Nutex Health (NUTX - $140) is primarily an operator of 24 “micro-hospitals” across 11 states, and also has contracts with various physician groups to help run them. A “micro-hospital” appears to be similar to what I would call an urgent care or outpatient facility in my part of town, in that they are fairly small, have only 4-10 doctors staffing each, maybe 2 to 10 beds reserved for overnight stays, and perhaps half a dozen treatment rooms. They may also have MRI, XRAY, laboratory, and pharmacy on site, something common for urgent care centers.
The company recently released their blockbuster Q4 and FY2024 results, and a few things stuck out to me.
Now, if you simply look at the following recently released basic Nutex Health metrics, and without knowing anything else, what’s the first thought that crosses your mind?
For Q4:
Q4 revenues increased 270% year over year from $70M to $258M and increased sequentially from $79M.
Accounts Receivables jumped sequentially from $62.7M to $232.5M.
Operating cash flows only increased by $3M in Q4.
Hospital visits during Q4 only increased 10%.
Opened 4 new facilities in 2024 and closed 2 facilities.
For FY2024:
Revenues for all of FY2024 increased from $218M to $449M for a 106% year over year increase.
Adjusted EBITDA in 2022 was $12.5M, in 2023 dipped to $10.8M, and in 2024 it rose to $123.8M.
Patient visits in 2024 meanwhile increased only 17% from 144K to 168K, and slightly outpaced 2022’s total of 161K visits.
Hospital visits were only slightly more in 2024 vs. 2022 (on 5 new net hospitals) but revenues were up 220%.
If you look at the amount of revenue they recognize per patient, then in FY2024 that number would have been $449M/168K = $2,673 per patient while in FY2023 that number would have been $218M/144K = $1,514 per patient.
So…..
Foot traffic for the quarter is up less than 10% but revenues are up over 270%.
Huge receivables jump with no effect on cash flows.
Massive one-quarter revenue and profitability jump.
Each patient walking through the door is suddenly worth over $1,000 more than in the prior year.
Well, I know the first thought that crosses my mind at least is that they’re probably playing some billing games with their insurance companies, and perhaps recognizing some revenues before they actually earn them.
And lo and behold, that turns out to be right on target.