Nano-X Imaging Ltd. (NNOX) Q4 2025 Earnings Report, Transcript and Summary

Ladies and gentlemen, thank you for standing by. Welcome to the Nano-X Fourth Quarter 2025 Earnings Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would like now to turn the conference over to Mike Cavanaugh, Investor Relations. Please go ahead.

Good morning, and welcome to the Nano-X Imaging Fourth Quarter 2025 Investor Call. Earlier today, Nano-X Imaging Ltd. released financial results for the quarter ending December 31, 2025. The release is currently available on the Investors section of the company's website. With me today are Erez Meltzer, Chief Executive Officer and acting Chairman; and Ran Daniel, Chief Financial Officer. Before we get started, I would like to remind everyone that management will be making statements during this call that include forward-looking statements regarding the company's financial results, research and development, manufacturing and commercialization activities, regulatory process and clinical activities, among other matters. These statements are subject to risks, uncertainties and assumptions that are based on management's current expectations as of today and may not be updated in the future. Therefore, these statements should not be relied upon as representing the company's views as of any subsequent date. Factors that may cause such a difference include, but are not limited to, those described in the company's filings with the Securities and Exchange Commission. We will also refer to certain non-GAAP financial measures to provide additional information to investors. A reconciliation of the non-GAAP to GAAP measures is provided with our press release with the primary differences being non-GAAP net loss attributable to ordinary shares, non-GAAP cost of revenue, non-GAAP gross profit, non-GAAP gross profit margin, non-GAAP research and development expenses, non-GAAP sales and marketing expenses, non-GAAP general and administrative expenses and non-GAAP gross loss per share. With that, I'd now like to turn the call over to Erez Meltzer.

Thank you, Mike, and thank you all for joining us today. In the fourth quarter of 2025, we continued to move the business forward across multiple fronts. While our primary focus remains on expanding our commercial presence, given the current geopolitical situation, we spent a lot of efforts during the quarter and the beginning of 2026 to secure our supply chain and strengthen our financial positions as well. On top of that, we made good progress advancing the capabilities of Nanox platform and strengthening the operational infrastructure needed to support our long-term growth. I'm happy to report that we recently entered into an agreement with Howard Technology Solutions, a division of Howard Industries, which has a national reach and an established presence in health care and public sector market, providing us with a scalable framework for expanding Nanox.ARC deployment. This agreement reflects our confidence in the commercial demand for the Nanox.ARC and our ability to engage partners that can support sustained growth in system placement across the U.S. Under the framework of this agreement, Howard is expected to deploy 300 Nanox.ARC systems over a 3 years period, of which 60 are indicated to be deployed in the first year. We also recently announced multiple commercial agreement, which together accumulates to roughly 360 systems over a 2 to 3 years' period. These partnerships expand our reach across imaging centers and specialty care setting where point-of-care imaging is integral to clinical workflow and patient management. This represents a fundamental shift in how we are poised to scale our business from providing our technology to the deploying it in a meaningful volume, shifting toward a growing CapEx portion. This is what we see as getting us closer to our indicated revenue of 2026. The framework has the potential to become a meaningful contributor over time and gives us confidence in our ability to convert our robust pipeline into revenue as we move forward. We view this as continued momentum and see ourselves moving closer to an inflection point. We observed a clear shift in the market perception at major radiology conferences, including RSNA in the U.S. and ECR in Europe, where engagement and inbound interest increased meaningfully. We've also taken important steps to strengthen our operational foundation. A key component of this initiative is the restructuring of certain activities in our Korean manufacturing facility in order to reduce our Korean operation's OpEx and cash burn and improve efficiency while maintaining our supply of Nanox.ARC system component. We are very pleased with the progress we have made recently, but it is clear that the pace of deployment continues to be influenced by various external processes, including import licenses, construction time line, and regulatory requirements in certain markets. These steps take time to complete. And while we are not satisfied with the pace and would like to see deployments move faster, this reflects the current operating reality across multiple markets. We expect that many of these processes will streamlined as additional sites move through the pipeline. Introducing new technology of any kind into a medical environment is always complex process. It requires alignment across clinical workflow, regulatory framework, and operational infrastructure as well as changing behaviors which all takes time to achieve it. While this can slow down the early stages of deployment, it is also a natural part of introducing innovative technology into the health care systems. Turning to revenues. We continue to target $35 million in revenue for the full year of 2026 based on the execution of our current plans. Today, as part of the above mentioned, we have signed commercial agreement, which we believe could result in present and future placements up to about 400 systems globally over the next 2, 3 years. Of this, approximately 38 systems are currently at various stages of deployment, including demonstration, commercial installation and systems pending construction and/or regulatory approval. In addition, there are approximately 15 systems that are expected to be installed over the next few months as part of our Nanox Imaging network. That said, it is important to emphasize that our current revenue base remain at an early stage and part of this deployed base is not generating revenues and the pace of ramp up will depend primarily on the timing of system activation, their transition into a revenue-generating operation and the impact of the deployment by the business partners. As more systems move into operation and utilization increases, we expect revenue to build accordingly. However, the exact timing of this trend may vary and always depending on the deployment process and progress and other factors. I will now provide some additional color on the Korea restructuring that I referenced in my opening remarks. Recently, we adopted a restructuring plan designed to better align our manufacturing cost structure with our long-term financial model, support our path toward improved gross margin and align our manufacturing capabilities with the company's strategic priorities. As part of this plan and our broader cost reduction efforts, we are closing our chip manufacturing line in South Korea, downsizing our fabrication facilities and shifting production to established international manufacturing partners, including CSEM, a Switzerland-based manufacturing partner. We currently hold substantial emitter inventory, which we plan to work through as we transition to a more efficient outsourced production model better aligned with current and projected demand. With these actions, we expect to reduce structural and overhead costs, lower our cash burn and enhance overall operation efficiency. With that overview, let's now take a detailed look at our various business segments, starting with the U.S. deployment. Beyond the Howard agreement, we also recently announced a distribution agreement with Imperial Imaging Technology, a U.S.-based provider of diagnostic imaging solution, to support rollout across the Southeast, particularly in orthopedic-focused environment where there is strong demand for a point-of-care imaging. In addition, we signed agreements with distributors such as: Integrity Imaging, a U.S.-based provider of medical imaging solution with established relationships across imaging centers and health care providers; Elite Surgical, which serves surgical and specialty care environments; Digital X-Ray Imaging, a leading diagnostic imaging provider with deep regional presence across Arkansas; and most recently, a collaboration with [indiscernible], an imaging solution provider focused on expanding access to diagnostic imaging and radiology oncology system to support -- all to support the deployment of Nanox.ARC systems. These collaborations aim to strengthen our distribution capability by adding sales resources and on the ground presence, expands our geographic coverage, and we believe it has the potential to become a meaningful contributor to revenues over time. In parallel, we remain in active discussion with additional partners, reflecting continued interest from medical equipment providers and likely further expansion of our U.S. pipeline. Alongside our channel strategy, our U.S. direct sales team on the ground continues to make progress in targeted clinical segments. For example, we recently signed an agreement with [ Regional Sports Medicine in Orthopedic Group ], our first orthopedic practice customer in the United States. This represents an important step into a segment where imaging plays a central role in diagnostic and treatment decisions and where providers benefit from having imaging available on site. Orthopedics remain a high volume and imaging-driven specialty with strong incentives to retain imaging in-house. Additionally, we are advancing the Nanox Imaging Network, a focused initiative designed to build a network-based imaging services model in the U.S. This initiative target segments such as the workers' compensation and specialized care where reimbursement dynamics may support higher per scan pricing. We are currently deploying already systems across a number of sites in the U.S. Under this model, Nanox supports Nanox.ARC system deployment, maintenance and connectivity, while our partners manage site operation and local engagement. While still in the very early stage, we believe this initiative can become an important component of our long-term commercial strategy as the utilization increases and the model is further validated. To provide additional context around this shift in engagement, we participated in 2 major industry events during the period. At RSNA, the world's largest annual radiology conference held in the U.S., our booth featuring live demonstration of the Nanox.ARC system saw strong interest throughout the event. At the European Congress of Radiology, ECR, the largest radiology conference in Europe, we showcased the Nanox.ARC live in Europe for the first time and presented new clinical and AI data. Engagement levels were high, reflecting growing awareness of the system's clinical value and its potential role in routine imaging workflow. We were also proud to receive the Red Dot Award for Product Design 2026 for the Nanox.ARC X, a prestigious international recognition that reflects the maturity, usability and clinical readiness of our platform. Let's now turn to work outside of the U.S. As I mentioned earlier regarding ECR, we were also honored to receive the Newcomer award at ECR 2026, reflecting the growing recognition of Nanox within the European radiology community. In February, Nanox announced an exclusive distribution agreement with Intec SRL, a leading medical distributor in Argentina with more than 35 years of experience. Under this agreement, Intec will oversee marketing, distribution, installation and support for the Nanox.ARC system and related services across the country. The collaboration intended to support commercial expansion of Nanox's 3D digital tomosynthesis technology in Argentina and strengthened the company's presence in Latin America, leveraging Intec's established relationship with the health care providers and nationwide service capabilities. Commercialization will be subject to obtaining the required regulatory approval. In Latin America, we were expected for a significant presentation at the International Congress of Radiology, the ICR in Cartagena, Colombia. The presentation will support clinical discussion around digital tomosynthesis and contribute to engagement with regional clinicians and industry stakeholders. In Europe, we continue to build momentum through partners and additional regional distributors. As a reminder, over the past few quarters, we have announced multiple European collaborations, including France, Romania, Czech Republic, Serbia alongside additional engagement in other European markets. These collaborations support our ability to navigate local regulatory environment and advanced commercialization across multiple countries. Switching gears, we continue to advance regulatory work that supports our commercial initiatives by expanding the use cases for our solution and making them accessible in more markets. We have advanced key milestones, including TAP2D clearance in the United States. As a reminder, TAP2D is the 2D view image output for the Nanox.ARC system, a practical tool for radiologists to enhance their diagnostic confidence as they become more experienced evaluating digital tomosynthesis images in part of our broader vision to alleviate adjunctive-use limitation over time. We also updated the AMAR approval for Nanox.ARC in Israel based on our existing CE Mark, enabling use of the system without adjunct limitation. Removal of the adjunctive-use limitation in the U.S. remain a key regulatory priority. We believe this is an important step that can expand our addressable market and support broader adoption. We are also working to finalize our CE Mark submission for the Nanox.ARC in Europe, which is currently anticipated in 2026, subject to change based on regulatory priorities. Turning to our AI business. We continue to strengthen our position as a comprehensive platform for the interpretation of medical images. I'm happy to report that Cedars-Sinai Medical Center in Los Angeles is joining a trial studying the benefit of Nanox.AI aortic valve calcification measurement solution, which is currently under development. We have recently conducted an on-site revaluation of the model across approximately 600 retrospective cases. The result exceeded our expectations with 6 cases of severe classification identified and approximately 100 cases showing clinical relevant findings. The Cedars-Sinai team has also expressed interest in collaboration on scientific publications based on these results. We are very pleased to be partnering with Cedars-Sinai, one of the nation's premier medical institutions. Overall, we are seeing growth in Nanox.AI business driven by new customers, expansion of existing agreements and the integration of Nanox Health IT. During the quarter, we completed the strategic acquisition of VasoHealthcare IT, now Nanox Health IT, a health care IT provider serving hospitals and health care systems across the United States with expertise in health care IT implementation. Since completing the acquisition, we have been progressing with integration and alignment while also signing several new customer agreements. We are seeing growth driven by new customers, expansion of existing agreements and the integration of our health IT capabilities and we expect this business to contribute to revenue from day 1. In addition to increasing our footprint in AI, the Health IT platform enhance our ability to integrate into clinical workflow, expand customer cases access and support cross engagement across our ecosystems. Moreover, the rest of the organization is leveraging the Health IT team's expertise and market presence, particularly as it pertains to lead generation for the USARAD Nanox.AI and Nanox.ARC. Similar to our regulatory work, clinical validation remains central to our strategy and support our commercial efforts in generating evidence across multiple applications and supporting the use of Nanox solution. As already mentioned, the Cedars-Sinai Medical Center is joining a trial of Nanox.AI aortic valve calcification measurement solution and we've accomplished much more recently. In an exciting update from our collaboration with MDS wellness, an independent provider of wellness screening programs located in Michigan, we secured our first institutional review Board approval for a clinical trial within the U.S. The trial will focus on a lung cancer screening of high-risk patients and the applicability of Nanox.ARC technology as it relates to patient population of Nanox MDS. As I stated earlier, we attended the European Conference (sic) [ Congress ] of Radiology, the ECR, where we were able to present several scientific achievements and I'd like to share some highlights now. Dr. Nogah Shabshin, ARC's Chief Medical Officer, presented our scientific work on lung cancer screening using the Nanox.ARC in the work with our collaboration in what was shown that is the majority of patients, the screening outcomes based on the lung-RADS category, the standard lung cancer screening calcification system was similar when analyzing the CT and digital tomosynthesis. This further strengthens the applicability of the DTS as a potential addition to screening activities ramping up globally. Dr. Orit Wimpfheimer, senior medical and clinical adviser presented the proven value of our opportunistic screening for CT images using Nanox.AI 3 FDA-cleared algorithm enabling earlier detection of chronic disease. Our latest imaging addition, tomosynthesis augmented projection, known as TAP2D was also featured in several scientific posters showing value of TAP2D image as a supplemental image to DTS in lieu of the traditional 2D X-ray imaging with no additional dose or acquisition time inflicted on the patient. And in addition, at the recently concluded world conference of osteoporosis, Nanox.AI bone solution were featured, including updates from our ADOPT trial conducted across 4 NHS Trust and led by the University of Oxford as well as initial observation from our collaboration with the Greek Air Force. The data will show once more the clinical and economic benefits of AI-based opportunistic screening for routine CT exams. The validation abstract comparing the accuracy of the CCS 2.2 compared with cardiology expert reader as part of the AI INFORM trial was accepted as the poster at the Society of Cardiovascular Computed Tomography Annual Scientific Meeting in the coming July. Outside the U.S., we are excited about our recent collaboration with Meir Medical Center in Israel, which is part of the Clalit, the Israel largest health services organization, where we have an exciting relationship. The Nanox.ARC has been deployed in the emergency department and will be utilized by orthopedic staff as part of the clinical workflow to help establish the digital tomography as an effective tool with lower dose and more efficient workflow than today's CT-based workflow. This is the first time that Nanox.ARC is installed within an emergency department in a major hospital and represent the confidence our collaboration has in Nanox solution. I'll now provide an update on our robust OEM relationship. Nanox continued to advance its technology pipeline with ongoing development of next-generation field emission X-ray sources and tube architecture. Recent progress includes improvement in an emitter design and fabrication processes aimed to expanding chip lifetime and enhancing performance, development of micro focus and multi-zone emitter configuration for applications such as semiconductor inspection and [indiscernible] XRF and continued advancement of the Nanox.MDX, the multisource tube platform, enabling new system architecture for 3D imaging. The company is also progressing a multiple OEM collaboration and pilot projects across industrial, semiconductor and security market, supporting the expansion of Nanox's technology into new applications. We recently received a purchase order from a leading semiconductor equipment manufacturer for the developmental emitters, supporting advance inspection applications at the leading edge of next-generation IT technologies. With Oak Ridge National Laboratory, the U.S. government agency, a second round of prototype is currently in progress, and in process with preparations underway as required materials become available. In parallel, one global imaging component supplier has agreed to evaluate our micro-focus emitter technology and is preparing dedicated test infrastructure to support that work. Another major OEM continues to advance prototype development based on our emitter design with validation activities ongoing. Overall, these engagements reflect continued momentum across multiple development track as we work to validate our technology with established industry partners. Before I move on, I'd like to briefly note that despite the current geopolitical situation in the Middle East, we have not experienced any material disruption to our operation, and our business continues to operate as planned. With that, I will turn the call over to Ran to review our financials. Ran, over to you.

Thank you, Erez. We reported a GAAP net loss for the fourth quarter of 2025 of $33.4 million, which is the reported period, compared with a net loss of $14.1 million in the fourth quarter of 2024, which is the comparable period. The increase was largely due to an impairment of long-lived assets in the amount of $17.5 million which was recorded during the reported period as a result of the company's restructuring plan that is intended to better align the company's manufacturing activities. The increase was also due to an increase of $0.7 million in the gross loss, increase of $1.1 million in the sales and marketing expenses and increase of $1.4 million in other expenses. Revenue for the reported period was $3.7 million compared to revenue of $3.0 million in the comparable period. The increase of $0.7 million, increase of 23% in the revenues stems from an increase of $0.3 million in our revenue from the teleradiology services and an increase of $0.4 million in our revenue due to the consolidation of Nanox Health IT Inc. since the completion of its acquisition on November 19, 2025. Gross loss for the quarter period was $3.6 million on a GAAP basis compared to a gross loss of $2.9 million in the comparable period on a GAAP basis. Non-GAAP gross loss for the reported period was $1.2 million as compared to a gross loss of $0.3 million in the comparable period which represents a gross loss margin of approximately 32% on a non-GAAP basis for the reported period as compared to a gross loss margin of 9% on a non-GAAP basis in the comparable period. Revenue from the teleradiology services for the reported period was $3.1 million compared to revenue of $2.8 million in the comparable period. The company's GAAP gross profit from the teleradiology services for the reported period was $0.9 million, gross profit margins of approximately 27%, compared to $0.6 million, gross profit margin of approximately 21% in the comparable period. Non-GAAP gross profit of the company's teleradiology services for the reported period was $1.5 million, gross profit margins of approximately 48%, compared to a non-GAAP gross profit of $1.1 million, gross profit margin of approximately 41%, in the comparable period. The increase in the company's revenue and gross profit from the teleradiology services was mainly attributable to customer retention, increased rates and increased volume of the company's reading services. During the reported period, the company generated revenue for the sales and deployment of its imaging systems, which amounted to $49,000 for the reported period with a gross loss of $2.6 million on a GAAP and non-GAAP basis compared to revenue of $136,000 with a gross loss of $1.5 million on a GAAP and non-GAAP basis in the comparable period. The revenue stems from the deployment of our Nanox.ARC systems and the sales of our OEM services in the U.S. The company's revenue from its AI and software solutions for the reported period was $0.5 million on a GAAP and non-GAAP basis compared to revenue of $0.1 million on a GAAP and non-GAAP basis in the comparable period. Included in the reported period were revenue of $0.4 million, which was generated by Nanox Health IT Inc. since the completion of its acquisition on November 19, 2025. The company's gross loss from its AI and software solutions for the reported period was $1.9 million on a GAAP basis compared to a gross loss of $2.0 million on a GAAP basis in the comparable period. Non-GAAP gross profit of the company's AI and software solutions for the reported period was $0.1 million compared to $6,000 in the comparable period. Research and development expenses net for the reported period were $4.8 million compared to $5.4 million in the comparable period, which represents a decrease of $0.6 million. The decrease was mainly due to a decrease of $0.2 million in share-based compensation, $0.6 million in grants received net and $0.4 million in expenses related to our research and development activities to maintain our current and future products. The decrease was mitigated by an increase of $0.5 million in salaries and wages. Sales and marketing expenses for the reported period were $2.0 million compared to $0.9 million in the comparable period, which represents an increase of $1.1 million, mainly due to an increase of $0.7 million in salaries and wages due to our increased efforts to commercialization -- of the commercialization of our products in the U.S. market and $0.4 million in sales and marketing activities mainly due to expenses that are related to the RSNA conference, which took place during the fourth quarter of 2025. General and administrative expenses for the reported period was $6.0 million compared to $5.8 million in the comparable period, that the increase of $0.2 million was mainly due to expenses that are related to the acquisitions of Nanox Health IT Inc. Other expenses net for the reported period were $1.4 million, largely due to the noncash settlement with the shareholder. Recently, we initiated a restructuring plan that is intended to better align our manufacturing and overhead cost structure and to support gross profit margin improvement to the company's long-term financial model and the company's strategic priorities. As part of this restructuring plan, the company will shift its manufacturing operations from the company-owned facilities into a fully outsourced model. The plan will reduce structuring and overhead cost by downsizing the manufacturing facilities located in the company's fab in South Korea and transfer the production to other international manufacturers such as the Swiss chip maker, CSEM. The restructuring plan is expected to be largely completed in fiscal year 2026 and resulted with the company recording a noncash impairment of its long-lived assets of approximately $17.5 million in fiscal year of 2025, a cost that is related to the impairment of its machinery and equipment of the company's chip manufacturing line. We continue to evaluate the overall composition of the restructuring-related charges, including potential additional cash components. The remaining restructuring-related costs, if any, are expected to be incurred over the course of the implementation of the restructuring plan that estimates of the total charges and the timing thereof are subject to a number of assumptions and uncertainties and actual results may differ materially. Non-GAAP net loss attributable to ordinary shares for the reported period was $11.2 million compared to $10 million in the comparable period. The increase of $1.2 million in the non-GAAP net loss attributable to ordinary shares was mainly due to an increase of $0.9 million in the non-GAAP gross loss and an increase of $1.4 million in the non-GAAP operating expenses. Please refer to the non-GAAP adjustments, which were included in the financial portion of the PR that we have issued today. Turning to our balance sheet. As of December 31, 2025, we had cash, cash equivalents and marketable securities of approximately $60 million compared to $55.5 million as of September 30, 2025. We also had a $3.1 million short-term loan from a bank as of December 31, 2025. We ended the quarter with a property and equipment net of $29.7 million compared to $45.4 million as of December 31, 2024. The decrease was mainly attributable to an impairment of approximately $17.5 million that was recorded in the reported period as a result of the above-mentioned impairment related to the machinery and equipment of the company's Korean fab. We had approximately 69.6 million and 63.8 million shares outstanding as of December 31, 2025, and December 31, 2024, respectively. During the fourth quarter of 2025, the company sold approximately 4.2 million ordinary shares, which generated net proceeds of approximately $15.5 million, net of issuance expenses. With that, I will hand the call back over to Erez.

Thank you, Ran. Before closing, I'd like to address the leadership update. After 5 years with the company, our great Chief Financial Officer, Ran Daniel, decided to step down from his role to explore other opportunities. During his tenure, Ran played an important role in strengthening our financial discipline, supporting our transition to a public company, in building the financial and reporting infrastructure needed to support our long-term strategy. He also led successful capital raises that strengthened our balance sheet. In addition to leading our finance organization, Ran also oversaw our Investor Relations activity and worked closely with investors and analysts throughout his tenure. We are grateful for his many contributions and wish him continued success in his future endeavors. Ran will remain with the company to support a smooth transition period. As we look ahead, we are pleased to announce that Guy Nathanzon will be joining Nanox as Chief Financial Officer. Guy brings extensive financial leadership experience with the U.S. publicly traded companies, including several senior CFO and CEO roles in the med-tech companies as well as his deep experience supporting growth, scale and global operations. His background includes capital raising, capital markets, both sell-side and buy-side M&A and global financial operations. Guy also brings deep medical technology leadership experience with senior CFO and COO roles at multiple med-tech companies during periods of commercialization, scale-up, and global expansion. Guy also brings medical technology experience, having served in senior leadership roles during periods of commercialization and expansion. He has previously served as the CFO of Scopio Labs medical technology company developing AI-based diagnostic platform and most recently was CFO of Valens Semiconductor, a New York Stock Exchange listed company. We are pleased to welcome Guy to the leadership team. He will join the company and will assume the role of Chief Financial Officer as of August 1. As we look back to this quarter and ahead to the rest of 2026, I want to leave you with a few takeaways that underscore the momentum we are building at Nanox. First, our commercial progress in the United States has been good. We have established a strong foundation with various partners expected to place systems over the next 2 to 3 years, including significant agreements with Howard Industries, Imperial Imaging, Integrity Imaging and others. This represents a fundamental shift in how we are poised to scale our business. From providing our technology to deploying in a meaningful volume, shifting towards a growing CapEx portion, this is what we believe will get us closer to our indicated revenues of 2026. Second, our strategic acquisition of VasoHealthcare IT, now operating as Nanox Health IT, has immediately strengthened our capabilities and revenue base. The recognition we received at RSNA and ECR, including the Newcomer award at ECR, reflect the broader truth. Nanox is now recognized as a credible player contributing to conversation around the future standard of care in the medical imaging. That perception shift in translating into deeper market engagement and robust pipeline. The foundation we have built positions us well to convert our pipeline into revenues and deliver on our growth objectives. We are excited about what lies ahead and remain committed to executing on our vision of democratizing medical imaging globally. Thank you all for your continued support, and we look forward to updating you on our progress in the quarters ahead. Operators, please open the call for questions.

[Operator Instructions] And the first question comes from Jeffrey Cohen with Ladenburg Thalmann & Company.

Just a couple of questions. I'd like you to dive in a little further. So could you talk a little bit about your footprint and commercial organization, mainly related in the U.S. as far as teams that are direct sales organizations and talk a little bit about how that works with your distribution channels in the U.S.

Okay. So we have in the U.S., what we call Nanox Impact. We have 5 direct salespeople with the Director of Sales, the national sales that is coming from one of the biggest distributors in the country with a lot of experience. In addition, we have which we call the clinical education specialists where their role and assignment is to go to the places that we have the systems installed, train the people, trying to get a better understanding of the referring physician who works with this site. So their job is to build awareness around the site and what's the clinical value that can be added for other referring physicians that will do there. We are -- we have a few administration and operational responsibilities, including tech people who are doing the part of the installation. And in addition, we have people who are doing the STR, like building the deal flow. We are in the process of adding another 2 people who would be responsible for the channel management. But right now, since we have almost 10 business partners, one of them, as mentioned today, is huge. This will require a lot of coordination, a lot of support. We have an onboarding process for each one of them, which is very methodological that we do in the process to -- when we sign an agreement, the training process, the demo unit, for example, we have a few of the business partners that we lately signed, we have tens of meetings that already were arranged with the potential customers in order to expand and to fulfill what they are committed to in this agreement.

Okay. Got it. And then as a follow-up, could you talk a little bit about the South Korean facility and the impairment, what should we expect for 2026, you anticipate further restructuring and impairment? And will that be in the front half of the year versus the back half of the year? And could you guesstimate for us if that will be cash and noncash?

Besides the impairment expenses we recorded in 2025, which was the impairment of mainly whatever is related to the chip line in Korean fab which was amounted to $17.5 million in the noncash expense, we do anticipate relatively minor expenses which are related to more efficiency steps that we're going to enact. It won't be -- we don't anticipate that it will be a significant amount of dollars. So that's actually going probably to be a cash expense. But as I said, it's not going to be material.

Bear in mind that this fab was built during COVID when semiconductors were not necessarily available. So right now, we are rationalizing the situation where we have a sustainable supplier with a much lower cost of the chips that we do. The fab in Korea will be converted to more of R&D center for the ceramic tubes that we are developing there and might be even another product which is going to come out from this region.

[Operator Instructions] Our next question will come from Scott Henry with AGP.

First, Ran, it was a pleasure working with you. I wish you the best in your future endeavors.

But don't give me yet. I have another one earnings call.

Excellent. And then, I guess, the first question. When we look at the guidance for 2026, the $35 million, which is strong growth. Can you talk about the cadence throughout the year? Q1 is over. So when will we see that inflection point to reach those impressive numbers?

I think that you will see most of it in the second half -- towards the second half of 2026. I don't think that they should expect a big ramp in the revenue in Q1. But I think once we will be able to materialize all the opportunities in terms of distribution agreements that we just announced, you will see -- you may see a ramp-up in the second half of 2026.

Scott, most of the agreements were signed beginning of about a month or 2 after the RSNA and part of them also after the ECR. And most of them -- most of the business partners agreements, which are going to shift our revenues to be more coming from more from CapEx rather than only the MSaaS has been signed in the last few weeks, let's say, a month. So right now, what we will do, we will start the onboarding the process and the ramp-up will be, hopefully, exponential towards, as Ran said, towards the second part of the year.

Okay. I appreciate that color. And just from a modeling perspective, the teleradiology services, which at this point is still your largest revenue driver. For 2026, should we be thinking about kind of low double-digit growth? Is it still on that trajectory?

I don't think that we refer to the specific segment in our guidance. So I don't want to make any specific attribution to any specific line of business or segments, but generally saying I think that your assumption would be...

Not far from real.

Not far from real, yes.

And then when we look at spending for Q4 removing the onetime items, it was a little elevated from Q3. With the restructuring, do you -- would you think that it should start declining from Q4 levels going forward? How should we think about those trends in spending?

Well, what happened in the -- you mean, if you look at the non-GAAP, of course, which adds on the impairment expenses and the expense -- the other expenses, that's mainly related to the settlement with the shareholder, you've seen an increase in G&A, which is, I would call it a seasonal increase mainly because of audit and all kind of other year-end items and expenses that were related to the acquisition of VasoHealthcare, which is onetime in nature. On the other hand, you also see an increase in the sales and marketing, which are -- some of it is related to the commercialization efforts in the U.S. market. So that's actually something that is not onetime item in nature, but on the other hand, and if we will participate again in RSNA conference, that will depend on the questions. We participated in the RSNA in the fourth quarter, as you remember, that cost money, unfortunately. But if we participate again, so then it will be recurring. If we won't, it won't.

Thank you. And this does conclude today's conference call. Thank you for your participation, and you may now disconnect.