Nutex Health Q2 Earnings Call Highlights

Key Points

• Profitability improved sharply despite lower revenue: Second-quarter revenue fell 13.6% to $210.8 million, but net income rose to $65.8 million from a $17.7 million loss and adjusted EBITDA increased 25.7% to $90 million.
• Lower arbitration-related costs drove margin gains: A reduced CMS independent dispute resolution fee and revised HaloMD terms contributed substantially to lower expenses. Nutex expects normalized contract-services costs to decline 25% to 30% if current IDR trends continue.
• Patient volumes, cash flow and expansion remained positive: Hospital visits increased 9.6% year over year, first-half operating cash flow rose 40% to $109.7 million, and the company plans to open hospitals in Arkansas, Texas and Florida during the second half of 2026.

Nutex Health NASDAQ: NUTX reported higher second-quarter profitability and adjusted EBITDA despite lower revenue, as the company benefited from reduced arbitration-related costs, lower stock-based compensation and continued patient-volume growth.

For the three months ended June 30, Nutex reported revenue of $210.8 million, down 13.6% from $244 million a year earlier. Hospital division revenue declined 14.6% to $201.9 million, while population health revenue rose about 16% to $8.9 million.

Net income attributable to Nutex was $65.8 million, compared with a net loss of $17.7 million in the prior-year quarter. Adjusted EBITDA rose 25.7% to $90 million. Operating income increased to $121.7 million from $33.7 million.

Revenue Decline Reflected Prior-Year IDR Catch-Up

Chief Financial Officer Jon Bates said the year-over-year revenue decline primarily reflected the comparison with the second quarter of 2025, when the company recognized a larger increase in collection assumptions as its experience with the independent dispute resolution, or IDR, process developed.

Revenue per visit in the second quarter of 2025 was approximately $5,185, compared with a cumulative range closer to $4,000 to $4,200 per visit since Nutex began using IDR in July 2024, Bates said. The company had increased its collection percentage assumption from 65% at the end of 2024 to 75% by June 30, 2025, creating a favorable prior-year adjustment. The collection percentage has since leveled out at just over 80%, he said.

Bates said management expects revenue per visit to remain generally consistent with the cumulative range, although increased inpatient activity could cause some variability.

Hospital visits increased 9.6% to 49,962 in the second quarter, while same-hospital visits rose 6.3%. For the first six months of 2026, hospital visits rose 6.2% to 99,704, with same-hospital growth of 3.4%.

Lower IDR Costs Boosted Margins

Facility-level operating costs and expenses declined to $69.5 million, or 33% of second-quarter revenue, from $119.1 million, or 48.8% of revenue, in the prior-year period. Bates said the reduction was primarily driven by changes to arbitration-related costs.

A federal IDR rule issued in May reduced the CMS non-refundable administrative fee to $15 from $115 per party per dispute for cases initiated on or after June 11. Nutex said the change contributed approximately $4.3 million to the quarterly decline in contract-services expense.

The company also amended its agreement with HaloMD in June. The revised arrangement moved relevant fees to a pay-on-collected basis from payment upon award determination, retroactive to the original 2024 agreement. Bates said that change contributed about $38.4 million to the quarterly reduction in costs. Revised service fees for certain settlement amounts accounted for another approximately $9.6 million reduction.

Nutex expects the CMS fee reduction and amended HaloMD agreement to reduce normalized contract-services costs by approximately 25% to 30%, assuming current IDR metrics continue. Arbitration-specific costs, previously in the mid-20% range of arbitration-related revenue, are expected to move to the high teens to low 20% range, Bates said.

The company said it submits roughly 50% to 60% of claims through the IDR process, prevails in more than 85% of determinations, and collects more than 80% of determination wins on average.

Chairman and Chief Executive Officer Dr. Tom Vo also highlighted court decisions in several states that he said reinforced the finality of IDR awards and limited insurers’ ability to challenge arbitration outcomes. Nutex characterized the federal IDR rule as constructive because it improves disclosures, electronic processing, claim batching and cooling-off periods without changing the core reimbursement framework.

First-Half Earnings and Balance Sheet

For the first half of 2026, revenue decreased 6.3% to $427.2 million from $455.8 million. Net income attributable to Nutex increased to about $112 million from $3.5 million a year earlier, while adjusted EBITDA rose 2.2% to $147.5 million.

Stock-based compensation was a $1 million gain in the first half, compared with a $106.4 million expense in the prior-year period. Bates said one earn-out was finalized in the first quarter, while two remaining facilities are expected to complete their measurement periods in the fourth quarter.

Cash and cash equivalents were $205.2 million at June 30, up from $185.6 million at the end of 2025, according to Bates. Net cash from operating activities increased 40% to $109.7 million for the first half. Total bank and equipment debt declined to $39.9 million from $43.5 million at year-end.

Expansion, Services and Population Health

Nutex said it expects to open hospitals in West Little Rock, Arkansas; San Antonio; and Jacksonville, Florida, during the third and fourth quarters of 2026. Its 2027 pipeline includes projects in South, Central and East Florida and Oklahoma. The company is internalizing real estate development capabilities and plans to monetize stabilized properties through sale-leaseback transactions rather than retain them as long-term real estate holdings.

During the question-and-answer session, management said it remains focused on opening three to five hospitals annually, though it will continue to evaluate development opportunities.

Chief Operating Officer Wes Bamburg said the company launched endoscopy services during the quarter, including colonoscopies and diagnostic EGDs, and plans to evaluate further service-line additions based on local demand. Management also said it is seeking to retain more higher-acuity patients in its hospitals, which could support inpatient volumes and revenue per patient over time.

Nutex reported an average Google rating of 4.8 stars across more than 2,300 reviews and employee turnover of 6.8% during the first half of 2026.

President Dr. Warren Hosseinion said the population health division manages nearly 40,000 patients across Medicare Advantage, commercial and Medicaid managed-care platforms. The company’s Southern California, Houston and Phoenix independent physician associations were profitable in the first half, while South Florida was slightly cash-flow negative. New physician associations in Dallas and San Antonio are contracting with physicians and are expected to begin enrolling patients in 2027.

About Nutex Health (NASDAQ:NUTX)

Nutex Health, Inc NASDAQ: NUTX is an integrated outpatient healthcare services company based in San Antonio, Texas. The company focuses on delivering a range of ambulatory care solutions, including urgent care, telemedicine, medical imaging, teleradiology, weight‐loss services and behavioral health support. By combining in‐person clinics with virtual care capabilities, Nutex Health aims to provide patients with accessible, cost‐effective treatment options outside traditional hospital settings.

The company’s urgent care network operates through both standalone and retail‐anchored centers, offering treatment for non‐life‐threatening injuries and illnesses, preventive screenings and basic primary care.

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