RadNet, Inc. (RDNT) Earnings Call Transcript

Good day, and welcome to the RadNet Inc. Business Update Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Mark Stolper, Executive Vice President and Chief Financial Officer. Please go ahead.

Thank you. Good morning, everyone, and thank you for joining our team today. We are very excited to discuss the acquisition of iCAD, which we announced last evening in a press release after the market closed. Today, we have approximately a dozen slides to go through, which will give you more detail about why we are so excited about what iCAD will bring to the company and after our presentation, we will open up the call to your questions. I just want to remind everyone before we begin of the disclosures that we have here on Pages second -- numbers 2 and 3, regarding that this is not an offer or solicitation. This presentation is not -- contains forward-looking statements, typical of what we released in our earnings reports each quarter, and we will use some non-GAAP items. I'd like to introduce the speakers today. You've got on the call with me today, we have Dr. Howard Berger, RadNet's Chief Executive Officer. We have Kees Wesdorp, who's the President and Chief Executive Officer of RadNet's Digital Health Division. Part of his team is also joining today Sham Sokka, who's the Chief Operations and Technology Officer for RadNet Digital Health. We have Sanjog Misra, who is the Chief Commercial Officer of RadNet Digital Health, and we have also Dr. Greg Sorensen who is the Chief Science Officer of RadNet. And with that, I'd like to turn the call over to Dr. Berger, who's going to make some opening remarks.

Thank you, Mark, and good morning, everybody. About 5 years ago, RadNet made a bold move to enter the field of artificial intelligence with its purchase of DeepHealth. Hard to believe that 5 years seems to have elapsed so quickly, but the success that we've had not only receiving FDA approval for our DeepHealth AI breast imaging tools, but implementing it in the RadNet centers and as of this quarter, we are seeing approximately 40% of our patients adopting to have artificial intelligence which is -- approximates approximately 600,000 mammograms annual. The results and benefits of this have become very obvious and very satisfying to us because we have both through our efforts and other reported publications seen the benefit of earlier detection, both in terms of better outcomes and reducing health care costs. Given that success, and with what we felt even 5 years ago that this would be the standard of care in the field of breast imaging and screening mammography, we have decided to make another bold move to merge with iCAD, another public company and who has been doing development of artificial intelligence for close to 15 years. By combining these teams, we hope to accelerate the growth and utilization. And more importantly, the importance of this as a screening tool that can have substantial impact on both our U.S. as well as global opportunities that both iCAD and RadNet through its DeepHealth division have been working on. I couldn't be more proud of my team, and I couldn't be more enthusiastic about how important this is to the health care community and obviously, the radiology community. And I think, again, demonstrates that RadNet continues to earn the moniker we have attached to us of leading radiology forward. With that, I'd like to turn the call over to Dr. Gregory Sorensen, not only is Dr. Sorensen, the Chief Scientific Officer, but was the founder and developer of the detailed breast AI product. Thank you.

Thanks, Dr. Berger. Hello, everyone. Thanks for spending some time with us today. I'd like to spend just a couple of slides giving you some background about why we're so excited about the iCAD acquisition and why we think this is going to be such a good thing for the health of the women around the world and a growth driver for RadNet. First, a little bit of background, as Dr. Berger has alluded to, about RadNet, we are very interested and very focused on improving the lives of women through screening technologies and especially mammography. This may not be apparent, but actually close to 1/3 of RadNet's overall revenue is focused on Breast Health. We have tremendous scale. As you can see in the slide, close to 2 million mammograms a year are done across the RadNet network. And just for putting that in context, that's about as many mammograms as the entire country of England every year. So this is already a big part of our business. And that's, of course, why we've been investing so much, not only in AI, but in new ways of using AI and as Dr. Berger alluded to our enhanced breast cancer detection program, we've now documented in hundreds of thousands of women that we can, with this novel workflow, leverage AI to boost the cancer detection rate substantially, more than 20% in women across many different age groups, different racial categories. We can also use it to lower recall rates. It's really quite compelling. And a further background, RadNet is very interested in bringing this technology into novel settings, such as in grocery stores or doctors' offices, et cetera. So for all these reasons, mammography has been on our mind and AI and its ability to improve the lives of women for quite some time. Next slide, please, Mark. So with that background, it's -- obviously, we've been watching with the like the growth in the presence of iCAD, a 40-year-old company that has been, as Dr. Berger said, focused on artificial intelligence, especially in women's health for quite some time. And they have been able to build a substantial installed base. They're in more than 50 countries, more than 1,500 health care providers where they are using their software and they've got software to help detect cancer better and are working on other tools. So you think about that 2 million mammograms inside RadNet now by this acquisition, we'll be able to reach 4x as many, so up to another 8 million mammograms that iCAD touches and bring this novel technology and new technologies that we're building not just to the patients the RadNet sees, but to women around the world. It's a really compelling idea. We can take the -- the innovations that we validate inside the RadNet's portfolio and now through the DeepHealth mechanism, spread them around the world. And to help describe that in more detail. I'd like to now turn this time over to our DeepHealth CEO, Kees. Take it away, Kees, and on to the next slide, please, Mark.

Thank you, Dr. Sorensen. And thank you all for tuning in, so that we can share our great excitement for the acquisition that we announced yesterday. If there are 3 things that I want you to remember about why we're so excited about the acquisition, it's all about scale and capabilities, customer reach and the most comprehensive portfolio of breast imaging AI solutions. So this acquisition will strengthen RadNet's DeepHealth leadership in AI-driven breast cancer solutions by accelerating scale across commercial, product and engineering functions to meet the growing market demand that we see in this space. It allows us to expand reach and that's also what Dr. Sorensen already explained to a combined 10 million annual mammograms in terms of volume or otherwise set over 1,700 provider sites and that over more than 50 countries. It also creates the industry's most comprehensive portfolio of breast imaging AI solutions, and we'll spend some time shortly about that, where Sham Sokka, our CTO, will go through what that really means. Now and last but not least, this transaction will allow enhancing iCAD's financial performance with a positive adjusted EBITDA run rate expected by 2026, and we delivered that through attractive synergies. Next slide, please. To get us grounded on the financial baseline of the combination, First of all, I want to remind people of the guidance that we have given for DeepHealth on 2025, which is for revenue, $80 million to $90 million and for adjusted EBITDA, $15 million to $17 million. The acquisition will add to that based on the 2024 reported actuals of iCAD, a sizable $20 million, close to 20 million of revenue. Moreover, following the acquisition, we expect positive adjusted EBITDA run rate by end of 2026. Again, through the identification that we see on attractive synergies. And let me dig into that a little bit more on the next page. We see 3 types of synergies. Cost synergies, commercial synergies and product synergies and all 3 are equally important in the success of integrating iCAD with DeepHealth. On cost synergies, we see over $7 million run rate cost synergies. Approximately half of that indirect savings, think of duplicative costs on the Board of Directors or public company costs or audits, and these can all now be avoided. Then the other half really by fulfilling pre-existing hiring plans of DeepHealth in the commercial and R&D and other domains. On commercial synergies, we're super excited that we can expand into iCAD's installed base in terms of DeepHealth differentiating offerings, obviously, in the domain of best but also beyond in terms of the informatics solutions that we provide or other population health AI solutions that we can deliver. It gives us access to over 50-plus countries. It accelerates our European growth plans, and then obviously, the commercial funnels when we combine those, that only strengthens our ability to grow further. In terms of product synergies, I want to mention again that from day 1, we'll have a highly complementary offering and Sham shortly will talk through that, what that means and how we will capitalize on that. iCAD also brings in future products and propositions that will strengthen our suites such as breast arterial classification and image-based risk assessment. And last, but not least, this allows us to expand our products, R&D and regulatory capacity to accelerate new solutions above the 2 examples that I just mentioned. I'm going to hand over to Sanjog, who is going to talk us through how the iCAD workforce and team will expect -- is expected to accelerate our DeepHealth growth plans. Sanjog, over to you.

Thank you, Kees. Good morning, everyone. As Kees mentioned earlier, one of the key strategic reasons of this acquisition is really the addition of the team, which is seasoned and experienced professionals. With the addition of the iCAD team, we will be able to accelerate our growth plans as well as expand our capabilities at DeepHealth, specifically in scaling our AI portfolio across the globe. If you look at one of the most compelling drivers of this acquisition is the strong people synergies between the 2 organizations. Both teams share a very complementary culture center around innovation, agility and a deep commitment to customer success. We believe this alignment will enhance our talent pool by combining experienced leaders and high-performing teams as well as helping accelerate integration through shared values and operational philosophies that we also believe as well as foster cross-functional collaboration, enabling us to deliver enhanced value to our clients. This acquisition is bringing 66 employees of iCAD into the DeepHealth family, where 26 of their employees are in the commercial space that includes sales, service and marketing. The sales and service teams will help us in expanding our reach not only in the U.S. market, but globally as well. They don't only give us the reach to the existing installed base of iCAD, but also help us to deploy a portfolio of AI solutions at scale. Now, the combined team can also cross-sell each other's customer bases as well as share client knowledge and support. Another 26 employees will help us in strengthening our product and R&D teams. This is, again, extremely critical as we scale up our AI portfolio, that definitely brings that capability. This includes employees from quality and regulatory as well as clinical affairs. And lastly, there is a 14-member team, which includes all the support functions, including finance, HR, and other functions. So the addition of the iCAD team fills up immediately some of the key positions that we had anticipated to hire DeepHealth in 2025 in order to strengthen and expand our commercial product and R&D teams. So this will help us in accelerating the external growth for DeepHealth. Hence, we are confident that these people in synergies will be a critical factor in unlocking the full value of this transaction and driving sustainable long-term performance for the combined organization. With that, I'll turn over to Sham.

Thanks, Sanjog. Good morning, everyone. I want to walk a little bit through the offering portfolio and what we're really excited about. As Dr. Berger and Dr. Sorensen emphasized earlier, a key pillar of our mission is expanding the reach of high-quality mammography screening to serve more people. And with this acquisition now, we have a complementary progressive set of offerings for customers early in their adoption journey, where people are just looking for AI to customers that are using in -- that want to use AI in very advanced ways as RadNet does, for example, with its EBCD program, Enhanced Breast Cancer Detection program, where we have workflows where there are secondary reviews and so forth, to drive really the highest level of cancer detection and reduce recast. So what I want to want you to walk you through is this offering cascade that we now can bring to the market from left to right, right? So first, let me talk a bit about iCAD's core offering, right? It's an AI detection software that improves cancer detection rates above conventional 3D mammography. So they've proven over the years, significant clinical benefit to the product. The other nice really beautiful thing about that offering is that it has very broad compatibility, 2D mammography systems, 3D mammography systems, regulatory approvals in over 50 countries, expanding the broad reach, but more importantly, also regulatory approvals across multiple diverse set of systems, Hologic systems, GE systems, Siemens systems, Fuji systems. So you have a strong base offering that we can bring to many customers that get people going on their AI and improved cancer screening journey, right? On top of that now, we can bring the next level of offering, which is okay. You have AI, but to really get the maximum value of AI, that AI has to be integrated into the reading environment of the radiologist very, very tightly, right? So you get the detection right overlaid on top of the images, you can go right to this -- to the point where the studies need to have the cancers identified. The data from the AI automatically populating into the reports, right? So that idea that AI plus viewing plus recording now creates a more efficient workflow, right? So Rad can read faster not just more accurate, right? And then all the way to the highest level of the cascade, which is what we do now at RadNet, and what RadNet has implemented and some others are starting to implement, which is this enhanced breast cancer screening, right, where now we're generating revenue, as Dr. Berger mentioned earlier, about 40% of our customers adopting it, where they get not only the radiologists get AI at the point of detection, but we have an AI-assisted safeguard review process where if there is disagreement between the AI and the radiologist primary read, a second reader is triggered to come for a safeguard review. And when you put all that together, now you have improved cancer detection, you have workflow efficiency because you have now that integrated in a viewing and reporting environment and with the secondary -- second reviewer, you have even a more improved catch detection as well as reduction in recalls. And that's what we've published, and we've shown really strong clinical outcomes in 600,000 women in studies and that we started to now release is SmartMammo with Recalls, right? So the opportunity here is we can meet customers at the earliest level of the adoption, all the way to this advanced opportunity where there's even now revenue generation opportunities, but also really more importantly, the optimal screening and detection solution in the market, right? Now the other aspect of this acquisition that we're excited about is also the future road map and future broadband possibilities. ICAD brings also these advanced risk products, 2 specifically, image-based risk, which is to look at, can we predict the future risk based on the current mammogram and then what's called breast arterial classification, essentially ability to look at cardiac risk factors from a mammogram, right? Both of those products have approvals -- some approvals outside of the United States, but not yet approved in the U.S. And so taking those models, bringing them into the RadNet ecosystem where we can test and validate and use the RadNet data as well as the RadNet clinical environment to accelerate those risk products is another part of the synergy, the product synergies that we're looking to harness as well. So with all those, as we put those pieces together from early adopters to advanced users to adding risk product, we believe it's the most comprehensive breast AI portfolio, and we can bring that to this large customer base now that we bring together as iCAD and DeepHealth and so with that, I'm going to hand off to Mark, who will kind of go through the transaction summary.

Thank you, . As many of you saw in the press release last night, we summarized some of the integral financial aspects of the transaction. This is a stock-for-stock acquisition where we will be having a fixed exchange rate of RadNet shares of 0.0677 shares of RadNet common stock for each share of iCAD common stock. So as of the end of business yesterday, the closing price of RadNet stock that valued iCAD at -- the equity of iCAD at $103 million. You may have seen that iCAD closed last quarter, meaning December 31, 2024, with about $17 million of cash. So the enterprise value as of the end of -- as of the cash at the end of the last quarter for the valuation of iCAD was approximately $85 million. The price of iCAD that we're paying as of yesterday's close was about $3.61, representing about a 98% premium to the iCAD shareholders. The transaction is expected to close during the second or third quarter of this year. It is subject to approval by iCAD stockholders. There will be a proxy statement that is mailed and delivered to the iCAD shareholders and the transaction is also subject to other customary closing conditions. It was unanimously approved by both companies' Board of Directors. With that, I'd like to, operator, open the call to questions from the investors and the analysts. Thank you.

[Operator Instructions] Our first question today will come from Brian Tanquilut with Jefferies.

Congrats on the deal. Maybe Howard or the team, just curious, as we think about the implementation and kind of integration plan for iCAD in terms of the cross-sell in terms of developing the AI that's in the pipeline right now with -- I know you guys mentioned risk assessment and BAC, just curious how you're thinking about that path, number one. And then second, the monetization goals for those IP assets as we think about maybe 2 to 3 years down the road?

Go ahead, Kees.

Yes. Thank you, Dr. Berger. let me start off with. So I sketched out the 3 different domains of synergies or value creation. The way to think about it on the cost synergies that's really an 18-month time line as we integrate the teams. I think you're referring, obviously, more to the commercial synergies and product synergies. Those are going to be on a longer time scale, think of 3 years here over 3 years' time spend, we are going to upsell into the installed base of iCAD with a degree of success that we've underwritten to ultimately get to, let's say, high single digit, at least for the breast AI domain of revenue upsell opportunities. And for the product road map, quite frankly, we see that really as an acceleration of the road map items which is a bit hard to quantify how that ultimately will impact your bottom line other than that it strengthens our conviction for accelerated growth.

Yes, Kees, maybe if I could add a little bit. So, If you look at the 3 pillar products that we kind of talked about, the early product, which is AI only and then going all the way to kind of a full review product. The first pillar is kind of sub $5 product, the AI only per study. You do then bring the viewer in the reporting. We're talking about between $5 to $15 and then as you get into the advanced one, you're now talking $15-plus in terms of price per study kind of thing, right? So there's a value cascade there as we now bring these more advanced AI solutions. And then on top of that, you have the risk products, which would be complementary to that as well as we start to bring them to the market. So the first 3 products, so that's the reason why we put it on the slide, those are -- will be available immediately, right? Day 1, we bring that offering into the market. The risk products will come in over time, and now provide even additional opportunities over the midterm horizon.

So if I could just add my first comment to that. We're starting to have good conversations with employers and payers around the benefits that they would see if they were to cover the enhanced breast cancer detection program. It really is from -- strictly from an employer's point of view, it's actually a cost savings to their employees as well as to their own bottom line. And we're -- that's based on, as I said, earlier, hundreds of thousands of women, the data from RadNet, now with the iCAD sockets with the installed base they have, as payers say, "Oh, well, we'd like to have that ability." But in geographies that there aren't RadNet providers, Well, now that we've got iCAD, we've got providers basically not in every state who could then tap into that employer eagerness to pay. And so the women benefits, the payer benefits and then we have this full suite of solutions, no matter which kind of where on the product horizon as Sham laid out, a particular provider might want to dial into, we can meet all of those opportunities. And with the promise of added reimbursement, I think we're going to see more eagerness for that. Hard to predict how quickly, which I know was the core of your question, but kind of over the time frame you proposed a couple of years, we have a lot of confidence that's going to happen.

Awesome. And then maybe for Howard and Mark, Obviously, you're doing the deal here on the Digital Health side of the business. I think a lot of investors are wanting or looking for you to do deals on the other side on the core business. So just curious how we should be thinking about capital deployment of that $750 million of cash still on your balance sheet and what the pipeline looks like? And should we expect deal announcement sometime this year?

Brian, I'll take this initially, Mark, and then you can chime in. But as you've seen from the announcement here, this particular acquisition was done as a stock-for-stock transaction. And so we -- and in fact, we actually will add to our cash reserves once the transaction is closed. So we did not use any of our balance sheet, if you will, for this acquisition. And I think the importance of that is that the shareholders, stockholders of iCAD saw the benefit in this combination, this merger and being a part of the growth story in artificial intelligence, particularly for breast imaging, and therefore, we're confident about the long-term benefit and opportunity by having RadNet stock. That being said, we are, as we always have been looking at expanding the services side of our business. There's several that are in conversation and others that are in the beginning process of further investigation. So this will not at all hamper the growth of the services side of the division. And in fact, in some ways, may help it because as people begin to understand our roadmap for the Digital Health division, the relationship, whether it's acquisitions of imaging centers and the ability for them to transform their IT platform and begin using AI or if it's hospital systems and joint venture partners, both current and future, RadNet becomes an even more formidable partner in terms of the skills and deployment of what the future of radiology is going to look like. So in a way, we are looking at this as an opportunity to further solidify our position as the leader in the outpatient imaging space. And we're getting more and more inbound calls, unsolicited, I might ask or I might say, from hospital systems that are looking for an outpatient imaging strategy. And this is an integral part of that strategy, which ultimately dovetails into their inpatient strategy, too. So I think this sends the message that we wanted into the community and marketplace about our commitment to Digital Health, not only for RadNet, but as a transformative part of what radiology will clearly be adopting over the next several years to transform radiology into truly a tech services and tech-enabled business. Mark, go ahead if you want to add to some of that?

Sure. I'll just emphasize that, Brian, that we do have an active pipeline of imaging center acquisition opportunities. I'm highly confident that we will put some capital to work this year, with some of the dislocation in the capital markets, both on the equity side as well as the debt side I think it's putting more and more pressure on some of the smaller operators, some of the private equity owned operators and I think that, that bodes well for more and more opportunities on the core imaging center side going forward. We have been extremely disciplined with regards price and valuation. We'll continue to be that way. We feel we have a very good sense of what businesses are worth in our industry, but I'm also highly confident that we'll get some transactions done this year.

Our next question will come from David MacDonald of Truist.

Congratulations. Just a couple of quick ones. One, just on the commercial employees that you're adding, the 26 that you mentioned in the slides, can you guys remind us right now in the Digital Health area, roughly how many sales folks you have? And then secondly, just on the 1,500 providers that iCAD gives you access to, I assume the bulk of those are kind of traditional radiology sites. Are there any nontraditional channels where they're seeing some success in terms of their product offering?

Thank you. Sanjog, do you want to take both questions?

Sure. So the first one in terms of the sales. So today, we have roughly 11 people between U.S. and Europe in our sales organization who are basically customer-facing at this point of time? This -- so with the iCAD acquisition, we will add Canada roughly 12 to 13 people who will join the sales teams, predominantly in the U.S., to a large extent, but of course, we will also continue to expand the European footprint when it comes to the commercial teams. So that's number one. On the 1,500 iCAD customer base, okay, so at this point of time, this is a combination of not only outpatient radiology imaging centers, but it also has a lot of hospitals to whom iCAD is currently selling their AI solutions. So this gives us a good footprint in terms of us selling both our Enterprise Imaging Solution as well as our AI portfolio. So it definitely helps in growing. The third piece is, of course, iCAD also goes around distributing not only through the direct sales team, but there is also indirect channels, including distributors and aggregators with whom they currently partner up, and that also opens up a door for us to use those distribution channels in selling our portfolio.

Okay. And then just a couple of other quick ones. One, can you just provide a little bit more detail on the image-based risk evaluation product? Right now, when these guys are using this, I assume that this is kind of looking at the patient, et cetera. But can you talk about the potential benefits over time in terms of how you guys think about this relative to potentially your payer partners? Just any additional detail on that product. And then what you would expect the steps to be to kind of get that ramped up and going domestically?

Yes. Maybe let me take that one. So today, risk is based on a on a questionnaire, Tyrer-Cuzick is the kind of the standard. And what you do is you have your screening mammogram and then when we have these women, we also do the screening. We also do the risk questionnaire. And based on that risk, some of the women will be eligible for kind of more rapid screening protocols or MR-based screening based on the risk levels and so forth, right? The image-based risk is to -- is sort of, let's say, complementary to that, right, because not all women fill those questionnaires. They don't -- it's kind of laborious to administer, et cetera. The idea behind the image-based risk is, okay, now when you get your screening mammogram, you get a clear sign, but maybe that there's a 12- to 24-month risk that something may develop. And so the clinical protocol then can be accelerated very similar to the Tyrer-Cuzick Risk Score. And we can now monitor women more closely if they're at a higher risk, right? So that's the promise of the technology, right? Now as you can imagine, we're looking at forward risk. And so the regulators, especially FDA, sees that as a de novo product, right? Sees that really as a higher-risk product. And so, therefore, iCAD so far has built that product, has some data in markets outside of the U.S. where they've commercialized it. And the idea is to now bring that into the U.S. under investigation. So hopefully, that gives you a bit of background.

Okay. And then, guys, just last question. I think it's 14% of their revenue is OUS. And looking at the breakdown from some of their filings, it looks like a good chunk of that is in France. But I'm just curious, is there any specific countries or anything outside the U.S. that you would flag in terms of a disproportionate opportunity? Or should we just think about this as you integrate the products outside the U.S. also has some nice running room here.

Yes. So I can take that. So yes, France is definitely one of the biggest markets outside of Europe for them. But at this point of time, with whatever we understand, they are also expanding their reach beyond the existing countries and specifically some of the European countries where they see potential, let's say, like Germany is 1 market, the Nordic is 1 market, but Australia's per se which is also kind of an evolving market, specifically with adoption of AI. So these are some of those key markets that we are looking at expanding, including, of course, Brazil is again another market where we're seeing a lot of adoption of AI. So these will be some of those other important markets from a future standpoint.

I think the distinction maybe here is a little bit revenue so far by geography versus boots on the ground investments that have been done recently and going forward. That's what Sanjog is trying to emphasize, which shows a broader coverage across those 50-plus countries as we go forward.

And one additional element, right, as Dr. Berger talked about tech-enabled services, as you -- many of you know, we have a radiology reading service in the U.K. And so like we've now done in the lung cancer screening space in the U.K, we see there's a nice opportunity also for a combined reading and mammography opportunity also in the U.K., right, just to sort of highlight that as well.

And our next question today will come from Andrew Mok of Barclays.

Just wanted to follow up on the 26 FTEs in each of the commercial and R&D segment. I think the release mentioned that you anticipate these employees to join DeepHealth. So first, what actions do you take on your side to ensure that they join? And second, you previously earmarked $20 million in guidance for Digital Health reinvestment, which includes sales. So how much of the hiring needs does this still for the year? And does that alleviate some of the $20 million of reinvestment for this year?

Yes. Thank you for that question. Let me start with the last question first. So the way we look at it right now, the earlier communicated $20 million was across commercial and product and R&D efforts. We see that roughly $3 million to $4 million out of that, so let's say, 15% to 20% will be fulfilled by the iCAD acquisition. That's what we were also referring to, as we stated, fulfilling earlier hiring needs. So that's maybe the answer. Sham or Sanjog, do you want to talk a little bit about Digital Health? Well, let me also say, we're obviously very, very focused to retain people and partially that is to make sure that we emphasize that iCAD strategy and core proposition as Sham laid out is something that we will roll forward and will be part of our suite of offering going forward. And secondly, there will be the traditional retention vehicles in place obviously to make sure that at least are satisfied and excited about our journey and Sanjog and Sham do you want to talk about specifically your 2 domains on that for any additional color?

Yes. So specifically on the commercial part. So like I mentioned, with the addition of 13 to 14 FTEs that definitely kind of takes care of all the AI portion of the commercial expansion that we were wanting to do specifically in the U.S. Of course, we will still have a little bit of additional commercial teams on the enterprise imaging because the existing teams from iCAD bring in more of the AI experience as compared to enterprise imaging. So you will -- we will, at least, let's call it this way, that at least 70% of our commercial requirement from an employee standpoint is taken care. Of course, that does not -- as I mentioned, that does not take into account the Europe expansion because iCAD does not have a commercial team in Europe, which is predominantly or -- outside of U.S. is predominantly done through distributors and aggregators. We will be, of course, adding maybe another few people for the outside of U.S. expansion. Sham, do you want to comment on the R&D and production.

Maybe just very briefly, I think the kind of the really interesting opportunities, and I'll call it quick area. One is ML, machine learning and AI expertise, which iCAD brings, which we're quite excited about. I think they're quite excited about the RadNet data state and the ability to maybe accelerate some of the models. And so there's like a really nice win-win and excitement around that from the team. The other area is quality and regulatory. They have -- this demonstrated experience of being in multiple markets and really putting a very thoughtful and accelerated strategy to enter new markets. And we're very excited to combine that capability to the rest of the product portfolio so we can bring them into more market. So there's really, really nice complementary synergy to really accelerate both businesses going forward.

And maybe just a follow-up, Mark, you didn't explicitly reiterate guidance with the release and deck, but there's obviously references to it. So can we take that to understand that guidance is reiterated today?

Yes. So we didn't change guidance. We've never historically changed guidance in the middle of a quarter. So what this transaction would do for us. Obviously, if you look at iCAD's filings for 2024, they did about $19.6 million of revenue. They had -- they lost about $4 million of EBITDA. We don't know exactly when this transaction will close because it is subject to iCAD shareholder vote. But assuming it closes, let's say, close to the beginning of the third quarter, we have 1 quarter's worth of their revenue, so you can assume that's $4 million or $5 million of revenue within our 2025 guidance. And we expect it to be fairly neutral with respect to EBITDA this year because of the synergies that we talked about today in terms of the alleviation of costs on the Digital Health side in terms of hiring as well as some of the synergies that we would expect to get fairly immediately in regards to some of the direct costs that Kees went over in terms of the elimination of Board of Directors costs, certain public company costs, auditor costs and the like. So I think it's going to be a positive on the revenue side for 2025, clearly, in the -- likely in the $4 million to $5 million range and fairly neutral on the EBITDA side.