Operator: Pardon me, this is the conference operator. Thank you for joining the RadNet conference call today. We will be beginning in just a few minutes. We appreciate your patience and please continue to hold for the RadNet Conference Call. We will be starting in just a few Thank you. Good morning. And welcome to the RadNet, Inc. Second Quarter 26 Financial Results Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by 0. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Mark D. Stolper, Executive Vice President and Chief Financial Officer. Please go ahead.

Mark D. Stolper: Thank you. Good morning everyone and thank you for joining Doctor. Howard G. Berger and me today to discuss RadNet's second quarter 26 financial results. On this call, we have also invited Cornelis Wesdorp, president and CEO of Digital Health and Shyam Sokka, Chief Operating and Technology Officer of Digital Health who will share additional information about the progress of the digital health operating segment. Before we begin today, we would like to remind everyone of the safe harbor statement under the Private Securities Litigation Reform Act of 2 thousand. This presentation contains forward looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 2 thousand. 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, generating revenue and adjusted EBITDA for the acquired operations as estimated successfully selling and licensing digital health solutions among others, are forward looking statements within the meaning of the safe harbor. 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 statement contained herein. 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 12/31/2025. 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. 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. And with that, I would now like to turn the call over to doctor Berger.

Howard G. Berger: Thank you, Mark. Good morning, everyone, and thank you for joining us today. On today's call, Mark, Kaes, Shyam and I plan to provide you with highlights from our second quarter 26 results, give you more insight into factors which affect this performance, and discuss our future strategy. After our prepared remarks, we will open the call to your questions. I would like to thank all of you for your interest in the company and for dedicating a portion of your day to participate in our conference call this morning. Let's begin. I am very pleased with the performance in the second quarter. Total company revenue and adjusted EBITDA were both quarterly Total company revenue increased 25% to $623 million from $498 million in last year's second quarter, and total company adjusted EBITDA increased 22.7% to $99.7 million from $81.2 million last year's second quarter. Growth in the quarter was broad based driven by strong increases in aggregate and same center procedural volumes. The contribution from recent acquisitions, a continuing shift in procedural volumes towards advanced imaging, and incremental digital health sales and licenses of our enterprise imaging and AI solutions. Within the imaging center operating segment, we continue to experience strong demand in advanced imaging. MRI, CT, and PET/CT, which is both a function of broader industry trends as well as the many initiatives and capital investments we have been implementing designed to expand capacity at our centers. During the second quarter, advanced imaging procedural volumes increased 21.2% in aggregate and same center advanced imaging procedural volumes increased 9.6% as compared with last year's second quarter. Aggregate MRI volume increased 21% and same center MRI volumes increased 40% Aggregate CT volume increased 20.9%, and same center volume increased 8.6% and aggregate PET/CT volume increased 31.0% and same center PET/CT volume increased 8.8%. Disproportionate higher growth MR, CT, and PET/CT relative routine imaging drove a 238 basis point shift in our advanced imaging procedural volume mix. Increasing from 27.5% of total procedural volume in last year's second quarter to 29.9% in this year's second quarter. This favorable mix shift together with continued operational focus on controlling costs contributed to a 17 basis point improvement in imaging center segment adjusted EBITDA margin, which increased to 16.1% in the second quarter of 26. Also, within the imaging centers, the joint venture relationships continue to expand. As of the end of the second quarter, a 157 of our now 442 centers or approximately 36% were held within health system partnerships. During the quarter, we announced a multisite joint venture in Boise, Idaho with Trinity Health's Saint Alphonsus Health System, which will initially include the operation of 5 multimodality outpatient imaging centers. As part of the relationship, our contracted radiology group Gem State Radiology, and the Saint Alphonsus hospitals in Boise will be adopting a variety of deep solutions, including diagnostic suite, reporting pro, AI studio, and various clinical AI applications. Health systems continue to recognize that cost effective freestanding outpatient imaging centers are essential to their long term strategies, and we continue to see a healthy pipeline of additional health system partnership opportunities. In addition, health systems have growing interest in implementing digital health tools to more effectively manage imaging volumes and provide radiologists and administrative staff with solutions to make them more productive and accurate. We are in discussions with new and existing partners about how we can provide more comprehensive solutions for all their imaging needs, both inpatient and outpatient. Given the positive trends we experienced throughout the second quarter and the strong financial performance we delivered, we elected to increase our 26 full year guidance ranges for imaging center revenue. Adjusted EBITDA and free cash flow. We are reaffirming all Digital Health guidance ranges Mark will review the details of our updated guidance in his remarks. Finally, we continue to maintain a strong liquidity position and modest financial leverage. We ended the quarter with a cash balance of $726 million and a net debt to adjusted EBITDA ratio of 1.8 times. This continued financial flexibility positions us well to continue investing in both organic growth and disciplined acquisitions across both operating segments. I would now like to turn the call over to Kaes Wesdorp and Shyam Soka. Who will do a deeper dive into the digital health performance and provide a status update on many of our AI and enterprise imaging initiatives. Kaes, please go ahead.

Cornelis Wesdorp: Thanks, Howard. Good morning, everyone. We continue to see good growth this quarter. Driven by continued strengthening of the commercial funnel, with strategic deals materializing across both Clinical AI and enterprise informatics in hospital and outpatient settings. Digital Health revenue for the quarter was $32.4 million, up 56.5% year over year, and 11.4% versus Q1 26, split between $16.1 million of AI revenue up 136% year over year, and $16.3 million of enterprise imaging revenue, up 17.3% year over year. ARR, annual recurring revenue, ended the quarter at $106 million up 97% year over year and nearly 9% versus Q1 26, of which a large proportion was organic growth. We remain on track to grow full year ARR by approximately 91% from 2025 to over $140 million by the end of this year. End of 26. With our recent acquisitions now layered on top of a healthy core business, External ARR, revenue generated outside of RedNet, now makes up 63% of our ARR base, and we expect that to grow towards 65% to 70% by year end. On new business, we closed approximately $21 million of total contract value. In the second quarter, bringing us roughly to $37 million TCV for the first half of the year, split about evenly between North America and Europe/Rest of the world. Out of the $37 million TCV, $24 million comes from the hostel segment with key wins from both clinical AI and enterprise imaging. Our funnel continues to build as well. Our clinical AI and enterprise imaging TCV funnel has grown from roughly $101 million at the start of the year to more than $224 million in TCV, or the equivalent of 65 million in annual contract value. We see a good mix across segments in our funnel with close to 50% from the hospital segment. Our customer base is also scaled meaningfully to nearly 3 thousand accounts, and total procedure volume across our AI and informatics solutions reached over $17 million for the quarter, up more than 200% year over year, reflecting both organic growth and the scale added to recent acquisitions. Turning to profitability, adjusted EBITDA for the segment was $2.5 million for the quarter, a step up from the $1.3 million in the first quarter. On a year over year basis, adjusted EBITDA was down from $3.4 million in last year's second quarter, which reflects the deliberate investments we have been making to fuel growth. Continued headcount build out in our commercial team and in our service and implementation organization, and temporary margin dilution from our acquisitions. Most recently, Gleamer. I am pleased to say those acquisitions are now fully integrated and performing well. Their profitability trajectory has moved from negative at the time of acquisition to profitable for legacy iCAD and C-MODE, we are on the same trajectory for Gleamer, which is very encouraging and validates integration plan we have been running. And Gleamer is a good example. 5 months into the integration, organizational integration is complete, our product roadmaps have been merged, and team morale remains strong. Commercially, legacy Glimmer portfolio of solutions exited the second quarter at approximately $25 million of ARR, and is on track to exceed $30 million by year end. And the Glimmer and DeepHealth teams are now cross trained and cross selling an integrated portfolio, on 1 AI platform, the DeepHealth Radiology AI Suite. On the RadNet side, we have gone live with the acquired X-ray AI from Gleamer, fully integrated the DeepHealth platform across California, Arizona, the Northeast, and significant parts of Maryland and Florida. And we remain on track to capture the cost synergies we underwrote in conjunction with Gleamer's acquisition. Growing to roughly $4 million in 2027, split between people and vendor synergies alongside significant cross- and upsell revenue synergies in 2027 and beyond. We are very proud of our recent FDA 510(k) clearance for DeepHealth breast ultrasound. Our AI powered solution that automates lesion detection, measurements, characterization and reporting in breast ultrasound imaging, 1 of the most operator dependent exams in radiology. The software distinguishes between negative exams, benign lesions, suspicious findings, generating standardized draft BI-RADS categories and reports to support all breast ultrasound exams, not just those with lesions. Our validation studies the solution demonstrated greater than 98% accuracy in localizing breast lesions, improved sensitivity for breast cancer detection by 8%, and reduced radiologist interpretation time by 37%, alongside a more standardized and streamlined workflow for sonographers. The solution is now commercially available to customers in The US, where providers can pursue reimbursement on an existing category 3 CPT code for quantitative ultrasound tissue characterization, and we plan to implement it across RadNet's network by year end, covering nearly 1 million breast ultrasound studies annually. That may be eligible for material portion of our thyroid ultrasound AI since the beginning of the year. Together, RadNet imaging services will have about 40% of its 3 million-plus annual ultrasound exams covered by potentially reimbursable FDA cleared draft reporting solutions. We are pioneering the transformation of radiology workflow.

Mark D. Stolper: Mark, apparently, I got cut out. So I am back if I can get--I can get over.

Cornelis Wesdorp: [Crosstalk]

Shyam Soka: Thanks, Kaes.

Cornelis Wesdorp: A technical glitch. Apologies.

Shyam Soka: In terms of commercial impact, combined with our existing offerings in mammography based breast cancer detection, density and arterial calcifications detection, we now have what we believe is the most comprehensive screening and diagnostic platform for breast imaging. Strengthening both clinical practice within RadNet and our external commercial offering. Taken together, we continue to assemble the widest native portfolio of AI and informatics solutions in radiology. With 27 FDA clearances and 26 CE marks to date. Covering 100-plus clinical findings across routine and advanced imaging relevant for both acute care and outpatient imaging. In conjunction with the continued development of our clinical AI, we are pioneering the ability to produce automated draft reports. Driving significant think of 20% to 30% productivity gains in reporting time. This is made possible by combining 4 parts of our product portfolio into an integrated solution. Our AI powered reporting solution, we market as Reporting Pro, our viewer, our AI orchestrator, and our clinical AI solutions. We initiated this with our thyroid solution last year and are seeing very strong results. Across an annual run rate of about 250 thousand thyroid ultrasound exams, over 90% of the automated draft reports generated by this AI powered auto draft has been accepted by a radiologist for final sign off without further markups or changes. Our plan is to drive the same results with our FDA cleared ultrasound breast solution and with the Glimmer acquisition, we are now in the deployment phase on the research protocols in the X-ray domain as well. Initially focused on California, Arizona, and expanding over time to Northeast, Maryland, Indiana, Idaho and Florida. Accordingly, we expect close to 15% of RadNet volumes to run through AI powered autodraft solutions by year-end. Growing to over 50% by end of the second quarter of 2027. Progress also continues across several strategic operational programs at RadNet. We are making strong progress on the deployment of our diagnostic suite, the next generation AI native packs, Following the initial high speed streaming viewer deployment completed last year, our near term focus is full deployment by Q1 27, across RadNet centers for the reporting component of diagnostic suite ReportingPro, driving further radiologist reporting productivity, as well as cost savings as we switch out the Nuance PowerScribe solution at RadNet. Next, our fully automated registration tool for patients as part of our operation suite, has been piloted in the Northeast in California in more than 25 centers, is now ready to scale to drive measurable site level front office productivity gains. As well as patient satisfaction in the coming 6 months. We continue to make strong progress with our clinical AI deployments as well. Last quarter, we reported a DeepHealth in third party AI solutions are now available to cover more than 70% of RedNet's imaging studies. We are making strong progress deploying these solutions with now focus on X-ray, breast ultrasound and brain AI tools in our largest regions in the second half. All in all, another good quarter of progress. Looking into the second half of the year, we have our sights set on $140 million of recurring revenue by year end, and we remain on track to meet our budget. I see a clear bridge to that number. From our Q2 paying ARR, we have visibility into roughly $12 million of ARR pending go live that is signed and secured, plus additional $23 million conversion from our late stage pipeline. Based on the historical conversion rates we are seeing on these types of opportunities. Our guidance remains unchanged, dollars 135 million to 145 million of revenue, And 10 million to $12 million of adjusted EBITDA for the segment. If the right strategy, the right solutions and the momentum to keep delivering our solutions at scale, Thank you for your continued support as we build the future of radiology. And at this time, I would like to turn the call back over to Mark, who will discuss key financial highlights from the second quarter.

Mark D. Stolper: Thank you, Sokka. I am now going to briefly review our second quarter performance and attempt to highlight what I believe to be some material items. 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. I will also provide an update to 2026 financial guidance levels which were amended in conjunction with last evening's financial results press release. 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 noncash equity compensation. Adjusted EBITDA includes equity and earnings in unconsolidated operations and subtracts allocations of earnings to noncontrolling interests in subsidiaries. And is adjusted for noncash or extraordinary and 1-time events taking place during the period. A full quantitative reconciliation of adjusted EBITDA to net income or loss attributable to RadNet, Inc. Common shareholders is included in our earnings release. I will also be using a second non GAAP measure pertaining to the digital health segment called annual recurring revenue, or ARR. We use ARR as a key operating metric to evaluate the scale, growth, and health of the recurring component of our digital health business. We define ARR as a key subscription economy metric representing the predictable normalized annual value of contract contracted recurring revenue generated from active customer contracts. ARR includes subscription fees, recurring support fees, and contracted usage charges and excludes 1 time or nonrecurring fees such as implementation fees, hardware sales, professional services, consulting, and 1 time training. ARR is determined based on the contractual term of active customer arrangements and is not calculated by reference to revenue recognized under GAAP deferred revenue, or another GAAP financial measure. ARR is not a forecast of future revenue which may be affected by contract start and end dates cancellations, renewal rates, customer usage, and other factors. With that said, I would now like to review our second quarter results. While I will not recap all the financial information that is contained in last night's earnings report, here are some of the highlights. For the second quarter of 26, total company revenue was $623 million and total company adjusted EBITDA was $99.7 million both quarterly records. Revenue increased 25% and adjusted EBITDA increased 22.7% as compared with last year's second quarter. The imaging center segment results were driven by strong aggregate and same center procedure volumes especially in advanced imaging, which Doctor. Berger spoke about in his prepared remarks. The upgrades we have made in the last few years to faster MRI scanners, the use of TechLive remote technologists, and refinements we have made to our operations to move more patients efficiently through our centers have contributed to the capacity growth for advanced imaging. In the case of PET CT, we continue to benefit from the greater utilization of prostate-specific PSMA and brain amyloid studies. Which during the second quarter represented over 25% of our PET volume. Despite continued pressure on salaries, from labor shortages, particularly with technologists and radiologists, we continue our streak of quarters with increasing adjusted EBITDA margins within our imaging center segment relative to prior year quarters. With respect to digital health, I will just highlight a few additional items to expand on Kaes's previous comments. The 56.5% quarter over prior year same quarter increase to revenue resulted from the full breadth of digital health solutions. Aside from new revenue from the acquisitions of Gleamer, C-MODE and iCAD, which contributed approximately $9.3 million of revenue in the second quarter. Revenue from the EBCD program increased 16% prostate and neuro products grew over 13%, TechLive revenue increased over 38%, and enterprise imaging workflow revenue increased 17.3%. We remain on track to reach our full year revenue and ARR goals for the operating segment, which implies a ramp in both revenue and adjusted EBITDA for the second half of the year, which is supported by newly signed contracts a pipeline of new business opportunities, and a schedule of customer implementations throughout the rest of the year. We finished the second quarter with a strong cash and liquidity position. Contributing to our liquidity, on 06/10/2026, we entered into incremental amendment number 3 to our credit agreement. Pursuant to this amendment, we repriced both our existing term loan and our $282 million revolving credit facility. Each at a 25-basis point reduction in interest rate. With the term loan now bearing interest at SOFR plus 2%. As part of the transaction, we also funded a $250 million incremental term loan which added to the cash balance at quarter end. We intend to use the proceeds of the incremental term loan to fund future acquisitions organic expansion initiatives, health system partnerships, and other general corporate purposes. At quarter end, we had $726 million of cash on the balance sheet and full availability of a $282 million revolving credit facility. Continued improvements in revenue cycle particularly in the area of patient collections, have allowed us to maintain DSOs or days sales outstanding to a near RadNet low of 31 days. Which we believe to be 1 of the best in the industry. This continues to provide the cash flow we require to fund our growth and expansion in both operating segments. With regards to our financial leverage, as of 06/30/2026, unadjusted for bond and term loan discounts we had $616 million of net debt which is our total debt at par value less our cash balance. Note that this debt balance includes RadNet's ownership or 49% of New Jersey Imaging Network's net debt of $13.8 million for which RadNet is neither our borrower nor guarantor. At quarter end, our net debt to adjusted EBITDA leverage ratio was 1.8. Given the strength of our second quarter results, and the positive trends we continue to experience we elected to increase 2026 full year guidance ranges for revenue, adjusted EBITDA, and free cash flow for our imaging center segment. Total net revenue guidance for the imaging center segment increased to a range of 2.37 billion to $2.42 billion an increase of $15 million at both the low and high end of the range as compared with the guidance we provided after our first quarter results. Adjusted EBITDA guidance increased to a range of $345 million to $358 million an increase of $5 million at both the low and high ends of the range. Free cash flow guidance increased to a range of $115 million to $125 million an increase of $3 million at both below and high ends of the range. While the capital expenditures guidance range of $165 million to $175 million remains unchanged, we did increase our cash interest expense guidance by $3 million at both ends of the range to $48 to $53 million reflective of the incremental borrowings from our recent debt repricing transaction. I will now take a few minutes to give you an update on 2027 anticipated Medicare reimbursement rates. As a reminder, Medicare represents about 24% of our business mix. With respect to Medicare reimbursement, several weeks ago, we received a 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. We have completed an initial analysis and compared those proposed rates to our current 2026 rates. We volume weighted our analysis using expected 2027 procedure volumes. In the proposed rule, Medicare is proposing to decrease the conversion factor in the Medicare fee schedule by about 1.68% from $33.40 to $32.84. Along with certain changes to the RVUs or the relative value units of specific radiology CPT procedure codes and to the Medicare geographic practice cost indices or GPCIs. Our initial analysis of all these moving parts of the proposal indicates that RadNet on roughly $2.4 billion in revenue will be almost net neutral for Medicare next year. Our analysis shows a negative impact of less than $1 million to 2027 revenue. Despite the decrease to the conversion factor proposed increases to RVUs are almost fully mitigating the 1.68% decline in the conversion factor. On a related note, the hops Medicare fee schedule or the hospital outpatient prospective payment system proposal for 2027 contains a site neutrality provision where CMS will now reimburse hospitals at the lower Medicare physician fee schedule for certain non contrast studies. This is going to result in a significant contrast going to significant decline in reimbursement for hospitals anywhere between 30-50% decrease on these Medicare procedures depending upon the CPT code. If this site neutrality provision is finalized later this year, it is going to contribute to the already significant economic pressure that health systems are feeling within the radiology department. And we believe that this financial pressure will continue to drive more health system partnership discussions. The Medicare fee schedule final rule is expected to be released later this year in November. there is no assurance that the final rule will be consistent with this proposal. On our third quarter financial results call in November, we hope to be able to provide more certainty around 2027 Medicare rates. I would now like to turn the call back over to Doctor. Berger who will make some closing remarks before we begin the question and answer portion of today's call.

Howard G. Berger: Thank you, Mark. I would like to take just a moment to reemphasize the core strategic initiatives that RadNet has embarked on. We have assembled a extraordinarily talented and seasoned team to take us and the industry through a transition that must occur in the adoption of artificial intelligence to help deal with the challenges that have presented themselves since COVID in the form of increasing cost for radiologists which are in extraordinarily demand shortage. And for technologist fees and salaries. That have continued to escalate. We are fortunate that we began embarking on this endeavor 6 years ago. And I want to emphasize that our primary investments have been made in those modalities, the routine modalities, X-ray, ultrasound, and mammography, which comprise 70% of our volume. And which we are enthusiastic about having the majority of these exams read both by our clinical AI tools and then generative AI tools for full draft reporting by mid 27. This is a function of the overall direction of having every radiology and imaging exam go through artificial intelligence again, both on the clinical and reporting side, which is an essential requirement if we are going to keep pace with the demand for imaging procedures and the shortage of staffing. That is likely to continue to be a challenge for all providers, both outpatient and hospital related for years to come. I am proud to say that RadNet will lead this initiative by being not only aggressive in adopting the technology, but making certain that all of our tools have FDA approval and are available to all constituents both inside and outside RadNet, on a cost-- on a cost attractive basis. and 1 that will truly answer the issues that we face with these shortages. I am proud to lead the team that is taking up this challenge and responding. And the years that we have started to invest in this technology are now bearing fruit at just the right time. Operator, we are now ready for the question and answer portion of the call.

Operator: We will now begin the question and answer session. To ask a question, you may press star then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then 2. We will pause momentarily to assemble our roster. Our first question comes from Brian Tanquilut with Jefferies. Please go ahead.

Brian Tanquilut: Hey, good morning guys and congrats on a really solid quarter. Definitely a win here. Maybe Mark, as I think about the ultrasound approval from the FDA, a couple of questions. Number 1, how do we think about the flow through of that to the business from a numbers perspective or at least even qualitatively? And then maybe as we think about some of your other pending approvals, just curious what you think the timeline looks like in terms of getting those in and then maybe translating all this into T-codes in terms of reimbursement. Thanks.

Mark D. Stolper: Sure, Brian. I am going to have Shyam respond to that, and I will chime in if he needs any assistance with numbers.

Shyam Soka: Yeah. Thanks, Mark, and I hope you are well, Brian. Maybe just to talk about the breast impact. We will be doing in 2026, full year annualized about a million breast ultrasound exams. And so what we are really, starting the journey now, the solution's actually already with the first radiologist after our FDA clearance. And we are now scaling that, as Case mentioned, across all of our major centers. And, essentially, the impact is very similar to thyroid where it will help us reduce our slot times for breast ultrasound, so about a million. Just compare that. it is about 4x the volume of our thyroid. Exam. It will help us report faster. Right? Because it very similar to thyroid. it is a draft reporting product. With both detection identification of lesions, and also the BI-RADS categorization. And then finally, it will it is eligible for the same 0690T code. And so we will take the same sort of steps that we have now realized with thyroid. But with a volume that is 4x larger, And in, quite frankly, in a in a space which is also the outcomes are not as clear as they are in thyroid. So we really think the AI will have a impact on outcomes as well because breast ultrasound is quite variable from both the radiologist perspective as well as from the scanning perspective. And so a tool to automate these tasks and to standardize these tasks should also help clinically drive our performance. Improvement. Right? So as we talked about time wise, we expect that we are we are we are fully rolled out in our major centers by the end of the year. And the billing were eligible as we go. And then into next year, Q1, Q2, we should be fully scaled out for the full volume for breast ultrasound. Now you asked a question about what other applications that we are also working on. You know, I think we are we have we have put sort of numbers out there, and just to clarify the 2 numbers. We have talked about 70% of our studies having clinical AI and about 50% targeting for draft reporting by middle of 27. And I just wanna make a distinction. When we talk about that 70% number, we are basically saying that AI will be used in those studies to assist the interpretation. Sometimes it is actually for clinical quality improvement, not full draft reporting. For example, in the case of our mammography AI, right, that cancer, no cancer, better cancer detection, that is an example where AI's in front of the study, but not yet fully draft reported. So I just wanna make the distinction between the clinical AI versus the draft reporting. Right? Now we are working on solutions with the FDA. On both fronts. So things that are say, clinical, what we would call clinical AI, improving quality, improving outcomes. We have with the FDA already image based risk on mammography. So this is the idea that you know, between screening studies, and long term. So based on 1 screening study, can we project a 3- to 5-year risk of the patient? So this is beyond just do you have cancer or not. Can I put you in a higher risk category based on images? Right? So we think that is gonna change the way mammography and breast screening work. Works because we can actually now become more predictive in identifying high risk population. We are also working on things like MR spine, which is about 150 thousand of our studies, which is a complex measurement based study. And we are looking at autografting solutions We are we are putting that through the FDA. So that is both the clinical quality improvement and a drafting solution. We are also with the FDA with our next generation of our chest X-ray and X-ray solutions again, moving from the spectrum of, hey. If there is a finding to draft reporting, type of solutions. In addition, we have a CT lung AI solution with the FDA. And our next ultrasound application will be in the vascular space. So these are all things that we are working on. That we hope to bring into the RadNet workflow over the next 2 to 3 quarters. So let me pause there. Hopefully, that addresses your question.

Brian Tanquilut: No, that was great. Thank you. And then, Mark, as I think about the strength in continued strength in advanced imaging modalities, I mean, you know, MRI, 10% same-store volume. Curious, what do you think are driving these things? And then when I layer margin improvement there for the core business, just how are you thinking about the sustainability or the remaining opportunity to drive margin as we think things like TechLive and some of the other tech initiatives that you have laid out or installed in some of these clinics?

Mark D. Stolper: I think that there is been a number of benefits that we have gotten from just industry trends in general where there is just a higher in general out there for more advanced imaging as the equipment post processing software, AI, you know, has just created more and more clinical indications of ordering these types of advanced imaging. And then you combine that with all the initiatives that we are doing in internally to build capacity in advanced imaging around investing in some of the newer MRI equipment that has faster scanning times, and therefore, we can do more work in the same number of work hours. We have been aggressive in expanding the hours the scanning hours of many of our locations by opening up later, you know, in the evening and on weekends. In a lot of our very densely populated markets. TechLive has had a big impact on our ability to utilize that MRI capacity where, you know, 1 of the things that we and the rest of the industry has suffered over you know, the past, half a decade or so or even longer is the shortage of technologists. And so we have had to close rooms in the past when we could not appropriately staff an MRI room, and now we are being able cover that schedule without you know, closing the room, you know, via a remote technologist, that is been a big deal. Clearly, the growth in the PSMA prostate and the amyloid studies has driven PET/CT growth, in an extraordinary way. that is representative now of over 25%, those 2 procedures. of our PET/CT volume. And when you go back you know, 2 or 3 years, we were essentially doing no amyloid studies and very few PSMA studies. So that is the focus on that type of imaging, the newer tracers that are coming out on the market that are tumor specific, will continue to drive high demand for PET/CT. In the areas of CT, we have been growing specialty cardiac programs around the CCTA program. Which is the coronary CT angiography where we have hired 2 very prominent physician leaders on both coasts who are building out that program. So it is and then there is a lot of blocking and tackling that is occurring at our centers. From an operation standpoint and a technical standpoint. For instance, you know, we have introduced digital patient registration at many of our centers where patients no longer have to go to the front desk to get checked in with the front office people. that is been a problem for us to drive more patients through our centers in the past, and it is also alleviating some of the challenges that we have had in hiring and retaining front office, personnel. So it is it is not 1 thing, Brian. it is the combination of the focused investments we have had in technology, the initiatives that we have had in digital health, the and also what is going on in the broader industry.

Operator: Thank you, Mark. The next question is from David Samuel MacDonald with Truist. Please go ahead.

David McDonald: Congratulations. I had a quick question. I wanted to come back to some comments you made in the prepared remarks just about the automated draft reports. And I think the numbers that you said was roughly a 30% increase in terms of efficiency, and it would be about half rolled out by the middle of next year. A, do we have that correct. and, B, that sounds like a pretty meaningful increase just in terms of, you know, capacity that you are gonna free up for your radiologists and some of your staffing. You know, a, are we thinking about that correctly and just any additional details that you could provide there.

Mark D. Stolper: I think I can take that, Mark. Yeah.

Howard G. Berger: Let me just make a couple of comments, and then, Kaes, if you want to weigh in. But our challenge has been how do we create efficiency for our radiologists. And the 2 areas that we think and others who have commented and are building life opportunities are primarily how do we make our radiologists more efficient in what they see and then how they interpret it. it is been a burden for radiologists for quite some time. That it takes them often longer to dictate a report than it does to actually assess the clinical information that is presented to them. With draft reporting, as we have seen in our C-MODE thyroid, ultrasound application, when we are capable of reading the study clinically, and characterizing the findings, presenting that 4 our draft reporting, That draft reporting is has been accepted by a radiologist 90% of the time. And that it has an enormous impact on their productivity. As a result, what we are hopefully driving towards is making our radiologists that much more efficient in the number of cases they can read on a daily basis and take a lot of the drudgery and burden away from the enormous volumes. That we have in our queues. To be read and then distributed to our referring physicians. So I cannot emphasize enough how important this is. And our tools as I mentioned in my closing remarks, our tools will all be FDA approved so that we can use this both internally and sell these products externally to our partners and customers. That will help everybody experiencing the same problems address the challenge and the shortage of radiologists to meet the growing demand that imaging continues to present. So this is how we are transforming the radiology workflow to make them not only more efficient, but more accurate and more confident in their results. Kaes, if you wanted to add something to that.

Shyam Soka: Maybe doctor Berger, I will add a little bit to it. I think just to answer your question, we do see that impact it is the right way to think about it. I would add 1 other factor. Just take your ultrasound for example. We do 3 million ultrasound studies. Now with breast and thyroid, about 40% of those studies will have draft reporting. So just about the efficiencies there on the radiologist. But remember, when you do ultrasound, it also reduces the sonographer time. Because what happens is the reports are pre prepared a bit by the sonographers. But in thyroid, we reduced about a third of the time of the scan. We are also now going to be doing that on breast. So about 40 percent of our ultrasound we are reducing the timing by a third for the scan as well. So it creates additional capacity in the imaging centers, and we get the productivity on the radiologist's interpretation as well. Right, when we start now doing graph reporting. And so that is really why we have this aggressive push, let's say, starting with ultrasound. But also expanding into more routine imaging like X-ray, now where we have started to deploy. And then into the advanced image advanced imaging like MR, high-volume advanced imaging like MR spine, for example, where we see some of the where we will see some of the first applications for graph reporting in the MR space. Right? So all those will drive productivity across multiple fronts.

David McDonald: And then, guys, just, you have made obviously a bunch of investments that have driven a lot of efficiencies and, you know, helped offload some administrative burden. Can you just make just any kind of high level conversation in terms of the impact that you are seeing that have on, you know, recruiting, retention, pay employee satisfaction, etcetera?

Howard G. Berger: I think that we are seeing a an improvement in our recruiting as people see the tools that we are beginning to implement. That will make their job and their tasks that much easier if you will. And it is helping us reduce the number of open positions that we have as well as bring on additional staff that will then lessen the need we had to outsource some of our readings to teleradiology services. I wanna emphasize that teleradiology amongst a lot of the other techno technological evolutions has been a lifesaver for us and other providers to help manage the demand for the reading and the volumes that we have. And I think that the future for RadNet could involve looking at teleradiology as more of a insourced rather than an outsourced responsibility that we have right now. So technology, again, is the solution that everybody needs to embrace. To deal with the challenges that I think whether you are in a hospital system or an outpatient, urgent care, physician offices that do imaging, is essential in order to drive better quality medicine. Okay.

David McDonald: And then, guys, just last 1. Was wondering if you could just provide a quick update on the recent acquisitions, especially Florida. And just what you are seeing in terms of conversations around additional opportunities maybe further M&A in the state, you know, conversations with health systems, just, you know, anything on the recent deals, especially the Florida. Thank you.

Howard G. Berger: Yeah. The Florida acquisition, which was part of our Q1 initiatives. Has been a very has met with a very enthusiastic response. By the Florida teams there who now are part of the RadNet family. it is taken us the better part of the first 6 months to transition them. Onto the RadNet platforms, which is not unusual. But having acquired 13 new centers, which are contributing 100 million of revenue, was a large undertaking. But to the credit of the RadNet management team, they have done this relatively seamlessly And I think this will help drive not only additional revenue from backlogs that operation had, much like the rest of the RadNet systems. But also allow us greater efficiency in the operation. So we are very encouraged that the second half of this year will produce results that will contribute significantly to the deleveraging of that acquisition and 1 that brings us to another region from which we think we can expand. Virtually, every market that we are in has expansion opportunities, some of which are building de novo centers, which this year, we will have built 13 new centers. And next year, looking for a similar amount. As well as acquisitions of other existing providers to become part of the RadNet network. In addition to that, we are getting on a weekly basis fielding incoming calls from health systems that are looking for radiology solutions to manage their problems. And the number 1 problem that they are all facing without exception is a shortage of radiologists and the burden and demand that is on the radiologists, which is causing a delay in delivering reports. So we think that the tools that we are developing and the logic which around which we are building this we will continue grow that segment of our business and we hope to be reporting some of these success stories and achievements here between now and the end of the year. So there is Okay. there is certainly no shortage of opportunity on the acquisition side. Whether you are talking about health systems, new health systems, expanding existing health system joint ventures, or expanding into our existing markets. And potentially going into new markets.

Operator: The next question is from Andrew Cooper with Raymond James. Please go ahead.

Andrew Cooper: Hey, everybody. Thanks for the question. Maybe first, talked about some of the labor challenges on techs and RADs and obviously all the efficiencies with some of the digital tools. Can you give a sense for how much do you feel like your volume trends are maybe still constrained, whether it is at a center level by capacity, or is this more of a cost factor and an ability to drive higher margins down the road?

Operator: Well, I think the go ahead, Mark.

Mark D. Stolper: Were you going to take that? Yeah. I was just gonna say that we do still face backlogs in many of our markets depending upon what modality you are you are looking at. Which is why we have been, you know, building de novo centers at a faster clip over the last several years because, you know, we need to build the capacity to support the demand those in those markets. While it sounds great to have backlogs, it also is a problem that we to deal with because if the backlogs get too big or too long, patients do not wanna wait a couple weeks to come in for an MRI if they have got or a CT if they have got a potential serious issue and we start losing business to competitors, and then we start losing referral sources. And so, managing that backlog is something that our operations teams do very, very carefully. And that is, you know, when the backlogs get too long, that is when we start investing in new equipment, creating new capacity by opening up new centers. And essentially continuing to monitoring monitor, you know, where those backlogs exist.

Howard G. Berger: Howard, you were gonna say something? Yeah. I was just gonna say some of the credit for improving our capacities. Is a function of the OEMs themselves. Building products that allow us to take existing equipment upgrade them, and shorten exam time. So 1 of the reasons why we have been very and consistently investing in new capital equipment in existing centers is the ability to access the patient backlogs not just through tools that we are developing, but by making our equipment better and more efficient. So I wanna give a shout out to all the OEMs who have embraced this kind of opportunity much of which is driven by artificial intelligence of their own. So combining all of our in house capabilities as well as working closely with the OEMs, has truly created a significant improvement in how many cases or exams we can do per unit time. Virtually with every piece of equipment that we have. The latest of which is by taking our thyroid ultrasound exams and running them through our C-MODE thyroid AI tool We have effectively shown that we have been able to increase 1 exam per day per unit, in our existing centers, and we have close to a thousand ultrasound systems. So you can see that 1 of the things that we thrive on is scale and small changes can be helpful in producing significant results for the company.

Andrew Cooper: Okay. Helpful. And then maybe 1 on the digital health side and margin trajectories. I think the first half was around 6%. The guide implies maybe 9% or so in the back half at the midpoint. You had the 20% target as you talked about at the Investor Day. So maybe just as we think about trending from here towards 2027 and 2028, you know, how do we think the cost side moves? And, you know, how should that leverage on the investments that you have been making and continue to make starts to flow through to the margin expansion?

Cornelis Wesdorp: Thanks, Andrew. I hope I am audible. Yes. Yes. You are, Kaes. Great. And I do apologize for the tech for the technology issue on my on my side. Great question. And the Investor Day presentation that we gave towards margins of 20%-plus remains unchanged. If not, we are more positive on the outlook for that. We have deliberately invested quite significantly in our headcount commercial headcount as well as service and implementation headcount over the last 2 or 3 quarters. You have seen that our margin dipped in Q1 and is now an upward trend again, and we are very confident that we are going to meet our guidance for the year, the 10 million to $12 million adjusted EBITDA. And from there onwards, move towards 20% margins. Maybe 1 thing to note we track internally our core business growth, so we dissect a little bit what is the impact from acquisitions, what is organic growth what is the organic part of our business performing at. And we are seeing very favorable margins in line with SaaS businesses, of 30% to 40% EBITDA margins in that domain. And so we know that core growth, the core business as we add on the acquisitions, as we turn them to profitability and as we scale our business, is actually very much in line with what you would expect of a SaaS business. We will to your last part of your question, we will continue to invest in our portfolio because we know that is the way to pioneer this industry. But you will see the impact of growth covering these investments in a much more lucrative way, so to say. And therefore, we move into 2027-2028, we are quite confident about increasing that profitability to 20-plus percent.

Operator: The next question is from Matthew Gillmor with KeyBanc. Please go ahead.

Matthew Gillmor: Hey, thanks for the question. Maybe the first 1 following up on the reimbursement and revenue opportunity for C Mode with breast ultrasound following the FDA approval. I thought you had offered some prior comments that for thyroid ultrasound, you were able to bill for the t code you referenced 30 to 40% of the time with payers. As breast ultrasound becomes more widely available across your network, does the reimbursement ramp up more quickly so the same payers will pay 30% to 40% of that T-code or does it ramp more slowly and you gotta go back payers and discuss reimbursement?

Shyam Soka: Tom, do you want to take that question? Yeah. So the answer to the question is yes. We do see that it would be easier to get to that 30% to 40% but we do have to we motivate for, let's say, a new indication. But the fact that they are already covering we know which payers, for example, have positive determinations. So we will get to that reimbursement level faster with breast than we would than we had with thyroid.

Matthew Gillmor: that is great. Thanks. And then as a-- I-- let me just say-- Go ahead.

Howard G. Berger: 1 other point. Yeah. I am sorry. And Sean mentioned this. We do 4x as many breast ultrasounds as we do thyroid ultrasounds. So even if the initial launch throughout RadNet we are going to be doing the breast ultrasound AI on all breast ultrasounds, both screening and diagnostic. If we apply the same percentages, and look at the revenue that we have been able to achieve in the area of thyroid, We are cautiously optimistic that number right out of the gate could be 4x as much. It will take us a little bit longer to ramp that up. Simply because we have a lot more mammography units to and physicians to get accommodated or acclimated to using breast ultrasound. And then after that, we will be looking at going to all of the payers who are not currently reimbursing and lobbying for them to do that because the use of these tools certainly is good medicine. And I think that is gonna be the winning theme long term.

Matthew Gillmor: Great. And then as a follow-up, on the digital health sales front, you know, you all sound very in getting to the ARR metric and we appreciate the total contract value that you have been disclosing over the past few quarters. I was curious that as we are tracking that externally, is there a is there a seasonal dynamic with the total contract sales numbers you disclosed to sales activity ramp up in the back half for customers as they are thinking about 2027 and setting budgets. Just kinda curious how we should be thinking about that over the next few quarters.

Cornelis Wesdorp: There is a-- and thank you for the question, Matt. there is a degree of seasonality there. it is definitely loaded towards the back-end, if not to H2, if not to Q4 even. However, that is more prominently the case for larger enterprise informatics kind of deals, where we see that skew maybe towards the second half into Q4. Versus clinical AI sales. Also, there is the seasonality is not as profound. But in a way, the back end loading of the year is an industry dynamic. Both on closing deals as well as ARR and, generating revenue. And that is why, you see a little bit of a skew towards the end of the year.

Matthew Gillmor: Great. Thank you.

Operator: The next question is from Larry Solow with CJS Securities. Please go ahead.

Larry Solow: Great. Thanks. Good morning, everybody. Most of my questions have been answered. Just a couple of follow ups. On the just on the margin, Mark, just on the margin improvement in the core imaging, With 240 bps kind of mix shift which is a good guy and nice volumes, also a good guy. I would think it would have a little more margin improvement plus with the AI benefits. The direct health benefits. Than you did. And I know you mentioned the pressure on salary. Is just most of that benefit being wiped out by the and not to be negative, but it just is most of that benefit being wiped out by the pressure on salaries? Or was there anything unusual in the quarter?

Mark D. Stolper: Yes. There was nothing, I would say, unusual in the quarter, Larry. there is a few things happening here. 1, yes. We are still in an inflationary environment with respect to a lot of our costs, but, in particular around salaries. Especially as it relates to technologists, and radiologists, which is where I think the big impact is gonna come, you know, from the digital health roll outs of many of these products and solutions, you know, within our centers and to our radiologists. We and we are we are absorbing a cost of implementation Right. Both on the digital health side as Case mentioned in his remarks, you know, impacting the profitability right now in digital health, but also on the RadNet operations side with our operations teams in terms of the implementation and training of our staff. That will be a continued expense, you know, expense I think, for the next, you know, couple years as we continue to roll this out. But there is a lot of margin enhancement opportunities, you know, to come in the coming quarters. I mean, just you know, when you think about even this just breast this breast opportunity, the breast ultrasound opportunity, where, you know, we could have 1 million scans you know, and even if only 30% to 40% of the payers recognize the t code and they are reimbursing us at $50 to $60, that is that is a lot of incremental revenue, against which we have very little incremental cost. And so there is there is a lot of these things that are gonna come and that will show through our you know, into our margins in the coming quarters and couple of years. You know, we still feel very confident with what we said last November at our Investor Day in New York. Where we felt relative to 2025 margins, that we think that there is a 100- to 150-basis-point margin enhancement opportunity by you know, at the end of 2028, so as we are exiting 2028, I still I still feel good about that number and it is coming from a lot of different places.

Larry Solow: No. Okay. that is fair and just second question. Just on the on the credit expansion, increase, I guess, $250 million. It looks like you got a little bit of a more favorable rate. On the whole facility there. But just any was it just opportunistic in terms of just adding that $250. Sounds like, you know, your acquisition environment sounds as good as it is ever been, but any particular reason just to expand now?

Mark D. Stolper: Yeah. The entire repricing opportunity you know, was purely opportunistic. Meaning that you know, our debt has been trading above par for or had been trading above par for quite some time. So the yield was lower than our interest rate because of that. And so we were able to avail ourselves of slightly better pricing. We took down the pricing by 25 basis points, and because there was so much demand for our paper at the time, there was an opportunity to take more money down, replenish some of the capital that we spent in, you know, in the last you know, I would say, 90 to a hundred and 20 days where we put out a significant amount of capital for the Gleamer acquisition as well as the imaging center acquisition. In Southwest Florida as well as, in Indiana. And so this was essentially an opportunistic transaction to lower our debt costs as well as, replenish the capital, on the balance sheet. And we are pretty confident that, you know, there are more opportunities to continue to expand the business through M&A in the coming quarters and years.

Larry Solow: Great. Thank you.

Howard G. Berger: 1 other comment, Mark, that I will make. Part of our margin in the first and second quarter of this year has been because of the additional cost of the large acquisitions that we made on the imaging services side. To get them magnetized so that we had to extend quite a bit of human resources in order to take some of these newer acquisitions, particularly the 1 in Florida, and get them onto the RadNet platforms, which is not just our IT platforms, but our purchasing platforms, our accounting platforms, our HR platforms, And so there was a lot of duplicated expense, which will go away in the second half of this year.

Mark D. Stolper: And I would add to that, Howard, that those 2 assets that you mentioned were not at, were not operating at rad net margin when we purchase them. They both know, were had some challenges, with their own margins. So you know, they were dilutive to RadNet's overall margin. So not only are we gonna or have we been spending money in the integration of those assets, but they also started at margins that were below our own.

Operator: The next question is from Yuan Zi with B. Riley Securities. Please go ahead. Mr. Zee, your line is open on our end. Perhaps it is muted on yours. The next question is from Jim Sidoti with Sidoti and Company. Please go ahead.

Jim Sidoti: Hi, good morning. Thanks for taking the question. Just a follow-up to the last question. When you think about the additional acquisition targets that are out there, are you thinking mainly on the digital health side or on the imaging side?

Howard G. Berger: Both. Both. There, I think that there is plenty of acquisition opportunities as we have demonstrated over the years in the services side. And we will continue to explore those because they not only enhance the services side of our division, but we then can implement our new digital tools to help you know, deleverage and make those operations more efficient. But you know, we should not overlook the opportunities not only on the digital health side, or acquisitions. This is a consolidating marketplace. Both on the services and digital health side. And not everybody can be a winner out there We think that there will be opportunities for us to broaden and accelerate the portfolio that we have. And we will be looking at newer opportunities to continue to make RadNet an even more attractive partner for our hospitals and others with capabilities that we believe we can bring to the table that address their choke points, which are primarily, as I mentioned in my other comments, related to, you know, staffing issues both on the radiologist and non side of it.

Mark D. Stolper: So that was indeed 1 of the theories or rationales that we use for upsizing our credit facility and putting more cash on the balance sheet. We think that can help drive new opportunities for RadNet to continue to grow this business. Jim, the 1 thing I will add is from a capital allocation standpoint, I would I would say while there are acquisitions on both operating segments within RadNet, I it is highly unlikely that we would put out capital know, along the lines of what we did with the Glimmer acquisition in terms of in terms of its size. Many of the opportunities on the digital health side for acquisitions are much smaller in nature. And the acquisitions on the imaging center side, you know, they span from onesies and twosies, you know, little tuck in transactions to larger scale transactions. So it is highly likely that more of the capital will be allocated towards the imaging center side of the business.

Jim Sidoti: Alright. And then just a quick follow-up. You indicated earlier that the reimbursement trends are continuing to favor the outpatient centers for digital imaging. You know, how long, you know, do you think it takes for hospitals to adjust to when the new rates get into effect?

Mark D. Stolper: Well, the hospitals are under tremendous pressure right now within their radiology departments in general. They are they are having staffing issues They are they are suffering from the shortage of radiologists. They are very inefficient when it comes to driving patient volume through the radiology departments both on the inpatient and the outpatient side, and they are now being impacted to a certain extent by the changes in the Affordable Care Act and some of these exchange programs And so this budget neutrality provision in the HOPs fee schedule that is been proposed by Medicare. it is just 1 other thing that is gonna be piled upon that already high level of pressure that the hospitals are feeling within radiology. And so we think that is going to 2 things that are both positive for RadNet. 1, is it is going to create more and more interest in partnering with, you know, an outpatient provider who has experience and background and success in managing and operating outpatient facilities at scale at the lower you know, at the lower pricing, number 1. And number 2 is it is going to put more pressure on their in on their existing radiology staff to adopt you know, digital health tools that can make them more efficient and drive you know, potentially more volumes or at least deal with the volumes that they currently have in a more efficient way. And so, I think, you know, we are we are feeling really good about our hospital joint venture business We are getting more and more inbound interest. We have 157 locations now held within these health system partnerships, and we are hoping that we will be in a position to announce some expansions of existing partnerships and some new partners in the coming quarters.

Jim Sidoti: Great. Thank you.

Operator: This concludes our question and answer session. I would like to turn the conference back over to Howard G. Berger for any closing remarks.

Howard G. Berger: Thank you. Again, I would like to take this opportunity to thank all of our shareholders for their continued support and the employees of RadNet for their dedication and hard work. Management will continue its endeavor to be a market leader that provides great services with an appropriate return on investment for all stakeholders. Thank you for your time today, and I look forward to our next call. Good day.

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