Nutex Health Inc.

Greetings. Welcome to NewTex Health's fourth quarter and full year 2025 10K earnings call. At this time, all participants will be in listen-only mode. The question and answer session will follow the formal presentation. If anyone today should require operator assistance during the conference, please press star zero from your telephone keypad. Please note this conference is being recorded. At this time, we'll now turn the conference over to Jennifer Rodriguez, Investor Relations Manager. Thank you, Jennifer. You may now begin.

Good morning, everyone, and welcome to NewTex Health, Inc.' 's fourth quarter and full year 2025 earnings call. My name is Jennifer Rodriguez, and I'm happy to serve as your moderator today. We're truly grateful for your participation and your continued interest in our company as we share the highlights of another exceptional year. Please note that this call is being recorded for future reference. Joining me this morning are some of the key leaders driving NewTex Health forward. Our chairman and CEO, Dr. Tom Bowe, our Chief Financial Officer, John Bates, our President, Dr. Warren Sinian, and our Chief Operating Officer, Wes Bamberg. Together, they'll provide prepared remarks to give you a comprehensive view of our performance, strategies, and vision, after which we'll open the floor for your questions. Before I turn things over to Dr. Vo, I'd like to take a moment to address a few important points. Today's discussion may include forward-looking statements, which reflect management's current expectations about our future performance. These statements are based on what we know today, but they're subject to risks, uncertainties, and other factors that could cause our actual results to differ from what we'll share. For a deeper dive into these forward-looking statements and the factors that might influence them, I encourage you to review the press release and Form 10-K filed earlier this week, as well as our various SEC filings. You'll find all the details there. Additionally, we may reference non-GAAP financial measures such as adjusted EBITDA during the call. For those interested in how these metrics reconcile to GAAP standards, please refer to the press release and Form 10-K where we've included that information. With those housekeeping items out of the way, it's my pleasure to hand the call over to Dr. Tom Vo, our Founder and Chief Executive Officer. Dr. Vo, the floor is yours.

Thank you, Jennifer, and good morning, everyone. Thank you for joining us today. It's a pleasure to be with you as we review NewTex Health's fourth quarter and full year 2025 results. This past year has been one of exceptional growth, operational discipline, and continued innovation as we advance our mission of delivering high-quality, concierge-level, accessible healthcare to the communities we serve. Our organization remains deeply committed to a patient-first culture, and I'm really excited to walk you through the accomplishments, strategies, and opportunities that shape our year. First, let's discuss the full year 2025 financial and operational performance. Total revenue reached $875.3 million, an 82% increase from $479.9 million in 2024. That income increased to $70.8 million compared to $52.1 million in 2024. Note that this includes a non-cash expense of $117 million for stock-based compensation for 2025 in the form of a one-time obligations of earn-out shares issuable to qualifying under-construction and ramping hospitals. This expense would decrease drastically in future years, as most of the under-construction facilities from 2022 have already vested. Just at EBITDA, which includes the add-back of the stock-based compensation, rose to $259.6 million, up 152.6% from $102.8 million the prior year. On the volume side, our hospitals recorded 188.3 thousand total patient visits up 11.8% from 168.4,000 in 2024. 1.3% of that growth came from mature facilities, demonstrating their resilience and continued relevance in their markets. On the balance sheet, even with three new hospitals opening in 2025 and early 2026, the current portion of long-term debt decreased slightly from $14.4 million to $13.3 million. That long-term debt increased from $22.5 million to $29.2 million, still very low relative to our revenue and expansion pace. That cash from operating activities of $248.1 million for the 12 months ended December 25th, 2025, and cash on hand grew dramatically to $186 million as of 12-31-2025, up from $41 million a year earlier. Next, I'd like to touch on the fourth quarter financial report. During the fourth quarter, we did recognize a one-time $55 million revenue reduction related to the cumulative true-up of 18,950 arbitration claims that were deemed ineligible by arbitrators under the IDR process. The periods involved were July 24th, we first started doing arbitration and IDR through the end of December 2025. 18-month reconciliation resulted from a mid-2025 CMS directive instructing IDREs to resolve and clear the existing backlog of disputes. Fortunately, this process was very slow on the inefficient side and involved a lot of other providers, including myself. This catch-up period reduced the number of active disputes compared to the same period last year and consequently lowered reported net revenue for the quarter. It's important to emphasize that this was a one-time reconciliation driven by a CMS mandate. So to put this number into perspective, the approximately 18,950 yards deemed ineligible equate to an average of roughly 1,050 yards per month. And according to Halo MD, our IDR consultant, the ineligible rate for NewTex Health is roughly 8% of all the charts that we submit. This is significantly better than the national average of approximately 19%, indicating that our processes are performing well above industry norms. Additionally, HaloMD is continuing to challenge the ineligibility determinations for a portion of these charts. Should any of these disputes be resolved in our favor, the associated revenues will be added to future monthly and quarterly financial results. The good news, though, is that excluding the impact of this adjustment, our Q4 2025 adjusted revenue would be approximately $206.7 million, just consistent and in line with revenue levels from previous quarters. However, even with a slight decrease in accrual revenue, operating cash flow remained very strong. Net cash provided by operating activities was 70.4 million in the fourth quarter of 2025, compared to only 100,000 in the same quarter last year, demonstrating that cash collection continues to perform very well. We encourage investors seeking a deeper financial understanding of our business to focus on the full period from 2024 to December 2026. Portability results can appear lumpy, to the natural constraints of accrual-based accounting can shift the timing of revenue and expense recognition. John will provide additional insights into these dynamics later in the presentation. In terms of arbitration and IDR process performance, it continues to perform well within the IDR framework. It is now a normal part of our revenue cycle process. 50 to 60% of our claims are submitted through the IDR process. When a determination is issued, we avail in over 85% of those cases, demonstrating that insurers are still underpaying in 85% of the cases that we send to arbitration. We are also currently realizing an average cash collection rate of more than 85%, and our legal determination wins. We are actively monitoring the forthcoming IDR final rules from the Office of Management and Budget and other federal agencies. At this time, we do not expect any material changes to the current process and remain optimistic that the final rule will further strengthen and streamline the IDR process with additional mandates for insurers to comply. An example of a more efficient IDR system would be the avoidance, such as the 18-month two-up that we just experienced for the fourth quarter. On the regulatory and legislative outlook front, we are closely watching the progress of the No Surprises Act, I'm sorry, No Surprises Enforcement Act, also known as the Murphy Act. It is designated as HR 4710 in the House and S2420 in the Senate. These bills are currently under review. The following committees in the House, the Energy and Commerce, Education and Workforce, and Ways and Means. And in the Senate, it is currently being reviewed in the Health, Education, Labor, and Pension Committee, otherwise known as HELP. Our 2025 financial and operational results demonstrate the strength of our model, scalability of our platform, and our discipline focus on three core metrics, ER visit growth, inpatient volume growth, and revenue per patient. As many of you know, Tix Health has operated since 2010. More than a decade as a private company, our micro-hospital model built on concierge-level, high-accessible care delivered consistent and respectable profitability. After going public in 2022, we faced challenges primarily driven by the faulty implementation of the No Surprises Act, or the NSA, which materially reduced reimbursement across our industry. The authors of the No Surprises Act decorated anticipated that insurers might use the payment process to underpay smaller providers like us. For that reason, Congress included the Independent Dispute Resolution process as an essential safeguard, giving providers a meaningful avenue to challenge unfair reimbursement. Without this mechanism, insurers would have the unchecked ability to dictate payments unilaterally, effectively determining winners and losers in the marketplace and undermining fair competition. The resulting imbalance would stifle free trade, weaken small operators, and distort the healthcare ecosystem. In many ways, this is truly a David and Goliath battle. As we enter the next stage of our growth, we are fortunate to have strong liquidity and adequate cash on hand. This financial position allows us to remain disciplined and highly return-focused. Our capital allocation strategy continues to center on four priority areas. Number one, share repurchases. Share purchases activity underscore our conviction in the intrinsic value of NewtXL. Launched a $25 million repurchase program in late 2025 and completed it in early 2026. Earlier, we authorized an additional $25 million for further repurchases. These programs reflect our commitment to delivering shareholder value through prudent, accretive capital deployment. Number two, growth at existing hospitals. Our existing micro-hospital footprint remains a powerful engine for organic growth. We are heavily investing in both the ER and inpatient volume initiatives to expand capacity, run service lines, and enhance revenue quality. In terms of ER volume initiative, we are strengthening community engagement, expanding referral pathways, and diversifying service offerings. Targeted investments include improving services such as medical detox programs, behavioral health services, outpatient imaging, outpatient procedures, personal injury services. These initiatives are in addition to our normal ER volume and will help expand patient access and improve the overall revenues. On the inpatient volume initiative, and to capture more high-acuity cases and reduce unnecessary transfers, we are enhancing specialized equipment. We are very excited because with advances such as AI, medical device, biopharma, there are more cases that we could treat at our microhospital than ever before. We have also expanded inpatient nursing and insular capacity. And to top it off, we are adding a tele-hospitalist and tele-specialist coverage for all of our hospitals coming here. These upgrades allow us to manage high-acuity patients within our own facilities, increase retention, and strengthen in contribution margins. As our COO, we'll discuss more on this operational part later. Thirdly, expansion of our IPA and population health divisions. Our independent physician association, currently operating in Los Angeles, Phoenix, Houston, and South Florida, continue to be a strategic advantage. They strengthen our relationship with community physicians, enhance care coordination, and support bi-directional referrals, and to expand our IPA footprint into markets surrounding our hospitals, sampling more efficient care pathways, stronger physician alignment, and bi-directional referrals between the IPAs and the new tax hospitals. This expansion also positioned us more effectively within the risk-based and value-based three-person models, and our goal will be to operate as many IPAs around our existing hospitals as possible. Warren will discuss this more in detail when he speaks later. Lastly, real estate development strategy. We are evaluating opportunities to develop micro-hospitals using a capital-efficient real estate model. where we develop and own the facilities during the stabilization period, build both operational and real estate value, and possibly eventually execute a sell-leaseback transaction to recycle capital into future. This approach preserves strategic control of early-stage operations while enabling accelerated expansion without over-leveraging the balance sheet. Today, Texas Health operates 27 hospital facilities across 12 states. In 2025 and early 2026, we open new hospitals in Sherman, Texas, St. Louis, Missouri, and Humboldt, Texas. We are actively building a pipeline of new hospitals for later in 2026, 2027, 2028, and starting in 2029. Each facility is designed around the same principles, cancer-level care, little to no emergency wait times, and tailored inpatient and outpatient services that meet the needs of the local community. Demand remains very strong. Physicians and community leaders across the country continue to approach us weekly requesting new facilities in their markets. We try to keep up with demands. In addition, we are in ongoing communication with payers and continually reviewing their in-network contracts. We evaluate whether the terms are offered are fair and reasonable. Good news is that we are now receiving better offers than we have in the past. In closing, it has taken approximately two and a half years to recalibrate our operational and reimbursement strategies. I am very pleased to share that in 2025, we turned to the level of profitability that our model has historically produced. Over the years, we have operated four different administrations. navigated the complexities of the Affordable Care Act, thrived through COVID, overcame the challenges of the No Surprises Act, and are now actively optimizing our approaches to the IDR process. While no one can predict the future, our longevity and experience across multiple healthcare cycles give me confidence that new techs can continue to pivot effectively against any geopolitical or regulatory headwind. We are very excited about the trajectory of NewTex Health as we enter 2026. We are carrying significant momentum for 2025, and we believe we are very well positioned to continue our disciplined, profitable growth. So with that, I'll turn it over to John Bates, our CFO, to talk through the financials and more detail.