Q2 2025 RadNet Inc Earnings Call

Speaker #3: Pardon me, ladies and gentlemen. You have been connected to RadNet; the second quarter conference call will begin shortly. Please stay connected. Ladies and gentlemen, you have been connected to RadNet's second quarter conference call.

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Speaker #4: Good day and welcome to RadNet, Inc. Second quarter 2025. Financial results, conference call. All participants will be in the listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key, followed by zero.

Speaker #4: After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on a touch-tone phone.

Speaker #4: To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Mr. Mark Stolper, Executive Vice President and Chief Financial Officer of RadNet.

Speaker #4: Please go ahead.

Speaker #5: Thank you. Good morning, ladies and gentlemen, and thank you for joining Dr. Howard Berger and me today to discuss RadNet's second quarter 2025 financial results.

Speaker #5: Before we begin today, we'd like to remind everyone of the Safe Harbor statement under the Private Securities Litigation Reform Act of 1995. This presentation contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995.

Speaker #5: Specifically, statements concerning anticipated future financial and operating performance, RadNet's ability to continue to grow the business by generating patient referrals and contracts with radiology practices, recruiting and retaining technologists, receiving third-party reimbursement for diagnostic imaging services, successfully integrating acquired operations, and generating revenue and adjusted EBITDA for the acquired operations, as estimated, among others, are forward-looking statements within the meaning of the Safe Harbor.

Speaker #5: Forward-looking statements are based on management's current preliminary expectations and are subject to risks and uncertainties which may cause RadNet's actual results to differ materially from the statements contained herein.

Speaker #5: These risks and uncertainties include those risks set forth in RadNet's reports filed with the SEC from time to time, including RadNet's annual report on Form 10-K for the year ended December 31, 2024.

Speaker #5: Undue reliance should not be placed on forward-looking statements, especially guidance on future financial performance, which speaks only as of the date it is made.

Speaker #5: RadNet undertakes no obligation to update publicly any forward-looking statements to reflect new information, events, or circumstances after the date they were made or to reflect the occurrence of unanticipated events.

Speaker #5: And with that, I'd like to turn the call over to Dr. Berger.

Speaker #6: Thank you, Mark. Good morning, everyone, and thank you for joining us today. On today's call, Mark and I plan to provide you with highlights from our second quarter 2025 results, give you more insight into the factors that affected this performance, and discuss our future strategy.

Speaker #6: After our prepared remarks, we will open the call to your questions. I'd like to thank all of you for your interest in our company and for dedicating a portion of your day to participate in our conference call this morning.

Speaker #6: Let's begin. I am very pleased with the performance in the second quarter. After experiencing significant disruption in the business during the first quarter of this year, as a result of the California wildfires, and severe winter weather conditions in the northeast and Houston markets, the second in the second quarter business rebounded, and we achieved record quarterly revenue and adjusted EBITDA.

Speaker #6: Relative to last year's second quarter, total company revenue increased 8.4% to a quarterly record of $498.2 million, and digital health segment revenue increased 30.9% to a quarterly record of $20.7 million.

Speaker #6: Contributing to core imaging center revenue growth were a variety of factors. First, industry trends continue to provide tailwinds. Imaging technology advances in equipment, post-processing software, artificial intelligence, contrast materials, and nuclear isotopes continue to drive increased utilization of diagnostic imaging within healthcare in general.

Speaker #6: Furthermore, within this growing industry, the shift of procedural volumes away from the more expensive hospital alternatives to more cost-effective ambulatory freestanding centers continues. Second, improvement continues in reimbursement rates with commercial and capitated payers that recognize the position RadNet offers as a lower-priced alternative to hospital-based imaging.

Speaker #6: To this end, we have been successful in receiving rate increases from many of the larger commercial payers, and several capitated contracts have been converted to higher-paying fee-for-service relationships.

Speaker #6: Lastly, and perhaps most importantly, the focus has been on driving more advanced imaging procedures—MRI, CT, and PET CT—and increasing advanced imaging capacity through a variety of initiatives.

Speaker #6: Advanced imaging has a higher per-procedure pricing and typically better margins. During the second quarter of this year, advanced imaging as a percentage of total procedures increased to 27.5% from 26.5% in last year's same quarter, an improvement of 102 basis points.

Speaker #6: This increase is due in part to initiatives that have been identified within each of these modalities. For example, within MRI, the 9% aggregate and 6.6% same-center growth in the second quarter compared with last year's second quarter is partially the result of capacity created from investments made in MRI software upgrades and operating protocols, which enable shorter scan times.

Speaker #6: The shorter scan times allow for the scheduling of more patients in the same hours of operation. Within CT, programs have been expanded on both costs to offer more complex procedures; an example of this is cardiac CT angiography, which is growing rapidly and, in some cases, is enhanced with reimbursed artificial intelligence-assisted analytics.

Speaker #6: Within PET/CT, emphasis has been on newer diagnostic and screening offers for prostate cancer, Alzheimer's disease, dementia, and new procedures with leading-edge tumor-specific radioactive tracers.

Speaker #6: PET CT has been the fastest-growing procedure. This quarter, PET CT increased 22.4% on an aggregate basis and 16.2% on a same-center basis as compared with last year's second quarter.

Speaker #6: The increase in advanced imaging, particularly MRI, has also been driven by the implementation of tech live, our remote screening technology, which was recently cleared by the FDA.

Speaker #6: Tech Live is a vendor-agnostic integrated solution enabling remote scanning of MRI, CT, PET CT, and ultrasound procedures. Amidst tech labor shortages and inflationary wage pressures, Tech Live empowers technologists to scan for multiple locations, enables improved operational efficiency, extends center operating hours, and enhances access to complex procedures.

Speaker #6: The most significant impact we are experiencing with tech live is its ability to expand hours of operation by staffing exam rooms that previously would have been closed.

Speaker #6: As an example, in a pilot deployment at 64 locations inside RadNet's New York area facilities, Tech Live significantly contributed to a 42% decrease in MRI room closures during the second quarter of 2025, as compared with the same period of 2024.

Speaker #6: Currently, more than 300 of RadNet's MRI, CT, PET CT, and ultrasound systems are connected with Deep Health's Tech Live solution, and we are targeting to connect substantially all of RadNet's advanced imaging equipment with Tech Live by early 2026.

Speaker #6: The strong revenue growth from all the factors just discussed, and in particular the initiatives driving more advanced imaging along with cost-effective management, contributed to the record adjusted EBITDA and margin expansion in the quarter.

Speaker #6: Adjusted EBITDA during the second quarter of 2025 increased by 12.3% to a quarterly record of $81.2 million, up from $72.3 million in last year's second quarter. Adjusted EBITDA margin increased to 16.3% during the second quarter of 2025, which compares with 15.7% in last year's second quarter, marking an improvement of almost 60 basis points.

Speaker #6: The strong operating results in the second quarter relative to our internal budget resulted in the decision to increase 2025 full-year guidance ranges for revenue and adjusted EBITDA.

Speaker #6: Mark will discuss this in more detail in his prepared remarks. Steady progress also continues in the digital health operating segment. The EBCD Deep Health AI-powered breast cancer screening program continues to expand.

Speaker #6: Currently, we are experiencing a blended adoption rate nationally approaching 45%, with more cancers being found across RadNet centers that otherwise might have been detected at a much later date.

Speaker #6: On July 17th, the previously announced acquisition of ICAD, a global leader in clinically proven AI-powered breast health solutions, was completed. ICAD's profound breast health suite and RadNet's Deep Health AI-powered screening solutions together can materially expand and improve patient diagnosis and outcomes on a global basis by further enabling accuracy and early detection.

Speaker #6: With over 1,500 healthcare provider locations facilitating over 8 million annual mammograms in 50 countries, ICAD's installed base and strong sales engineering and marketing capabilities will provide immediate, broad, and valuable customer relationships and commercialization capabilities that can accelerate deep health objectives.

Speaker #6: On June 4th, the acquisition of CMO Technologies, a global innovator in AI for ultrasound imaging, was completed. CMO's initial applications to detect and characterize thyroid nodules and breast lesions in ultrasound imaging improve diagnostic accuracy and enhance clinical workflows.

Speaker #6: With the inherent complexity of ultrasound imaging and its dependency on the individual capabilities of the technologist and radiologist, the opportunity to improve care through AI is significant.

Speaker #6: With demand exceeding available appointment slots for many of the 900 ultrasound units in 326 of our locations, the increase in capacity created by CMO's technology should improve our ability to drive better access and more revenue through RadNet's existing centers.

Speaker #6: Early deployment of CMO's FDA-approved thyroid ultrasound artificial intelligence across 83 of the imaging centers has demonstrated up to a 30% reduction in scan time. It is anticipated that CMO will be fully implemented in the remaining centers by the end of the first quarter of 2026.

Speaker #6: Furthermore, a reimbursement code already exists that makes a portion of our approximately $250,000 annual thyroid ultrasounds eligible for additional reimbursement. An initiative is ongoing to pursue FDA approval for CMO's next application in breast AI ultrasound, which constitutes over $600,000 of RadNet's approximately $2.7 million annual ultrasound exams performed.

Speaker #6: While the initial focus will be on the implementation within RadNet, these technologies will also be sold and marketed by the digital health division to third parties as the offerings are further commercialized.

Speaker #6: Finally, financial liquidity and leverage continue to be carefully managed. As of June 30, 2025, our cash balance was $833 million, and our net debt to adjusted EBITDA ratio was 0.96.

Speaker #6: An attractive pipeline of acquisition opportunities is being evaluated for both the core imaging services division and for digital health, and we have confidence in our ability to invest the cash balance over time in opportunities that advance RadNet's strategic objectives.

Speaker #6: At this time, I would like to turn the call back over to Mark to discuss some of the highlights of our second quarter 2025 performance.

Speaker #6: When he has finished, I will make some closing remarks.

Speaker #5: Thank you, Howard. I'm now going to briefly review our second quarter 2025 performance and attempt to highlight what I believe to be some material items.

Speaker #5: I will also give some further explanation of certain items in our financial statements, as well as provide some insights into some of the metrics that drove our second quarter performance.

Speaker #5: I will also provide an update to 2025 financial guidance levels, which were released in conjunction with our 2024 year-end results in February and amended following our first quarter financial results in May.

Speaker #5: In my discussion, I will use the term adjusted EBITDA, which is a non-GAAP financial measure. The company defines adjusted EBITDA as earnings before interest, taxes, depreciation, and amortization and excludes losses or gains on the disposal of equipment, other income or loss, loss on debt extinguishments, and non-cash equity compensation.

Speaker #5: Adjusted EBITDA includes equity and earnings in unconsolidated operations and subtracts allocations of earnings to non-controlling interest in subsidiaries. It is also adjusted for non-cash or extraordinary and one-time items taking place during the period.

Speaker #5: A full quantitative reconciliation of adjusted EBITDA to net income or loss attributable to RadNet income and shareholders is included in our earnings release. With that said, I would now like to review our second quarter 2025 results.

Speaker #5: As Dr. Berger highlighted in his remarks, our business bounced back in the second quarter (Q2) nicely, recovering to more anticipated levels following the California wildfires and severe winter weather conditions in the northeast that significantly impacted us in the first quarter (Q1) of this year.

Speaker #5: In the second quarter, we returned to the type of growth we have been demonstrating over the last several years. Our results were highlighted by strong performance and growth in advanced imaging, which is being driven by many of the initiatives that Dr. Berger discussed.

Speaker #5: Advanced imaging grew 9% in aggregate and 6.6% on the same-center basis relative to last year's second quarter. PET CT, which continues to be our fastest-growing modality, grew 22.4% in aggregate and 16.2% on the same-center basis, predominantly on the growth of PSMA and amyloid brain studies.

Speaker #5: The disproportional growth in advanced imaging relative to routine imaging has been a steady trend and continues to help us absorb the inflationary pressure we and the rest of the industry have been feeling with respect to the availability and rising costs of labor.

Speaker #5: Especially as it pertains to radiology technologists, we believe there is continued opportunity for margin improvement as a result of driving more advanced imaging in our centers and through the implementation of many of the software tools offered by the digital health division.

Speaker #5: During the quarter, we opened one new facility in New Brunswick, New Jersey, and we are targeting to open nine additional facilities by the end of the year. This includes three joint venture facilities and six wholly owned locations.

Speaker #5: These novo openings will give us the necessary capacity to support the heavy diagnostic imaging demand in our markets and should enable us to continue similar organic growth into the future.

Speaker #5: For the second quarter of 2025, RadNet reported total company revenue of $498.2 million and adjusted EBITDA of $81.2 million, both quarterly records. Revenue increased by $38.5 million, or 8.4%, and adjusted EBITDA increased by $8.9 million, or 12.3%, compared with the second quarter of 2024.

Speaker #5: The combination of the strong top-line growth and our ability to manage operating costs effectively caused EBITDA margins to improve by 57 basis points relative to last year's second quarter.

Speaker #5: The digital health segment reported revenue of $20.7 million, a 30.9% increase from last year's second quarter. Breaking this down further, AI revenue within digital health increased 21.6% from a combination of growing the EBCD program revenue and through expanded licensing of Deep Health lung, prostate, and neuro solutions, primarily in Europe.

Speaker #5: Radiology software revenue within digital health grew 36.1% relative to last year's second quarter, driven by a combination of internal revenue from RadNet's imaging centers adopting further elements of Deep Health OS, including certain contact center software and Tech Live.

Speaker #5: As well as from external sales of workflow software solutions, we continue to make important investments in sales, marketing, development, customer support, and implementation teams necessary to support anticipated growth over the next five years.

Speaker #5: Despite these investments in infrastructure-related operating expenses, EBITDA for digital health grew 4.1% over last year's second quarter. As Dr. Berger mentioned, we finished the second quarter of 2025 with a strong cash and liquidity position.

Speaker #5: At quarter end, we had $833 million of cash on the balance sheet, full availability of a $282 million credit facility, and a term loan that is priced at SOFR plus 225 basis points, reflective of the refinancing transaction we completed last April and the repricing transaction we completed last November.

Speaker #5: Continued improvements in the revenue cycle have driven down DSOs, or Days Sales Outstanding, to 32.4 days, slightly lower than where we were at this time last year.

Speaker #5: With regards to our financial leverage as of March 31, 2025, unadjusted for bond and term loan discounts, we had $264.6 million of net debt, which is our total debt at par value less our cash balance.

Speaker #5: Note that this debt includes RadNet's ownership percentage of New Jersey Imaging Network's net debt of $36.2 million, for which RadNet is neither a borrower nor guarantor.

Speaker #5: At quarter-end, our net debt to adjusted EBITDA leverage was slightly less than one times. Given the strong second-quarter results and the positive trends we continue to experience, we elected to increase revenue and adjusted EBITDA guidance for our imaging center business.

Speaker #5: We increased revenue by $15 million at the low and high ends of the guidance ranges and increased adjusted EBITDA by $3 million at the low and high ends of the ranges.

Speaker #5: We also increased our capital expenditure guidance range by $7 million, which is reflective of additional growth investment opportunities we plan to pursue in the second half of the year.

Speaker #5: Otherwise, all guidance ranges for the imaging center segment remain unchanged. For digital health, we plan to update guidance ranges upon announcing our third-quarter results in November.

Speaker #5: This update will reflect contributions from the ICAD and CMO transactions and incorporate any other information about the operating segment we have at that time.

Speaker #5: At that time, we should have a much better sense as to how the integration of ICAD and CMO is progressing, as well as each's revenue contribution for the second half of the year.

Speaker #5: I'll now take a few minutes to give you an update on the 2026 anticipated Medicare reimbursement rates. As a reminder, Medicare represents about 23% of our business mix.

Speaker #5: With respect to Medicare reimbursement, several weeks ago, we received the matrix for proposed rates by CPT code, which is typically part of the physician fee schedule proposal that is released about this time every year.

Speaker #5: We have completed an initial analysis and compared those proposed rates to our current 2025 rates. We volume-weighted our analysis using expected 2026 procedure volumes.

Speaker #5: In the proposed rule, Medicare is proposing increasing the conversion factor in the Medicare fee schedule by 3.3% from $32.35 to $33.42. Along with certain changes to the RVUs or relative value units of specific radiology CPT procedure codes and to the Medicare geographic practice cost indices or GIPCs.

Speaker #5: Our initial analysis of all of these moving parts of the proposal indicates that RadNet, on roughly $1.9 billion in revenue, will benefit from an approximately $4 to $5 million Medicare revenue uplift in 2026.

Speaker #5: We are very pleased that we will likely be getting this modest increase next year after about five years of annual cuts to Medicare reimbursement, including in 2025 when we have absorbed and are continuing to absorb about a $7 to $8 million cut.

Speaker #5: We hope that this is a recognition from CMS that it must compensate providers appropriately and that its reimbursement should be commensurate with the rising costs of providing services.

Speaker #5: The Medicare physician fee final rule is expected to be released on or about November 1, 2025. There's no assurance that the final rule will be consistent with this proposal.

Speaker #5: On our third-quarter financial results call in November, we hope to be able to provide more certainty around 2026 Medicare rates. I'd now like to turn the call back over to Dr. Berger, who will make some closing remarks.

Speaker #6: Excuse me. Thank you, Mark. The diagnostic imaging industry has entered a period of transformation. Traditionally, diagnostic imaging has relied primarily on manual processes and labor to complete most aspects of services.

Speaker #6: The manual nature of the industry has historically leaned heavily on the availability of skilled labor for all clinical aspects of the patient journey, as well as for performing all the requisite non-patient-facing support functions, including scheduling, pre-authorization, insurance verification, revenue cycle, and coding, just to name a few.

Speaker #6: More recently, quantum leaps in computing power, machine learning, and artificial intelligence have demonstrated the possibilities for the future of the industry. Having under one roof both the largest-scale imaging services business in the United States and a leading radiology-focused digital health segment that is building innovative workflow and clinical solutions, RadNet is at the nexus of this industry's transformation.

Speaker #6: Over the past five years, RadNet has been investing in both clinical and operational artificial intelligence. Within clinical or predictive AI, the focus of our investments and development efforts is in two areas.

Speaker #6: The first is in the development of interpretive AI solutions focused on population health screening. Today, the diagnostic imaging industry principally performs procedures on patients who are already symptomatic, sick, or injured.

Speaker #6: In contrast, the solutions being developed in breast, lung, and prostate are designed to lower the cost and increase the effectiveness of diagnostic imaging-based screening tools to detect diseases earlier when better patient outcomes are achievable.

Speaker #6: Launching the EBCD AI-powered breast screening program, working with the NHS in the UK to implement the targeted lung health check program, and beginning an MRI-based AI-powered prostate screening program are examples of what is possible in diagnostic imaging-based population health.

Speaker #6: The second area of RadNet's clinical AI and technology investment is in AI tools that can make the clinical staff technologists and radiologists more productive.

Speaker #6: Two examples are the recent purchase of CMODE and the recently FDA-cleared Tech Live solution. In regard to CMODE, the technology eliminates certain manual processes of technologists and radiologists in conjunction with commonly performed thyroid and breast ultrasound exams.

Speaker #6: Thereby increasing center-level productivity by reducing scanning times and creating valuable scanning capacity. Tech Live, as we discussed earlier, reduces exam room closures from insufficient staffing and allows for the expansion of hours of operation.

Speaker #6: Thereby also helping to create screening capacity. Excuse me, scanning capacity. Within operational or generative AI, the focus has been on developing the Deep Health OS, a comprehensive end-to-end cloud-native operations and image management solution designed to automate many of the manual functions that are currently performed throughout the diagnostic imaging workflow.

Speaker #6: RadNet's performance in the second quarter reflected some of the early benefits from these strategic technological initiatives and investment in both clinical and operational AI.

Speaker #6: During the quarter, revenue was enhanced from the clinical investment in screening programs from breast, lung, and prostate and from the early deployment of Tech Live.

Speaker #6: In addition, costs were reduced, and margins were improved from some of the early implementation of certain Deep Health OS modules at selected RadNet centers.

Speaker #6: In the coming quarters, we will continue to expand all of these programs within RadNet centers and will be more actively marketing the digital health solutions through external customers, including some of our existing health system joint venture partners and current customers of our legacy eRAD software solutions.

Speaker #6: We look forward to updating you on our progress in the coming months. Operator, we are now ready for the question and answer portion of the call.

Speaker #4: Thank you. We will now begin the question-and-answer session. To ask a question, you may press star, then one on your touch-tone phone.

Speaker #4: If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star, then two.

Speaker #4: At this time, we will pause momentarily to assemble our orchestra. The first question comes from David McDonald with Tourist. Please go ahead.

Speaker #7: Good morning, Yone. Just a couple of questions, you know. First, can you just talk a little bit about, you know, once all of this is kind of fully rolled out in 2026, between, you know, capacity you're seeing with De Novo's, with the TechLives and CMODES of the world, and also just the improvement in the underlying technology and, you know, quicker throughput?

Speaker #7: Can you give us some sense or just talk in more detail about either you ow how much incremental capacity you anticipate having or just the incremental leverage around your in-place labor force?

Speaker #8: Good morning, David. Thanks for joining us. Well, I think I can perhaps at this time answer by example some of which I gave in our prepared remarks.

Speaker #8: If we take a look, for example, at our New York market where we have probably the greatest demand and some of the greatest challenges from a staffing standpoint, we were able to reduce the number of hours that our centers were forced to close not close, but certain modalities were unable to have scheduled patients by 40%.

Speaker #8: I'm king primarily about MRI at this time since that's the most complete or larger amount of the modality with the largest amount of Tech Live adoption.

Speaker #8: That is a substantial improvement that has created capacity by expanding hours. And so expanding hours and creating that capacity can only you can only realize the benefit if you have the demand for procedures that will allow you fill you ow those now available slots.

Speaker #8: That's why we chose to introduce this into the greater New York City marketplace, because of the enormous volume of procedures that we do and the demand that we have.

Speaker #8: So, I think that's a good measure for us in looking at just the impact of Tech Live, which is primarily one that allows us to open rooms that would otherwise have been closed.

Speaker #8: And if we use that as a benchmark for what we would anticipate elsewhere, I think that that's a reasonable assumption. So that in and of itself was creating a 40% improvement in capacity for those centers that had rooms closed.

Speaker #8: If we were to take a particular day that we might have closed two hours or may have been capable of opening two hours more, and being able to do three patients on average per hour, that would be six per day.

Speaker #8: So if you have the demand to fill those slots, I think you can do some of the math to see what the potential improvement there is.

Speaker #8: In another example that I'll give you, which is more related to equipment upgrades, we have been able to take some of our MRI scanners and upgrade the software that allows for faster processing of the imaging, and therefore reducing the amount of time that the patient has to spend on the scanner.

Speaker #8: In our West Coast marketplace, where we did an extensive amount of these upgrades and looked at those centers, we were able to create, just through the investment, which is relatively nominal if you look at the cost of an MRI scanner.

Speaker #8: We're talking $150,000 to $200,000 for the upgrade, which is all software, versus a price point of closer to $1.5 million for an MRI scanner. We were able to create another four to five scans per day in the same hours of operation.

Speaker #8: And again, you could do the math and see what kind of potential improvement in revenue that could generate. So, we think that that is a very good benchmark for us to use to explain some of the margin improvement.

Speaker #8: While it's nice to generate more revenue, the goals that we have, from what we're already doing as well as what we have planned, are more difficult to measure at this point until more of the deep health OS system is actually tested, implemented, and operationalized.

Speaker #8: Could have the kind of margin improvements that we've already demonstrated and then some. But we're talking about something that is going to take another 12 months to become fully implemented.

Speaker #8: But suffice it to say, two important things from maybe a little longer answered, David, than you expected. But number one is increasing capacity with limited investment is clearly a driver of margin improvement.

Speaker #8: The other is really completing the process of something that would be transformative for the entire patient journey, which could have an even more profound impact once we're able to fully implement it and make certain that the tools give us the results that we anticipate.

Speaker #4: And then, guys, just a couple of go ahead. I'm Ry.

Speaker #7: No, I was going to just add one more thing to Dr. Berger's answer, which is to say that, you know, this year in 2025, we are targeting to build 11 facilities.

Speaker #7: And we've opened to thus far. We've got nine that are on the docket for the second half of the year to open, and we have 11 projects in the works for additional De Novo facilities in 2026.

Speaker #7: So if you add those two together, you're talking 22 additional centers on 405 current locations. So that's about a 5% increase in centers or additional potential capacity to be filled going forward.

Speaker #7: So the combination of what we're trying to do within the existing footprint, as well as expanding the existing footprint pretty substantially, I think should give us the ability to continue to drive a similar type of same-center procedure volume growth into the future.

Speaker #4: And then, guys, just a couple of quick ones. One, can you just give us a sense of, you know, initial feedback from the ICAD customer base? How do you think about, you know, the cross-selling opportunities? And, you know, just as you start to put the two companies together?

Speaker #8: Well, I think we're a little bit early in that journey, David, given that we just closed and are starting to do a deeper dive into ICAD.

Speaker #8: As of July 17th, so we're barely three weeks into that process. What we are pleased with is the quality of the sales and marketing team.

Speaker #8: The engineers and the management team will help embrace both cross-selling and, most importantly, take the ICAD products along with the Deep Health breast AI products and put them into a more comprehensive offering.

Speaker #8: So, I think it's a little early to give you more specifics, other than we're very pleased with what we see so far. I think I'll be able to make more comments on that at the end of our Q3 financial reporting.

Speaker #4: Okay. And just one last thing for me. I'm just curious about any additional conversations or anything that's been prompted by some of the EBCD reimbursement announcements that you guys put out. What are you hearing from other payers in terms of potential further expansion of coverage for that product?

Speaker #8: Yeah, that's another one of those journeys that we're going to have to be patient with. But I think the announcement that we did—that one of our capitated groups has now endorsed and is paying for EBCD for all their membership at no cost to their patients—should be some impetus for the other payers to recognize that the value proposition that we're talking about is rather profound.

Speaker #8: And I think putting pressure to have these kinds of screening tools, particularly at what I believe are very modest prices, and recognizing the opportunity for better outcomes is extraordinary.

Speaker #8: And I think we are having conversations with a number of the payers. It's just a matter of time till this becomes fully recognized as the state of the art here in the US.

Speaker #8: And it's adopted. But I think we're going to have to go through the efforts of having the consumer, meaning our patients, recognize it ahead of perhaps the payers that are going to adopt it, put pressure themselves on those systems.

Speaker #8: To do the right thing is to make good medicine good business.

Speaker #4: Okay. Thanks very much. Congratulations.

Speaker #8: Thanks, David.

Speaker #4: The next question comes from Brian Tranculer. With Jeffries, please go ahead.

Speaker #9: Hi. Good morning. Congrats on the quarter. Maybe Howard, just or Mark, just to follow up as I think about you know some of these acquisitions that you've done, I mean, CMODE comes up as you know a technology that supports the other side of the business, right?

Speaker #9: Even though it runs under the digital health side, I mean, Howard, you talked about you know the what technology is doing to open up capacity.

Speaker #9: So if I'm just trying to think of quantifying these things, I mean, number one, is this one of those things where there's enough backlog and demand that as long as you add capacity, you feel like you can add the revenue?

Speaker #9: Then, when I think of CMODE, I think in the past you've said it adds like two scans a day or something like that. Running the math, I mean, it's a pretty big number.

Speaker #9: And you know if you can walk us through how you're thinking about that and kind of like what kind of margins should we be thinking about, you know, what these technology additions add to the business?

Perhaps as much by 50%, and that's after a pretty substantial trial that we've done, uh, in the initial implementation. Uh, so that will create a lot of, uh, additional capacity for our Radiology to help manage the turnaround time for reporting and for us to have to use less uh outside ter Radiology Services uh to satisfy the demand that we have uh on the technologists side of it and the equipment side of it. Uh the early reporting is that we can reduce uh at least 30% of the scan time which means that

The normal amount of time that we or the traditional amount of time that we allocate for doing and ultrasound of any kind is about, uh, 30 minutes. Uh, if we can reduce that by 30%, which is a is what we're showing initially. Uh, that's a pretty substantial reduction and potentially could give us 1 to 2 more slots

Per hour, per system. Now again, much like I was describing with MRI, um, number one, do you have that capacity? Meaning the demand to fill the capacity if you create it? Uh, and number two...

Will that happen on every ultrasound unit and the answer to that is probably no, because not every piece of ultrasound equipment that we have functions, uh, at that same level of intensity, like our busiest centers. But in those busiest busy centers, we have I'll go back, we have, I'll, we have over 900 ultrasounds in 300 and I think the number was 28 centers, uh, and about 30% of those, uh, 25, or 30%. Now have the C mode and we're putting those into the centers, uh, where we have the biggest challenges. So what this will allow us to do in those centers that have the demand and we have extraordinary demand ultrasound has always been 1 of the

The most sought after uh Imaging modalities and it's growing perhaps more rapidly than almost any other procedure that we have. Um is the 1 that became a major Focus for us as we went to the next uh Imaging modality after demography to try to create improvements in AI. So uh I think we'll have better statistical information on this Brian. Um

The fit is, uh, that capacity needs to meet the demand at a particular location. Um, our teams on both coasts are quite confident that they will be able to do that. But like everything else, there will be a period of adjustment because it's not just build it and they will come; it's a matter of, um, kind of integrating it into the entire workflow program, uh, to create that kind of success. But, um, the math on the numbers is quite, uh, overwhelming, and we think in the long run, not just what RadNet can do, but what this can do for the entire industry will help not only drive this as a sales opportunity, but will enhance our ability, uh, overall to externalize our entire platform because all the tools that we want to build on that platform, hopefully, will have similar events.

Benefits either for the radiologists, uh, the technologists, or both.

Uh, so it may be a little bit early for me to give more specifics. I'd rather do that. When I feel we've had a better chance to do this. We just you know, completed the simote, acquisition on June 1st. So um after uh doing some tests work we're now in full deployment to uh get all of the rest.

Of.

Either 70% or 75% of our ultrasound scanners have been upgraded to the SEMO technology, and it can happen fast enough. I have often said in the past.

If I had enough rooms to put ultrasounds in, we could fill them. Now, at least we feel that we don't need more ultrasound systems and we don't need more texts; we need more capacity on the existing systems.

I I'll add 1 other thing to do to your question about the flow through and the margin, you know, the the flow through will be very substantial because we're talking about just doing more scans in the same facilities, you know, in the same hours of operations because essentially what what SEO does is allow for shorter scanning times and so theoretically, the the principal cost that would be what that would come from the incremental scans that go through the same centers at the same. In the same business hours is really the, the cost of the, the Radiologists to read or interpret. The the incremental scans, which are usually runs in the 20% ish range, give or take a few points, uh, on that, uh, on that Revenue. So, um, it's it's it's as we've always said that the most profitable growth, we can have is driving more Revenue through the same fixed cost. Uh, uh, base of centers.

No, it's awesome. That sounds really good. Um Mark maybe as I think about m&a Capital deployment, um I know you added or you tap a credit facility during the quarter so you're you know your cash balance is pretty is even more significant now, just curious how you're thinking about Capital deployment, uh, on the m&a's front, more specifically, and then I I know you're You're Building 11 do. So, just curious how you're thinking about, you know, the cost of that and what the denovo, um, kind of like Outlook is as we think about the growth algorithm going forward. Thank you.

Uh, sure. So, uh our, our pipeline of opportunities has grown and uh, I think we're more confident today than we have been in past quarters uh, to say that, you know, we we should be putting some of that Capital that, that cash balance to work in the second half of this year. So, um, we're, we're excited about that. I think predominantly most of that is earmarked towards uh, Imaging Center. You know, traditional Imaging Center, uh um, Acquisitions as well as uh, uh, some new joint venture Acquisitions where, uh, joint venture opportunities, where we'll be putting some Capital to work, um, and then there are a couple of, uh, digital Health, uh, Acquisitions that we are, um, uh, evaluating uh, as as well. So, um, stay tuned. Uh, hopefully we'll be in a position to, uh, talk about some of these things publicly.

You know, beyond that, you know, it it remains to be seen, you know, what is the opportunity? We we tend to allocate our Capital based upon the opportunities that exist at the time. Whether it's, you know um earmarked for m&a, denovos Hospital joint ventures Etc. It's just so happens that we see a lot of opportunity on the denovo side today where, you know, to build substantial capacity, where we've got a lot of demand in in the local markets or we're not sir or we need points of access to service. Patient. Populations that we currently don't have today. We you know, we're we're constantly evaluating and re-evaluating you know what, what the best and and uh use of our capital is

Awesome.

Thanks Brian.

The next question comes from John Ransom with Raymond James. Please go ahead.

Hey, good morning. Um

A couple for me, uh, market as we think about, uh, M&A. And I know you had an outstanding thing, but just directionally, how shall we think about the next year currently considering in digital assets versus traditional imaging assets?

Sure. Um I I think more of the capital is going to be allocated at this point given given what we see and what we have in the pipeline towards uh, the Imaging Center, you know, the traditional Services business, there are some Acquisitions. We are looking at, on the, uh, on the digital Health side, I think, uh, uh, most of them are smaller than the, the icad, uh, opportunity. Um, so I don't necessarily see us doing something, you know, with a lot of our Capital, you know, towards uh, Imaging Service, uh, to towards digital Health at this point, obviously, that, that could change if something were to, uh, come to the table. That's so compelling. But, uh, uh, right now, the the majority of our, our, uh,

Pipeline or actionable pipeline is on the Imaging Services side.

Great. Um, second one for me, um, you know, look, Mark, for a state school grad, this digital health story has gotten complicated. Um, so we're still working at figuring it out, but let's just kind of focus on, for now, the technology as it.

As it, uh, exists in your core imaging segment. So there are a few things going on, right? There's the conversion to deep health iOS. There's the remote tech which you certainly talked a lot more about this call. Um, I mean, there's you've got a call center. I know that you spent a lot of money on, but if we were just to dream a little bit and look out a few years, and I'm not asking you for 2026 guidance, but just directionally, what kind of margin could all of this unlock when you kind of fully deploy it?

Well, you know, I think the best way to answer that question is to look at some of the other Radiology software providers, or just sas-based software businesses out there that, you know, where we think and we hope and, and we aspire to grow our digital Health software business, you know, in the, in the range of 30% per year for, for many years to come. Um, that doesn't mean that every year might be 30%, it could be a little lower, a little higher in any given year. But that's, that's the trajectory that we're looking for for that business and we think once mature, if you look at other sas-based, you know, software uh businesses uh we should have IBA margins approaching 50%. Um with with you know, little C little Capital intensity, you know certainly as compared to our core Imaging Center business that that that was a different question than I asked, but I appreciate that color. No, I'm asking like just on the core Imaging once you fully deploy.

Uh, the, uh, Deep Health iOS, once you fully deploy remote tech. Once you maybe look at some opportunities in your call center. What's the imaging? IBA margin? Unlock percentage? Once you just start using, once you fully deploy all these tools in the out years—not not with digital health segment alone. What could this do with the core business? I'm sorry, I wasn't clear. Now I understand your question. Yeah, um, I think, um, Howard, do you want to take that or do you want me to give a shot at it?

Uh, I'll give you a shot at it, and then you can amplify on it, Mark. Um, uh, you have to, John.

If you will at a time multiple if we want, but 1 at a time to see what kind of a potential impact going from a more manual, uh, labor intense process to a shorter to 1. That is more, uh,

Tech-enabled, if you will. I don't want to just use the word AI, but tech-enabled. And, for example, in the contact centers, we look at our current ...

Typical call handling time. And right now, we measure.

On a blended basis, the average call in minutes.

Um, obviously some calls are shorter than others. But, uh, even if I were to use...

5 minutes, uh, as a typical call. I actually think it's longer than that. If we were able to get a modest 10% reduction on every call that...

I'm logged into our contact centers that improvements are enormous. When you consider that, we do about 11 million procedures annually. But each procedure is associated with multiple calls. Some of those calls are not to schedule a patient, but to ask for directions or to...

Give insurance information or to ask about, um, uh, directions on, you know, the the closest Center, all of those are things that we feel, we can have, uh, impact on. And if you would do, if you do simple math and something that I think is easily achievable a, a modest 10% Improvement on this. The, the numbers are are just staggering and for, for us, while it may not necessarily lead to, um, less

People, we employ, we want to make the people that we do employ that much more productive so that we can grow the volume without the dependency of continuing uh, to have to be challenged with the labor costs and availability of Labor. Uh, that everybody in the industry is is facing. So um, I I I think we could do some statistics around that we haven't as yet, but everything that we're that we do now will have, uh, either a full or a partial component that has addressed by artificial intelligence and I named a few of those a couple of times in my, uh, prepared remarks. Uh, but maybe you can tell us what what

What do you spend on your call center today? What's that cost?

Yeah, our overall call center cost for a company um is is north of $60 million a year, okay? That includes the people the systems the facility rent, you know, out um services that we currently use offshore. So it's it's a it's a very substantial.

Yeah, you know, I've covered you guys for a long time. I don't think I've ever discussed the cost center with you, so that's maybe I'm the last guy out of the party here, but that's, that's pretty interesting. Uh, and then lastly, Mark you've said before, you know, putting your centers on detail to IOS as an 8 figure. Good guy. I know, you're just starting that process, is the goal still to have all these done by the end of the year? And do you have any obviously 8 figures could be 10 million or 999 million. Uh, so if you thought any more about narrowing that uh, that that good guy as well,

Yeah, I mean, it's going to be hard to come up with a number today. I mean, we're, we're, we're blazing A New Path with with some of these details, uh, or digital Health, uh, um, initiatives. Um, I I think

You know, we'll have a better feeling as we start, you know, just like with tech live. As we start rolling that out and we get a pilot, now we have a little bit better feeling for that. Um, I think we'll, you know, as we get into our budgeting process, you know, towards the end of this year, which starts looking at what 2026 will look like, I think we'll.

Have a better feeling uh, you know, for some of that but some of these modules aren't going to be being aren't being adopted, you know until you know, 2026 or throughout 2026. So even if we were to come up with a you know, a big number it's it's not going to happen, you know overnight it's gonna it's gonna be a gradual over the next few years.

Okay guys, thanks a lot.

Thanks John.

Andrew mock with buckles. Please go ahead.

Hi, good morning. Just one question for me. I just noticed Mark, I think you called out a $4 to $5 million benefit from the Physician Fee Schedule. Next year, I think this year's rate headwind, without the doc fix, was $7 to $8 million, and the headline rate update next year would suggest at least a 4% plus and maybe a larger benefit than what you called out. So, can you help us understand the items weighing on that benefit when you did the CPT analysis? Thanks.

Yeah, sure. Um, you know we we always caution every year people to just, you know, extrapolate the headline that you might read and news stories or even, you know, CMS when they give their little tables in there because you have to go CPT code by CPT code. Um, you have to then also incorporate the gypsies or the geographic codes based upon where in the United States you operate. Um and so um it it's often that that when when it looks like a big impact 1 way or another traditionally, it's been, it's been a cut for us, our Cuts not quite as big as the as as the impact, it shows it well. It's the same thing that's happening. Next year, on the increase where our increase is not quite as big as what, you know the headline number says, because even though the conversion factor increased by 3 or is increasing by 3.3% next year for non-ap, you know, uh,

Facility based, you know, uh, Medicare fee, schedule billers. Um, when you look at the individual CPT codes, they've made a number of adjustments. Um, particularly to the practice expense portion of the, uh, procedures, uh, where some of these rvus are going down in some of these gypsies are going down that that um, uh, therefore mitigate some of that otherwise, you know, headline number benefit to us. So it's um, you know, we we've done an exhaustive analysis that we do every year and we're we're confident in the 4 to 5 up uh you know uplift in our reimbursement next year.

Great. Thank you.

The next question comes from Larry Solo with CJs Securities. Please go ahead.

Good morning guys. I guess, uh, question just on, I was just some really nice detail on the, on the C mode, kind of the strategy and and it really makes sense. I'm just curious on the with with IAT is, is the

Strategy from a high level, you know clearly you you your exposure to the morphe procedures is going up by like 4 fossil. Um is is the strategy just to upsell your your AI um equipment to these customers or is it a combination of the profound? You know, Health Trust Health Suite that I could bring along with your Technologies? Can you just give us a little more color just from a high level there?

Sure, Larry. Um, the ICAD.

Products, which is their profound suite. Um, and the

Deep Health product, which is primarily our Sage DX platform or smart mammography. Um, I really very different in some respects and well what our teams are working on already is how do we blend those into a single set of offerings to both, you know, the current radnet customers as well as IAD customers. Um, but I would also like to point out that IAD also has a couple of other uh products uh, that they uh, either have or will be getting FDA approval that we can add to the

Um, existing EBCD program that will expand, uh, the value proposition for early breast care detection. So, uh, we're still working out, uh, some of those details. And again, this has only been in the last 3 weeks that we've been able to speak directly to the various people and departments inside of iCAD. Uh, but I think you can expect both.

That we think some of our other products in the Deep Health, uh, program, uh, or just in mamography, uh, will gain a lot of traction. So, um, we're we're very pleased that we've done the icad uh transaction. And I think the marketplace should be pleased with that, too, because I think putting these 2 Brands together is going to have a, a far greater impact on the overall value. Proposition of artificial intelligence and early disease detection. And I'm specifically using the word disease detection and that breast cancer detection. Because some of the tools that we're looking at, uh, things like risk assessment and, um, our breast arterial calcification are all things that fall into the category of screening, but not necessarily just for breast cancer.

Got, you know, I appreciate all the call and and Mark, I know you're not ready to give guidance. But just from a high level, I think when you you first announced acquisition, uh, I think you, you mentioned that that there was some spending that you were going to do organically um, that you may not have to do now as you acquire IAT is that kind of build, you know, you had a couple more months at least not under the hood, but at least to plan your own internal strategies is that stuff. Kind of the case.

Yeah, so before we announced icad, we had earmarked up to about 20 million dollars of additional infrastructure Investments within digital Health. Uh, for 2025, which was the reason why we weren't going to we were in, we were in anticipating in 25 to see a lot of throat flow through on the profitability, side of that business, uh, with the IAT acquisition, some of that investment in infrastructure, which was, you know, earmarked for sales and marketing teams, commercialization teams. Um, uh, deployment, you know, customer customer support implementation, um, that we're getting from the icad, uh, uh, transaction. And some of the, The Talented team members that, you know, have have come on board. So I think what we're synthesizing that this quarter and in November, when we uh, release our third quarter results, um will

Update the guidance for digital Health, which will incorporate, um, the revenue contributions, uh, that we see for the second half of the Year, from both icad and C mode, as well, as any adjustments that we might make on the profitability side, um, which will, um, you know, which will have this benefit that, that we just talked about, you know, as incorporated into the results.

Got it. Great, thanks. I appreciate the call.

The next question comes from Yanni with P. Reilly. Please, go ahead.

Uh, thank you for taking our questions, and congrats on another strong quarter. Uh, with increased utilization mentioned by multiple payers, how did that impact your conversations on capitated contracts?

Uh are you thinking? Yeah I just want to make sure I understand the question. Are you asking about with the improved uh uh pricing that we're getting from some of the commercial insurance companies does that affecting our our our Viewpoint or our outlook on on capitation

Yeah. So my question is, the multiple health care providers or the insurance companies have mentioned that they have increased utilization, including imaging and diagnostic imaging. I wonder, did they try to hedge those risks by signing more capitated contracts? And how does that impact your conversation about capitated contracts?

We have to make sure that we're getting compensated, commensurate with the efforts that and and the number of procedures that were uh um contributing to these to these contracts and in situations where we can't um, or or we don't feel like we're being paid, uh, adequately and and we can't get the increases that that, um, I think would would, um, allow us to continue these. These relationships. We flip, some of these relationships over to fee for service, uh, relationships where they're no longer obligated to send us all of these patients. Like they were when when we were caping for them. But because of our our, our strong position in in many of these local markets, we end up seeing most if not all of these patients anyway under fee for service Arrangements where we can get significantly better pricing. So what you've seen in in our Revenue, over the last, I'd say 4

Revenue has gone up. And that's because we're we're we're taking some we're getting increased reimbursement. When we flip these, uh, these contracts to uh um, to fee for service relationships. And the and the capitation arrangements that we uh um currently still perform are being performed at rates that that we think are appropriate, given the other books of business that we have.

Got it. As for this remote scanning solution, how quickly do you think you will be able to deploy it outside of the New York facilities? Are there any regulatory requirements for someone, let's say in California, to operate a machine in New York?

Well, we've actually begun that process already. And so we have.

We have, uh, technologists in Florida that are operating scanners in New York. We have technologists in Arizona that are assisting scanning in California. So, uh, we've already gone beyond the New York market. I only use the New York market because it's one of the more mature ones and it's the one where we, uh, where the demand issues are particularly profound. So, um, you know, we hope to have the

The rest of our MRI fleet will be enabled with tech live by the early part of 2026, in that first quarter. So we're rapidly moving along that path right now.

We're we're also. Yeah, I was going to just add 1 1, other thing. We're also testing the ability for technologists or better techn or more capable techs to control multiple multiple machines at 1 time. Which, um, uh, while, I don't know that all of our techs are, are, you know, have the capabilities of doing this, but it, it will give us some additional, you know, uh, leverage with our, with our labor force. And, uh, we'll allow some of our technologists to make more money, um, and, and be more productive.

from us, considering the rapid increase of Alzheimer related Imaging where our way in terms of, uh, the current capacity utilization for pet scan and MRI do have really meaning capacity for more backlogs or for, for our utilization,

Yeah. Go ahead. Okay, so I was gonna say the answer to that is. Yes. And it it's probable that the increased demand that we're seeing for MRI uh, is in fact, coming from Alzheimer's, because once you do the, the PET CT and identify a candidate that might be a, um, or a patient that might be a candidate for drug treatment, you then wind up doing, I believe it is either 3 or 4 MRIs in that first year on the, on the drug treatment. So, uh, we're getting a, a double bang for the buck. If you will, uh, that our MRI. Um, SC scanners are getting more challenged by the success that we're having in the, uh, Amal and Alzheimer's,

Uh, the program, which has grown dramatically here since the beginning of the year.

And and and to your question directly on the PET CT capacity. Uh, we have a fair bit of PET, CT capacity, today, looking at a at a run rate. If you if you just multiply the pet CTS, we completed this quarter times 4 you know close to about 90,000 scans per year. We're doing that on a

Run into some capacity issues is around the CT uh um modality because many of the most all of our PET. CT uh scanners today do double duty in the sense that when they're not doing, uh the PET CT work, they're doing traditional CTS. And so to the extent that our pet CTS, get busy and busier. Uh, which we hope they will with the PET. CT portion of that, we'll have to offload the CT volume to additional scanners or additional capacity.

The next question comes from Jim Sidoti with Sidoti and Company. Please go ahead.

Good morning, and thanks again for taking the time for all the Q&A. Um,

Uh, can you, uh, give us some sense of how many centers, or what percentage of your 405 centers, are now using Deep Health?

Well, um, hi Jim. Uh, nice to hear from you. Uh, the

The centers.

None of the centers are really using the Deep Health operating system platform with anything more than one or two modules. One of those modules is, for example, Tech Live. Another module that we're beginning to deploy is our new reporting tools that significantly shorten.

The interpretation time for our Radiologists and, uh, move on to a an own platform versus the uh platform that we license right now. And so we also are working on our contact centers, our, uh, kiosks in our imaging centers, all of these, uh, are in some way being tested but on a case-by-case basis. So nobody is using the full range of the potential of the deep Health uh OS. Uh in the outpatient space, even in radnet at this point in time because we're still uh tweaking some of the algorithms and and protocols we use for it but slowly but surely, uh, every facet of what we do is being tested to improve.

Virtually every component of uh, as we described it the patient Journey, whether it's scheduling or whether it's the, the call-ins, whether it's, um, notifying patients of the prep that they might need for a particular exam. Directions off a number of things that can be answered by chat Bots and not necessarily live people. So when I was giving the example, uh, of, really the scale that we're talking about is that even a

10% Improvement of, uh, hand of reducing the call time, uh, given, you know, 11 million procedures. And probably, I'm just guessing each procedure has an average maybe 3 or 4 calls. So we may be handling, you know? In in the neighborhood of 40 to 50 million calls a year and, uh, as as Mark pointed out the the cost of our contact centers is quite a substantial but um, they they can do additional capacity, uh, if we create these kind of efficiency tools.

So, how long do you expect it? It will be before your fully implemented in your centers. We talking about 12 months, 18 months. You know how long is I would expect this process will probably. Yeah. We're we're probably talking about uh, towards the end of 2026 to have it, fully implemented with all of these tools. So I I I think uh, 15 to 18 months for all of the centers, there will be some of the Senators and some regions that will go ahead of others obviously. But uh, our our timetable is to uh, not rush this because it's a heavy lift number 1 and number 2. It is the platform that we think uh will be a 1 of a kind in the industry that we're going to get a, a lot of traction uh externally for. So we we want to make certain that we uh test this out in an environment.

At scale, that can truly make certain that it achieves all of the operational.

Performance tools that we know are capable.

Center volume increased. Yeah. So so what we started doing Jim is, we started, um, kind of bifurcating the reporting between, uh, Advanced Imaging and routine Imaging. And the reason is because we do far more routine Imaging by by, by the number of procedure volumes than we do Advanced Imaging. It's it's almost a, uh, a 7525, you know, in in, in favor of routine and imaging, but really Advanced Imaging that the 27 and a half percent of the Advanced Imaging that we do by procedure volume. Um,

provides more than between 60 and 65% of our Revenue, so it would be misleading. Let's say if Advanced Imaging were were were expanding very rapidly and and routine Imaging warrants. Um, the routine would would would, uh, um, skew the numbers if if we did a blended rate, but to answer your question. Um, MRI CT and PET CT, Advanced Imaging. Um, together increased about 6.6% on a, um, on, you know, on a blended basis for those 3. Uh, MRI itself on a same Center. Basis was up 6.6%, CT on a blend on on, on on a same Center. Basis was up, 5.9%, PET. CT was up 16.2%, it's a routine Imaging, which is ultrasound

X-ray all other exams. Um, that was only up, I think, about.

1 in a quarter percent. Uh, 1.4% it was, it was up. Um, so if you blend all of that together, uh, which we're no longer doing because of this, uh, distortion, it would be about a 2.7% increase on all procedure volumes.

Okay. All right. And then, uh, the last 1 for me, um, when you, uh, when you, well, when you talked about the IAT acquisition initially indicated, they were going to have about 25 or 26, uh, sales reps, uh, marketing, uh, your deep Health, you know, now that the deal is closed, you know, have have you been able to keep all those folks and is that a good number, uh, for us to, uh,

to consider for your details. Salesforce

I, I believe in. Yeah, I think that's a good number for us to go with at this point in time. Again, it's only been about 3 weeks and we're, uh, you know, uh, trying to be as um,

Efficient as possible with getting to all of the people. But, uh, we think we're going to keep that entire sales force, and, yeah, all of those team members have come on board, and, uh, we hope and anticipate that we will be able to keep them.

All right, all right. Thank you.

Thanks Jim.

Thank you.

This concludes our question-and-answer session.

I would like to turn the conference back over to Dr. Harvard for closing remarks.

Thank you, operator. Um,

I again, would like to take the opportunity to thank all of our shareholders for their continued support. And in particular, the employees have read that for their dedication and hard work to help having produced uh, these, uh, extraordinary results in Q2, uh, management will continue its Endeavor to be a market leader. That provides great services within appropriate return on investment for all shareholders. We are looking forward uh, to your uh, next. Uh, next call, and thank you very much for your time today.

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