Nutex Health, Inc. Q2 FY2025 earnings call

Management Statement and Operational Highlights

• Tom Vo highlighted strong operational results for Q2 2025 with total patient visits up, revenue growth (total revenue $244 million in Q2 2025 vs. $76.1 million in Q2 2024, a 220% increase), gross profit improvement ($124.8 million or 51.1% of total revenue in Q2 2025 vs. $22.6 million or 29.7% in Q2 2024), and adjusted EBITDA at $73.3 million vs. $6.8 million in Q2 2024. Discussed the No Surprises Act and arbitration strategy for revenue cycle management.
• Jon Bates provided details on the restatement process related to stock-based compensation obligations, mentioned financial data unaffected by the restatement, and discussed hospital project earn-outs.
• Warren Hosseinion updated on the Population Health Management Division, noting refined focus on growth and operational efficiency, with IPA network expansion and improved profitability.
• Dr. Mike Chang focused on clinical quality, with patient satisfaction rates exceeding 96%, high Google ratings, and discussions on costs, supply chain, and technology investments.

Segment Performance

• Hospital Division: In Q2 2025, total revenue was $244 million, with the Hospital Division generating $236.3 million, which is 71% of total revenue. For the six months ended June 2025, Hospital Division revenue was $440.2 million, accounting for 64% of total revenue. Patient visits in Q2 2025 for the Hospital Division were 45,573, a 10.6% increase from Q2 2024. For the six months ended June 2025, total visits were 93,842, a 15.5% increase from the same period in 2024.
• Population Health Division: In Q2 2025, revenue was $7.7 million, a 9.2% increase from Q2 2024. For the six months ended June 2025, revenue was $15.5 million, a 2.4% decrease from the same period in 2024.

Guidance

• Over 15 hospital projects in development, with 2 confirmed openings by the end of 2025 and a potential third.
• Board of Directors authorized a stock repurchase program of up to $25 million of the company's common stock over the next 6 months.

Risks

• Short seller report allegations regarding HaloMD and revenue clawback, but Nutex disagreed with the allegations and stated compliance with federal arbitration rules.
• Restatement process related to accounting treatment of stock-based compensation obligations, which could impact financial filings.

Question and Answer Q: In terms of the restatement process, do you have a timeline for when you'll get the audited results and be able to file the amended '24 10-K and the first quarter '25 10-Q?

A: We're working actively on it, with 60 days to file the second quarter, and engagement has begun in the restatement process, focusing on reclassifications of equity to debt.

Q: I was wondering in terms of the restatement process, do you have a time line for when you think you'll get the audited results and be able to file the amended '24 10-K and the first quarter '25 10-Q?

A: Yes, we're working through it, with engagement already begun, and focusing on reclassifications, with 60 days to file the second quarter.

Q: As I look at your preliminary results, I think the implied EBITDA margin is about 30% for the quarter, and that's a little bit down from what we've seen in the last couple of quarters, though your gross margin was strong, 51%. So I'm just trying to reconcile that. What -- is there anything that was compressing EBITDA margins this quarter relative to the last couple of quarters?

A: There are supplier payments and arbitration costs, with some costs related to opening newer facilities and improvement in arbitration side costs, but nothing dramatic, and strong cash collections and trends.