All right. Good afternoon. Welcome back to KeyBanc's Healthcare Forum and the RadNet presentation. My name is Matthew Gilmore, and I lead Healthcare Services Equity Research Coverage for KeyBanc. Joining me on screen is RadNet CFO, Mark Stolper. RadNet is a leading provider of outpatient diagnostic imaging services and operates over 400 centers across the U.S., concentrated in, I think, 10 states now, right? Maybe it's eight states, Mark. You can correct me. RadNet's, of course, also distinguished by its complementary digital health platform that includes a self-developed IT platform and AI that we will dig into. This will be a fireside chat presentation. I'll lead Q&A. I think there is a way to submit questions, and we'll be monitoring the dialogue box if you wanna join in and submit your questions. With all that said, Mark, welcome, and thank you for joining us today. Thank you. My pleasure. Thanks for having me. Well, I thought we'd just begin the conversation with a little bit of a state of the union, you know, quick review on 2025 and then outlook for 2026, just some of the things you're focused on. If you could just rewind the clock a little bit and just tell us what were some of the positive drivers that the company experienced in 2025. Were there any challenges that you had to overcome, and then what are some of the things that you and the organization are focused on in 2026 as we look at this year? Sure. Well, the year started off quite unexpected with a lot of challenges, you know, with the California wildfires that we suffered through all throughout Southern California and, of course, the severe winter weather conditions that you had last winter in the East Coast that you're having again actually this or you had again this January and February. After we recovered from that, we had a super positive year with a lot of growth and a lot of excitement throughout the year. You know, when you look at the second, third, and fourth quarters of last year and the growth that we had, it was really unprecedented. You know, we were growing by the end of the year in the third and the fourth quarters, we were growing MRI volume, you know, in double digits over 11%. CT volume is consistently throughout last year on a same center basis growing in the mid-single digits. PET- CT, which has been the shining star of our core imaging center business, was growing north of 14% per year, you know, over the prior years' quarters. Throughout the year continues to be, you know, have significant growth with both the Alzheimer's and the prostate, you know, scanning that we're doing. Throughout the year, you know, we did a number of tuck-in acquisitions, that really, I guess, culminated with a couple of acquisitions we did on the first of January or early January this year by entering two new markets, one in southwest Florida, with the 13 centers that we bought there, as well as the centers that we bought in Indiana, earlier this year, the six centers there. We're excited. We've never been more excited about the business going forward. Our digital health platform also had a lot of progress throughout the year. We had significant growth, you know, almost a 100% growth from the prior year. We ended the year with $92 million of revenue. We introduced ARR as a metric for that industry or that division of our company and gave pretty positive guidance for 2026. That includes growth in our revenue from 17%-19% on the imaging center side and on the digital health side close to 50% growth in the revenue there. We're excited for this year and have a lot of. Also, of course, did the Gleamer acquisition more recently. Got it. We'll dig into a lot of those details. I did wanna ask another foundational question, which is sort of how you think about RadNet or how, you know, you'd encourage us to think about RadNet. It's a really unique company in that you are operating these outpatient imaging centers, but you have this growing digital health business. Maybe just a foundational question, give us some sense for how these businesses are positioned with their markets, and then what are the benefits that you get from operating these two businesses together? Yeah. Well, we think about them internally quite symbiotically, you know, they're almost as one business. You know, the digital health division of RadNet is an outgrowth of our core imaging center business, and the genesis of it goes all the way back to 2009, 2010 when we made the decision to own our own IT platform and an IT stack as we were more seriously growing the company and as we were realizing that the existing vendors at the time could not keep up with our demands for scalability and customization. You know, the digital health platform really is designed to solve the pain points of our workflow, both internally with our employees as well as our radiologists, and to create more efficiencies and cost savings, you know, as we continue to grow and scale this business. Of course, we're solving our own problems and our own pain points and making our own business more efficiently. We're just a microcosm of the larger industry, and these are solutions that are being sought by, you know, others, you know, providers both on the imaging center side, on the hospital side, even within physician offices that are looking for similar types of solutions. That's what gives us so much excitement. With the advent of, you know, the more recent technology advances on compute power, GPU, large language models, AI, machine learning, all of that just takes what we're doing on the digital health side and puts that on a new platform because in the end of the day, we know this for our own business and we know this for the industry that our industry is going to transform in the coming years to take advantage and capitalize on a lot of these new advancements in technology. Got it. Before we get into digital health, I did wanna ask a couple questions on the outpatient imaging division. I think you referenced the guidance, but it's, you know, 17%-19% revenue growth and then 18%-22% EBITDA growth, so EBITDA is growing a little faster than revenue. Could you just spend a minute and talk about some of the underlying drivers or assumptions within the guide and particularly what's driving the expectation for margin expansion in 2026? Sure. I mean, the increase in revenue, the 17%-19%, which by the way is higher than what we said in November of last year with respect to our three-year outlook through 2028, where we felt we could grow the company, you know, on a compound annual growth rate of 11%-13%. The 17%-19% is a little obviously a little bit better than that, and it's a function of the following things. One, of course, it includes the acquisitions that we did in Southwest Florida and in Indiana earlier this year, so that's inorganic growth. There's a lot of organic growth that's coming from, you know, the continuation of our same center performance, which, as I mentioned, is kind of in the mid-single digits on average for advanced imaging, you know, with PET-CT being, you know, north, you know, double digits. And then, you know, kind of in the low single digits for routine imaging, X-ray, ultrasound, and mammography. That is, you know, continued same center performance on the volume side. We will get some pricing benefit. We have a $4 million-$5 million benefit on the Medicare side. With respect to our commercial book of business, which is about 60% of our payer mix, we do expect kind of 1%-3% on average increases in pricing on that book of business. We also expect to greatly expand our hospital joint venture business in 2026. In 2025, we expanded some existing partnerships with some de novo centers and a couple of acquisitions. In 2026, we expect, given our pipeline, to be able to announce by year-end some new partnerships with new health systems that even could take us into new geographies in the country. That's built into, it's somewhat built into our guidance. On the digital health side of the business, the growth is from Gleamer as well as organic growth. All told, you know. Oh, also, I should mention on the imaging side of the business, we're expecting to build, or have completed by year-end 11-13 centers, and have them open by year-end. Hopefully, we'll get there. I mean, if you've ever done construction, everything takes longer and is more expensive, but nonetheless, we've got 11-13 centers in development right now. Yeah. Let me follow up on one of those trends you called out. The you know advanced imaging continues to you know grow very nicely. I think it's 60% of the revenue at this point on the imaging center business. Give us some sense for what drives the expansion of clinical indicators where just you know doctors are prescribing more advanced imaging procedures based on additional indicators and sort of how do you see the mix of advanced imaging progressing over the next couple years? Yeah. When you look at our industry, most of the technology development has occurred within advanced imaging, both on the equipment, as well as everything associated with the equipment such as post-processing software, advances in contrast materials, advances in radioactive isotopes. Also as the population ages, it relies more heavily on advanced imaging. All of that is contributing to the business mix that you know we've seen shifting in favor of advanced imaging. Over the last couple of years, we've seen over a 200 basis point, you know, shift towards advanced imaging, and we expect that to grow. I mean, there's also things that we're doing inside of RadNet to grow that business mix. For instance, you know, over the last several years, we've upgraded many of our MRI scanners and the software associated with them that has more advanced post-processing software that allows for shorter scanning times, thereby increasing the capacity in our centers to see more MRI patients. Because of the heavy demand that exists in our markets, we've been able to fill that capacity over time. Also, some of the technology advances that, you know, have been occurring through our digital health division with the TechLive remote scanning technology that we now have on all of our MRI machines, that has had a significant impact in decreasing exam room closure hours in situations where we wouldn't have had the tech on site to scan the patients. That's had an impact on our business mix. The AI-powered dynamic scheduling that we've implemented on both coasts for advanced imaging is a predictive tool that looks at the schedule and predicts which patients may not show up, and then we're able to overbook the schedule so that we don't have any unfilled time slots. All of those things internally have either built capacity or allowed us to fill that capacity more effectively, which contributed to all of the let's call it industry-wide or clinical reasons why more advanced imaging is being ordered. Yeah. It's really fascinating that, you know, innovation is actually just driving more demand or allowing you to meet the demand in some cases for advanced imaging. Okay. Let me hit on the hospital JV topic because you had referenced that and it's. You know, I think it's maybe a little over a third, maybe like 36% of your imaging centers are in joint ventures with hospitals. Why does that model make sense for both the hospital and RadNet? If I could try to follow up on one of. You know, I think you kind of referenced it here. I think Howard Berger, your CEO, has also referenced that there are these sort of larger hospital JV opportunities in the pipeline. Just give us some sense for the nature of those conversations and how they're progressing. Sure. On the first part of your question, why it makes sense for the hospital, why it makes sense for us, you know, the hospitals are suffering today from a more aggressive and concerted effort on the part of the payers or the health plans to drive business out of the more expensive hospitals into ambulatory sites of care. This is not unique to radiology. You're seeing it in all disciplines, I'm sure, of the companies that you follow with respect to surgeries moving to outpatient surgery centers, clinical laboratory work, you know, moving to the clinical laboratory outpatient players, dialysis, home health, urgent care centers taking emergency room visits. Many of the hospitals are starting to recognize that they're on the losing side of the trend and that they need to figure out a strategy to participate in that trend as opposed to continue to try to, you know, trying to fight that trend and trying to hold onto that business at much higher pricing for as long as possible. We're seeing a lot of inbound calls from hospitals who are saying, "Look, we see the writing on the wall. We're losing more and more of our radiology business." Or in the case of a couple of hospitals who have called us recently, they're so full in their radiology departments they don't have capacity, and they're looking at quick ways to expand their outreach and their capacity to capture more business. Many of these hospitals also recognize that they don't have the business acumen and the scale to operate these ambulatory sites of care profitably. They look to a partner, and so they'll look to us to be their operating partner. They'll own an equity position in the centers that either we already operate in that market, where we let them buy into it or we'll both put in capital, and we'll build centers together. In some cases, they may have assets to contribute, and we may have assets to contribute, or we acquire some centers in that particular market, and then we become the operating partner. We bring all of our technology, all of our operating functionalities to bear. We, you know, we handle all the day-to-day operations. We handle the revenue cycle. All of the billing and collecting is done on outpatient RadNet or RadNet affiliated physician group tax IDs, so we're not billing or trying to arbitrage higher rates from the hospitals. It's a way for the hospitals to actually recapture some of the revenue that they're losing and all of the other health systems in their market are losing on the ambulatory outpatient side. The reason why it makes sense for us is because these health systems do have relationships with community-based physicians, both primary care doctors and specialists, and they are influential in where those imaging referrals go, and they try to direct some or if not all of that business into our now jointly owned outpatient centers. It's a way for RadNet to capture some revenue and some patient volume that we otherwise wouldn't capture. The other thing is, you know, there's been situations where we've we and the hospital have gone to the payers and explained to them that we're driving more of this business out of the health systems and we're their partners in this endeavor, and we've been able to get slightly better outpatient pricing perhaps than RadNet would've gotten by itself. It's been a win-win structure, you know, for both of us, and you know, today 151 of our 418 locations, I'm giving you 12/31 numbers, are in joint ventures, which represents about 36% of our centers. Given the demand that we see in the pipeline, we continue to think that someday it could be more than 50% are in these JVs. Our pipeline is busy right now. I think it's highly likely this year that we'll be in a position to announce at least a couple of new joint venture relationships, and one or more of them could actually take us into a new geography in the country. Got it. One, before we transition over to the digital health part of the business, one of the areas that we hear from the hospitals that we cover that trend means for your business in terms of hospitals having to pay more subsidies to radiology groups. Sure. Yeah, I mean, the model within the hospital isn't working for the radiologist. What I mean by that is, remember, in the hospital, they're doing split billing, where the hospital's billing for the technical component and the radiology group who reads the scans in the hospital is billing for the professional component. There's simply not enough productivity, volume, efficiency within the hospital for the radiologist to make enough money by simply billing the professional component. Many of the hospital radiology groups today are demanding subsidies from the hospital to, you know, essentially subsidize the lack of fees that are running through the professional component. Obviously, that's a pain point for the hospitals. They don't like this, but, you know, I don't think. You know, they don't have a choice today in terms of being able to get the coverage they need without these subsidies. Now, how long that model is sustainable, I don't really know. Our model is different because RadNet, you know, we provide the tools, and we see so much pathology and see so many scans per radiologist that the productivity of our radiologists far outstrip that which you see in the hospitals. You know, we're billing on a global basis. We pay the radiologist essentially the professional component of that global bill. In our model, that model works, but it's only because of all the tools and efficiencies we give the radiologists. In our model, you know, our radiology, our affiliated radiology groups are so large that they're subspecialized, so we can allow the radiologist to specialize in a modality or a disease process or body part that he or she is, one, enjoys reading most, and two, is most productive at. That allows for the model to work on our side. You know, the radiologists that are attracted to our model, you know, for the most part, they have a pretty good lifestyle in the sense that, you know, they don't see emergency room patients or trauma patients. They're not getting beeped or called in the middle of the night or on weekends during their kid's softball game. Their hours are predictable, and they're very productive during those hours, so they can make as much or more money having a better lifestyle in our model than within the hospitals. We've had a pretty good experience, you know, over the last few years in terms of attracting and retaining talent. Now, having said all that, we're still fishing from the same pond, right? There's a shortage of radiologists in general, and that shortage is not gonna get any better in out years. Because the great thing about our industry is that it grows every year, but we're simply not graduating enough of these radiologists from internship programs, residency programs, fellowship programs, to meet the increasing demand for diagnostic imaging. This is what gives us such excitement and optimism about our digital health platform because we're solving many of the problems that the industry needs, and this is just not a RadNet unique problem. This industry is not sustainable as it's currently working, and the industry has to adopt these workflow solutions and these clinical AI solutions in order for us to solve the radiology problem going forward. Which may be a good segue into our digital health side. Yeah. I take it as a perfect segue, Mark. Why don't we, you know, we'll start off the digital health conversation just grounded in sort of your outlook. I think you know you're guiding to 45%-55% growth and ARR of $140 million. You know, Gleamer that you mentioned is embedded within that as well. Maybe just take a step back and give us some sense for where are you seeing organic growth within the digital health portfolio? You know, I appreciate you're kind of putting a lot of pieces of the puzzle as you're also growing it organically. What is driving growth, you know, on the DeepHealth OS side or the AI tools that you're developing? Where are you seeing the most demand from digital health? You know, it's not one thing. It's a combination of all of the things that you mentioned and more. For instance, on the EBCD program, we're still seeing continued adoption in, you know, our patients choosing to be part of that AI-powered program, which is driving revenue. You know, we're seeing as of last quarter, 46% of all of our patients electing into that program. We're over 51% on the East Coast. We're about 42% on the West Coast. There's, you know, no reason why one coast should be different other than the fact that the West Coast started later. We're seeing more patient adoption and more patient acceptance of the value of AI. That's one area we'll see growth. We bought iCAD in the middle of last year, July first. We're gonna see the full year impact of iCAD in our digital health division this year. Obviously, Gleamer, we're expecting to add $16 million of GAAP revenue to our projection of digital health this year. That's embedded in that $135 million-$145 million of revenue and should be on a $30 million-plus ARR come the end of 2026. That continues to grow really nicely. Then you've got all of our digital health point solutions, the AI clinical solutions. We're talking about lung, prostate. Lung, it continues to grow, especially in the U.K. as the U.K. is growing this targeted lung health check program. That's their four-country rollout of this lung cancer screening program. We're talking with the U.K., the NHS, and some other countries about similar population health screening programs where AI can play a major role in the interpretation of these programs. We're seeing growth with our solutions around ultrasound. We're starting to sell the thyroid or the See-Mode product, or now we call it the DeepHealth Thyroid product. We've now deployed that internally on our roughly 240,000 scans a year of thyroid. We're starting to sell that externally. We're seeing growth in TechLive. As much as we've loved that product as we're rolling it out, we're seeing more and more demand from external sources to grow that business. We're expecting a busy growth year from all of these products and we're also expecting continued development of these products. We're anticipating at least four FDA approvals in the coming quarters in lung, breast, prostate going forward, and in ultrasound, you know, breast ultrasound. I think we're feeling well-positioned, you know, in an industry that today is at its infancy. Right. Why don't we discuss Gleamer? I think in some ways that's a little, it's a nice kind of microcosm for what you're doing across a lot of different domains with respect to AI. Maybe describe the challenge, particularly with X-rays and other sort of routine images that Gleamer helps solve for and some of the efficiency gains that, you know, RadNet and third parties can get out of that as you deploy Gleamer's solutions. Sure. Well, X-ray is the most common procedure that we perform. It's about 25% of all of our procedure volume. It's also the lowest reimbursing procedure that we do, including the lowest reimbursing professional component, meaning that the radiologists don't make a lot of money reading X-rays. In order for a radiologist to make substantial money reading X-rays, they have to read a huge amount of them. There's a lot of burnout, there's a lot of cherry-picking where radiologists don't want to read plain film X-ray. Also a lot of X-ray in the industry is not even read within imaging centers at hospitals. It's done at urgent care centers, primary care offices, orthopedic offices, who currently now are contracting with teleradiology groups at very, very high pricing to read these types of scans. It's a problem for the entire industry, not just RadNet. We did a global search over the last year to year and a half of all the AI X-ray companies and, you know, we met with all of them, we evaluated all of their technologies, and, you know, Gleamer for us was just far and away worlds ahead of what else we saw out there, not only in terms of the capabilities of the organization, the quality of the organization, the number of indications that they had either gotten FDA approval on or CE marking, some of the advancements that they're making in other modalities around lumbar spine and MRI, chest, CT. But also where they were well ahead of the industry was in the commercial side of the business. They've been growing their ARR 90% compound annual growth rate since 2022. They have over 40 salespeople. Much of their sales has been international, meaning outside of the United States, which is where we, you know, today have not outside of Gleamer built a robust sales force. The idea that we can now take the Gleamer products and cross-sell that with the existing 2,000+ domestic customers of DeepHealth and then take the DeepHealth products and cross-license and cross-sell those in the 700+ customers that Gleamer currently has, that has a lot of value for us. Putting, you know, the old DeepHealth business with Gleamer today, we believe you know makes us the largest radiology AI company in the world and gives us a big head start. I wanted to ask in the last couple minutes here, you know, one is just a capital allocation question. You've obviously got a lot of potential M&A opportunities on the core imaging center business, really fragmented market. You know, you're building something very special on the digital health side. How do you think about prioritizing capital deployment and where do you see sort of the best opportunity on the, you know, either organic development or inorganic investment or opportunities to acquire different businesses that'll provide long-term benefit? Yeah. I think we're gonna have an opportunistic approach, and that changes from time to time. As I sit here today, I don't see us doing another scale acquisition, you know, anywhere near the size of Gleamer within the digital health division. I do see more opportunities right now to put that capital to work on the imaging side of the business. Not to say that there won't be any more M&A in digital health or opportunities there. I think there might be, but just not at that level of scale. Gleamer was special and unique in the fact that it was so far ahead of everything else we had seen on the commercial front, you know, and on the sales side of the business. You know, we have a pipeline of opportunities on the imaging center side, in terms of acquisitions, tuck-in acquisitions, hospital joint ventures, acquisitions that are connected to hospital JVs. We've always had a very opportunistic approach to acquisitions where we don't allocate capital at the beginning of the year to acquisitions. We simply, you know, process acquisitions as they bubble up from our operations teams or as we get called about them from intermediaries. There are some years we'll be very acquisitive, some years we'll be less acquisitive, and either is fine with us, because we're patient and we have a disciplined approach about the types of acquisitions we look at and the prices we're willing to pay. We're patient, we've got a lot of liquidity, we still have a fair bit of cash on the balance sheet. We're gonna be producing well over $100 million of free cash flow this year, we're gonna add to that cash balance in the absence of any major acquisitions. I think we're as well positioned today as we have ever been in our history. The last question, Mark, that's kind of come through the chat is around site neutrality, which are those regulations that impact hospitals. Any way to think about the impact to RadNet? Is that just another factor that accelerates the procedures to the outpatient clinics versus a hospital setting? How would you think about sort of site-neutral reforms? Yeah. In the hospital setting? Well, I mean, I think when you talk about site neutrality, you have to bifurcate the discussion between Medicare and commercial insurance. In our industry, you know, if you look at the HOPPS schedule, the hospital outpatient prospective payment schedule for Medicare, the premium that the health, the hospitals and the health systems get is maybe 30%-35% or 30%-40% premium. However, on the commercial side, the hospitals are getting 200%-500% of the pricing. I think the hospitals might be able to survive, at least in the radiology department, if Medicare went to site neutral payments. I don't know what the hospitals do if the commercial payers were able to lower their pricing to ambulatory or outpatient pricing. I think it's not sustainable for the hospitals. Therefore, I think the likelihood of it happening on the commercial side is slim to none because the hospitals just wouldn't be able to survive that. Having said all this, you know, I think the fear of site neutrality or even if site neutrality does come about, you know, with the Medicare side of the business, is that will drive more hospitals towards partnership, you know, structures where they'll look to folks in the ambulatory outpatient business, whether it's RadNet in radiology or, you know, a dialysis company or a surgery center company, who have experience and a track record in managing profitable businesses at lower cost at scale. I only see this as site neutrality as a positive for RadNet, but I am a little skeptical about whether this practically can happen, and I worry for the hospital systems. Got it. Mark, I think this is a good place to leave it. We're up against time, but we really appreciate you being here and spending the day with us. My pleasure. Thanks for having me, Matt. Take care.