Lumexa (LMRI) Q1 2026 Earnings Transcript

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Date

Tuesday, May 12, 2026 at 5 p.m. ET

Call participants

• Chief Executive Officer — Caitlin Zulla
• Chief Financial Officer — J. Anthony Martin

Takeaways

• Consolidated revenue -- $253 million, up 3% year over year, driven by volume and rate improvements.
• System wide revenue growth -- 4%, with approximately 67% from volume and 33% from rate.
• Advanced modality volume growth -- 7% growth year over year, with PET up 23.1% and MRI up 8.2%.
• Adjusted EBITDA -- $51.2 million, essentially flat compared to $51.1 million the prior year, reflecting $4 million impact from seasonality and weather.
• Adjusted EBITDA margin -- 20.3%, compared to 20.8% in the prior year, reflecting fixed cost absorption during lower volumes.
• Net income -- $2 million compared to a net loss of $8 million in the prior year period.
• GAAP EPS -- $0.02 per share; Adjusted EPS -- $0.18 per share.
• Cash flows from operating activities -- $3 million, a $17 million year-over-year improvement due to lower interest payments following debt refinancing.
• Free cash flow -- Negative $2 million, a $13 million improvement, driven by operating efficiency and lower capital outflows.
• Outpatient net patient service revenue -- $138 million, up 4%, supported by same-site growth and new de novo centers.
• Professional fee revenue -- $59 million, representing 1% growth.
• Management fee and other revenue -- $55 million, up 5%; $21 million from JV management fees and $34 million from pass-throughs (employee, IT, site costs).
• System wide volume growth -- 2.5%, with strength in advanced modalities offset by flat routine scans.
• Payer mix -- Seasonal shift toward government payers, as commercial declined as a percentage of system wide revenues in the first quarter, which is described as typical.
• Interest expense -- $16 million, down $14 million due to debt paydown from IPO proceeds.
• Stock based compensation -- $12 million, up from $6 million due to legacy plan reset; expected to be approximately $50 million for full year (with run rate $20 million-$28 million annually from 2027).
• G&A expense -- $20 million, up $3 million, with $7 million increase from public company costs and stock-based compensation, partially offset by $4 million in lower transaction and timing expenses.
• CapEx -- $5 million, consistent with disciplined strategy for growth through de novos and equipment upgrades.
• JV operating model -- $15 million equity in earnings from unconsolidated affiliates, flat year over year; JV-related debt is $82 million and off-balance-sheet.
• Advanced modalities share -- 37.4% of total volume, an increase of 160 basis points year over year, exceeding every quarter in the prior year.
• New centers and acquisitions -- Two acquisitions completed and two de novo centers opened; targeting eight to ten de novos per year.
• FastScan adoption -- MRI FastScan installations tracking to reach approximately 67% of MRI fleet by year-end, up from 51% at the start of the year.
• AI and strategic service lines -- Continued rollout of AI breast arterial calcification solution; expansion to new markets with strong patient uptake.
• Full-year 2026 outlook -- Revenue guidance of $1.045 billion-$1.097 billion, adjusted EBITDA of $234 million-$242 million (reflecting $7 million public company costs), and adjusted EPS of $0.71-$0.77 per share.
• Seasonality guidance -- 55% of adjusted EBITDA expected in second half; first quarter contributed approximately 21.5% and second quarter expected at 23.5% of full-year total.
• Cybersecurity incident -- Vendor breach involving company data; management stated, "we do not believe it has a material impact on our business or financial results."

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Risks

• J. Anthony Martin stated, "was a more meaningful factor for us this year than usual," with four significant events, producing a $4 million EBITDA impact and "enhanced seasonality."
• Routine imaging volumes described as "essentially flat," with mammography "taking longer to rebound after the storms."
• Stock-based compensation doubled to $12 million for the quarter due to equity plan resetting tied to the IPO, resulting in higher non-cash expense burden for 2026.
• Decrease in commercial payer mix in the first quarter contributed to "a bit more seasonality," representing a headwind to revenue mix versus previous years.

Summary

Lumexa Imaging Holdings (NASDAQ:LMRI) reported revenue growth and margin stability, led by strong performance in advanced modalities and new center expansion. Management reaffirmed its full-year financial outlook, including guidance for revenue, adjusted EBITDA, and EPS, despite elevated seasonality, weather impacts, and a non-material cybersecurity breach. Joint venture activity and technology deployment (FastScan and AI solutions) are advancing according to plan, supporting year-over-year improvement in modality mix and geographic reach.

• The company initiated two acquisitions and launched two wholly owned de novo centers, including its first in a joint venture with UPMC, and expects more de novo activity with joint venture partners in upcoming quarters.
• Adjusted EBITDA, while flat year over year at $51.2 million, absorbed a $4 million impact from adverse weather and remained within internal expectations, as both advanced modality volumes and patient uptake on new AI solutions increased.
• Operating cash flow and free cash flow both improved year over year, leveraging lower interest costs after the IPO's debt paydown, but remain highly seasonal with most cash flow generation expected in the back half.
• Advanced modalities rose to 37.4% of the total scan volume, indicating progress in shifting the acuity mix, while PET scans grew 23.1% and MRI grew 8.2%, fueling higher average revenue per scan.
• FastScan MRI software penetration is targeting over 67% of the fleet by year-end, up from 51%, with centers equipped with FastScan delivering productivity gains aligned with internal benchmarks.
• The company's contractual revenue base is relatively stable, with management viewing payer mix changes and first quarter commercial payer decline as within typical seasonal norms.

Industry glossary

• De novo center: A newly built imaging center that is not acquired but developed from the ground up by the company.
• Advanced modalities: Higher-complexity imaging technologies such as MRI, PET, and certain forms of CT, generating higher reimbursement and margin relative to routine modalities like X-ray or ultrasound.
• JV (Joint Venture): Structured partnerships between Lumexa and health systems where centers are jointly operated, with financial contributions and equity interests from both parties.
• FastScan: MRI workflow software implemented to reduce scan times and optimize MRI equipment utilization.
• Net promoter score: Metric assessing customer willingness to recommend services, cited as “consistently exceed[ing] 90” in this call.

Full Conference Call Transcript

Caitlin Zulla: Thanks, Sue. Thank you all for joining us today. In Q1, we delivered several meaningful achievements to kick off a year at executing on our strategic priorities, which include driving strong same centric growth, an expanding mix of advanced modalities, targeting a record number of de novo openings, ensuring the successful ramp of newly opened centers, accelerating high impact strategic service lines, and expanding our geographic footprint. Here are a few highlights of our announcement tonight. Our Q1 results came in line with our expectations. after the seasonal and weather dynamics we discussed in our Q4 call. Q1 volumes ramped throughout March, and we recovered our momentum.

Specifically, we drove strong same center growth and strategic service lines are expanding among a healthy mix of advanced modalities. In Q1, advanced modalities grew 7% year over year with pet growing at 23.1% year over year and MRI growing at 8.2% year over year. Rollout of our AI powered breast arterial calcification solution continues with plans for expansion into new markets and strong continued patient uptake. We are actively ramping novo centers and our 2024 and 25 cohorts are tracking in line with our expectations and advancing our plans towards long term growth and profit expansion.

And in some exciting news tonight, we completed 2 acquisitions and opened 2 de novos this year, and We are well on our way to achieving our stated goal of opening 8 to 10 de novos to fuel future growth. Meaningfully, 1 of the acquisitions was an IVTS site in Pennsylvania, the first site in our new JV with UPMC. We are actively advancing multiple site location plans with this important partner. And finally, we are excited to welcome 2 exceptional leaders to Lumexa, each bringing the depth of experience and vision that will help drive our next chapter of growth and results. I will go into some more detail in just a moment.

At Lumexa, we are addressing a large market opportunity and deploying a disciplined growth algorithm. We are confident we are well positioned to execute our growth plans while driving better outcomes across the imaging landscape. I would like to take a moment to speak about our experience in the market as we meet with health systems and the providers who are so important to us. And as we continue with our commercial efforts to drive growth and acuity mix. Our value proposition resonates strongly with patients, providers, and payers. Reflected in net promoter scores that consistently exceed 90.

We deliver high quality imaging in more convenient settings on a more timely basis and at a meaningfully lower cost than hospital outpatient departments. Helping health systems solve important operational challenges and achieve their patient care and market expansion goals. As we pursue our priorities, it is clear the market is moving towards us. We are benefiting from durable long term tailwinds, aging populations, new treatment paradigms requiring advanced imaging, rising preventative screening rates, and an ongoing shift from inpatient to outpatient care in a fragmented, capacity constrained industry. In our conversations with multiple potential health system partners, Bayside struggles with imaging bottlenecks that constrain operational throughput, and delay patient access.

This underscores the strong need for outpatient capacity, and a growing demand for a partner who can deliver speed, access, and capital efficient expansion. At the same time, many systems are proactively preparing for potential site neutrality by accelerating their shift towards lower cost outpatient settings, which we believe further reinforces the relevance of our model. And they tell us they like our nimble, best-of-breed approach that ensures we will always be able to leverage innovation to drive efficiency and the best patient experience and outcomes. As I mentioned a moment ago, reflecting the sizable growth opportunity we are pursuing at Lumexa, we are delighted to welcome 2 seasoned leaders. First, Kyle Lynch.

Our new Chief Growth Officer, brings deep experience in building high performing business development organizations executing complex transactions, and implementing growth strategies that translate into durable financial performance. And another proven industry veteran, Rick Mondo, has joined Lumexa as chief enterprise operations officer. Rick has a strong track record of leading and scaling national platforms to drive integration and operational excellence. As we continue to grow, her focus on enterprise wide alignment will be critical to delivering for our patients, partners, and team. Welcome, Kyle and Rick. We are thrilled to have you join our team to help drive disciplined, efficient, and sustainable growth through joint venture, de novo development acquisitions, and commercial growth initiatives.

And now a moment on the key elements of our growth algorithm. Our commercial team is laser focused on driving same center growth. On the heels of a successful New Jersey launch, we expanded our AI powered breast arterial calcification program to include New York, And in both markets, we are seeing strong acceptance for this cash add on assessment for cardiac health in women. Our team continued their focus on driving advanced imaging. PET, MRI are strategic areas of focus for us. Additional seasonal campaigns targeted gastroenterologists and ENT specialists time to the start of allergy season. These contribute to our growth and increase in acuity mix.

We are on track to expand our geographic footprint In Q1, through new de novo openings, JV partnerships, and carefully selected M&A. Tonight's announcement showcases the opening of 4 new Lumex imaging centers including 2 small but strategic tuck in acquisitions, demonstrating the strength of our JV partnership. The first location is in Pennsylvania with UPMC, and the second location is in North Carolina with Advocate Health. The acquired facilities will ramp over time, and their integration into our operating platform, and as we complete payer enrollment requirements.

The 2 new de novos are in South Carolina and Florida, expanding our footprint in attractive MSAs and advancing us towards our goal to open 8 to 10 de novos annually and deliver profitable growth. When it comes to M and A, tuck in acquisitions of new centers, there is a lot of opportunity to bring our expertise to a fragmented market and accelerate our presence across targeted geographies. We are continuously evaluating accretive opportunities with a disciplined and proven approach. On the JV front, in addition to excitement around our ramping UPMC partnership, we are cultivating a robust pipeline of potential health system partners with multiple ongoing conversations at various stages.

In my conversations with health system leaders, it is clear to me that our approach to joint ventures is a key differentiator for our company. Health systems are seeking ways to participate in the rapid site of care shift to outpatient imaging, and grow their outpatient ambulatory footprint. Our JV model provides a highly effective entry point. Through clinical, commercial, and operational excellence, we demonstrate particularly in de novo development, Lumexa Imaging is well positioned to help systems execute against these ambitions while they remain focused on their broader enterprise priorities. In return, these partnerships accelerate our presence in any given market.

Finally, a note on our ongoing efforts to scale our company We are constantly targeting efficiency gains to meet growing outpatient imaging volume and leverage our installed base of centers and equipment within. Our FastScan integration continued rolling out across our centers, and we are targeting 2/3 adoption by 2026. We are also successfully leveraging virtual cockpit for remote MRI scanning which allows us to minimize the impact of machine downtime to flex our staffing schedule, and to extend our hours to serve our patients. And we continue to advance our strategy to leverage technology and AI across support services functions to drive scale as we continue to grow.

As I conclude my remarks, I want to briefly note that 1 of our vendors recently experienced a cybersecurity incident that involved a breach of Lumexa data. Unfortunately, these types of events have become increasingly common across industries, Our patients are always our top priority, and we are fully committed to doing right by them. We have responded swiftly and are taking the steps necessary to address the situation protect our patients, and comply with applicable laws and regulations. Importantly, we have reviewed the situations and its effects, we do not believe it has a material impact on our business or financial results. In the spirit of transparency, we wanted to make you aware.

Given the nature of the event, we cannot say more at this time and will of course, provide updates in the future as we have them. Wrapping up, I am pleased with our Q1 results. We move forward into Q2 with confidence fueled by a strong execution and a sense that at Lumexa Imaging, we are in the early innings of capitalizing on the opportunities ahead of us. We are inspired by our mission to extend access to high quality imaging to elevate compassionate care. Improving lives and advancing health care across the country.

Before turning the call over to Tony to review our first quarter in more detail, I want to say a huge thank you to our dedicated team members and radiologists. With that, Tony, please continue.

J. Anthony Martin: Thank you, Caitlin, and thank you all for joining us today. On today's call, I will review the financial results and speak to some key drivers of our performance for the quarter. I will then provide our outlook for full year 2026. To supplement my review of our GAAP financials on today's call, I will cite some system wide metrics to help you better understand our overall performance and the breadth of our business. System wide metrics include all centers that we operate. Including those we own as well as the centers we operate in our 8 joint ventures with health systems. Turning to our first quarter financials.

Consolidated revenues came in at $253 million an increase of 3% compared to the same period last year. System wide revenue growth, which includes all sites we operate, was 4% in the quarter. About 2/3 from volume and 1/3 coming from rate. A proportion consistent with how we model the company. Revenue per unit, which includes both scan and read revenue, also increased. Due to advanced modalities being a higher proportion of our business and some continuing benefit due to modest increase in contracted rates with payers. Who appreciate our lower price point compared to hospital based services. We experienced strong system wide performance across all our outpatient sites, both wholly owned and in JVs.

And we continue to be pleased with the core performance of the business. Advanced modality volumes, which reimbursed 3 to 4x higher than routine modalities, grew 7% versus prior year on a consolidated and system wide basis. As we discussed on our Q4 call, Our first quarter volumes were shaped by a combination of factors. Strong Q4 seasonal performance, that created enhanced seasonality coming into Q1 and weather related disruptions in Q1 that temporarily suppressed patient volumes at a number of our sites. Overall, these factors ended up impacting Q1 EBITDA by about $4 million as anticipated. Advanced modalities returned the fastest and grew 7% for the quarter. With strong momentum heading into Q2.

Overall system wide volume growth was 2.5%, with the strength of advanced being offset by routine scans, which were essentially flat. With mammography taking longer to rebound after the storms. While routine scans impact our earnings less than advanced, we are glad to see them ramping back to further strengthen our confidence around our annual performance. In addition, our payer mix follows a predictable seasonal pattern. Q4 consistently reflects the strength of our commercial book. As patients seek care ahead of deductible resets. And Q1 naturally sees a relative shift toward our government book. As that commercial activity normalizes. Like many other health care service providers, we experienced a bit more seasonality in payer mix.

In Q1 26 than we did in Q1 25. A bit of decrease in commercial as a percentage of total system wide revenues. Now to provide some additional detail on our consolidated revenues. Outpatient net patient service revenues at $138 million grew 4% as we delivered same site growth and new de novos from the cohorts of 2024, and 2025 continue to ramp. Professional fee revenues, our second operating segment, were $59 million reflecting growth of 1%. Finally, management fee and other revenues grew 5%. And were $55 million. Within that management fee line, roughly $21 million represents management fees we earn from operating the sites in our health system JVs.

This is usually computed as a percentage of site revenues. The remaining $34 million in this category represents zero margin pass throughs. Of employee, IT, and site level costs that we pay on behalf of our joint ventures. So when you are modeling us, it is important to understand those 2 components in terms of impact to margin. G&A for the quarter was $20 million up $3 million from 2025. This reflects $7 million higher expenses for combined public company costs and stock based comp. An increase that was partially offset by about $4 million in reductions in some transaction related costs and timing differences in G&A expense in Q1 versus later quarters.

The pubco costs, which are in line with the guidance we gave, were $1.2 million in the quarter. And a ramping to the full year impact of $7 million. The stock based compensation increase from $6 million in Q1 25 to $12 million in Q1 2026 is a function of the resetting of legacy equity comp plans as part of our IPO in December. This takes expected stock based comp for the full year to around $50 million. Half of that $50 million related to historic m and a, and will be fully amortized by 2026. Looking ahead, we expect ongoing stock based compensation of approximately $20 million to $28 million per year, starting in 2027.

Quarterly amounts may vary depending on timing of vesting. Below operating expenses, we include our equity and earnings of unconsolidated affiliates. This represents our pro rata ownership share of the net income of our JV sites, which at $15 million was flat year over year. Consistent with the overall performance of the business. Below the operating line, interest expense was $16 million in Q1. This new run rate is $14 million less than Q1 25. Reflecting our use of IPO proceeds to pay down debt. Freeing up more than $50 million in cash annually that we plan to invest in growth. Pretax income was $3 million for Q1 26 compared to a pretax loss of $4 million in Q1 25.

We are now a cash taxpayer, and so after a tax provision of $1 million in the quarter, net income was $2 million in Q1 26 compared to a net loss of $8 million in the prior year period. Our GAAP EPS was $0.02 per share in Q1 and adjusted earnings per share was $0.18 And now on to adjusted EBITDA. Which we view as an important measure of our company wide operating performance. And which demonstrates the strength of our financial model. Our adjusted EBITDA benefits from contributions from our pro rata ownership share of EBITDA at all of our sites. Both the ones we own 100% and those in health system JVs.

While revenue remained strong in the quarter and particularly from advanced modalities, Adjusted EBITDA came in at $51.2 million, flat compared to $51.1 million a year ago. But in line with our expectations. This reflected the impact of seasonality and weather we are related volume softness against a partially fixed cost structure. Including staffing and facility costs that do not flex proportionately with short term volume changes, especially during weather disruptions when scan volumes per day can be suppressed.

Despite these site level factors, plus the $1.2 million step up in public company costs, our adjusted EBITDA margin was 20.3% in Q1 2026 compared to 20.8% in Q1 2025 As with earnings, adjusted EBITDA margin tends to be lowest early in the year and ramp as the year progresses. Before moving on to cash flows, I wanna spend a moment on our joint venture and how these show up in our numbers. We view our JV structures as simple capital efficient models to scale our business. While generating significant cash flows for us and our health system partners in an amount that tracks closely with our income from these JV sites.

JVs extend our brand, support our mission to deliver exceptional patient care, and expanding access to high quality imaging. Details of JV Financial performance are included in our quarterly financial statement disclosures as follows. But briefly, JV revenues and expenses are not included in our GAAP results. Due to our minority ownership position. Our pro rata share of JV EBITDA is included in our adjusted EBITDA and reflects the operating performance of the asset we own. And aligns our EBITDA with the true scale of our business. As an example, if we own 49% of a JV generating $20 million of EBITDA, The system wide EBITDA contribution for us from that JV would be $9.8 million.

Our JVs also distribute cash to us, Those distributions flow into free cash flow as distributions from unconsolidated affiliates. Which is a discrete line item on our cash flows from operating activities. These cash receipts are net of any JV CapEx, so we do not specifically describe JV CapEx in our discussion of cash flows. Debt of these JVs is not on our balance sheet. And consists of equipment lease financing totaling $82 million. Our business generates healthy operating cash flow. The first quarter is traditionally the lowest cash flow quarter of the year, due to normal seasonal swings in working capital as well as the seasonality of volumes and earnings.

So like our earnings, cash flows generally ramp by quarter. Cash flows from operating activities were $3 million in Q1 26, This represents a $17 million improvement over Q1 25. Largely driven by lower interest payments from refinancing our debt and our IPO last December. Free cash flow, which we define as cash flows from operating activities, less CapEx, was negative $2 million for Q1 2026. A $13 million improvement over Q1 2025. And now on to CapEx and how we think about it.

As we stated at the time of our IPO, in 2026 and 2027, we see a sizable opportunity to accelerate our growth plans in our fragmented industry, to earn meaningful returns by investing in de novos, new and upgraded equipment at our existing sites, and through targeted M&A. Our $5 million capital spend in Q1 26 reflects our plans to grow the business in a disciplined manner. We additionally finance capital expenditures under lease arrangements. Which adds to our capital efficiency. In general, as we invest to grow, we currently expect free cash flow in 2026 to operate in the neighborhood of 25% to 30% of our adjusted EBITDA. On a full year basis.

With belief that it will trend higher with scale and once spending on our growth initiatives and infrastructure to scale our company returns to more normal levels. There can be variation of CapEx across the quarters due to working capital timing or other strategic uses of capital that we identify from time to time. To answer a question we sometimes receive, our JVs make capital expenditures on their own. Our cash flows from operating activities are already fully reflective of everything our JVs do. JV sites generate operating cash flows, make capital expenditures, and fund equipment lease payments. And then they distribute our pro rata share of the remaining cash to us.

This is what I referred to as distributions from unconsolidated affiliates. it is reflected as a single line item in our cash flows from operating activities. Wrapping up and moving on to our guidance. We have now moved through the seasonal and weather related impacts of Q1. And with healthy growth and advanced modalities, strong demand, improving capacity, and contributions from ramping JVs and de novos, we are well positioned to deliver on our full year commitments. On the strength of these drivers, we continue to expect revenue to be in the range $1.045 billion to $1.097 billion.

Adjusted EBITDA to be in the range of $234 million to $242 million, which includes approximately $7 million of public company costs that were not incurred in 2025. At the midpoint, the adjusted EBITDA growth rate excluding the addition of these costs being incurred in our first full year of operations as a public company, would be 7%. And we expect adjusted EPS to be between $0.71 and $0.77 per share. For some additional color, we expect a gradual sequential ramp in adjusted EBITDA throughout the remaining 3 with the majority of full year adjusted EBITDA coming in the back half of the year.

As we drive same center growth, geographic expansion, expand strategic service lines, and deliver efficiencies across our company. As we look ahead to Q2 continue executing on our goals, we are energized by the opportunities in front of us. So with that, let's turn to your questions. Operator? Would you please open the call?

Operator: Certainly. And our first question for today comes from the line of Brian Tanquilut from Jefferies. Your question please.

Analyst (Brian): Hey. Good afternoon, guys, and thanks for hosting the call. Maybe just on the UPMC transaction first. Just curious. I mean, is this how we should be thinking about it where you could accelerate the ramp in within the UPMC joint venture as you do Gallic start up acquisitions here to build the scale with that partnership.

Caitlin Zulla: Yes. Thank you so much, Brian. We are exceptionally excited to start off the UPMC joint venture with the acquisition of a facility and very much it is something that will continue to drive the growth of our partnership together. You know, we are actively advancing site planning with UPMC and to be able to announce at least a few de novos with them this year. As a reminder, the JV partnership with UPMC was officially inked in about August, September. And so, you know, typically getting a de novo out of the ground is a year.

So excited to already have an acquisition under our belt and then to be able to continue to support it with de novo's this year and into next year as well.

Analyst (Brian): Got it. And then maybe, Tony, just to your comments towards the end of your prepared remarks about the gradual ramp and EBITDA over the course of the year. Just curious if you can share with us how we should be thinking about the magnitude of that Q4 seasonal lift And then just what the drivers would be for margins and how we should be thinking about kinda, like, the margin progression From Q1 into all the way to Q4. Thanks.

J. Anthony Martin: Yeah. Sure. Yeah. First of all, you know, remain confident in the full year guidance, you know, unchanged. But, you know, in terms of the enhanced seasonality that we talked about a few weeks ago, You know, the way we look at that is that it will it will continue to ramp in a steady way like it does every year, but it is Starting from a bit lower point in Q1. So now the way I look at it is we expect about 55% of our adjusted EBITDA to be in the second half of the year. Not meaningfully different than before, maybe a 100 basis point shift from our original expectations on how that would be spread.

But that is that is how we look at the you know, how that seasonality will play out. And, you know, we are really confident in that because of all the strength we have Particularly on our advanced modalities heading into Q2. And, of course, it is natural for the results to climb by quarter. After the annual deductible reset kind of starts everything at the beginning of the year. With all those de novos we have, we got you know, 15 that we have opened just since late 24. All those ramping through the year. You know, that will add to that, you know, by quiet allocated that way through the year.

Operator: Thank you. And our next question comes from the line from Benjamin Rossi from JPMorgan. Your question please.

Benjamin Rossi: Hey, everyone. Good afternoon and thanks for taking my questions here. So for the combined $4 million EBITDA impact during Q1 from that volume pull forward dynamic and weather related drag, In your framing of this through seasonality impact as being enhanced, can you provide any framing on how this year's weather impact or combined impact is compared to previous years? And then is the magnitude of drag relative to 1Q earnings larger than normal?

J. Anthony Martin: Yes. Yes. I mean, weather happens, and know, it is part of the business, so it is difficult to predict with any precision. But, yes, it was a more meaningful factor for us this year than usual. There were there were, you know, 4 separate weather events. That were pretty big deal in a number of markets. And so now we do not do not consider that quite a normal year, but it is something normal to have to manage through when it happens. So that is a part of the enhanced seasonality we have seen.

Benjamin Rossi: Got it. And I suppose just as a follow-up on the full year guide for some of your volume recapture assumptions. What has that happened from Q2 through Q4 to make up some of the lost Q1 volume or but otherwise, what does your guide assume for the portion of those volumes that have already been rebooked versus those that are still seem to be maybe recaptured later in the year?

J. Anthony Martin: Sure. Thanks. Well, we have we have we have captured a lot of the advanced already. That was the fastest to come back. And, of course, we love that because that is the higher reimbursement, higher margin business that and, you know, a bigger part of our book all the time. So that came back first. Some of the routines came back a little More slowly, and we will be ramping into Q2, Q3. But, you know, predominantly, what drives the ramp is just the you know, the resetting of deductibles at the beginning of the year and how that plays out.

Over the year for, you know, many health care service providers. there is there is a natural ramping to the business. Heading toward the, you know, the biggest Performance being in Q4. So that happens kind of steadily through the year. And, of course, also the de novos we have so many of them now, 15 that are ramping very well. You know, all of them are at or above the expectations we had for them. And only gaining momentum quarter-by-quarter throughout 2026. So that is another reason we have a lot of confidence you know, kind of where we are headed as the year unfolds.

Operator: Thank you. And our next question comes from the line of Matthew Mardulla from William Blair. Your question please.

Matthew Mardula: Hello. Yeah. This is Matthew Mardula on for Ryan Daniels. Thank you for taking the question. And can we get a update on the percentage of MRI machines that currently have the FastGAN software technology? And then overall, how are you expecting to add the scan software to MRI machines? Is it more second half weighted? Any color into that? And then for the machines that have had the fast scan software implemented this quarter, how has the initial increase in capacity and volume been compared to your internal expectations?

Caitlin Zulla: Yes. Thank you, Matthew, so much. I appreciate the question. When we think about Advanced Growth, really proud of the strength that we are able to demonstrate in Q1, both our system wide and consolidated at 7% We were able to, you know, call out in our earnings trip, Pet, over 23% year over year growth, which is fairly remarkable, and then MRI at 8.2%. A significant driver of that strong pet excuse me, strong MRI growth is, as you said, Fast scan. We continue to install FastScan as we can across our fleet, either through upgrades or system enhancements.

Know, we started the year at 51 and said we would get to just north of think, 66, 67% of our MRI fleet with Baskin before the end of the year. Well on track to achieve that. And then when you think about kind of the performance of centers with FastScan, they are performing really well. Our team is continuing to think through scheduling efficiencies. And I think just notably, you know, benchmark that gives you a sense of the strength of success is that advanced as a percentage of our total volume this quarter was 37.4% in Q1. that is 160 basis points improvement over Q1 25, and that is higher than every quarter last year.

So something that we are very much committed to growing.

Operator: Thank you. And our next question comes from the line of John Ransom from RJF. Your question please.

John Ransom: Hey, good afternoon or evening. Just want to make sure we kind of nailed down the CapEx cash flow puzzle So it let's ignore the, capital lease accounting What are we thinking about in terms of end of the year net PP and E and cash flow either financed or not financed by capital leases? Like, yeah.

Operator: Thanks for your question.

J. Anthony Martin: Yeah. CapEx, we think, will be about $5 million to $7 million per quarter. So, you know, totaling somewhere know, in the mid to upper twenties by, you know, on a full year basis. And as you said, we do finance some additionally, so there is no cash out the door for that. it is probably about a similar amount to what I just described, but, you know, no cash outflow for that.

John Ransom: Okay. And then my second question, and I may be the slow kid in the class, but the 4 centers you announced today, was that already part of the UPMC deal as your longer term plan, or are these new centers as part of all that?

Caitlin Zulla: Yeah. Thanks so much, John. So 4 centers, 2 were single sites, 1 with UPMC and then 1 with Atrium. And then 2 are de novos, both wholly owned, 1 in South Carolina, and then 1 in Niceville, Florida. I actually happened to visit the Niceville, Florida. We opened it last week. It is a beautiful facility. it is an incredible team, and we already have a lot community interest and a really strong schedule. When we think about de novos, we have 2 done, well on track to get to the 8 to 10 before end of the year.

And then for UPMC, started with an acquisition and then the UPMC de novos will be part and parcel of that 8 to 10.

Operator: Thank you. And our next question comes from the line of Andrew Mok from Barclays. Your question please.

Analyst (Andrew): Hi. Your operating cash flow was about $3 million this quarter and free cash flow was negative $2 million. I think your guidance implies quarterly free cash flow will accelerate to north of $20 million. So can you walk us through the components and drivers of that accelerating free cash flow?

J. Anthony Martin: Sure. Sure. The start of the year is always kind of the lowest point for cash flow, just the same similar reasons that it is for the business as a whole, you know, volumes and earnings. But in addition, the working capital tends to be negative toward the early part of the year. We have kind of disproportionate funding of bonus and plans the first half of the year. So Q1 and Q2 you know, are slow cash flow quarters, traditionally in the business. And, you know, we expect that to be true this year too.

And then it really picks up in the second half of the year when we, you know, do not have that kind of working capital timing issue. And, of course, the underlying business is ramping as well.

Analyst (Andrew): Got it. Okay. So it is gonna be 2H weighted. On the maybe next question on the net revenue per scan. On a same store basis, the net revenue per scan was up 2.3% on a consolidated basis. But it was only up 1% on a system wide basis. So it looks like unconsolidated net revenue per scan was dilutive and could have even been negative in the quarter. Can you help us understand what is driving the weakness in unconsolidated revenue per scan especially given the positive mix effect of advanced volume growth? Thanks.

J. Anthony Martin: Yeah. Yeah. And, you know, advanced is a hugely successful driver of the of our business in both, you know, JV structures and in the in the consolidated structures, particularly in the JV structures. I think we tend to focus mostly on system wide metrics for this you know, the business can behave differently on the consolidated book versus JVs and that does not really necessarily mean a lot for the business. So I would focus on that system wide piece the most. I think our that said, our consolidated book of business has a little bit of impact from other modalities more. it is it is not quite as heavily in advance.

And so depending on what those modalities are doing, such as if routine is slow and that book of business, then, you know, advanced tends to shine even more in terms pulling up the rate per scan. And that is, you know, that is that is the type of phenomena we see at quarters like this 1 where you know, the routine was a little bit slower to come back than the advanced modalities were.

Operator: Thank you. And our next question comes from the line of Whit Mayo from Leerink Partners. Your question please.

Benjamin Mayo: Hey, thanks. Any way to size the 2 acquisitions you completed? In the quarter? And then any reason they are larger or smaller than the average center? Thanks.

Caitlin Zulla: Yeah. Thanks, Whit. You to directly answer your question there, you know, typical size acquisition, you know, when we think about kind of in your contribution, big focus for us right now is getting them in network. And doing all the credentialing and integration work. You know, quite candidly, we buy sites that require You know, we buy them because of the potential, not because they are optimized already. And so we get the site in network, you gotta get the right equipment installed to drive patient volumes to Lumex standards. So when we think about the, you know, impact, you know, these facilities will ramp over the year their contribution, I expect, in 2026 will be fairly minimal.

And they you know, I am excited because they demonstrate the power of our model and really set us up for 2027 and beyond.

Benjamin Mayo: Okay. And then maybe just on the technology side, anything that you would care to call out?

Caitlin Zulla: Just anything new on revenue cycle or things impacting operations that you are particularly excited about? Thanks. I mean, technology is exciting in our space in every access. You know, as we think about technology and AI, it really continues to sit in those 4 categories. How are we improving our core operations, bringing in more patients, serving more patients on the same machine? Know, how do we create back end operational efficiencies? How do we our strategic service lines, then, of course, how do we support our radiologists and their productivity.

Analyst: We are seeing proof points in all of those categories, really focused continues on the operational side, continuing the deployment of FastScan. We talked to Matthew's question. Expanding penetration of virtual MRI. Revenue cycle, still working on bots, agent. Including also in our scheduling, centralized scheduling team. On the strategic service lines, you know, we rolled out breast arterial calcification in 2 of our markets, and we are actively exploring other similar cash pay add ons for modalities like CT and ultrasound. And then on the clinical side to support a radiologist, you know, continuing to work with tools like Serum. that is our clinical algorithm convener. And then RadPair and RadAI. To support abnormality identification, physician dictation, and drafting.

So a lot of fun stuff. The way I think about it is the near term continues to be really focused on improving productivity and efficiency. And then the long term is gonna continue to be focused on how do we drive reimbursable revenue growth. Okay. Thanks.

Operator: Thank you. Our next question is a follow-up from the line of This is from Steven Baxter from Wells Fargo. Your question, please.

Stephen Baxter: Yeah. Hi. Thanks. I just wanted to ask about the $4 million kind of estimate of the transient items in the quarter. I was wondering if there was potentially a same store revenue drag or maybe decremental margin you could kind of give us as kind of modeling assumptions around that $4 million just generally color on how you develop the $4 million estimate would be helpful. And then I have a follow-up Thanks.

J. Anthony Martin: Sure. Yeah. Yeah, that is our estimate of, you know, how much of the increased seasonality affected us. A big part of that being the storms. But also just kind of inherent to the business. So we got back quite a lot of that volume in the quarter. You know? And so from a revenue standpoint, it ended up being strong, particularly with Advance. You know, if we had not had the storms, it would have been even more outstanding for us. So from a revenue standpoint, we got a lot of that back, but there is some margin drag. As you can see from the flat EBITDA.

And that is just what it takes to see patients during this time. You know, we have you know, somewhat fixed cost base at the site, you know, whether it is the rent, the equipment payments, and then we pay technologists by the shift rather than by the scan. You know? So there is a fixed component there that really benefits us a lot. As volume surge. But on days where, you know, there is a storm and, you know, some patients can make it in, others cannot, we are seeing everybody we can. But we have kind of some you know, fixed cost base with fewer scans per day there for a while.

And so, you know, that did hurt us some on the margin. But, know, it is it is good business to have, and we are still, you know, glad to be doing it, reaching our patients, and making some amount of money on it, but it did it did affect the margin a little bit.

Stephen Baxter: And so that is, you know, that is okay. that is part of it. Okay. Got it. And then if we were to, I guess, add back that $4 million, it would suggest that the EBITDA growth rate in the quarter was around 8%, and I think it implies the rest of the year kind of has to grow year-over-year about 4%. So it looks like you are kinda well on track, but at the same time, kinda the implied second quarter guidance, looking at the 45%, I think, would maybe put you on track for like, flatter year over year EBITDA again as we move out to the second quarter.

I guess just help us understand kind of the transition and the growth rate and whether there is anything to consider in terms of you know, ramping costs, whether it is public company costs or other things to consider. Thanks.

J. Anthony Martin: Yes. Yes. You are correct, of course, in terms of, you know, what that what that means for our outlook for Q2 and beyond. Know, we do see some continuation of the seasonality and so there will be a steady ramp. You know? Q1, figures to be 21 and a half percent of our of our annual adjusted EBITDA at the midpoint. So it is Q2 know, as described with the 45% in the front half and the 55% of the earnings being in the back half, you know, that means Q2 is about 23 and a half percent of our year. So that is a, you know, it is a steady climb, but not a huge 1.

So I agree we are well positioned to do that. And then Q3 and Q4, you know, as the business naturally grows and as the JVs and de novos ramp, you know, you see, you know, steady increases in those as well with the Q4 kind of being the culmination of that.

Operator: Thank you. And our final question for today comes from the line of Karen Ryan from Deutsche Bank. Your question please.

Analyst (Karen): Hi there. Yes, this is Karen on for Peter. Thanks for taking the questions. Wondering if you could expand a little bit on the commentary you provided on payer mix as far as what you saw in the quarter? Understand there is a seasonal component, but was there anything that was out of the ordinary, as far as impact from Rick or anything else?

Caitlin Zulla: Yes. Karen, thank you for the question. We are really not seeing anything in the reimbursement or landscape that is meaningful change. Dynamic we saw in Q1 were consistent with normal seasonality, you know, particularly around deductible resets and then just a temporary shift in payer mix from commercial to Medicare. You know, when it comes to risk,, it continues to be a small part of our business. We are not seeing anything significant in that side. You know, in that part of the business as well.

Even we think about the world more broadly, we continue to benefit from being that lower cost side of care, certainly relative to hospital outpatient departments and remain attractive to payers and patients and health systems. So, you know, from a reimbursement and a payer perspective, we feel really good about the stability and the positioning of the business.

Analyst (Karen): Great. Thank you. And then just 1 follow-up. It seems like I think you said PEP growth was 23%. So that represents pretty nice acceleration versus at least where 2025 full year came in. So if you could just catch us up on any trends, in the quarter there as far as volume and utilization across your fleet? More broadly, what you are seeing on referrals and demand and any threats pressure points around radio tracers or anything like that. Thank you. Yeah.

Caitlin Zulla: Thank you for the question. We are very excited by the significant year over year growth in pet, 23% quarter over quarter. In Q1, we talked during the roadshow and in many of our conversations with you about just the opportunity that we have to grow pets. You know, we are on a small end, and we are on track for continuing to grow our expansion in pet. You know, we are adding machines on track for the additions in 2026. And then we are also working across the company on strategies to further accelerate the growth of pet in 2026 and beyond.

You know, whether it is through new marketing strategies, new applications, isotopes, tracers, as you said, and then additional new sites.

Operator: Thank you. This does conclude the question and answer session of today's program I would like to hand the program back to Caitlin for any further remarks.

Caitlin Zulla: I want to close by thanking our team members and our radiologists whose commitment to our mission and the patients and communities we serve remains the foundation of everything we do. Thank you for your questions today. We enter Q2 with strong momentum, a clear strategy and deep confidence in our ability to execute. And we look forward to updating you on our progress ahead. You all have a good night.

Operator: Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.

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