diff --git a/src/dbSta/include/db_sta/dbNetwork.hh b/src/dbSta/include/db_sta/dbNetwork.hh
index 96aaeb4c865..190b53d0642 100644
--- a/src/dbSta/include/db_sta/dbNetwork.hh
+++ b/src/dbSta/include/db_sta/dbNetwork.hh
@@ -367,7 +367,10 @@ class dbNetwork : public ConcreteNetwork
 
   // Return the highest net above the given net.
   // - If the net is a flat net, return it.
-  // - If the net is a hier net, return the modnet in the highest hierarchy.
+  // - If the net is a hier net (dbModNet), return the associated flat dbNet.
+  // This ensures parasitic externality checks in ensureParasiticNode work
+  // correctly: net_ is always a flat net, so the comparison net != net_
+  // must also operate on flat nets.
   Net* highestNetAbove(Net* net) const override;
 
   ////////////////////////////////////////////////////////////////
diff --git a/src/dbSta/src/dbNetwork.cc b/src/dbSta/src/dbNetwork.cc
index 49514f4a413..9237290c88e 100644
--- a/src/dbSta/src/dbNetwork.cc
+++ b/src/dbSta/src/dbNetwork.cc
@@ -2018,9 +2018,18 @@ void dbNetwork::visitConnectedPins(const Net* net,
   }
 }
 
+// Caution:
+//- Network::highestConnectedNet(Net *net) retrieves the highest hierarchical
+// net connected to the given net.
+// - But `dbNetwork::highestConnectedNet(Net* net)` retrieves the corresponding
+// flat net for the given net.
+// - It behaves differently to cope with the issue 9724.
+// - This redefinition may cause another issue later when
+// `Network::highestConnectedNet(Net *net)` is used elsewhere.
 const Net* dbNetwork::highestConnectedNet(Net* net) const
 {
-  return net;
+  const Net* flat = findFlatNet(net);
+  return flat ? flat : net;
 }
 
 ////////////////////////////////////////////////////////////////
@@ -5218,11 +5227,15 @@ Net* dbNetwork::highestNetAbove(Net* net) const
   }
 
   if (modnet) {
+    // Return the flat net associated with this mod net.
+    // Parasitic externality checks in
+    // ConcreteParasiticNetwork::ensureParasiticNode compare against net_ which
+    // is always a flat net (set via makeParasiticNetwork). Returning the
+    // highest mod net causes all pin nodes on hierarchically-connected nets to
+    // compare unequal to net_ and be incorrectly marked as external, making
+    // node_count_ = 0 and crashing PRIMA in measureThresholds.
     if (dbNet* related_dbnet = modnet->findRelatedNet()) {
-      if (odb::dbModNet* highest_modnet
-          = related_dbnet->findModNetInHighestHier()) {
-        return dbToSta(highest_modnet);  // Found the highest modnet
-      }
+      return dbToSta(related_dbnet);
     }
   }
 
diff --git a/src/dbSta/test/BUILD b/src/dbSta/test/BUILD
index 7f92bb385fc..2777fa257e6 100644
--- a/src/dbSta/test/BUILD
+++ b/src/dbSta/test/BUILD
@@ -27,6 +27,7 @@ ALL_TESTS = [
     "hierclock",
     "hierwrite",
     "hier_deep",
+    "hier_highest_connected_net",
     "hier_weird_port",
     "levelize_drvr_vertices1",
     "make_port",
diff --git a/src/dbSta/test/CMakeLists.txt b/src/dbSta/test/CMakeLists.txt
index b9d63de611b..66c31a6e138 100644
--- a/src/dbSta/test/CMakeLists.txt
+++ b/src/dbSta/test/CMakeLists.txt
@@ -17,6 +17,7 @@ or_integration_tests(
     hierclock
     hierwrite
     hier_deep
+    hier_highest_connected_net
     hier_weird_port
     levelize_drvr_vertices1
     make_port
diff --git a/src/dbSta/test/cpp/TestDbSta.cc b/src/dbSta/test/cpp/TestDbSta.cc
index 1825ff0ad3e..d51382780ea 100644
--- a/src/dbSta/test/cpp/TestDbSta.cc
+++ b/src/dbSta/test/cpp/TestDbSta.cc
@@ -82,9 +82,26 @@ TEST_F(TestDbSta, TestHierarchyConnectivity)
   ASSERT_NE(modnet_out2, nullptr);
   Net* sta_modnet_out2 = db_network_->dbToSta(modnet_out2);
   ASSERT_NE(sta_modnet_out2, nullptr);
+  // highestNetAbove on a mod net now returns the associated flat dbNet, not the
+  // highest mod net, so that parasitic externality checks work correctly.
   Net* sta_highest_modnet_out
       = db_network_->highestNetAbove(sta_modnet_mod_out);
-  ASSERT_EQ(sta_highest_modnet_out, sta_modnet_out2);
+  ASSERT_EQ(sta_highest_modnet_out, sta_dbnet_out2);
+
+  // Regression for PR #3194: dbNetwork::highestConnectedNet on a hier
+  // dbModNet must return the associated flat dbNet, not the modnet wrapper
+  // itself. Parasitics::findParasiticNet uses this as the lookup key into
+  // the parasitic network map. SPEF is a flat format so parasitics are
+  // keyed by flat dbNet; returning the modnet wrapper caused a cache miss
+  // and silently degraded delay calculation to LumpedCap.
+  const Net* sta_highest_connected_modnet
+      = db_network_->highestConnectedNet(sta_modnet_mod_out);
+  ASSERT_EQ(sta_highest_connected_modnet, sta_dbnet_out2);
+
+  // Flat dbNet input: highestConnectedNet is idempotent.
+  const Net* sta_highest_connected_flat
+      = db_network_->highestConnectedNet(sta_dbnet_out2);
+  ASSERT_EQ(sta_highest_connected_flat, sta_dbnet_out2);
 
   // Check get_ports -of_object Net*
   NetTermIterator* term_iter = db_network_->termIterator(sta_dbnet_out2);
diff --git a/src/dbSta/test/hier_highest_connected_net.ok b/src/dbSta/test/hier_highest_connected_net.ok
new file mode 100644
index 00000000000..bc99f5fb785
--- /dev/null
+++ b/src/dbSta/test/hier_highest_connected_net.ok
@@ -0,0 +1,7 @@
+[INFO ODB-0227] LEF file: Nangate45/Nangate45.lef, created 22 layers, 27 vias, 135 library cells
+[WARNING ORD-0011] Hierarchical flow (-hier) is currently in development and may cause multiple issues. Do not use in production environments.
+Found 3 unannotated drivers.
+ ff_out/QN
+ ff_top/QN
+ sub_inst/ff_sub/QN
+Found 0 partially unannotated drivers.
diff --git a/src/dbSta/test/hier_highest_connected_net.spef b/src/dbSta/test/hier_highest_connected_net.spef
new file mode 100644
index 00000000000..9f16f403b40
--- /dev/null
+++ b/src/dbSta/test/hier_highest_connected_net.spef
@@ -0,0 +1,97 @@
+*SPEF "IEEE 1481-1998"
+*DESIGN "top"
+*DATE "now"
+*VENDOR "n/a"
+*PROGRAM "n/a"
+*VERSION "1.0"
+*DESIGN_FLOW ""
+*DIVIDER /
+*DELIMITER :
+*BUS_DELIMITER [ ]
+*T_UNIT 1 NS
+*C_UNIT 1 PF
+*R_UNIT 1 OHM
+*L_UNIT 1 HENRY
+
+*D_NET clk 0.001
+*CONN
+*P clk I
+*I ck_buf:A I
+*CAP
+1 clk 0.0005
+2 ck_buf:A 0.0005
+*RES
+1 clk ck_buf:A 0.1
+*END
+
+*D_NET clk_int 0.002
+*CONN
+*I ck_buf:Z O
+*I ff_top:CK I
+*I ff_out:CK I
+*I sub_inst/ff_sub:CK I
+*CAP
+1 ck_buf:Z 0.0005
+2 ff_top:CK 0.0005
+3 ff_out:CK 0.0005
+4 sub_inst/ff_sub:CK 0.0005
+*RES
+1 ck_buf:Z ff_top:CK 0.1
+2 ck_buf:Z ff_out:CK 0.1
+3 ck_buf:Z sub_inst/ff_sub:CK 0.1
+*END
+
+*D_NET in 0.001
+*CONN
+*P in I
+*I ff_top:D I
+*CAP
+1 in 0.0005
+2 ff_top:D 0.0005
+*RES
+1 in ff_top:D 0.1
+*END
+
+*D_NET out 0.001
+*CONN
+*I ff_out:Q O
+*P out O
+*CAP
+1 ff_out:Q 0.0005
+2 out 0.0005
+*RES
+1 ff_out:Q out 0.1
+*END
+
+*D_NET midnet 0.001
+*CONN
+*I ff_top:Q O
+*I sub_inst/ff_sub:D I
+*CAP
+1 ff_top:Q 0.0005
+2 sub_inst/ff_sub:D 0.0005
+*RES
+1 ff_top:Q sub_inst/ff_sub:D 0.1
+*END
+
+*D_NET intermediate 0.001
+*CONN
+*I sub_inst/buf_sub:Z O
+*I ff_out:D I
+*CAP
+1 sub_inst/buf_sub:Z 0.0005
+2 ff_out:D 0.0005
+*RES
+1 sub_inst/buf_sub:Z ff_out:D 0.1
+*END
+
+*D_NET sub_inst/q_int 0.001
+*CONN
+*I sub_inst/ff_sub:Q O
+*I sub_inst/buf_sub:A I
+*CAP
+1 sub_inst/ff_sub:Q 0.0005
+2 sub_inst/buf_sub:A 0.0005
+*RES
+1 sub_inst/ff_sub:Q sub_inst/buf_sub:A 0.1
+*END
diff --git a/src/dbSta/test/hier_highest_connected_net.tcl b/src/dbSta/test/hier_highest_connected_net.tcl
new file mode 100644
index 00000000000..3b3611a1e4e
--- /dev/null
+++ b/src/dbSta/test/hier_highest_connected_net.tcl
@@ -0,0 +1,68 @@
+# Regression for PR #3194: dbNetwork::highestConnectedNet on a hier
+# dbModNet must resolve to the associated flat dbNet so that
+# Parasitics::findParasiticNet hits the parasitic_network_map_ entry
+# inserted under the flat dbNet key.
+#
+# Why this test uses read_spef rather than estimate_parasitics:
+# estimate_parasitics keys parasitic_network_map_ via findParasiticNet
+# for BOTH insert and lookup, so the bug is self-consistent and
+# invisible (insert key == lookup key, both buggy or both fixed).
+# SPEF read keys insertion by flat dbNet (parser -> findNet -> flat
+# at top scope) while lookup still uses findParasiticNet ->
+# dbNetwork::highestConnectedNet. Pre-fix override echoed the modnet
+# wrapper -> modnet key != flat key -> cache miss -> driver
+# classified unannotated. Fix returns the related flat dbNet -> hit.
+#
+# Design (hier_highest_connected_net.v): 2-level hier with reg-to-reg
+# data path crossing sub_inst. Top clk is buffered by ck_buf so the
+# clock-tree driver iterated is a leaf iterm, not the top BTerm; this
+# avoids the top-port bypass branch in Parasitics::findParasiticNet
+# (which returns network_->net(term) directly with no
+# highestConnectedNet call and is independent of PR #3194) that would
+# otherwise leave clk unannotated on the fixed binary too.
+#
+# Hier-crossing nets (carry both flat dbNet + dbModNet on their leaf
+# iterms after link_design -hier):
+#   clk_int      : ck_buf/Z -> ff_top/CK, ff_out/CK, sub_inst/ff_sub/CK
+#   midnet       : ff_top/Q -> sub_inst/ff_sub/D
+#   intermediate : sub_inst/buf_sub/Z -> ff_out/D
+#
+# Expected outputs:
+#
+# Fixed binary:
+#   Found 3 unannotated drivers.
+#    ff_out/QN
+#    ff_top/QN
+#    sub_inst/ff_sub/QN
+#   Found 0 partially unannotated drivers.
+#
+# Bug binary:
+#   Found 6 unannotated drivers.
+#    ck_buf/Z
+#    ff_out/QN
+#    ff_top/Q
+#    ff_top/QN
+#    sub_inst/buf_sub/Z
+#    sub_inst/ff_sub/QN
+#   Found 0 partially unannotated drivers.
+#
+# The 3 baseline entries (ff_top/QN, ff_out/QN, sub_inst/ff_sub/QN)
+# are dangling DFF QN outputs -- no loads, no wire, no parasitic
+# possible. The 3 bug-extras (ck_buf/Z, ff_top/Q, sub_inst/buf_sub/Z)
+# are the modnet-wrapped drivers on the hier-crossing nets above:
+# findParasiticNet returns their dbModNet wrapper, SPEF-inserted
+# entries are keyed by flat dbNet -> map miss on bug binary, hit on
+# fixed binary.
+source "helpers.tcl"
+read_liberty Nangate45/Nangate45_typ.lib
+read_lef Nangate45/Nangate45.lef
+read_verilog hier_highest_connected_net.v
+link_design top -hier
+
+create_clock -name clk -period 5 [get_ports clk]
+set_input_delay -clock clk 0 [get_ports in]
+set_output_delay -clock clk 0 [get_ports out]
+
+read_spef hier_highest_connected_net.spef
+
+report_parasitic_annotation -report_unannotated
diff --git a/src/dbSta/test/hier_highest_connected_net.v b/src/dbSta/test/hier_highest_connected_net.v
new file mode 100644
index 00000000000..53d71c9bef3
--- /dev/null
+++ b/src/dbSta/test/hier_highest_connected_net.v
@@ -0,0 +1,32 @@
+// 2-level hier reg-to-reg design. midnet/intermediate span sub_inst
+// boundary so leaf iterms on those nets get both flat dbNet and
+// dbModNet wrappers after link_design -hier. Clock buffer ck_buf
+// isolates the top clk BTerm so driver iteration doesn't hit the
+// top-BTerm bypass branch in Parasitics::findParasiticNet (which is
+// independent of PR #3194 and would otherwise leave clk unannotated).
+
+module sub (din, sub_clk, dout);
+  input  din;
+  input  sub_clk;
+  output dout;
+
+  wire q_int;
+
+  DFF_X1 ff_sub (.D(din), .CK(sub_clk), .Q(q_int));
+  BUF_X1 buf_sub (.A(q_int), .Z(dout));
+endmodule
+
+module top (in, clk, out);
+  input  in;
+  input  clk;
+  output out;
+
+  wire clk_int;
+  wire midnet;
+  wire intermediate;
+
+  BUF_X1 ck_buf (.A(clk), .Z(clk_int));
+  DFF_X1 ff_top (.D(in), .CK(clk_int), .Q(midnet));
+  sub sub_inst (.din(midnet), .sub_clk(clk_int), .dout(intermediate));
+  DFF_X1 ff_out (.D(intermediate), .CK(clk_int), .Q(out));
+endmodule