Group 1 - The presentation is led by Christopher Brustuen, Managing Director, who emphasizes the importance of disclosures and encourages questions to be directed to Morgan Stanley sales representatives [1] - Dr. Berger and his team from RadNet are present for the discussion, indicating a collaborative approach to the session [2]

Group 1 - The presentation is led by Christopher Brustuen, Managing Director, who emphasizes the importance of disclosures and encourages questions to be directed to Morgan Stanley sales representatives [1] - Dr. Berger and his team from RadNet are present for the discussion, indicating a collaborative approach to the session [2]

RadNet FY Conference Summary Company Overview - **Company**: RadNet (NasdaqGM:RDNT) - **Industry**: Radiology and Imaging Services Key Points Industry Consolidation - Industry consolidation is expected to continue due to the corporatization of medicine, particularly in capital-intensive fields like radiology and imaging [7][8] - The average provider may struggle to meet the evolving service expectations driven by technological advancements [7] Market Demand and Reimbursement - Demand for imaging services is anticipated to grow, influenced by advancements in artificial intelligence (AI) and population health management [10] - The reimbursement environment is improving, with CMS increasing the physician fee schedule for the first time in years, which is expected to alleviate some reimbursement challenges [11] - There is a shift towards moving elective imaging services from hospitals to outpatient centers, which are more cost-effective [12] Organic Growth Drivers - Traditional growth drivers include an aging population, increased awareness of diagnostic imaging, and advancements in technology that enhance diagnostic capabilities [13][14] - Advanced imaging modalities like MRI, CT, and PET/CT are experiencing disproportionate growth compared to routine imaging [14] AI and Technology Integration - AI is crucial for creating capacity and improving throughput in radiology, allowing for better patient management without significant capital investment [15][17] - The implementation of generative AI tools is expected to streamline patient engagement processes and reduce manual labor [25][27] Labor Shortages and Automation - The company faces labor shortages, particularly among imaging technologists, exacerbated by the COVID-19 pandemic [19] - Innovations like the TechLive product allow remote operation of imaging equipment, mitigating the impact of labor shortages and contributing to margin expansion [20][21] Multimodality Strategy and Capitation - RadNet operates as a multimodality provider, offering a full range of imaging services, which enhances referral relationships with physicians [28][29] - The company manages imaging for approximately 1.7 million lives under capitated arrangements, providing predictable revenue and cash flow [30][31] Joint Ventures and Market Expansion - 38% of RadNet's locations are in joint ventures with hospitals, which help drive referrals and improve pricing leverage with insurance companies [36][37] - The company plans to continue expanding its network of imaging centers in response to demand, with a focus on building rather than acquiring [38][39] Future Opportunities - RadNet is exploring new market opportunities, particularly in early disease detection and advanced imaging technologies [40][41] - The company aims to leverage its scale to enhance AI integration and improve operational efficiencies [51] Closing Remarks - RadNet is positioned for growth in the evolving healthcare landscape, with plans for an investor day to discuss future strategies [53]

Company Overview - RadNet, Inc. is a leading national provider of freestanding, fixed-site diagnostic imaging services in the United States, based on the number of locations and annual imaging revenue [3] - The company operates a network of 405 owned and/or operated outpatient imaging centers across various states including Arizona, California, Delaware, Florida, Maryland, New Jersey, New York, and Texas [3] - RadNet employs over 11,000 team members, including contracted radiologists, full-time and per diem employees, and technologists [3] Upcoming Event - RadNet's executives, including Dr. Howard Berger, Mark Stolper, and Mital Patel, will present at the Morgan Stanley 23rd Annual Global Healthcare Conference on September 9, 2025, at 04:50 p.m. Eastern Time [1][2] - The presentation will be held at the Sheraton New York Times Square Hotel [2]

Core Insights - The global medical imaging sector is undergoing a collective revaluation, driven by the integration of AI into clinical efficiency and commercial value [1] - HeartFlow and RadNet's strong stock performance highlights the market's recognition of the "AI + medical imaging" narrative as a key driver for redefining industry value [1][2] - The performance of these companies serves as a valuable reference for Hong Kong-based company Yimai Sunshine in the same sector [1] Company Performance - RadNet operates over 380 imaging centers across 8 states in the U.S., projecting 2024 revenue of $1.83 billion and a net profit of $38.84 million [2] - HeartFlow's AI platform significantly reduces patient risk and medical costs by accurately assessing coronary artery narrowing without invasive procedures, marking its transition from technical validation to commercial explosion [2] - Yimai Sunshine is expected to report a revenue of 450-480 million yuan for the first half of 2025, reflecting a year-on-year growth of 8.8%-16% and a net profit increase of 1350%-1550% [2] Business Model and Strategy - Yimai Sunshine differentiates itself through a "store-service-data-AI" integrated model, which is more comprehensive than RadNet and HeartFlow's approaches [3][4] - The company operates 106 imaging centers, covering 16 provinces in China, with an annual scanning volume exceeding 10 million [3] - Yimai Sunshine's AI initiative, "Yinghe Yimai," aims to launch a global first medical imaging foundation model by January 2025, with expected AI reading accuracy above 95% [4] Market Potential - The U.S. third-party imaging market penetration is around 40-50% with a growth rate of less than 5%, while China's penetration is only about 1%, with a projected market size of 18.6 billion yuan by 2030 and a compound annual growth rate of 30.7% [5] - Yimai Sunshine's current market valuation of 6.3 billion HKD is significantly lower than its business scale and market potential, suggesting a potential undervaluation compared to its U.S. counterparts [4][5] - The company is positioned to capitalize on the explosive growth potential in the Chinese market, which is 15 times larger than the U.S. in terms of growth opportunities [5]

[PART I – FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) This section presents RadNet, Inc.'s unaudited condensed consolidated financial statements and related notes for the periods ended June 30, 2025, and December 31, 2024 [ITEM 1. Financial Statements](index=4&type=section&id=ITEM%201.%20Financial%20Statements) This section presents RadNet, Inc.'s unaudited condensed consolidated financial statements, including balance sheets, income statements, cash flows, and comprehensive notes [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section provides a snapshot of RadNet's financial position, detailing assets, liabilities, and equity as of June 30, 2025, and December 31, 2024 Condensed Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2025 | December 31, 2024 | Change | % Change | | :----------------------------------- | :------------ | :---------------- | :----- | :------- | | Total Assets | $3,514,966 | $3,286,690 | $228,276 | 6.9% | | Cash and cash equivalents | $833,152 | $740,020 | $93,132 | 12.6% | | Goodwill | $751,514 | $710,663 | $40,851 | 5.7% | | Total Liabilities | $2,335,705 | $2,153,280 | $182,425 | 8.5% | | Total Equity | $1,179,261 | $1,133,410 | $45,851 | 4.0% | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section outlines RadNet's financial performance, including revenue, operating income, and net income (loss) for the three and six months ended June 30, 2025 and 2024 Condensed Consolidated Statements of Operations Highlights (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | % Change | | :-------------------------------------------------- | :------------------------------- | :------------------------------- | :------- | | Total service revenue | $498,230 | $459,714 | 8.4% | | Income from operations | $30,879 | $34,846 | -11.4% | | Net income (loss) attributable to RadNet, Inc. common stockholders | $14,454 | $(2,982) | N/A | | Basic net income (loss) per share | $0.19 | $(0.04) | N/A | | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | % Change | | :-------------------------------------------------- | :----------------------------- | :----------------------------- | :------- | | Total service revenue | $969,629 | $891,421 | 8.8% | | Income from operations | $6,778 | $46,185 | -85.3% | | Net income (loss) attributable to RadNet, Inc. common stockholders | $(23,472) | $(5,761) | N/A | | Basic net income (loss) per share | $(0.32) | $(0.08) | N/A | [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20income%20%28loss%29) This section presents RadNet's comprehensive income (loss), reflecting net income (loss) and other comprehensive income items for the periods ended June 30, 2025 and 2024 Condensed Consolidated Statements of Comprehensive Income (Loss) Highlights (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :---------------------------------------------------------------- | :------------------------------- | :------------------------------- | | Net Income (Loss) | $23,034 | $6,945 | | Comprehensive Income (Loss) Attributable to RadNet, Inc. Common Stockholders | $25,000 | $2,904 | | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------------------------------------- | :----------------------------- | :----------------------------- | | Net Income (Loss) | $(6,703) | $12,355 | | Comprehensive Income (Loss) Attributable to RadNet, Inc. Common Stockholders | $(7,784) | $(1,334) | [Condensed Consolidated Statement of Stockholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statement%20of%20Stockholders'%20Equity) This section details changes in RadNet's stockholders' equity, including common stock, additional paid-in capital, and accumulated deficit, for the periods presented Changes in Stockholders' Equity (in thousands) | Metric | June 30, 2025 | December 31, 2024 | Change | | :----------------------------------- | :------------ | :---------------- | :----- | | Total RadNet, Inc.'s Stockholders' equity | $932,314 | $902,308 | $30,006 | | Noncontrolling interests | $246,947 | $231,102 | $15,845 | | Total equity | $1,179,261 | $1,133,410 | $45,851 | - Stock-based compensation expense for the six months ended June 30, 2025, was **$37,275 thousand**, contributing to the increase in additional paid-in capital[21](index=21&type=chunk) - Net loss attributable to RadNet, Inc. common stockholders for the six months ended June 30, 2025, was **$(23,472) thousand**, impacting accumulated deficit[21](index=21&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section summarizes RadNet's cash inflows and outflows from operating, investing, and financing activities for the six months ended June 30, 2025 and 2024 Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | % Change | | :---------------------------------- | :----------------------------- | :----------------------------- | :------- | | Net cash provided by operating activities | $161,829 | $133,090 | 21.6% | | Net cash used in investing activities | $(154,201) | $(138,278) | 11.5% | | Net cash provided by financing activities | $84,918 | $404,404 | -79.0% | | Cash and cash equivalents, end of period | $833,152 | $741,679 | 12.3% | - Non-cash investing activities for the six months ended June 30, 2025, included acquiring equipment and leasehold improvements for approximately **$74.5 million**, and assets from radiology businesses with holdbacks and contingent liabilities totaling **$12.8 million**[27](index=27&type=chunk)[28](index=28&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements, covering accounting policies, acquisitions, and debt [NOTE 1 – NATURE OF BUSINESS AND BASIS OF PRESENTATION](index=12&type=section&id=NOTE%201%20%E2%80%93%20NATURE%20OF%20BUSINESS%20AND%20BASIS%20OF%20PRESENTATION) This note describes RadNet's business as a diagnostic imaging provider and its basis of financial statement presentation, including Variable Interest Entities - RadNet is a national provider of freestanding, fixed-site outpatient diagnostic imaging services, operating **405 centers** across eight states as of June 30, 2025[35](index=35&type=chunk) - The company consolidates Variable Interest Entities (VIEs), primarily professional corporations (Consolidated Medical Group) that provide medical services, where RadNet is the primary beneficiary due to controlling financial interest and operational authority[37](index=37&type=chunk)[38](index=38&type=chunk) Consolidated Medical Group Revenue and Expenses (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :---------------------------------------------------------------- | :------------------------------- | :------------------------------- | | Revenue (net of management fees to RadNet) | $48,300 | $54,900 | | Operating expenses | $48,300 | $54,900 | | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------------------------------------- | :----------------------------- | :----------------------------- | | Revenue (net of management fees to RadNet) | $106,500 | $107,200 | | Operating expenses | $106,500 | $107,200 | [NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES](index=13&type=section&id=NOTE%202%20-%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note outlines RadNet's key accounting policies, including revenue recognition, goodwill, intangible assets, income taxes, and recent acquisitions - Revenues are primarily from net patient fees for diagnostic services, recognized when obligations are satisfied (typically less than one day), with estimates for contractual allowances and implicit price concessions[46](index=46&type=chunk)[48](index=48&type=chunk) - Revenue under capitation arrangements is recognized monthly for making diagnostic imaging services available to plan enrollees[49](index=49&type=chunk) Total Service Revenue by Source (in thousands) | Source | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Commercial insurance | $278,902 | $256,517 | $541,410 | $497,145 | | Medicare | $116,331 | $101,719 | $224,499 | $195,186 | | Medicaid | $12,597 | $11,001 | $24,283 | $21,906 | | Workers' compensation/personal injury | $10,642 | $10,997 | $21,114 | $22,837 | | Other payors | $29,394 | $26,568 | $57,087 | $51,948 | | Management fee revenue | $6,688 | $6,106 | $12,967 | $12,014 | | Other revenue (software and AI) | $13,509 | $9,837 | $26,052 | $18,898 | | Revenue under capitation arrangements | $30,167 | $36,969 | $62,217 | $71,487 | | **Total service revenue** | **$498,230** | **$459,714** | **$969,629** | **$891,421** | - Goodwill increased to **$751.5 million** at June 30, 2025, from **$710.7 million** at December 31, 2024, primarily due to acquisitions and currency translation[58](index=58&type=chunk)[59](index=59&type=chunk) Goodwill Activity (in thousands) | Metric | Imaging Center segment | Digital Health segment | Total | | :-------------------------- | :--------------------- | :--------------------- | :------ | | Balance as of December 31, 2024 | $628,537 | $82,126 | $710,663 | | Goodwill from acquisitions | $12,120 | $19,843 | $31,963 | | Measurement period and other adjustments | — | $87 | $87 | | Currency translation | $2,221 | $6,579 | $8,800 | | Balance as of June 30, 2025 | $642,878 | $108,636 | $751,514 | - Total intangible asset amortization expense was **$3.2 million** for the three months and **$6.3 million** for the six months ended June 30, 2025[62](index=62&type=chunk) - The effective income tax rate for the three months ended June 30, 2025, was **3.4%** (provision of **$0.8 million**), compared to **26.1%** (provision of **$2.5 million**) in 2024[67](index=67&type=chunk) - For the six months, a benefit of **$2.6 million** (**27.8%** effective rate) was recorded in 2025, versus a provision of **$0.6 million** (**4.6%** effective rate) in 2024[67](index=67&type=chunk) - Lease abandonment charges of approximately **$5.5 million** were recognized during the six months ended June 30, 2025, due to closing several low-utilization imaging centers[70](index=70&type=chunk) - Interest income from securities was **$7.8 million** for the three months and **$15.5 million** for the six months ended June 30, 2025[72](index=72&type=chunk) - On June 2, 2025, RadNet acquired See-Mode Technologies Pte. Ltd., with contingent consideration of up to **$12.7 million** payable in stock and cash based on clinical and regulatory milestones[82](index=82&type=chunk)[85](index=85&type=chunk) Fair Value of 2019 Swaps - Interest Rate Contracts (in thousands) | Metric | As of June 30, 2025 | As of December 31, 2024 | | :-------------------------- | :------------------ | :-------------------- | | 2019 Swaps - Interest Rate Contracts | $3,050 | $7,112 | Investment in Joint Ventures (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :---------------- | :------------ | :---------------- | | Total net assets | $214,803 | $170,485 | | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------- | :----------------------------- | :----------------------------- | | Net revenue | $138,711 | $130,546 | | Net income | $14,908 | $14,657 | [NOTE 3 – RECENT ACCOUNTING AND REPORTING STANDARDS](index=23&type=section&id=NOTE%203%20%E2%80%93%20RECENT%20ACCOUNTING%20AND%20REPORTING%20STANDARDS) This note discusses recently adopted and upcoming accounting standards, including those related to segment reporting, income tax disclosures, and expense disaggregation - RadNet adopted ASU 2023-07 (Segment Reporting) for the year ended December 31, 2024, with interim disclosure requirements effective January 1, 2025[104](index=104&type=chunk) - ASU 2023-09 (Income Tax Disclosures) will be adopted prospectively for the period ending December 31, 2025, impacting disclosures only[105](index=105&type=chunk) - ASU 2024-03 (Expense Disaggregation Disclosures) is effective for annual periods beginning after December 15, 2026, and is currently being evaluated for impact[106](index=106&type=chunk) [NOTE 4 – BUSINESS COMBINATIONS AND RELATED ACTIVITY](index=24&type=section&id=NOTE%204%20%E2%80%93%20BUSINESS%20COMBINATIONS%20AND%20RELATED%20ACTIVITY) This note details RadNet's acquisition activities, including imaging centers and AI medical technology companies, and the formation of new joint ventures - During the six months ended June 30, 2025, RadNet acquired assets of six entities in its Imaging Center segment for an aggregate consideration of **$16.4 million**, strengthening its presence in California and Texas[107](index=107&type=chunk)[108](index=108&type=chunk) - On June 2, 2025, RadNet acquired See-Mode Technologies, an AI medical technology company, for approximately **$28.7 million**, including cash, a holdback, and contingent consideration[111](index=111&type=chunk)[112](index=112&type=chunk) - This acquisition is part of the Digital Health segment[112](index=112&type=chunk) - On March 21, 2025, RadNet formed Pacific Diagnostic Imaging Group, LLC (PDRG) and sold a **20%** membership interest to Tri-City Healthcare District for **$337,500**, retaining an **80%** controlling interest[114](index=114&type=chunk) [NOTE 5 – SEGMENT REPORTING](index=25&type=section&id=NOTE%205%20%E2%80%93%20SEGMENT%20REPORTING) This note provides financial information for RadNet's two reportable segments: Imaging Center and Digital Health, detailing their revenues and profit (loss) - RadNet operates two reportable segments: Imaging Center and Digital Health[116](index=116&type=chunk) - The Imaging Center segment provides diagnostic imaging services, while the Digital Health segment develops AI-powered health informatics solutions[117](index=117&type=chunk) Segment Revenues from External Customers (in thousands) | Segment | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Imaging Center | $487,216 | $450,282 | $948,594 | $873,491 | | Digital Health | $11,014 | $9,432 | $21,035 | $17,930 | | **Total** | **$498,230** | **$459,714** | **$969,629** | **$891,421** | Segment Profit (Loss) (in thousands) | Segment | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Imaging Center | $73,057 | $70,456 | $88,704 | $115,179 | | Digital Health | $(4,034) | $(466) | $(7,151) | $(1,071) | | **Total** | **$69,022** | **$69,990** | **$81,553** | **$114,108** | [NOTE 6 – CREDIT FACILITIES AND NOTES PAYABLE](index=29&type=section&id=NOTE%206%20%E2%80%93%20CREDIT%20FACILITIES%20AND%20NOTES%20PAYABLE) This note describes RadNet's debt structure, including term loans, revolving credit facilities, and recent amendments, along with associated interest rates - On June 11, 2025, RadNet entered into an Incremental Amendment No. 2 to the Barclays Credit Agreement, providing an additional **$100.0 million** incremental term loan, increasing quarterly principal payments to **$2.4 million**[132](index=132&type=chunk) - The Barclays Term Loan interest rates were reduced by **0.25%** on November 26, 2024, with the effective SOFR plus margin at **6.6%** as of June 30, 2025[130](index=130&type=chunk)[133](index=133&type=chunk) - As of June 30, 2025, RadNet had no outstanding balance under its **$282.0 million** Barclays Revolving Credit Facility (**$274.6 million** available) and **$50.0 million** Truist Revolving Credit Facility (full amount available)[136](index=136&type=chunk)[142](index=142&type=chunk) Debt Obligations (in thousands) | Debt Type | June 30, 2025 | December 31, 2024 | | :---------------------------------------------------------------- | :------------ | :---------------- | | Barclays Term Loans (net of discount) | $953,119 | $857,696 | | Truist Term Loan Agreement (net of discount) | $128,781 | $134,274 | | Equipment notes payable | $20,835 | $24,296 | | **Total debt obligations** | **$1,102,735** | **$1,016,266** | | Less: current portion | $(25,484) | $(24,692) | | **Long term portion of debt obligations** | **$1,077,251** | **$991,574** | [NOTE 7 – STOCK-BASED COMPENSATION](index=31&type=section&id=NOTE%207%20%E2%80%93%20STOCK-BASED%20COMPENSATION) This note details RadNet's stock-based compensation plans, including outstanding options, restricted stock awards, and their impact on equity - RadNet's Restated Plan reserves **20,100,000 shares** for various equity awards, with approximately **2,248,710 shares** available for future issuance as of June 30, 2025[146](index=146&type=chunk)[156](index=156&type=chunk) Outstanding Options Activity (Six Months Ended June 30, 2025) | Metric | Shares | Weighted Average Exercise Price | | :-------------------------- | :------- | :------------------------------ | | Balance, December 31, 2024 | 840,917 | $17.19 | | Exercised | (62,296) | $8.90 | | Balance, June 30, 2025 | 778,621 | $17.86 | | Exercisable at June 30, 2025 | 778,621 | $17.86 | Unvested RSAs and RSUs Activity (Six Months Ended June 30, 2025) | Metric | RSAs and RSUs | Weighted-Average Fair Value per Share | | :-------------------------------- | :------------ | :------------------------------------ | | Unvested at December 31, 2024 | 687,655 | $35.31 | | Granted | 911,965 | $70.95 | | Vested | (649,726) | $52.07 | | Forfeited or Canceled | (12,138) | $49.85 | | Unvested at June 30, 2025 | 937,756 | $58.16 | [NOTE 8 – SUBSEQUENT EVENTS](index=33&type=section&id=NOTE%208%20%E2%80%93%20SUBSEQUENT%20EVENTS) This note discloses significant events occurring after the reporting period, including acquisitions of imaging centers and an AI-powered breast health solutions provider - On July 1, 2025, RadNet acquired Kolb Radiology P.C., comprising five imaging centers in New York, for approximately **$22.0 million**, with a potential earnout of up to **$8.0 million**[157](index=157&type=chunk) - On July 17, 2025, RadNet acquired iCAD, Inc., a provider of AI-powered breast health solutions, issuing approximately **1.8 million shares** of common stock in the merger[158](index=158&type=chunk) [ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=33&type=section&id=ITEM%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's analysis of RadNet's financial condition, operational results, critical accounting policies, and liquidity for the periods ended June 30, 2025 [Overview](index=34&type=section&id=Overview) This section provides an overview of RadNet's business as a national diagnostic imaging provider and its expanding Digital Health segment - RadNet is a national provider of diagnostic imaging services, operating **405 centers** in eight U.S. states as of June 30, 2025, offering MRI, CT, PET, mammography, ultrasound, and X-ray services[166](index=166&type=chunk) - The Digital Health segment, established in fiscal year 2024, develops AI-powered health informatics solutions for imaging and radiology, with a focus on brain, breast, prostate, and pulmonary diagnostics[167](index=167&type=chunk)[169](index=169&type=chunk) - Recent strategic expansions in Digital Health include the acquisitions of iCAD, Inc. (AI-powered breast health) and See-Mode Technologies (AI for ultrasound diagnostics)[170](index=170&type=chunk) [Recent Developments](index=35&type=section&id=Recent%20Developments) This section highlights recent operational and strategic developments, including imaging center acquisitions and revenue trends by payor type Imaging Centers and Net Revenues | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------ | :----------------------------- | :----------------------------- | | Centers in operation | 405 | 375 | | Net revenues (millions) | $970 | $891 | Total Service Fee Revenue by Payor (in thousands) | Payor Type | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Commercial insurance | $278,902 | $256,517 | $541,410 | $497,145 | | Medicare | $116,331 | $101,719 | $224,499 | $195,186 | | Medicaid | $12,597 | $11,001 | $24,283 | $21,906 | | Workers' compensation/personal injury | $10,642 | $10,997 | $21,114 | $22,837 | | Other payors | $29,394 | $26,568 | $57,087 | $51,948 | | Management fee revenue | $6,688 | $6,106 | $12,967 | $12,014 | | Other revenue | $13,509 | $9,837 | $26,052 | $18,898 | | Revenue under capitation arrangements | $30,167 | $36,969 | $62,217 | $71,487 | | **Total service revenue** | **$498,230** | **$459,714** | **$969,629** | **$891,421** | - Revenue is typically lowest in the first quarter due to winter weather conditions and the resetting of high deductible health plans[174](index=174&type=chunk) - During the six months ended June 30, 2025, RadNet acquired six imaging centers for an aggregate consideration of **$16.4 million**, primarily in California and Texas[175](index=175&type=chunk) - Management service fees from joint ventures were approximately **$6.5 million** for the three months and **$13.0 million** for the six months ended June 30, 2025[177](index=177&type=chunk) [Critical Accounting Policies](index=37&type=section&id=Critical%20Accounting%20Policies) This section discusses RadNet's critical accounting policies, focusing on revenue recognition, allowances for bad debts, business combinations, and goodwill impairment - Revenue recognition involves estimates for contractual allowances and implicit price concessions, which are continuously reviewed based on laws, regulations, and contractual terms[181](index=181&type=chunk)[183](index=183&type=chunk)[185](index=185&type=chunk) - Accounts receivable allowances for bad debts are based on specific payor collection issues and historical experience, with no material changes in estimates for the quarter[186](index=186&type=chunk) - Business combinations require management to make estimates of fair values for acquired assets and assumed liabilities, with adjustments possible during the measurement period (up to one year)[187](index=187&type=chunk) - Goodwill and indefinite-lived intangibles (trade names, IPR&D) are tested for impairment annually or when indicators exist; no impairment was noted as of October 1, 2024, or through June 30, 2025[188](index=188&type=chunk) [Results of Operations](index=38&type=section&id=Results%20of%20Operations) This section analyzes RadNet's financial performance, detailing revenue and expense trends for both the Imaging Center and Digital Health segments [Three Months Ended June 30, 2025 Compared to the Three Months Ended June 30, 2024](index=38&type=section&id=Three%20Months%20Ended%20June%2030%2C%202025%20Compared%20to%20the%20Three%20Months%20Ended%20June%2030%2C%202024) This section compares RadNet's financial results for the three months ended June 30, 2025, against the same period in 2024, focusing on segment performance Imaging Center Segment Revenue (in thousands) | Metric | 2025 | 2024 | $ Increase | % Change | | :---------- | :--- | :--- | :--------- | :------- | | Total | $477,504 | $443,886 | $33,618 | 7.6% | | Same Center | $457,794 | $438,622 | $19,172 | 4.4% | - Same center revenue increased **4.4%**, driven by higher fees and a **2.2%** increase in total procedure volume, with advanced imaging (MRI, CT, PET/CT) showing significant growth[191](index=191&type=chunk) Imaging Center Segment Operating Expenses (in thousands) | Expense Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | % Change | | :---------------------------------------------------- | :------------------------------- | :------------------------------- | :------- | | Salaries and professional reading fees (excl. stock-based comp) | $258,148 | $243,354 | 6.1% | | Stock-based compensation | $6,091 | $4,349 | 40.1% | | Medical supplies | $31,196 | $26,523 | 17.6% | | Other operating expenses | $76,883 | $69,327 | 10.9% | | Depreciation and amortization | $32,941 | $32,089 | 2.7% | | Loss on sale and disposal of equipment | $1,812 | $398 | 355.3% | | **Total operating expenses** | **$439,509** | **$406,161** | **8.2%** | - Interest expense decreased by **34.1%** to **$17.2 million**, primarily due to the repricing of the Barclays Revolving Credit Facility in Q4 2024, partially offset by a **$100.0 million** incremental term loan in Q2 2025[204](index=204&type=chunk) - Equity in earnings from unconsolidated joint ventures increased by **28.5%** to **$4.4 million**, mainly from Santa Monica Imaging Group, LLC and Arizona Diagnostic Radiology Group[209](index=209&type=chunk) [Six Months Ended June 30, 2025 Compared to the Six Months Ended June 30, 2024](index=42&type=section&id=Six%20Months%20Ended%20June%2030%2C%202025%20Compared%20to%20the%20Six%20Months%20Ended%20June%2030%2C%202024) This section compares RadNet's financial results for the six months ended June 30, 2025, against the same period in 2024, detailing segment performance Imaging Center Segment Revenue (in thousands) | Metric | 2025 | 2024 | $ Increase | % Change | | :---------- | :--- | :--- | :--------- | :------- | | Total | $929,682 | $860,925 | $68,757 | 8.0% | | Same Center | $895,046 | $851,339 | $43,707 | 5.1% | - Same center revenue increased **5.1%**, driven by higher fees and a **0.5%** increase in total procedure volume, with advanced imaging (MR, CT, PET/CT) showing strong growth[214](index=214&type=chunk)[215](index=215&type=chunk) Imaging Center Segment Operating Expenses (in thousands) | Expense Category | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | % Change | | :---------------------------------------------------- | :----------------------------- | :----------------------------- | :------- | | Salaries and professional reading fees (excl. stock-based comp) | $528,839 | $488,065 | 8.4% | | Stock-based compensation | $31,319 | $15,418 | 103.1% | | Medical supplies | $60,922 | $48,478 | 25.7% | | Lease abandonment charges | $5,511 | — | N/A | | Other operating expenses | $151,456 | $135,064 | 12.1% | | Depreciation and amortization | $65,480 | $62,063 | 5.5% | | Loss on sale and disposal of equipment | $2,211 | $586 | 277.3% | | **Total operating expenses** | **$909,673** | **$808,846** | **12.5%** | - Interest expense decreased by **18.7%** to **$34.4 million**, due to lower interest rates from the Barclays Revolving Credit Facility refinancing, partially offset by a general increase in term loan debt[230](index=230&type=chunk) - Equity in earnings from unconsolidated joint ventures decreased by **9.8%** to **$7.0 million**, mainly due to decreased earnings from Santa Monica Imaging Group, LLC and St. Joseph Medical Center, LLC[232](index=232&type=chunk) [Digital Health Segment Performance](index=47&type=section&id=Digital%20Health%20Segment%20Performance) This section analyzes the financial performance of the Digital Health segment, including revenue growth, operating expenses, and net loss for the periods presented Digital Health Segment Financials (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | % Change | | :---------------- | :------------------------------- | :------------------------------- | :------- | | Revenue | $20,726 | $15,828 | 30.9% | | Total operating expenses | $27,842 | $18,707 | 48.8% | | Loss from Operations | $(7,116) | $(2,879) | 147.2% | | Segment net loss | $(4,871) | $(4,346) | 12.1% | | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | % Change | | :---------------- | :----------------------------- | :----------------------------- | :------- | | Revenue | $39,947 | $30,488 | 31.0% | | Total operating expenses | $53,178 | $36,382 | 46.2% | | Loss from Operations | $(13,231) | $(5,894) | 124.5% | | Segment net loss | $(10,258) | $(8,032) | 27.7% | - Digital Health revenue increased by approximately **31%** for both the three and six months ended June 30, 2025, driven by **27%** growth in AI-related revenue (Lung, Prostate/Neuro, Breast) and **33%** growth in informatics revenue[237](index=237&type=chunk) - Operating expenses increased due to higher headcount in engineering and executive roles, increased stock-based compensation, and higher non-capitalized research and development costs, reflecting continued investment in product development[238](index=238&type=chunk) - The Digital Health segment is expected to continue operating at a net loss in the near term as the company expands capabilities and scales platform adoption[238](index=238&type=chunk) [Non-GAAP Financial Measures](index=47&type=section&id=Non-GAAP%20Financial%20Measures) This section presents RadNet's Adjusted EBITDA, a non-GAAP metric, providing insights into core operational performance by excluding non-cash and non-recurring items - Adjusted EBITDA is a non-GAAP metric used to measure core operations, excluding non-cash and non-recurring charges, and is defined as earnings before interest, taxes, depreciation, and amortization, with specific adjustments[242](index=242&type=chunk)[243](index=243&type=chunk) Adjusted EBITDA (in thousands) | Segment | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :------------------------ | :------------------------------- | :------------------------------- | | Total Company | $81,246 | $72,327 | | Imaging Center | $77,843 | $69,058 | | Digital Health Segment | $3,403 | $3,269 | | Segment | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------ | :----------------------------- | :----------------------------- | | Total Company | $127,645 | $130,789 | | Imaging Center | $120,531 | $124,000 | | Digital Health Segment | $7,114 | $6,789 | [Liquidity and Capital Resources](index=49&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses RadNet's liquidity position, capital requirements, and funding sources, including cash flows and available credit facilities - RadNet expects existing capital, anticipated cash from operations, and borrowing capacity to be sufficient for the next twelve months and the foreseeable future[248](index=248&type=chunk) - Principal capital requirements include developing new diagnostic imaging centers, acquiring existing centers, and purchasing new equipment, funded primarily by cash flow, borrowings, or new equity/debt issuances[249](index=249&type=chunk) Key Liquidity Data (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :---------------------------------------- | :------------ | :---------------- | | Cash and cash equivalents | $833,152 | $740,020 | | Working capital (excl. current operating lease liabilities) | $607,706 | $596,158 | | Stockholders' equity | $1,179,261 | $1,133,410 | Cash Flow Summary (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------- | :----------------------------- | :----------------------------- | | Cash provided by operating activities | $161,829 | $133,090 | | Cash used in investing activities | $(154,201) | $(138,278) | | Cash provided by financing activities | $84,918 | $404,404 | - Operating cash flow increased by **$28.7 million**, primarily due to a **$16.0 million** change in assets and liabilities related to the timing of payments[252](index=252&type=chunk) - Financing cash flow decreased significantly by **$319.5 million**, mainly due to a public equity offering and Barclays Revolving Credit Facility refinancing in 2024, compared to a **$100.0 million** incremental term loan in 2025[254](index=254&type=chunk) - As of June 30, 2025, RadNet had **$274.6 million** available under its Barclays Revolving Credit Facility and **$50.0 million** under its Truist Revolving Credit Facility[259](index=259&type=chunk) [ITEM 3. Quantitative and Qualitative Disclosures About Market Risk](index=51&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section details RadNet's exposure to market risks, specifically foreign currency exchange risk and interest rate sensitivity, and mitigation strategies - RadNet is exposed to foreign exchange risk from revenues and expenses denominated in Pound Sterling, Euro, Canadian Dollar, Hungarian Forint, and Indian Rupee, with a hypothetical **1%** decline in exchange rates potentially increasing annual operating expenses by **$0.4 million**[261](index=261&type=chunk) - The company's debt instruments bear variable interest rates, making interest expense sensitive to changes in short-term rates[262](index=262&type=chunk) - Interest rate swaps (2019 Swaps) are used to mitigate floating rate interest expense exposure, securing a **1.98% SOFR rate** for **$400 million** notional value until October 2025[263](index=263&type=chunk) - A hypothetical **1%** increase in SOFR rates on the unprotected **$566.0 million** outstanding under the Barclays Term Loan would result in a **$5.7 million** increase in annual interest expense[264](index=264&type=chunk) [ITEM 4. Controls and Procedures](index=51&type=section&id=ITEM%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of RadNet's disclosure controls and procedures and reports no material changes in internal control over financial reporting - Management concluded that disclosure controls and procedures were effective as of June 30, 2025, providing reasonable assurance that required information is recorded, processed, summarized, and reported timely[266](index=266&type=chunk) - No material changes in internal control over financial reporting occurred during the three months ended June 30, 2025[267](index=267&type=chunk) [PART II – OTHER INFORMATION](index=52&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) This section provides additional information beyond financial statements, covering legal proceedings, risk factors, equity sales, and other disclosures [ITEM 1. Legal Proceedings](index=52&type=section&id=ITEM%201.%20Legal%20Proceedings) This section addresses RadNet's involvement in legal proceedings, stating that no current cases are expected to have a material adverse impact - RadNet is engaged in legal proceedings arising in the ordinary course of business[269](index=269&type=chunk) - Management does not believe current legal proceedings will have a material adverse impact on the business, financial condition, or results of operations[269](index=269&type=chunk) [ITEM 1A. Risk Factors](index=52&type=section&id=ITEM%201A.%20Risk%20Factors) This section refers to the comprehensive risk factors detailed in the Annual Report and acknowledges the potential for additional unforeseen risks - For information on business risks and uncertainties, readers are referred to the risk factors described in the Annual Report[270](index=270&type=chunk) - Additional unknown or currently immaterial risks could materially adversely affect the business, financial condition, and/or operating results[270](index=270&type=chunk) [ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=52&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section confirms that there were no unregistered sales of equity securities or related use of proceeds to report during the period - No unregistered sales of equity securities or use of proceeds occurred during the period[271](index=271&type=chunk) [ITEM 3. Defaults Upon Senior Securities](index=52&type=section&id=ITEM%203.%20Defaults%20Upon%20Senior%20Securities) This section states that no defaults upon senior securities occurred during the reporting period - No defaults upon senior securities occurred during the period[272](index=272&type=chunk) [ITEM 4. Mine Safety Disclosures](index=52&type=section&id=ITEM%204.%20Mine%20Safety%20Disclosures) This section clarifies that mine safety disclosures are not applicable to RadNet's business operations - Mine safety disclosures are not applicable to RadNet[273](index=273&type=chunk) [ITEM 5. Other Information](index=52&type=section&id=ITEM%205.%20Other%20Information) This section reports that no directors or executive officers adopted or terminated Rule 10b5-1 trading plans during the fiscal quarter - No directors or executive officers adopted or terminated any Rule 10b5-1 trading plans during the fiscal quarter ended June 30, 2025[274](index=274&type=chunk) [ITEM 6. Exhibits](index=53&type=section&id=ITEM%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including merger agreements, credit amendments, and required certifications - Exhibits include the Agreement and Plan of Merger for iCAD, Amendment No. 2 to Credit and Guaranty Agreement, Form of Voting and Support Agreement, and Certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002[275](index=275&type=chunk) [SIGNATURES](index=53&type=section&id=SIGNATURES) This section contains the official signatures of RadNet, Inc.'s President, CEO, and CFO, certifying the filing of the report - The report is signed by Howard G. Berger, M.D., President and Chief Executive Officer, and Mark D. Stolper, Chief Financial Officer, on August 11, 2025[279](index=279&type=chunk)

Financial Data and Key Metrics Changes - Total company revenue increased by 8.4% to a quarterly record of $498,200,000 compared to the same quarter last year [8][24] - Adjusted EBITDA rose by 12.3% to a record $81,200,000, up from $72,300,000 in the previous year [13][24] - Adjusted EBITDA margin improved to 16.3%, compared to 15.7% in the same quarter last year, reflecting a margin expansion of almost 60 basis points [13][24] Business Line Data and Key Metrics Changes - Digital health segment revenue increased by 30.9% to a quarterly record of $20,700,000 [8][24] - Advanced imaging procedures grew by 9% in aggregate and 6.6% on a same-center basis compared to last year's second quarter [22] - PETCT procedures saw a significant increase of 22.4% on an aggregate basis and 16.2% on a same-center basis [11][22] Market Data and Key Metrics Changes - The company reported a cash balance of $833,000,000 and a net debt to adjusted EBITDA ratio of 0.96 as of June 30, 2025 [18][26] - Days sales outstanding (DSOs) improved to 32.4 days, slightly lower than the previous year [26] Company Strategy and Development Direction - The company is focusing on expanding advanced imaging procedures and enhancing operational efficiency through technology such as TechLive and C Mode [12][35] - There is a strong emphasis on integrating AI solutions to improve diagnostic accuracy and operational workflows [33][35] - The company plans to open nine additional facilities by the end of the year and has 11 more in development for 2026, indicating a commitment to expanding capacity [23][47] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery from disruptions caused by wildfires and severe weather, highlighting a return to growth [8][22] - The anticipated increase in Medicare reimbursement rates is expected to provide a revenue uplift of approximately $4 to $5 million in 2026 [30][31] - The company is confident in its ability to invest its cash balance in opportunities that align with strategic objectives [18][27] Other Important Information - The acquisition of iCAD and C Mode Technology is expected to enhance the company's capabilities in AI-powered diagnostic solutions [15][16] - The company is actively evaluating a pipeline of acquisition opportunities in both core imaging services and digital health [18][67] Q&A Session Summary Question: Can you discuss the anticipated capacity increase from new technologies and facilities? - Management highlighted a 40% reduction in MRI room closures due to TechLive, which significantly increases capacity [40][41] - The company expects to add 22 additional centers, representing a 5% increase in capacity [47][48] Question: What is the initial feedback from the iCAD customer base regarding cross-selling opportunities? - Management indicated it is early in the integration process but is pleased with the quality of the sales and marketing teams [49] Question: How does the company view the impact of EBCD reimbursement announcements on payer conversations? - Management noted that the endorsement from a capitated group for EBCD is expected to influence other payers positively [51] Question: What are the anticipated margins from the implementation of new technologies? - Management expects substantial flow-through margins as more scans are performed in existing facilities without significant additional costs [65] Question: How is the company planning to allocate capital for M&A and de novo facilities? - The company plans to focus on traditional imaging center acquisitions while also evaluating digital health opportunities [67]

Financial Data and Key Metrics Changes - Total company revenue for Q2 2025 reached a record $498.2 million, an increase of 8.4% compared to the same quarter last year [8][24] - Adjusted EBITDA also set a quarterly record at $81.2 million, up 12.3% from $72.3 million in Q2 2024, with an adjusted EBITDA margin of 16.3%, improving from 15.7% year-over-year [14][24] Business Line Data and Key Metrics Changes - The digital health segment reported revenue of $20.7 million, a significant increase of 30.9% from the previous year [24] - Advanced imaging procedures grew by 9% in aggregate and 6.6% on a same-center basis compared to Q2 2024, with PETCT being the fastest-growing modality, increasing 22.4% in aggregate [22][24] Market Data and Key Metrics Changes - The company experienced a rebound in business following disruptions from California wildfires and severe winter weather, leading to a return to anticipated growth levels [8][22] - The shift of procedural volumes from hospitals to more cost-effective ambulatory centers continues to drive growth in the imaging sector [9] Company Strategy and Development Direction - The company is focusing on expanding advanced imaging capacity and improving operational efficiency through technology investments, including the implementation of TechLive and acquisitions like iCAD and C Mode [13][16][32] - The strategy includes enhancing patient diagnosis and outcomes through AI-powered solutions and expanding the digital health segment [15][16][32] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future growth, citing improvements in reimbursement rates and the ongoing demand for advanced imaging procedures [9][10][14] - The company anticipates a modest increase in Medicare reimbursement rates for 2026, which could result in an additional $4 to $5 million in revenue [29] Other Important Information - As of June 30, 2025, the company had a cash balance of $833 million and a net debt to adjusted EBITDA ratio of 0.96, indicating strong financial liquidity [18][26] - The company plans to open nine new facilities by the end of 2025 and has additional projects in the pipeline for 2026 [22][44] Q&A Session Summary Question: Can you discuss the anticipated capacity increase from new technologies and facilities? - Management highlighted a 40% reduction in MRI room closures due to TechLive, which has significantly increased capacity in high-demand areas like New York [38][39] Question: What initial feedback has been received from the iCAD customer base? - Management noted that it is early in the integration process but expressed satisfaction with the quality of the sales and marketing teams and the potential for cross-selling opportunities [47] Question: How does the company view the impact of EBCD reimbursement announcements? - Management indicated that the endorsement from a capitated group for EBCD could encourage other payers to recognize its value, leading to broader adoption [49][50] Question: What is the outlook for M&A and capital deployment? - The company is focusing on traditional imaging center acquisitions and evaluating digital health opportunities, with plans to deploy capital in the second half of the year [66][68] Question: What are the expected margins from the deployment of new technologies? - Management anticipates substantial margin improvements from increased efficiency and capacity utilization through the implementation of AI and operational tools [64][81]

Core Insights - RadNet reported revenue of $498.23 million for the quarter ended June 2025, reflecting an 8.4% increase year-over-year and surpassing the Zacks Consensus Estimate of $488.57 million by 1.98% [1] - The company's EPS for the quarter was $0.31, significantly higher than the $0.16 reported in the same quarter last year, resulting in an EPS surprise of 82.35% against the consensus estimate of $0.17 [1] Revenue Breakdown - Digital Health revenue reached $20.7 million, exceeding the average estimate of $19.92 million by two analysts, marking a 31% year-over-year increase [4] - Revenue from capitation arrangements was $30.17 million, slightly below the average estimate of $33.19 million from two analysts [4] - Service fee revenue amounted to $468.06 million, surpassing the estimated $459.02 million by two analysts, representing a 10.7% increase compared to the previous year [4] Stock Performance - Over the past month, RadNet's shares have declined by 3.8%, contrasting with a 2.7% increase in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 5 (Strong Sell), indicating potential underperformance relative to the broader market in the near term [3]

[Second Quarter 2025 Financial Highlights](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Highlights) [Key Financial and Operational Results](index=1&type=section&id=Key%20Financial%20and%20Operational%20Results) RadNet reported record quarterly revenue and Adjusted EBITDA for Q2 2025, driven by strong growth in both Imaging Center and Digital Health segments, leading to an upward revision of full-year guidance Q2 2025 Key Financial Metrics vs. Q2 2024 | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | **Total Company Revenue** | $498.2 million | $459.7 million | +8.4% | | **Digital Health Revenue** | $20.7 million | $15.8 million | +30.9% | | **Total Company Adjusted EBITDA** | $81.2 million | $72.3 million | +12.3% | | **Adjusted EBITDA Margin** | 16.3% | 15.7% | +57 bps | | **Adjusted Earnings Per Share** | $0.31 | $0.16 | +93.8% | - Growth was primarily driven by increased procedural volumes, improved reimbursement rates, a shift towards advanced imaging, and incremental sales from the Digital Health segment[3](index=3&type=chunk) - The proportion of advanced imaging (MRI, CT, PET/CT) as a percentage of total procedural volumes grew by **102 basis points to 27.5%** compared to the same quarter last year[4](index=4&type=chunk) - As of June 30, 2025, the company held **$833.2 million in cash** and maintained a Net Debt to Adjusted EBITDA ratio of **0.96x**[4](index=4&type=chunk) [Management Commentary](index=2&type=section&id=Management%20Commentary) Management emphasized strategic expansion of advanced imaging capacity and procedures, contributing to margin improvement, while Digital Health solutions address staffing and efficiency, alongside new imaging center openings - The company is focused on driving growth in advanced imaging (MRI, CT, PET/CT) through initiatives like software upgrades to shorten scan times and expanding complex procedures like Cardiac CT Angiography[5](index=5&type=chunk) - PET/CT was the fastest-growing modality, with a **22.4% volume increase** from Q2 2024, driven by new offerings for prostate cancer and Alzheimer's disease[5](index=5&type=chunk) - The Digital Health solution, TechLive, is being implemented to mitigate technologist staffing challenges by enabling remote control of imaging equipment, thereby expanding hours of operation[5](index=5&type=chunk) - RadNet is expanding capacity by opening new imaging centers, with one opened in Q2 and nine more planned for the rest of 2025[6](index=6&type=chunk) [Detailed Financial Performance](index=2&type=section&id=Detailed%20Financial%20Performance) [Second Quarter Financial Results](index=2&type=section&id=Second%20Quarter%20Financial%20Results) Q2 2025 saw Total Company Revenue reach $498.2 million, an 8.4% increase, with Adjusted EBITDA growing 12.3% to $81.2 million, and Adjusted Earnings significantly improving to $0.31 per diluted share Q2 2025 Financial Summary (in millions) | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | $498.2 | $459.7 | +8.4% | | **Total Adjusted EBITDA** | $81.2 | $72.3 | +12.3% | | **Digital Health Revenue** | $20.7 | $15.8 | +30.9% | | **Digital Health Adj. EBITDA** | $3.4 | $3.3 | +4.1% | | **GAAP Net Income** | $14.5 | ($3.0) | N/A | | **Adjusted Earnings** | $23.8 | $12.0 | +98.3% | - Adjustments to net income in Q2 2025 included items such as **$2.0 million loss** from interest rate swaps, **$2.3 million** in acquisition costs, and **$4.8 million** in non-capitalized R&D expenses[10](index=10&type=chunk) [Six-Month Financial Results](index=3&type=section&id=Six-Month%20Financial%20Results) For the first six months of 2025, Total Company Revenue increased 8.8% to $969.6 million, though Adjusted EBITDA decreased 2.4% to $127.6 million, primarily due to Q1 weather impacts Six Months Ended June 30 Financial Summary (in millions) | Metric | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | $969.6 | $891.4 | +8.8% | | **Total Adjusted EBITDA** | $127.6 | $130.7 | -2.4% | | **Digital Health Revenue** | $39.9 | $30.4 | +31.0% | | **Digital Health Adj. EBITDA** | $7.1 | $6.8 | +4.8% | | **GAAP Net Loss** | ($23.5) | ($5.8) | N/A | - The decrease in six-month Adjusted EBITDA was attributed to an estimated **$15 million loss** from California wildfires and severe winter weather that impacted Q1 2025[12](index=12&type=chunk) [Procedural Volume Analysis](index=3&type=section&id=Procedural%20Volume%20Analysis) RadNet experienced broad-based growth in Q2 2025 procedural volumes, with advanced imaging modalities showing particularly strong increases, notably PET/CT volumes up 22.4% Q2 2025 vs. Q2 2024 Procedural Volume Growth | Modality | Aggregate Volume Growth | Same-Center Volume Growth | | :--- | :--- | :--- | | **MRI** | +9.0% | +6.6% | | **CT** | +8.1% | +5.9% | | **PET/CT** | +22.4% | +16.2% | | **Routine Imaging** | +3.5% | +1.4% | [2025 Financial Guidance Update](index=4&type=section&id=2025%20Financial%20Guidance%20Update) [Imaging Center Segment Guidance](index=4&type=section&id=Imaging%20Center%20Segment%20Guidance) RadNet raised its full-year 2025 guidance for the Imaging Center segment for the second time, projecting revenue between $1,850 million and $1,900 million and Adjusted EBITDA of $271 million to $279 million Updated 2025 Guidance for Imaging Center Segment (in millions) | Metric | Original Guidance | Revised After Q1 | Revised After Q2 | | :--- | :--- | :--- | :--- | | **Total Net Revenue** | $1,825 - $1,875 | $1,835 - $1,885 | $1,850 - $1,900 | | **Adjusted EBITDA** | $265 - $273 | $268 - $276 | $271 - $279 | | **Capital Expenditures** | $140 - $150 | $145 - $155 | $152 - $162 | [Digital Health Segment Guidance](index=4&type=section&id=Digital%20Health%20Segment%20Guidance) Digital Health segment's 2025 revenue and Adjusted EBITDA guidance remains unchanged, but non-capitalized R&D spending for DeepHealth Cloud OS & Generative AI is increased to $17 million to $19 million Updated 2025 Guidance for Digital Health Segment (in millions) | Metric | Original Guidance | Revised After Q2 | | :--- | :--- | :--- | | **Total Net Revenue** | $80 - $90 | $80 - $90 | | **Adj. EBITDA (before specific R&D)** | $15 - $17 | $15 - $17 | | **Non-Capitalized R&D** | $16 - $18 | $17 - $19 | | **Capital Expenditures** | $3 - $5 | $2 - $4 | [Financial Statements](index=8&type=section&id=Financial%20Statements) [Condensed Consolidated Balance Sheets](index=8&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, RadNet's total assets grew to $3.51 billion, driven by increased cash and property, with total liabilities rising to $2.34 billion and total equity reaching $1.18 billion Balance Sheet Summary (in thousands) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | **Cash and Cash equivalents** | $833,152 | $740,020 | | **Total current assets** | $1,094,379 | $1,019,252 | | **Total Assets** | $3,514,966 | $3,286,690 | | **Total current liabilities** | $546,210 | $479,712 | | **Total Liabilities** | $2,335,705 | $2,153,280 | | **Total Equity** | $1,179,261 | $1,133,410 | [Condensed Consolidated Statement of Operations](index=9&type=section&id=Condensed%20Consolidated%20Statement%20of%20Operations) Q2 2025 total service revenue was $498.2 million, resulting in $30.9 million income from operations and a net income of $14.5 million, a significant improvement from a prior-year net loss Statement of Operations Summary (in thousands) | Metric | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | **Total service revenue** | $498,230 | $459,714 | $969,629 | $891,421 | | **Income from operations** | $30,879 | $34,846 | $6,778 | $46,185 | | **Net income (loss) to stockholders** | $14,454 | $(2,982) | $(23,472) | $(5,761) | | **Diluted EPS** | $0.19 | $(0.04) | $(0.32) | $(0.08) | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the first six months of 2025, RadNet generated $161.8 million in cash from operations, with a net increase in cash of $93.1 million, ending the period with $833.2 million in cash Six-Month Cash Flow Summary (in thousands) | Activity | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | | **Net cash from operating activities** | $161,829 | $133,090 | | **Net cash used in investing activities** | $(154,201) | $(138,278) | | **Net cash from financing activities** | $84,918 | $404,404 | | **Net increase in cash** | $93,132 | $399,109 | | **Cash at end of period** | $833,152 | $741,679 | [Non-GAAP Reconciliations and Supplemental Data](index=11&type=section&id=Non-GAAP%20Reconciliations%20and%20Supplemental%20Data) [Reconciliation of Net Income to Adjusted EBITDA](index=11&type=section&id=Reconciliation%20of%20Net%20Income%20to%20Adjusted%20EBITDA) Q2 2025 Net Income of $14.5 million was adjusted for various items to yield a Total Company Adjusted EBITDA of $81.2 million, with contributions from both Imaging Center and Digital Health segments Adjusted EBITDA Reconciliation Summary (in thousands) | Metric | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | **Net income (loss) to stockholders** | $14,454 | $(2,982) | $(23,472) | $(5,761) | | **Adjusted EBITDA - Radnet, Inc.** | $81,246 | $72,327 | $127,645 | $130,789 | | **Adjusted EBITDA - Imaging Center** | $77,843 | $69,058 | $120,531 | $124,000 | | **Adjusted EBITDA - Digital Health** | $3,403 | $3,269 | $7,114 | $6,789 | [Reconciliation to Adjusted Earnings Per Share](index=13&type=section&id=Reconciliation%20to%20Adjusted%20Earnings%20Per%20Share) After tax-effected adjustments for non-recurring items, RadNet's Q2 2025 Adjusted Net Income was $23.8 million, resulting in an Adjusted Diluted EPS of $0.31, up from $0.16 in Q2 2024 Q2 Adjusted EPS Reconciliation (in thousands, except per share) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | **GAAP Net Income to Stockholders** | $14,454 | $(2,982) | | **Total Tax-Effected Adjustments** | $9,331 | $15,029 | | **Adjusted Net Income** | $23,785 | $12,047 | | **Diluted Weighted Avg. Shares** | 75,531,743 | 74,944,366 | | **Adjusted Diluted EPS** | $0.31 | $0.16 | [Supplemental Operating Data](index=12&type=section&id=Supplemental%20Operating%20Data) In Q2 2025, commercial insurance was the largest payor, and MRI the top modality by payments, with the company performing over 2.9 million procedures, showing growth across most major modalities - In Q2 2025, the primary sources of payments were **Commercial Insurance (58.3%)**, Medicare (23.3%), and Capitation (6.1%)[37](index=37&type=chunk) - MRI (**37.3%**), Mammography (**15.8%**), and CT (**15.7%**) were the top three modalities by percentage of payments in Q2 2025[39](index=39&type=chunk) Procedures by Modality | Modality | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | **MRI** | 490,299 | 449,781 | | **CT** | 291,820 | 269,939 | | **PET/CT** | 22,155 | 18,107 | | **Mammography** | 508,000 | 483,510 | | **Total** | 2,923,663 | 2,785,804 |