing: Typical 3–5 month realization from open negotiation through award to cash; Q4 recognized wins spanning Q3 and Q4 dates of service .
  • De novo ramp: Of the four 2024 openings, two are performing better than expected; three 2025 openings planned for 2H25 (subject to construction) .

Estimates Context

  • Beats vs S&P Global consensus: Q4 revenue $257.6M vs $81.1M*, EBITDA $93.6M vs $8.4M*, diluted EPS $11.12 vs $(0.12), driven by IDR revenue recognition and improved mix/accruals .
  • Implications: Street models likely under-reflected IDR accruals and timing; management’s shift to monthly updates in 2025 should smooth quarterly volatility but dependence on policy/process and payer response remains a key variable .

Note: * Values retrieved from S&P Global.

Key Takeaways for Investors

  • The quarter’s upside was overwhelmingly arbitration-driven (≈$169.7M of Q4 revenue), with strong mix and cost leverage; sustainability hinges on IDR throughput, win rates, and payer behavior .
  • Working capital will be central: AR rose to $232.4M; monitor cash conversion vs accruals given 3–5 month realization lags and quarterly smoothing starting 2025 .
  • Core operations are improving: visits +9.8% y/y, mature hospital momentum, and G&A efficiency to 4.9% of revenue demonstrate operating scale beneath the IDR overlay .
  • Policy risk is non-trivial: any NSA/IDR rule changes or payer adaptations could alter recovery economics; the company explicitly warns current success may not persist .
  • Multi-year growth optionality: four 2024 openings and a 2025–2028 pipeline support volume and mix tailwinds as service lines broaden (observation/inpatient, behavioral health) .
  • Trading setup: Expect estimate dispersion and elevated quarter-to-quarter volatility until monthly accrual cadence is established and cash collections normalize; catalysts include further IDR disclosures and cash trends .

Notes: All company financials, KPIs, and commentary sourced from Nutex’s Q4/FY 2024 press release, 8-K, and earnings call unless otherwise indicated. Consensus figures marked with an asterisk are Values retrieved from S&P Global.