Nutex Health, Inc. (NUTX) Earnings

Management highlights

Tom Vo discussed the first quarter financial and operational performance, including revenue, net income, adjusted EBITDA, patient visits, balance sheet changes, share repurchase, and operational investments. Jon Bates provided more financial details like revenue breakdown by division, cost changes, stock compensation, and balance sheet strength. Warren Hosseinion talked about population health management, including division revenue, strategy around physician networks, and growth areas. Wes Bamburg focused on operational drivers, patient acuity, cost management, and technology investments

Guidance

Nutex is on track to open 3 additional hospitals in the third and fourth quarter of 2026. The company is investing in infrastructure, leadership team, business development, technology, and new service lines. It completed the first $25 million share repurchase program and initiated a second one. The Board approved direct investment in hospital facility development, aiming to monetize assets through sale-leaseback and recycle proceeds for future developments

Segment performance

Total revenue reached $216.5 million, a 2% increase from $211.8 million in Q1 2025. Net income increased to $46.8 million compared to $21.2 million in Q1 2025. Adjusted EBITDA dropped to $57.6 million, down 21% from $72.8 million in the prior period. Hospital recorded 49,700 total patient visits, up 3.1% from 48,300 patients in Q1 2025. Population Health division had revenue growth of approximately 14% to $8.9 million for the quarter 1 of 2026 versus $7.8 million for the same period in 2025. Net long-term debt decreased from $29.2 million at December 31, 2025, to $24.3 million at the end of Q1 2026. Net cash from operating activities was $75.5 million for Q1 2026 compared to $51 million in 2025, a 48% increase. Cash on hand grew to $207.3 million as of March 31, 2026, up from $185.6 million at year-end 2025

Risks & headwinds

Forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ. Arbitration costs and revenue recognition timing can impact financials. Insurance company resistance and court case outcomes are ongoing risks. The impact of legislative and legal developments, especially the Murphy Bill, is a risk

Analyst Q&A

• Q: Exciting news, Tom, about taking on the hospital development internally. When will that probably initiate? And what -- how should we think about the balance sheet impact as you get into that?

  A: Bill, thanks for asking, and great to have you on the call. So yes, the process has already started with 3 new projects in Florida. And typically, these project takes roughly 18 to 24 months to develop and open. So in other words, even if we start today, we may not open these for another 2 years. So once the facility opens at that time, we will then flip it to a REIT like I mentioned or some kind of a long-term real estate vehicle. Now as far as the balance sheet change, John could probably chime in, but each of these projects cost roughly $20 million to $30 million to build. Our thought is to have Nutex invest the down payments, get a financing vehicle of some type. And then once we flip it, get all that reimbursed [indiscernible] Jon, any further thoughts on the balance sheet question? Yes. I mean I think -- it's a great question, Bill. The -- I mean, obviously, when you have the asset on the books at the point you have it on the books, you're going to have the land and the building, and you'll have a mortgage of some kind or whatever cost to potentially finance it. So outside of that, then we'll decide to move on to the REIT concept, and there will be some slight changes there, but the main point at the start is going to be your asset and, of course, the mortgage.

• Q: The court cases, et cetera, I'm not sure what the status is of the Murphy bill is. But it seems like insurance -- the payer side is not getting any wins basically. And I'm just curious if there's a change in -- as you guys approach negotiating process prior to arbitration or even just discussions outside of that. Any change in you feel like how they want to approach this whole process and maybe even being more realistic about what [ network ] should look like for you?

  A: Yes. The answer is that we are constantly and always looking at new contracts that are submitted by payers. And we are always trying to get in their work, if possible. And you are correct that recently, we've had 3 very positive court cases that are Pro providers in California, Florida, and Pennsylvania. So those are all fantastic news for us. However, it is a long war, so to speak. So we just won a few battles -- but this will be a continuing process as insurance company are always going to fight back. And this is consistent with our experience with the insurance company for the past 15 years. That's always been the case. So that will not change anytime soon. Having said that, however, the good news is that we are looking -- we are seeing more and, I would say, better offer from the insurance company, and we are looking at all of them.

• Q: On the arbitration costs, right, increased to 35%. And historically, it's been that mid-20% range. Jon, you indicated that you expected to return to that 24% to 26% range. Just curious what gives you confidence in that returning back down to lower levels? Do you have an internal time line on when you expect these figures to return to stable levels? And also, if you could talk about what drove the increase in the quarter, that would be appreciated.

  A: Yes, sure. No problem. I mean, so it's just one slice and time on that piece. And as we talk about in my earlier discussions, and we talked about before, revenues on accrual base based on collection basis, our costs because of the way we're laid out are we record 100%. So technically, when that calculation comes out at being slightly higher in our financials. When the realization happens, cash ultimately goes out, will only be going out at the point at which there's a win. But right now, we're anticipating 100% of every single win on the cost side, but only whatever our average collection rate is on the revenue side. So that inherently brings that percentage up. So I think if you look back over the last 4 or 5 quarters, -- it actually -- it's averaging in that mid- to high 20%, which is where I think it will ultimately land when the dust settles on realization. So that's -- that's kind of the technical as the answer. And I do think over the second, third and fourth quarter, you'll see it will start probably working its way back into that area we were talking about, but I think just for this 1 period, just with the math on where the costs are just getting everything kind of in line and reported in the quarter relative to revenue is slightly higher, but that's not the -- I don't anticipate that being the case as we move forward. But another quarter or 2, and we'll look at it over the last 3, 4 quarters, I think you're going to see that it's going to resolve itself back into that lower number, but great question, Thomas.

• Q: First, on the arbitration costs, right, increased to 35%. And historically, it's been that mid-20% range. Jon, you indicated that you expected to return to that 24% to 26% range. Just curious what gives you confidence in that returning back down to lower levels? Do you have an internal time line on when you expect these figures to return to stable levels? And also, if you could talk about what drove the increase in the quarter, that would be appreciated.

  A: Yes, sure. No problem. I mean, so it's just one slice and time on that piece. And as we talk about in my earlier discussions, and we talked about before, revenues on accrual base based on collection basis, our costs because of the way we're laid out are we record 100%. So technically, when that calculation comes out at being slightly higher in our financials. When the realization happens, cash ultimately goes out, will only be going out at the point at which there's a win. But right now, we're anticipating 100% of every single win on the cost side, but only whatever our average collection rate is on the revenue side. So that inherently brings that percentage up. So I think if you look back over the last 4 or 5 quarters, -- it actually -- it's averaging in that mid- to high 20%, which is where I think it will ultimately land when the dust settles on realization. So that's -- that's kind of the technical as the answer. And I do think over the second, third and fourth quarter, you'll see it will start probably working its way back into that area we were talking about, but I think just for this 1 period, just with the math on where the costs are just getting everything kind of in line and reported in the quarter relative to revenue is slightly higher, but that's not the -- I don't anticipate that being the case as we move forward. But another quarter or 2, and we'll look at it over the last 3, 4 quarters, I think you're going to see that it's going to resolve itself back into that lower number, but great question, Thomas.

• Q: Revenue for business declined again this quarter slightly, but just still notable -- is that just a function of the IDR award dynamics? Or are we seeing something payer mix, patient acuity. And just if we look forward to 2026, how do you expect this metric to trend over time? I know you guys had some initiatives to hopefully drive this, but just kind of curious if you could get an update on that front. Will the new service offerings play a role? Or are you mostly just looking to increase the inpatient visit rate.

  A: Yes. No, good question, [indiscernible] and we talked about this before. Remember, 2025 had more of an aggregation of the beginning of the IDR process end of '24 was kind of the first piece. And as you know, collection percentages increased throughout each period, which is what we're using to accrue revenue in 2025. It's gotten to a pretty solid rate. Now -- but so there was a lot more if you look at just pure revenue per visit in 2025, which makes that piece look a little bit higher when probably some of that, if you look back and say, okay, if you were to collect it -- if you would add the higher percentage collection rate at the end of 2024, which ultimately resolved itself, then we would have had more revenue back then, which would have shifted some of the kind of net revenue per visit in those periods. And even this out a little bit more. So I think we talked about at year-end that if you looked at the rate per visit from when we really started the arbitration process back in July of '24, it it was averaging right around in that -- between 4,000, 4,200 range. And so that's -- I think that's where the normalization really is on a steady state. I know we're working in a lot of areas on acuity and improving in those areas and the [indiscernible] mentioned earlier about the observation and inpatient piece. That's happening. So I think the rate that we're seeing even look back the 6 quarters prior to December of '25 and then add this 1 in another seventh quarter, I think you're looking at kind of where we're at on the steady state assuming the same types of visits walk in the door day yesterday, they did do tomorrow. So I think the rate is probably in a pretty good spot there, and we're going to continue to work in the efforts that were mentioned earlier on finding ways to get some higher acuity and improving also on the realization side as we work hard with the payers, whether it's through the IDR process or just in normal negotiations, so making sure we're getting paid fairly, which I think things are improving in that area. And as we move through this year, I do think some positive things will happen and reimbursement should continue to stay pretty strong.

• Q: On the selective self-development of some of these de novo facilities. Just curious, do you guys have an internal target for the mix of how many of these facilities will be invested in by new tech versus having the real estate partner and does this impact how you guys look at long-term expansion strategies? This opened the door for more rapid expansion, more selective expansion in particular markets or anything on that front?

  A: Yes, Thomas a great question. By the way, thank you for joining the call. But the answer是 that, yes, we are looking at each location selectively on a one-by-one case-by-case basis. And so we're going to essentially develop based on what we think will bring the most value to our shareholders. Having said that, there will be an option for all the developers to come in and invest with us. And so all that is still open at this point. But the whole reason we're doing this, once again, is to, number one, ensure a steady pipeline as well as decreased costs and ensure that the pipeline remains robust, so that we consistently could still do 3 to 5 per year.

• Q: Congrats on a good start to the quarter and year. I wanted to ask a little bit about patient volumes. The 3% growth year-on-year seems a little modest to me considering that you opened 3 hospitals last year. And I'm just wondering was it that the openings were skewed toward year-end, which is why we didn't see more throughput there on the volume side?

  A: Yes. Gene, thanks for joining us. So the answer is multifold, but yes, you're correct in the sense that the 3 openings were earlier this year, and in fact, 2 of them open, I would say, in late December of 2025, and the last 1 opened in January. So they are [indiscernible] development. They are growing. They are in essence, growing as projected, but they are fairly new. And so I think that was one of the reasons why [indiscernible] has been a little bit flattish. The second reason is last year, we had a very robust and I would say, a very heavy flu season compared to this year. And so the flu season isn't just didn't hit as hard as we thought it would be. And so hence, leading to a slightly flatter volume. But having said that, it's still growing. We're still developing internal processes. So that we could accommodate more patients. So it's a never-ending job to increase volume and increase security.

• Q: The prior question a different way on the IDR process, do you -- or can you still quantify the revenue from IDR in the quarter? And how about that pivot towards higher acuity is that manifesting in the numbers today. Jon, do you want to add?

  A: Yes. I can talk to some of that. I mean, so we talk about we're submitting 50% to 60% of our claims going through there. So I think that's a general -- a pretty good idea of of the piece of it. I mean, we look at this as part of our overall business now. So we don't break it out as much as we used to because of the day-to-day. And to your point of, yes, it's certainly in the acuity certainly in our numbers when it comes to the revenue side of it. And as you can see in the reimbursement rate, it stayed relatively consistent with kind of where we looked at from almost inception of July of '24 all the way through even December '25 kind of reimbursement rate pretty close to what it is now when you go into the first quarter of this year. So I think that will continue. And I think there's opportunity for that to improve based on some of the initiatives that we have.

• Q: Growth in the Population Health segment, I mean, Q1 was strong at 14% and year-on-year, but revenues have been very lumpy there. And it seems like that your most profitable IPA, like L.A. does not even have a hospital around it. So I'm just wondering how do we think about this population segment longer term in terms of growth of both lives and contracted physicians.

  A: Gene, thanks for that question. So actually, in 2025, each of our IPA so in Southern California, in Houston and in Southern Florida, they generated cash on a stand-alone basis. So我 just want to start with that. Our goal, again, is to build these networks of physicians around our facilities. And it's not just bring IPA volume. But once these doctors join our IPAs, they're aware of our facilities, our services -- some of them become owners in the IPA medical entities. The -- we have seen anecdotally that they send their non-IT PPO/commercial patients to our ERs. So the goal is not to build the largest IPA. It's to just build these networks, build awareness and take really good care of our patients, bring volumes, both IPA non-IT volume to our facilities. So really, that's the goal. Yes. And Bill, I want to add that the LA IPA is our most mature and are most established. And so that's one reason why they're more profitable than the others. But Houston and Phoenix are coming along nicely, like warrants said they are profitable. And we do have hospitals around both of those. The Miami location is also slightly profitable, but we do have a hospital opening in the Hallandale area in 2027 that would complement that nicely as well as with Palm Beach hospital that will also complement the South Miami. And so we're also expanding to both Dallas and San Antonio, where we have planned hospitals opening. So strategy is to surround the hospital with a network of primary care and specialist physicians