Financial Data and Key Metrics Changes - For Q1 2025, RadNet reported total revenue of $471.4 million, an increase of $39.7 million or 9.2% compared to Q1 2024, while adjusted EBITDA decreased by $12.1 million or 20.6% [21][22] - Adjusting for the estimated $22 million impact from severe weather and wildfires, revenue would have increased by 14.3% year-over-year, and adjusted EBITDA would have increased by 5% [22] - The company ended Q1 2025 with a cash balance of $717 million and a net debt to adjusted EBITDA ratio of slightly more than one [17][25] Business Line Data and Key Metrics Changes - The Digital Health segment reported revenue of $19.2 million, a 31.1% increase year-over-year, with adjusted EBITDA increasing by 5.4% [22][23] - AI revenue within Digital Health grew by 33.3%, driven by improved adoption of the EBCD program [23][24] - Aggregate PET CT volumes increased by 22.9%, indicating strong growth in advanced imaging despite adverse weather conditions [9][42] Market Data and Key Metrics Changes - The company noted a gradual shift towards advanced imaging, with 26.9% of procedural volume coming from advanced imaging in Q1 2025, compared to 25.7% in Q1 2024 [8] - The company continues to expand its Hospital and Health System joint venture business, with 154 centers currently held within system partnerships [16] Company Strategy and Development Direction - RadNet is focused on enhancing its digital health initiatives, including the TechLive remote technologist solution and the EVCD AI-powered breast cancer screening program [10][12] - The acquisition of iCAD Inc. is expected to enhance RadNet's capabilities in AI-powered breast health solutions, positioning the company for leadership in this area [14][15] - The company plans to open 11 new centers by the end of 2025 and an additional 11 in 2026, indicating a commitment to expanding its operational footprint [36] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the recovery of business operations following the adverse weather conditions in early 2025, with strong procedural and revenue growth trends observed in March, April, and May [8][21] - The management anticipates continued growth in advanced imaging and routine imaging, driven by technological advancements and increased demand [41][44] - The company expects to see improved margins due to the growth of advanced imaging and the implementation of AI tools [72] Other Important Information - The company has an active pipeline of acquisitions for both its core Imaging Center division and Digital Health division [18] - RadNet's liquidity position remains strong, with full availability of a $282 million revolving credit facility [24] Q&A Session Summary Question: What are the growth prospects for advanced imaging in the next three to five years? - Management expects growth in advanced imaging to continue, driven by AI tools and new equipment investments [40][41] Question: Can you provide insights on the M&A pipeline? - The pipeline is robust, with ongoing discussions with hospitals recognizing the value of RadNet's radiology solutions [45][46] Question: What is the current status of technologist hiring trends? - There are improvements in hiring trends, and the company remains comfortable with the projected $45 million increase in labor costs [52][58] Question: How did revenue perform against internal expectations? - Revenue was strong and aligned with internal guidance, with a notable recovery in March following weather impacts [65][66] Question: What is driving the expected increase in EBITDA margins? - The growth of advanced imaging and the implementation of AI programs are primary drivers for improved margins [72][73] Question: What is the outlook for Medicare reimbursement? - The outlook for Medicare reimbursement is stable, with expectations for potential increases in the coming years [81][82]

Financial Data and Key Metrics Changes - For Q1 2025, RadNet reported total revenue of $471.4 million, an increase of $39.7 million or 9.2% compared to Q1 2024. Adjusted EBITDA was $46.4 million, a decrease of $12.1 million or 20.6% year-over-year [21][22] - Adjusting for the estimated $22 million impact from severe weather and wildfires, revenue would have increased by 14.3% year-over-year. Adjusted EBITDA, accounting for a $15 million impact, would have increased by 5% [22] - The company ended Q1 2025 with a cash balance of $717 million and a net debt to adjusted EBITDA ratio of slightly more than one [17][24] Business Line Data and Key Metrics Changes - The Digital Health segment reported revenue of $19.2 million, a 31.1% increase year-over-year, with adjusted EBITDA of $3.7 million, up 5.4% [22][23] - AI revenue within Digital Health grew by 33.3%, driven by improved adoption of the EBCD program [23] - PET CT volumes increased by 22.9%, attributed to the growth of newer prostate and brain procedures [8] Market Data and Key Metrics Changes - The company experienced a gradual shift towards advanced imaging, with 26.9% of procedural volume coming from advanced imaging in Q1 2025, compared to 25.7% in Q1 2024 [7] - The adoption rate of the EBCD program reached over 40% nationally, indicating strong market acceptance [12] Company Strategy and Development Direction - RadNet is focused on expanding its digital health initiatives, including the TechLive remote technologist solution and the EBCD AI-powered breast cancer screening program [10][12] - The company announced the acquisition of iCAD Inc, aiming to enhance its AI-powered breast health solutions and expand its market presence [14][15] - RadNet plans to open 11 new centers by the end of 2025 and has a robust pipeline for joint ventures and acquisitions [16][18] Management's Comments on Operating Environment and Future Outlook - Management noted that the severe weather conditions in early 2025 negatively impacted performance but expressed confidence in recovery and strong growth trends in subsequent months [6][9] - The company anticipates continued growth in advanced imaging and routine imaging, driven by technological advancements and increased demand [41][43] - Management expects to see improved margins due to the growth of advanced imaging and the implementation of AI tools [75] Other Important Information - The company has an active pipeline of acquisitions and is evaluating opportunities to advance its strategic objectives [18] - RadNet's liquidity position remains strong, with full availability of a $282 million revolving credit facility [23] Q&A Session Summary Question: What is the outlook for growth in advanced imaging over the next few years? - Management expects growth in advanced imaging to continue, driven by AI tools and new equipment investments [39][41] Question: Can you provide insights on the M&A pipeline? - The pipeline is robust, with ongoing discussions with hospitals recognizing the value of RadNet's radiology solutions [44][46] Question: What are the trends in technologist hiring? - There are improvements in hiring trends, and the company remains comfortable with the projected $45 million increase in labor costs [52][58] Question: How did revenue perform against internal expectations? - Revenue was strong and aligned with internal guidance, with a bounce back in March after weather-related impacts [66][67] Question: What is driving the expected increase in EBITDA margins? - Growth in advanced imaging and the implementation of AI programs are primary drivers for improved margins [75] Question: What is the status of stock-based compensation? - The increase in stock-based compensation is due to vesting from past years and new hires, but it is expected to decrease in subsequent quarters [76]

RadNet Q1 2025 Financial Results and Revised Guidance [Executive Summary and Highlights](index=1&type=section&id=Executive%20Summary%20and%20Highlights) RadNet's Q1 2025 revenue grew 9.2% to $471.4 million, but Adjusted EBITDA fell 20.6% due to weather, prompting revised 2025 guidance and the iCAD acquisition Q1 2025 Key Financial Metrics vs. Q1 2024 | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Total Company Revenue | $471.4 million | $431.7 million | +9.2% | | Total Company Adjusted EBITDA | $46.4 million | $58.5 million | -20.6% | | Digital Health Revenue | $19.2 million | $14.7 million | +31.1% | | Adjusted Diluted EPS | $(0.35) | $0.07 | - | - First quarter results were negatively impacted by approximately **$22 million** in Revenue and **$15 million** in Adjusted EBITDA due to Southern California wildfires and severe winter weather conditions[3](index=3&type=chunk)[4](index=4&type=chunk) - On April 15, 2025, RadNet announced a definitive agreement to acquire **iCAD, Inc.** to accelerate AI-powered early detection and diagnosis of breast cancer[4](index=4&type=chunk)[6](index=6&type=chunk) - The company revised its **full-year 2025 guidance**, increasing its outlook for both **Revenue and Adjusted EBITDA**[1](index=1&type=chunk)[4](index=4&type=chunk) [Operational and Strategic Developments](index=2&type=section&id=Operational%20and%20Strategic%20Developments) RadNet expanded TechLive to 255 MRI systems, achieved over 40% EBCD AI adoption, saw strong PET/CT volume growth, and plans to acquire iCAD, maintaining a strong balance sheet - The TechLive remote scanning capability has been implemented on approximately **255 MRI systems**, with testing now extending to ultrasound systems[5](index=5&type=chunk) - The EBCD AI-powered breast cancer diagnostic program has reached a blended adoption rate of **over 40%** nationwide, and the company is progressing in discussions with payors for reimbursement[5](index=5&type=chunk) - Advanced imaging procedural volume grew, with **PET/CT volume** increasing by almost **23%** compared to the same quarter last year, driven by prostate and brain imaging[5](index=5&type=chunk) - The acquisition of **iCAD** is expected to add **over 1,500 healthcare provider locations** and accelerate RadNet's global leadership in AI-powered breast cancer screening[6](index=6&type=chunk) - RadNet ended the quarter with a strong balance sheet, featuring a cash balance of **$717 million** and a Net Debt to Adjusted EBITDA leverage ratio **slightly above 1.0x**[6](index=6&type=chunk) [Detailed Financial Results](index=2&type=section&id=Detailed%20Financial%20Results) Q1 2025 Total Revenue grew 9.2% to $471.4 million, but Adjusted EBITDA fell 20.6% to $46.4 million, resulting in a $37.9 million net loss due to one-time charges Q1 2025 Performance vs. Q1 2024 | Metric | Q1 2025 (Million USD) | Q1 2024 (Million USD) | Change | | :--- | :--- | :--- | :--- | | Total Company Revenue | $471.4M | $431.7M | +9.2% | | Total Company Adjusted EBITDA | $46.4M | $58.5M | -20.6% | | Total Company Net Loss | $(37.9)M | $(2.8)M | - | | Net Loss Per Share | $(0.51) | $(0.04) | - | Q1 2025 Digital Health Segment Performance | Metric | Q1 2025 (Million USD) | Q1 2024 (Million USD) | Change | | :--- | :--- | :--- | :--- | | Revenue | $19.2M | $14.7M | +31.1% | | Adjusted EBITDA | $3.7M | $3.5M | +5.4% | - Adjusted Diluted Loss Per Share was **$(0.35)** for Q1 2025 after accounting for one-time items such as **$5.4 million** in lease abandonment charges and **$3.6 million** in non-capitalized R&D expenses[10](index=10&type=chunk) Q1 2025 Procedural Volume Growth vs. Q1 2024 | Volume Type | Aggregate Growth | Same-Center Growth | | :--- | :--- | :--- | | MRI | +8.4% | +3.4% | | CT | +8.3% | +3.0% | | PET/CT | +22.9% | +12.2% | | Overall | +3.6% | -0.3% | [2025 Revised Guidance](index=3&type=section&id=2025%20Revised%20Guidance) RadNet increased its full-year 2025 guidance for the Imaging Center segment's Revenue and Adjusted EBITDA, while Digital Health guidance remains unchanged Revised 2025 Guidance - Imaging Center Segment | Metric | Original Guidance Range (Million USD) | Revised Guidance Range (Million USD) | | :--- | :--- | :--- | | Total Net Revenue | $1,825 - $1,875 million | $1,835 - $1,885 million | | Adjusted EBITDA | $265 - $273 million | $268 - $276 million | | Capital Expenditures | $140 - $150 million | $145 - $155 million | 2025 Guidance (Unchanged) - Digital Health Segment | Metric | Guidance Range (Million USD) | | :--- | :--- | | Total Net Revenue | $80 - $90 million | | Adjusted EBITDA Before Non-Capitalized R&D | $15 - $17 million | [Financial Statements](index=8&type=section&id=Financial%20Statements) This section presents unaudited condensed consolidated financial statements for Q1 2025, including the Balance Sheet, Statement of Operations, and Statement of Cash Flows [Condensed Consolidated Balance Sheets](index=8&type=section&id=RADNET%2C%20INC.%20AND%20SUBSIDIARIES%20CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) As of March 31, 2025, RadNet's total assets were $3.336 billion, with total liabilities at $2.200 billion and cash at $717.3 million Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and Cash equivalents | $717,323 | $740,020 | | Total current assets | $1,015,861 | $1,019,252 | | Total Assets | $3,336,264 | $3,286,690 | | Total current liabilities | $505,399 | $479,712 | | Total liabilities | $2,199,747 | $2,153,280 | | Total Equity | $1,136,517 | $1,133,410 | [Condensed Consolidated Statement of Operations](index=9&type=section&id=RADNET%2C%20INC.%20AND%20SUBSIDIARIES%20CONDENSED%20CONSOLIDATED%20STATEMENT%20OF%20OPERATIONS) Q1 2025 total service revenue was $471.4 million, but higher expenses led to a $24.1 million loss from operations and a $37.9 million net loss Statement of Operations Highlights (in thousands) | Account | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total service revenue | $471,399 | $431,707 | | Income (Loss) from Operations | $(24,101) | $11,339 | | Net Income (Loss) | $(29,737) | $5,410 | | Net Loss Attributable to RadNet, Inc. | $(37,926) | $(2,779) | | Diluted Net Loss Per Share | $(0.51) | $(0.04) | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=RADNET%2C%20INC.%20AND%20SUBSIDIARIES%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASHFLOWS) Q1 2025 net cash from operations was $41.5 million, with $56.8 million used in investing and $7.5 million in financing, resulting in a $22.7 million cash decrease Cash Flow Highlights (in thousands) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $41,481 | $17,088 | | Net cash used in investing activities | $(56,751) | $(60,938) | | Net cash (used in) provided by financing activities | $(7,510) | $228,296 | | Net (Decrease) Increase in Cash | $(22,697) | $184,410 | | Cash and Cash Equivalents, end of period | $717,323 | $526,980 | [Supplementary Data and Non-GAAP Reconciliations](index=11&type=section&id=Supplementary%20Data%20and%20Non-GAAP%20Reconciliations) This section provides supplementary operating data, including payor and procedural volumes, and reconciles GAAP Net Loss to Adjusted EBITDA ($46.4M) and Adjusted Diluted Loss Per Share ($(0.35)) [Reconciliation to Adjusted EBITDA](index=11&type=section&id=RECONCILIATION%20OF%20GAAP%20NET%20INCOME%20ATTRIBUTABLE%20TO%20RADNET%2C%20INC.%20COMMON%20SHAREHOLDERS%20TO%20ADJUSTED%20EBITDA) Reconciliation from GAAP Net Loss to Adjusted EBITDA for Q1 2025 shows a total of $46.4 million, with $42.7 million from Imaging Center and $3.7 million from Digital Health Adjusted EBITDA Reconciliation (in thousands) | Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net loss attributable to Radnet, Inc. | $(37,926) | $(2,779) | | Plus: Interest, Taxes, D&A, etc. | $84,325 | $59,487 | | **Adjusted EBITDA - Radnet, Inc.** | **$46,399** | **$58,462** | | Adjusted EBITDA - Imaging Center | $42,688 | $54,942 | | Adjusted EBITDA - Digital Health | $3,711 | $3,520 | [Payments and Procedures Data](index=12&type=section&id=Payments%20and%20Procedures%20Data) In Q1 2025, commercial insurance was the largest payor at 58.0%, with MRI leading modalities, and total procedural volume increased 3.6% year-over-year Payments by Payor Class - Q1 2025 | Payor Class | Percentage | | :--- | :--- | | Commercial Insurance | 58.0% | | Medicare | 23.0% | | Capitation | 6.8% | | Other | 12.2% | Procedures by Modality | Modality | Q1 2025 (count) | Q1 2024 (count) | Change | | :--- | :--- | :--- | :--- | | MRI | 447,330 | 412,821 | +8.4% | | CT | 271,170 | 250,365 | +8.3% | | PET/CT | 20,389 | 16,594 | +22.9% | | Total | 2,742,973 | 2,646,951 | +3.6% | [Reconciliation to Adjusted Earnings Per Share](index=13&type=section&id=SCHEDULE%20OF%20ADJUSTED%20EARNINGS%20AND%20EARNINGS%20PER%20SHARE) After adjustments for non-recurring items, Q1 2025 Adjusted Net Loss was $26.2 million, resulting in an Adjusted Diluted Loss Per Share of $(0.35) Adjusted EPS Reconciliation (in thousands) | Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net (Loss) Income Attributable to RadNet | $(37,926) | $(2,779) | | Total Adjustments (pre-tax) | $13,070 | $5,096 | | **Adjusted Net Loss / Income** | **$(26,196)** | **$4,992** | | **Adjusted Diluted (Loss) / Earnings Per Share** | **$(0.35)** | **$0.07** | [Company Information and Disclosures](index=4&type=section&id=Company%20Information%20and%20Disclosures) This section provides Q1 2025 earnings call details, RadNet's operational overview, and important legal disclosures regarding the iCAD transaction, forward-looking statements, and non-GAAP measures - RadNet will host a conference call on **May 12, 2025**, at **10:30 a.m. Eastern Time** to discuss the first quarter results[16](index=16&type=chunk)[17](index=17&type=chunk) - RadNet is a leading national provider of diagnostic imaging services with a network of **401 owned/operated outpatient centers** and **over 11,000 employees**[18](index=18&type=chunk) - Important information regarding the proposed merger with **iCAD, Inc.** has been filed with the SEC in a **Form S-4 registration statement**, which investors are urged to read[20](index=20&type=chunk) - The press release contains **forward-looking statements** that are subject to **risks and uncertainties**, including those related to the iCAD merger, economic conditions, and healthcare reform[22](index=22&type=chunk)[23](index=23&type=chunk) - The company uses **non-GAAP financial measures** like **Adjusted EBITDA** and **Adjusted Earnings Per Share** to assist in measuring cash-based performance, and provides reconciliations to the most comparable GAAP measures[26](index=26&type=chunk)

Core Viewpoint - RadNet, Inc. reported its financial results for the first quarter of 2025, highlighting a revenue increase despite challenges from severe weather and wildfires, and announced an acquisition of iCAD to enhance its AI-powered cancer detection capabilities [1][4][3]. Financial Performance - Total Company Revenue for Q1 2025 was $471.4 million, a 9.2% increase from $431.7 million in Q1 2024 [4][6]. - Adjusted EBITDA for Q1 2025 was $46.4 million, down 20.6% from $58.5 million in Q1 2024 [4][6]. - The Digital Health segment saw a revenue increase of 31.1%, reaching $19.2 million in Q1 2025 compared to $14.7 million in Q1 2024 [4][7]. Operational Highlights - Procedural volumes increased by 3.6% overall, with advanced imaging growing 1.26% year-over-year [4][10]. - PET/CT procedural volume surged nearly 23% compared to the same quarter last year, driven by growth in prostate and brain imaging [2][4]. - The company implemented TechLive™ remote scanning capabilities, enabling approximately 255 MRIs, and began testing this technology on ultrasound systems [2]. Acquisition and Strategic Initiatives - RadNet signed a definitive agreement to acquire iCAD, which will enhance its Digital Health division and support over eight million annual mammograms globally [3][4]. - The acquisition is expected to strengthen RadNet's position in AI-powered breast cancer screening and improve population health initiatives [3]. Revised Guidance - RadNet revised its full-year 2025 guidance, increasing the revenue range to $1,835 - $1,885 million and Adjusted EBITDA to $268 - $276 million [12][11]. Balance Sheet and Cash Flow - As of March 31, 2025, RadNet had a cash balance of $717 million and a leverage ratio of Net Debt to Adjusted EBITDA slightly above 1.0x [5]. - The company reported a net loss of $37.9 million for Q1 2025, compared to a net loss of $2.8 million in Q1 2024 [8][42]. Market Position - RadNet operates a network of 401 outpatient imaging centers across several states, making it a leading provider in the diagnostic imaging industry [16]. - The company employs over 11,000 individuals, including contracted radiologists and technologists [16].

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 398 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 individuals, including full-time and per diem employees, technologists, and contracted radiologists [3] Upcoming Event - Mark Stolper, Executive Vice President and Chief Financial Officer of RadNet, will present at the Bank of America Securities 2025 Healthcare Conference [1] - The presentation is scheduled for May 13, 2025, at 5:00 p.m. Pacific Time, located at Encore Hotel, Las Vegas, NV [2] - Simultaneous and archived webcasts of the presentation will be available online [2]

LOS ANGELES, April 24, 2025 (GLOBE NEWSWIRE) -- RadNet, Inc. (NASDAQ:RDNT), a national leader in providing high-quality, cost-effective diagnostic imaging services through a network of owned and operated outpatient imaging centers, announced today that it will host a conference call to discuss its first quarter 2025 financial results on Monday, May 12, 2025 at 7:30 a.m. Pacific Time (10:30 a.m. Eastern Time). Investors are invited to listen to RadNet's conference call by dialing 844-826-3035. International ...

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 398 owned and/or operated outpatient imaging centers across several states, including Arizona, California, Delaware, Florida, Maryland, New Jersey, New York, and Texas [3] - RadNet employs over 11,000 individuals, including full-time and per diem employees and technologists [3] Upcoming Events - Mark Stolper, Executive Vice President and Chief Executive Officer of RadNet, will present virtually at the 35th Oppenheimer Healthcare MedTech & Services Conference on March 17, 2025, at 12:40 p.m. Eastern Time [1] - A live webcast of the presentation will be available for access and replay [2]

Core Insights - RadNet, Inc. is a national leader in providing high-quality, cost-effective diagnostic imaging services through a network of outpatient imaging centers [3] - The company will present virtually at the 35 Oppenheimer Healthcare MedTech & Services Conference on March 17, 2025 [1] Company Overview - RadNet operates a network of 398 owned and/or operated outpatient imaging centers across several states including Arizona, California, Delaware, Florida, Maryland, New Jersey, New York, and Texas [3] - The company employs over 11,000 individuals, including full-time and per diem employees and technologists [3] - RadNet also offers radiology information technology and artificial intelligence solutions under the DeepHealth brand, as well as teleradiology professional services [3]

Financial Performance - Total Company Revenue for Q4 2024 reached a record $477.1 million, up 13.5% from $420.4 million in Q4 2023[4] - Adjusted EBITDA for Q4 2024 was $75.0 million, representing a 14.0% increase from $65.8 million in Q4 2023[4] - For full-year 2024, Total Company Revenue was $1,829.7 million, a 13.2% increase, and Adjusted EBITDA was $279.5 million, up 20.3%[11] - Net income attributable to RadNet, Inc. common stockholders for 2024 was $2,793, compared to $3,044 in 2023, reflecting a decrease of 8.2%[37] - Net income attributable to Radnet, Inc. common stockholders for Q4 2024 was $5,345, compared to a net loss of $1,860 in Q4 2023, representing a significant turnaround[42] - Adjusted EBITDA for Q4 2024 was $75,008, compared to $65,813 in Q4 2023, reflecting a growth of 13.3%[43] - Adjusted diluted net income per share attributable to Radnet, Inc. common stockholders for Q4 2024 was $0.22, up from $0.15 in Q4 2023[45] Revenue Segments - Digital Health Revenue increased 28.1% to $18.9 million in Q4 2024, with Adjusted EBITDA rising 61.6% to $4.5 million[7] - Total service revenue for 2024 reached $1,829,664, an increase of 13.2% from $1,616,630 in 2023[37] - Digital Health segment revenue guidance for 2025 is set between $80 million and $90 million, with Adjusted EBITDA before non-capitalized R&D projected at $15 million to $17 million[24] Cash and Debt Management - The cash balance at year-end 2024 was $740 million, with a net debt to Adjusted EBITDA leverage ratio below 1.0x, down from approximately 2.0x at year-end 2023[5] - Cash and cash equivalents increased to $740,020 in 2024 from $342,570 in 2023, representing a growth of 116.5%[35] - Cash paid for interest during the year was $84,601, up from $64,695 in 2023, indicating increased financing costs[39] - Net cash provided by operating activities for the year ended December 31, 2024 was $233,023, an increase from $220,863 in 2023[39] Operational Metrics - Aggregate procedural volumes grew by 8.0% and same-center procedural volumes increased by 4.0% compared to Q4 2023[4] - Total procedures for Q4 2024 reached 2,771,753, up from 2,565,720 in Q4 2023, marking an increase of 8.0%[51] - MRI procedures increased to 452,063 in Q4 2024 from 398,625 in Q4 2023, reflecting a growth of 13.4%[51] Future Guidance and Investments - 2025 guidance for Total Net Revenue is projected between $1,825 million and $1,875 million, with Adjusted EBITDA expected to be between $265 million and $273 million[22] - The company plans to implement new Digital Health solutions in 2025 to enhance operational efficiencies and address labor challenges[20] - Significant infrastructure investments will be made in 2025 to support sales, marketing, and implementation teams for Digital Health solutions[20] Assets and Liabilities - Total assets grew to $3,286,690 in 2024, up from $2,690,473 in 2023, marking an increase of 22.1%[35] - Long-term operating lease liabilities increased to $655,979 in 2024 from $605,097 in 2023, reflecting an increase of 8.4%[35] - RadNet's goodwill increased to $710,663 in 2024 from $679,463 in 2023, showing a rise of 4.6%[35] Miscellaneous - The company operates a network of 398 outpatient imaging centers across multiple states, employing over 11,000 individuals[27] - The company incurred severance costs of $1,105 in Q4 2024, compared to $621 in Q4 2023, indicating ongoing restructuring efforts[42] - The company reported a loss of $9,926 from equity in earnings of joint ventures in 2024, contrasting with a gain of $9,176 in 2023[39] - The restated Adjusted Earnings for 2023 include a loss of $4,973 from AI businesses, which is now part of the Digital Health segment[47] - The company anticipates continued impacts from COVID-19 on its business results and liquidity moving forward[28] - The company emphasizes that Adjusted EBITDA and Free Cash Flow should not be considered measures of financial performance under GAAP[55]

PART I [Business Overview and Operations](index=5&type=section&id=Item%201.%20Business) RadNet is a leading U.S. diagnostic imaging provider with 398 centers, offering multi-modality services and leveraging AI for enhanced interpretations and efficiency - RadNet is a leading national provider of diagnostic imaging services in the United States, operating **398 imaging centers** as of December 31, 2024, across eight states[16](index=16&type=chunk) - The company's services include MRI, CT, PET, nuclear medicine, mammography, ultrasound, diagnostic radiology (X-ray), and fluoroscopy, with a multi-modality strategy to diversify revenue and reduce reimbursement exposure[17](index=17&type=chunk)[46](index=46&type=chunk) - RadNet has an Artificial Intelligence (AI) division, led by DeepHealth, Inc., which develops and deploys AI suites to enhance radiologist interpretations of breast, lung, and prostate images, and improve radiology service line operations[20](index=20&type=chunk)[52](index=52&type=chunk) - The business strategy focuses on maximizing performance at existing centers, profitable contracting, optimizing operating efficiencies, expanding networks through organic growth and acquisitions, and leveraging AI and technology[53](index=53&type=chunk)[54](index=54&type=chunk)[55](index=55&type=chunk)[56](index=56&type=chunk)[58](index=58&type=chunk) [Company Profile and Core Services](index=5&type=section&id=Business%20Overview) RadNet is a leading U.S. diagnostic imaging provider with 398 centers, offering diverse services and an AI division for image interpretation - RadNet, Inc. is a leading national provider of diagnostic imaging services in the United States, operating **398 imaging centers** as of December 31, 2024[16](index=16&type=chunk) - The company's principal business segment is diagnostic imaging services, including MRI, CT, PET, nuclear medicine, mammography, ultrasound, diagnostic radiology (X-ray), and fluoroscopy[16](index=16&type=chunk)[17](index=17&type=chunk) - RadNet's software arm, eRad, Inc., sells computerized systems for digital image distribution, display, storage, and retrieval, and the company has an AI division (DeepHealth, Inc.) developing AI suites for image interpretation[17](index=17&type=chunk)[20](index=20&type=chunk) [Diagnostic Imaging Industry Landscape](index=5&type=section&id=Industry%20Overview) The diagnostic imaging industry uses non-invasive procedures for early diagnosis, with rapid growth in MRI, CT, PET, and AI tools - Diagnostic imaging involves non-invasive procedures to generate internal anatomy representations, aiding early diagnosis and treatment while potentially reducing invasive procedures and costs[22](index=22&type=chunk) - MRI, CT, and PET are the fastest-growing and higher-margin procedures, with PET scans seeing rapid growth due to their efficacy in cancer diagnosis and monitoring[23](index=23&type=chunk) - The radiology field has seen rapid development of AI tools, with over **700 AI/ML-enabled radiology software products** granted marketing clearance by the FDA by August 2024[25](index=25&type=chunk) [Service Delivery Models](index=6&type=section&id=Diagnostic%20Imaging%20Settings) Diagnostic imaging services are primarily delivered in fixed-site outpatient centers or hospitals, not mobile settings - Diagnostic imaging services are typically provided in fixed-site, freestanding outpatient diagnostic centers (all wholly-owned centers fall into this category) or hospitals (often through joint ventures)[26](index=26&type=chunk)[27](index=27&type=chunk) - RadNet does not provide mobile imaging services, which involve transporting equipment to hospitals and clinics on a part-time or full-time basis[28](index=28&type=chunk) [Key Imaging Technologies](index=6&type=section&id=Diagnostic%20Imaging%20Modalities) Key imaging technologies include MRI for soft tissue, CT for internal organs, PET for metabolic activity, and other modalities like X-ray and mammography - MRI is a standard diagnostic tool for soft tissue anatomy, using magnetic fields and electromagnetic waves to produce high-resolution, three-dimensional images[29](index=29&type=chunk) - CT provides higher resolution images than X-rays, used to detect tumors, conditions affecting bones and internal organs, strokes, hemorrhages, and infections[30](index=30&type=chunk) - PET scanning uses radiopharmaceutical agents to determine metabolic activity, highly effective for detecting and assessing tumors, cardiac conditions, and epilepsy seizure sites, often combined with CT[31](index=31&type=chunk)[32](index=32&type=chunk) - Other modalities include Nuclear Medicine (studying anatomic and metabolic functions), X-ray (most common), Ultrasound (soft tissues, pregnancy), Mammography (breast cancer screening), and Fluoroscopy (real-time organ monitoring)[33](index=33&type=chunk)[34](index=34&type=chunk)[35](index=35&type=chunk)[36](index=36&type=chunk)[37](index=37&type=chunk) [Market Growth Drivers and Technological Advancements](index=7&type=section&id=Industry%20Trends) Industry growth is driven by an aging U.S. population, increased awareness of preventive screening, and technological advancements including AI tools - The diagnostic imaging services industry is expected to grow due to escalating demand from an aging U.S. population (**62 million over 65**, projected to reach **84 million by 2054**)[38](index=38&type=chunk) - Increased consumer awareness of preventive diagnostic screening and new effective applications for diagnostic imaging technology, including AI tools, are also driving growth[39](index=39&type=chunk)[40](index=40&type=chunk)[42](index=42&type=chunk) - Technological advancements include MRI spectroscopy, MRI angiography, teleradiology enhancements, combined PET/CT and PET/MRI scanners, and augmented reality for 3D images[40](index=40&type=chunk) - AI applications are aiding in image creation (e.g., reducing scan time/dose), diagnostic assistance, workflow prioritization, and administrative tasks, particularly valuable in cancer screening[42](index=42&type=chunk) [Competitive Landscape and Strengths](index=8&type=section&id=Competition) RadNet competes with independent operators and hospitals, differentiating through scale, comprehensive offerings, competitive pricing, and AI technology - Competitors include independent imaging operators, smaller regional operators, hospitals, hospital groups, and physician practices with their own diagnostic imaging centers[43](index=43&type=chunk) - RadNet differentiates itself through its scale and reputation (largest operator of freestanding centers in the U.S. with **398 centers**), comprehensive multi-modality offerings, competitive pricing, and facility density in highly populated areas[45](index=45&type=chunk)[46](index=46&type=chunk)[47](index=47&type=chunk)[48](index=48&type=chunk) - Other competitive strengths include strong relationships with diverse payors (commercial, managed care, government), experienced radiologists, and a committed management team[49](index=49&type=chunk)[50](index=50&type=chunk)[51](index=51&type=chunk) - Technologically advanced operations, including an AI division developing solutions for mammography, lung, and prostate imaging, provide a competitive advantage[52](index=52&type=chunk) [Strategic Growth Initiatives](index=9&type=section&id=Business%20Strategy) RadNet's strategy focuses on maximizing existing center performance, profitable contracting, operating efficiencies, network expansion, and leveraging AI technology - RadNet aims to maximize performance at existing centers by expanding physician relationships and increasing procedure offerings[53](index=53&type=chunk) - The company focuses on profitable contracting by regularly evaluating and renegotiating terms with third-party payors, vendors, and radiology groups[54](index=54&type=chunk) - Operating efficiencies are optimized through equipment utilization, cost reduction, use of radiology physician assistants, and upgrading advanced information technology systems[55](index=55&type=chunk) - Expansion occurs organically and through targeted acquisitions and joint ventures, strengthening market presence in existing and new geographic areas where patient demand, market share, referral relationships, and payor receptiveness are favorable[56](index=56&type=chunk)[57](index=57&type=chunk) - Leveraging investment in AI and technology is a key strategy to improve service quality, expand offerings, and enhance operating efficiency from patient intake to billing[58](index=58&type=chunk) [Service Offerings and Professional Structure](index=10&type=section&id=Our%20Services) RadNet offers comprehensive imaging services with standardized care, contracting with medical groups for professional services and deriving revenue from diverse payors - RadNet offers a comprehensive set of imaging services, focusing on standardized high-quality care, **24-hour turnaround** on routine exams, flexible scheduling, and sub-specialty interpretations[59](index=59&type=chunk)[62](index=62&type=chunk) - To comply with corporate practice of medicine prohibitions in most states, RadNet contracts with medical groups (including a Consolidated Medical Group) to provide professional medical services, while RadNet provides technical and management services[60](index=60&type=chunk)[61](index=61&type=chunk)[64](index=64&type=chunk) - Revenue is derived from a diverse mix of payors: Commercial Insurance, Managed Care Capitation Agreements (managed through a utilization management program), Medicare/Medicaid, and direct contracts with physician groups[66](index=66&type=chunk)[67](index=67&type=chunk)[68](index=68&type=chunk)[69](index=69&type=chunk)[70](index=70&type=chunk) [Center Network and Equipment](index=11&type=section&id=Imaging%20Centers) RadNet operated **398 imaging centers** as of December 31, 2024, with a modern fleet of diagnostic equipment, including MRI, CT, and PET units less than five years old - As of December 31, 2024, RadNet operated or managed **398 imaging centers**, an increase from **366 in 2023** and **357 in 2022**[72](index=72&type=chunk) Imaging Centers Owned or Managed (2022-2024) | | Years Ended December 31, | |---|---|---| | | 2024 | 2023 | 2022 | | Total centers owned or managed (at beginning of the year) | 366 | 357 | 347 | | Centers added by: Acquisition | 28 | 10 | 8 | | Internal development | 44 | 11 | 14 | | Centers closed or sold | (40) | (12) | (12) | | Total centers owned or managed (at year end) | 398 | 366 | 357 | Principal Diagnostic Equipment Count (2022-2024) | Equipment Count | Years Ended December 31, | |---|---|---| | | 2024 | 2023 | 2022 | | MRI | 382 | 353 | 340 | | CT | 220 | 208 | 208 | | PET/CT | 66 | 63 | 67 | | Mammography | 427 | 405 | 387 | | Ultrasound | 907 | 861 | 818 | | X-ray | 380 | 363 | 440 | | Nuclear Medicine | 56 | 55 | 57 | | Fluoroscopy | 120 | 121 | 116 | | Total equipment | 2,558 | 2,429 | 2,433 | - The average age of MRI and CT units is less than **five years**, and PET units less than **four years**, with a typical useful life of **ten years**[73](index=73&type=chunk) [IT Systems and Capabilities](index=12&type=section&id=Information%20Technology) RadNet uses a HIPAA-compliant IT system for billing, EMR, and image management, optimizing productivity and reducing costs - RadNet utilizes a state-of-the-art, HIPAA-compliant information technology system for billing, collections, electronic medical records, practice management, and image management[75](index=75&type=chunk) - This system enables cost reductions in image storage and financial management, and optimizes productivity by facilitating patient data capture, electronic claims, digital image storage/transmission, and sophisticated financial analysis[76](index=76&type=chunk) - The company developed its own Radiology Information System and its eRad, Inc. subsidiary develops and sells computerized imaging data storage and retrieval systems[77](index=77&type=chunk) [Workforce and Culture](index=13&type=section&id=Human%20Capital%20Management%20Strategy) RadNet's talent strategy focuses on attracting and retaining a diverse workforce of **8,546 full-time employees** as of December 31, 2024, through well-being and development programs - RadNet's talent management strategy focuses on attracting and retaining engaged, talented, and diverse team members to be an employer of choice[78](index=78&type=chunk) - As of December 31, 2024, the company had **8,546 full-time**, **454 part-time**, and **2,021 per diem employees**, including **218 full-time** and **91 part-time physicians**[80](index=80&type=chunk) - Key initiatives include promoting diversity, equity, inclusion, and belonging (e.g., cultural competence training), employee listening platforms, total well-being programs (benefits, wellness), and talent development (upskilling, tuition reimbursement)[81](index=81&type=chunk)[82](index=82&type=chunk)[83](index=83&type=chunk)[84](index=84&type=chunk) [Marketing Approaches](index=14&type=section&id=Sales%20and%20Marketing) The sales and marketing team uses physician, payor, and sports marketing programs, including in-stadium X-ray services for professional teams - The sales and marketing team employs a multi-pronged approach including physician marketing (liaison with referring physicians, educational programs), payor marketing (soliciting and solidifying managed care contracts), and sports marketing programs[85](index=85&type=chunk)[86](index=86&type=chunk)[87](index=87&type=chunk) - Sports marketing includes providing in-stadium digital X-ray services for professional sports teams (e.g., LA Clippers, Dodgers) and radiology services for other teams and university athletes, as well as sponsorship agreements[87](index=87&type=chunk) [Equipment and Maintenance](index=14&type=section&id=Suppliers) Major diagnostic imaging equipment is sourced from manufacturers like GE, Philips, and Siemens, with maintenance provided by their service arms - Major diagnostic imaging equipment is acquired directly from manufacturers (e.g., GE, Philips, Siemens) or through third-party financing companies[88](index=88&type=chunk) - Timely and effective maintenance of imaging equipment is ensured through arrangements with the service arms of original equipment manufacturers[89](index=89&type=chunk) [Risk Management and Coverage](index=14&type=section&id=Insurance%20and%20Liability%20Mitigation) RadNet maintains general and professional liability insurance, with physician groups requiring malpractice coverage, and benefits from California's medical malpractice cap - RadNet maintains general liability and professional liability insurance, along with workers' compensation insurance, in amounts deemed appropriate and consistent with industry practice[90](index=90&type=chunk) - Physician groups are required to maintain medical malpractice insurance with specific coverage limits[91](index=91&type=chunk) - California operations benefit from a statutory medical malpractice cap of **$250,000** on non-economic damages, which is not present in other states of operation[93](index=93&type=chunk)[94](index=94&type=chunk) [Regulatory Compliance and Healthcare Laws](index=15&type=section&id=Regulation) RadNet operates in a highly regulated healthcare environment, complying with federal and state laws like HIPAA, Anti-kickback Statute, and Stark Law, with **22% of 2024 revenue** from Medicare - The healthcare industry is highly regulated, and RadNet's operations depend on obtaining and maintaining licenses and complying with federal and state healthcare regulations, which are subject to change[95](index=95&type=chunk) - Key regulations include facilities licensing and certification laws (e.g., Medicare IDTF certification), corporate practice of medicine prohibitions (requiring contracts with medical groups), and government healthcare program rules (Medicare, Medicaid)[96](index=96&type=chunk)[97](index=97&type=chunk)[98](index=98&type=chunk) - Approximately **22% of net service revenue in 2024** was from Medicare and **2% from Medicaid**, making the company susceptible to changes in governmental reimbursement rates and cost containment measures[98](index=98&type=chunk)[99](index=99&type=chunk) - Federal laws like the Anti-kickback Statute and Stark Law prohibit certain financial arrangements and physician self-referrals, with non-compliance leading to significant penalties[100](index=100&type=chunk)[104](index=104&type=chunk) - The Patient Protection and Affordable Care Act (PPACA) and related acts have increased equipment utilization factors for advanced diagnostic imaging, leading to reductions in federal reimbursement[113](index=113&type=chunk)[114](index=114&type=chunk) - HIPAA and HITECH impose strict privacy and security standards for protected health information (PHI), with violations carrying substantial civil and criminal penalties[116](index=116&type=chunk)[118](index=118&type=chunk) - Mammography systems are regulated by the FDA under the Mammography Quality Standards Act (MQSA), requiring accreditation and certification[122](index=122&type=chunk) - RadNet maintains a compliance program to monitor adherence to federal and state laws, including periodic audits and mandatory employee education[128](index=128&type=chunk)[129](index=129&type=chunk) [Risk Factors](index=19&type=section&id=Item%201A.%20Risk%20Factors) RadNet faces risks from macroeconomic conditions, reimbursement changes, intense competition, cybersecurity threats, substantial debt, and regulatory hurdles for its AI products - Adverse changes in general domestic and worldwide economic conditions, including inflation and rising interest rates, could negatively impact operating results, financial condition, and liquidity[131](index=131&type=chunk)[135](index=135&type=chunk)[137](index=137&type=chunk) - Labor costs are adversely affected by competition for staffing, shortages of experienced healthcare professionals, and regulatory activity like minimum wage increases (e.g., California's increase in 2025)[138](index=138&type=chunk)[139](index=139&type=chunk) - Changes in third-party reimbursement methods or rates, particularly from Medicare and Medicaid, could significantly reduce net revenues and operating margins[144](index=144&type=chunk)[148](index=148&type=chunk) - The company faces intense competition from other diagnostic imaging companies and hospitals, and technological changes could reduce demand for services or require significant equipment upgrade costs[150](index=150&type=chunk)[151](index=151&type=chunk)[152](index=152&type=chunk) - Cybersecurity threats, including ransomware attacks and third-party service provider breaches, pose significant risks to operations, data integrity, reputation, and financial stability[166](index=166&type=chunk)[167](index=167&type=chunk)[168](index=168&type=chunk)[169](index=169&type=chunk) - Substantial debt could adversely affect financial condition, requiring a significant portion of cash flow for debt payments and limiting flexibility for growth and capital expenditures[206](index=206&type=chunk)[207](index=207&type=chunk) - The success of AI investments depends on effective integration, regulatory authorizations (FDA/CE clearance), market acceptance, and competitive technologies, with no guarantee of anticipated benefits[177](index=177&type=chunk)[178](index=178&type=chunk) [Unresolved Staff Comments](index=34&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) There are no unresolved staff comments from the SEC - The registrant has no unresolved staff comments[226](index=226&type=chunk) [Cybersecurity](index=34&type=section&id=Item%201C.%20Cybersecurity) RadNet's comprehensive Cybersecurity and Data Protection Program, overseen by the Board, aligns with industry standards for threat management and data integrity - RadNet has a Cybersecurity and Data Protection Program aligned with industry-standard frameworks (NIST Cybersecurity Framework, HIPAA Security Rule) and regulatory requirements[227](index=227&type=chunk)[233](index=233&type=chunk) - The program focuses on assessing, identifying, and managing cyber threats, maintaining privacy and protection of sensitive information, and ensuring durability and resiliency of IT systems[228](index=228&type=chunk) - An internal cybersecurity team and a third-party managed security operations center provide **24x7x365 real-time detection and response**, complemented by mandatory cyber-awareness training and phishing tests for all employees[231](index=231&type=chunk)[232](index=232&type=chunk) - The Board of Directors, through its Audit Committee, oversees management's risk mitigation processes, including regular reviews of the cybersecurity program, emerging threats, and compliance[237](index=237&type=chunk)[238](index=238&type=chunk) [Properties](index=35&type=section&id=Item%202.%20Properties) RadNet's corporate headquarters, regional offices, and 398 imaging centers are primarily leased, totaling approximately 2.7 million square feet nationwide - RadNet's corporate headquarters, regional office in Baltimore, and **398 imaging centers** are all operated under lease agreements[239](index=239&type=chunk)[240](index=240&type=chunk) - As of December 31, 2024, the total square footage operated under lease, including medical office, administrative, and warehouse locations, was approximately **2.7 million square feet**[241](index=241&type=chunk) - Initial lease terms for facilities typically range from **5 to 15 years**, with renewal options extending the total span to **10 to 35 years**; the company does not have options to purchase these leased facilities[240](index=240&type=chunk) [Legal Proceedings](index=36&type=section&id=Item%203.%20Legal%20Proceedings) RadNet is involved in various lawsuits arising from its ordinary course of business, with management believing no material adverse impact on operations - RadNet is engaged in lawsuits arising from the ordinary course of business[242](index=242&type=chunk) - Management does not believe current litigation will materially adversely impact the business, financial condition, or results of operations, but acknowledges the inherent uncertainty of outcomes[242](index=242&type=chunk) [Mine Safety Disclosures](index=36&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to RadNet, Inc - Mine Safety Disclosures are not applicable to RadNet, Inc[243](index=243&type=chunk) PART II [Market for Common Equity and Stockholder Matters](index=37&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) RadNet's common stock (RDNT) trades on NASDAQ, with **865 holders** as of February 24, 2025, and no planned dividends, showing **344.04% cumulative return** from 2019-2024 - RadNet's common stock is quoted on the NASDAQ Global Market under the symbol '**RDNT**'[246](index=246&type=chunk) - As of February 24, 2025, there were **865 holders of record** for the common stock[247](index=247&type=chunk) - The company does not intend to pay cash dividends on its common stock in the foreseeable future, planning to retain future earnings for business development and expansion[223](index=223&type=chunk)[248](index=248&type=chunk) Stock Performance (Indexed Returns, Base 100 on 12/31/19) | Company / Index | 12/31/19 | 12/31/20 | 12/31/21 | 12/30/22 | 12/29/23 | 12/31/24 | |---|---|---|---|---|---|---| | RadNet, Inc. | 100 | 96.40 | 148.33 | 92.76 | 171.28 | 344.04 | | S&P 500 Index | 100 | 116.26 | 147.52 | 118.84 | 147.64 | 182.05 | | S&P Health Care Sector | 100 | 133.67 | 146.72 | 117.56 | 123.62 | 125.79 | - On March 27, 2024, RadNet issued **95,019 shares of common stock**, valued at **$4.6 million**, to settle a milestone contingent liability from the acquisition of Heart & Lung Imaging Limited, utilizing a private placement exemption[253](index=253&type=chunk) [Reserved](index=39&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved and not required - Item 6 is reserved and not required[254](index=254&type=chunk) [Management's Discussion and Analysis](index=40&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) RadNet's **2024 revenue reached $1.83 billion**, with **$2.79 million net income**, driven by imaging and digital health segments, acquisitions, and strong liquidity of **$740 million cash** Total Revenue (2022-2024) | | Years Ended December 31, | |---|---|---| | | 2024 | 2023 | 2022 | | Total revenue (in thousands) | $1,829,664 | $1,616,630 | $1,430,061 | Net Income Attributable to RadNet, Inc. Common Stockholders (2022-2024) | | Years Ended December 31, | |---|---|---| | | 2024 | 2023 | 2022 | | Net income attributable to RadNet common stockholders (in thousands) | $2,793 | $3,044 | $10,650 | - RadNet's operations are segmented into Imaging Centers and Digital Health, with the Digital Health segment combining former AI and eRad, Inc. businesses[256](index=256&type=chunk)[258](index=258&type=chunk) - The company completed several acquisitions in 2024, including Houston Medical Imaging, LLC (**$22.7 million**), and Kheiron Medical Technologies LTD (**$2.3 million**) to strengthen its imaging and AI capabilities[264](index=264&type=chunk)[266](index=266&type=chunk) - Liquidity is strong, with cash and cash equivalents increasing to **$740 million** at December 31, 2024, from **$342.6 million in 2023**, supported by a **$230.2 million public offering** and refinancing of the Barclays credit facility[339](index=339&type=chunk)[340](index=340&type=chunk)[344](index=344&type=chunk) [Company and Segment Overview](index=40&type=section&id=Overview) RadNet, a national diagnostic imaging provider with **398 centers**, operates Imaging Centers and Digital Health segments, focusing on AI-powered health informatics - RadNet is a national provider of diagnostic imaging services, operating **398 centers** as of December 31, 2024, and has established a Digital Health business segment combining AI and eRad, Inc. operations[256](index=256&type=chunk)[258](index=258&type=chunk) - The Digital Health segment develops AI-powered health informatics solutions for imaging and radiology, focusing on breast, prostate, lung, and colon cancer screening[258](index=258&type=chunk)[259](index=259&type=chunk) Imaging Centers and Revenue (2022-2024) | | Years Ended December 31, | |---|---|---| | | 2024 | 2023 | 2022 | | Centers in operation | 398 | 366 | 357 | | Imaging Center revenue (millions) | $1,830 | $1,617 | $1,430 | - Revenue is diversified across commercial insurance, Medicare, Medicaid, workers' compensation, and other payors, with capitation arrangements also contributing[260](index=260&type=chunk) - The first quarter typically sees the lowest volumes and revenue due to winter weather and patient participation in high-deductible health plans[261](index=261&type=chunk) [Strategic Transactions](index=41&type=section&id=Acquisitions%2C%20Equity%20Investments%20and%20Joint%20Venture%20Activity) In 2024, RadNet completed **nine acquisitions** totaling **$59 million**, including Kheiron Medical Technologies for AI, and formed new majority-owned joint ventures - In 2024, RadNet completed **nine radiology imaging center asset acquisitions** totaling **$59 million** in purchase consideration, primarily to strengthen geographic market presence[263](index=263&type=chunk)[264](index=264&type=chunk) - Key acquisitions in 2024 included Houston Medical Imaging, LLC (**$22.7 million**) and Grossman Imaging Center of CMH, LLC (**$10.3 million**)[264](index=264&type=chunk) - On October 14, 2024, RadNet acquired Kheiron Medical Technologies LTD for approximately **$2.3 million**, adding deep learning AI for breast cancer detection to its Digital Health segment[266](index=266&type=chunk)[267](index=267&type=chunk) - RadNet formed new majority-owned subsidiaries and joint ventures, including Tri Valley Imaging Group, LLC (**52% controlling interest**) and Ventura County Imaging Group (**47.5% controlling interest**) in 2024, and Los Angeles Imaging Group, LLC (**65% controlling interest**) in 2023[269](index=269&type=chunk)[270](index=270&type=chunk)[271](index=271&type=chunk) - In September 2023, RadNet increased its economic interest in Santa Monica Imaging Group, LLC to **49%** by contributing two imaging centers valued at **$27.2 million** and purchasing an additional interest for **$11.3 million**, recognizing a **$16.8 million gain**[273](index=273&type=chunk) [Financial Performance Analysis](index=44&type=section&id=Results%20of%20Operations) RadNet's 2024 Imaging Center revenue grew **12.6%** to **$1.76 billion**, driven by volume and advanced imaging, while Digital Health revenue increased to **$65.7 million** despite higher R&D costs Consolidated Statements of Operations (Percentage of Total Service Revenue) | | Years Ended December 31, | |---|---|---| | | 2024 | 2023 | 2022 | | REVENUE | | | | | Service fee revenue | 92.5 % | 90.5 % | 89.4 % | | Revenue under capitation arrangements | 7.5 % | 9.5 % | 10.6 % | | Total service revenue | 100.0 % | 100.0 % | 100.0 % | | OPERATING EXPENSES | | | | | Cost of operations, excluding depreciation and amortization | 86.4 % | 86.3 % | 88.4 % | | Lease abandonment charges | 0.1 % | 0.3 % | — % | | Depreciation and amortization | 7.5 % | 7.9 % | 8.1 % | | Gain on contribution of imaging centers into joint venture | — % | (1.0)% | — % | | Loss on sale and disposal of equipment | 0.1 % | 0.1 % | 0.2 % | | Severance costs | 0.1 % | 0.2 % | 0.1 % | | Total operating expenses | 94.3 % | 93.9 % | 96.8 % | | INCOME FROM OPERATIONS | 5.7 % | 6.1 % | 3.2 % | | OTHER INCOME AND EXPENSES | | | | | Interest expense | 4.4 % | 4.0 % | 3.6 % | | Equity in earnings of joint ventures | (0.8)% | (0.4)% | (0.7)% | | Non-cash change in fair value of interest rate swaps | 0.4 % | 0.5 % | (2.8)% | | Debt restructuring and extinguishment expenses | 0.6 % | — % | 0.1 % | | Other income | (1.4)% | (0.4)% | 0.1 % | | Total other expenses | 3.3 % | 3.7 % | 0.3 % | | INCOME BEFORE INCOME TAXES | 2.5 % | 2.4 % | 3.0 % | | Provision for income taxes | (0.3)% | (0.5)% | (0.7)% | | NET INCOME | 2.1 % | 1.8 % | 2.3 % | | Net income attributable to noncontrolling interest | 2.0 % | 1.7 % | 1.6 % | | NET INCOME ATTRIBUTABLE TO RADNET, INC. COMMON STOCKHOLDERS | 0.2 % | 0.2 % | 0.6 % | - Imaging Center segment revenue increased by **12.6%** to **$1.76 billion** in 2024 (**9.8% same-center growth**), driven by a **3.2% increase** in total procedure volume and a product mix shift towards advanced imaging modalities, particularly PETHC procedures[281](index=281&type=chunk) - Salaries and professional reading fees increased by **15.3% in 2024** due to higher procedure volumes, staffing adjustments, and inflationary wage pressures, including California's minimum wage increase for healthcare workers[283](index=283&type=chunk)[284](index=284&type=chunk) - Medical supplies expense rose by **19.7% in 2024**, primarily due to higher patient volume, a shift to advanced imaging, and increased use of high-cost isotope tracers for PETHC procedures[287](index=287&type=chunk) - Equity in earnings from unconsolidated joint ventures increased by **125.2%** to **$14.5 million in 2024**, mainly due to additional contributions to SMIG and improved earnings from Arizona Diagnostic Radiology Group[302](index=302&type=chunk) - The Digital Health segment's revenue increased to **$65.7 million in 2024** from **$49.6 million in 2023**, driven by core eRad PICS growth and the rollout of DeepHealth OS and Enhanced Breast Cancer Detection solutions[328](index=328&type=chunk)[329](index=329&type=chunk) - Digital Health segment operating expenses increased significantly due to higher headcount for AI product commercialization and increased non-capitalized R&D for DeepHealth cloud OS and generative AI, leading to continued net losses[328](index=328&type=chunk)[329](index=329&type=chunk)[330](index=330&type=chunk) [Adjusted EBITDA Reconciliation](index=54&type=section&id=Non-GAAP%20Financial%20Measures) RadNet uses Adjusted EBITDA as a non-GAAP metric to measure core operations, with consolidated Adjusted EBITDA increasing to **$279.5 million in 2024** - RadNet uses Adjusted EBITDA as a non-GAAP metric to measure core operations, excluding non-cash and non-recurring charges, and it is not a GAAP measure[331](index=331&type=chunk)[332](index=332&type=chunk)[334](index=334&type=chunk) Adjusted EBITDA Reconciliation (2022-2024) | | Years Ended December 31, | |---|---|---| | | 2024 | 2023 | 2022 | | Net Income Attributable To Radnet, Inc. Common Stockholders (in thousands) | $2,793 | $3,044 | $10,650 | | Income taxes (in thousands) | 6,026 | 8,473 | 9,361 | | Interest expense (in thousands) | 79,849 | 64,483 | 50,841 | | Severance costs (in thousands) | 1,902 | 3,778 | 946 | | Depreciation and amortization (in thousands) | 137,838 | 128,391 | 115,877 | | Non-cash employee stock-based compensation (in thousands) | 29,833 | 26,785 | 23,770 | | Loss on sale and disposal of equipment and other (in thousands) | 2,276 | 2,187 | 2,529 | | Non-cash change in fair value of interest rate hedge (in thousands) | 8,006 | 8,185 | (39,621) | | Other (income) expenses (in thousands) | (24,916) | (6,354) | 1,833 | | Non-Capitalized R&D - DeepHealth Cloud OS & Generative AI (in thousands) | 14,995 | 1,308 | — | | Lease abandonment charges (in thousands) | 2,478 | 5,146 | — | | Gain on contribution of imaging centers into joint venture (in thousands) | — | (16,808) | — | | Loss on extinguishment of debt and related expenses (in thousands) | 11,292 | — | 731 | | Legal settlements (in thousands) | — | — | 2,197 | | Change in estimate related to refund liability (in thousands) | — | — | 8,089 | | Non-cash change to contingent consideration (in thousands) | 1,974 | (4,075) | 47 | | Acquisition related non-cash intangible adjustment (in thousands) | — | 3,950 | — | | Non-operational rent expenses (in thousands) | 4,233 | 3,629 | 4,297 | | Acquisition transaction costs (in thousands) | 880 | 222 | 927 | | Adjusted EBITDA - Radnet, Inc. (in thousands) | $279,459 | $232,344 | $192,474 | | Adjusted EBITDA - Imaging Center Segment (in thousands) | 264,901 | 225,846 | 190,695 | | Adjusted EBITDA - Digital Health Segment (in thousands) | $14,558 | $6,498 | $1,779 | - Consolidated Adjusted EBITDA increased to **$279.5 million in 2024** from **$232.3 million in 2023**, with the Imaging Center segment contributing **$264.9 million** and the Digital Health segment **$14.6 million**[336](index=336&type=chunk) [Financial Position and Funding](index=56&type=section&id=Liquidity%20and%20Capital%20Resources) RadNet expects positive cash flows to fund operations and acquisitions, with strong liquidity of **$740 million cash** as of December 31, 2024, supported by a public offering and credit facility refinancing - RadNet expects to generate positive cash flows from operations to fund ongoing operations, R&D, and acquisitions, believing current funds provide adequate liquidity for the foreseeable future[339](index=339&type=chunk) Key Balance Sheet Data (2023-2024) | Balance Sheet Data as of December 31, | 2024 (in thousands) | 2023 (in thousands) | |---|---|---| | Cash and cash equivalents | $740,020 | $342,570 | | Accounts receivable | $185,821 | $163,707 | | Working capital (exclusive of current operating lease liability) | $596,158 | $197,805 | | Stockholders' equity | $1,133,410 | $813,359 | Cash Flow Data (2022-2024) | Cash Flow Data | 2024 (in thousands) | 2023 (in thousands) | 2022 (in thousands) | |---|---|---|---| | Cash provided by operating activities | $233,023 | $220,863 | $146,417 | | Cash used in investing activities | $(233,070) | $(201,470) | $(246,949) | | Cash provided by financing activities | $397,950 | $195,635 | $93,647 | - Cash provided by financing activities in 2024 included **$218.4 million** from a public offering of common stock and approximately **$167.9 million** from refinancing the Barclays credit facility[344](index=344&type=chunk) - As of December 31, 2024, total term loan debt (net of discounts) was **$992 million**, with **$274.4 million available** under the Barclays revolving credit facility and **$50 million** under the Truist revolving credit facility[347](index=347&type=chunk) [Future Obligations](index=58&type=section&id=Contractual%20Commitments) RadNet has significant contractual commitments, including **$1.03 billion in notes payable** and **$1.02 billion in operating leases**, with **$35.4 million** for service agreements in 2025 Contractual Commitments (in thousands) | | 2025 | 2026 | 2027 | 2028 | 2029 | Thereafter | Total | |---|---|---|---|---|---|---|---| | Notes payable | $27,025 | $26,920 | $128,440 | $11,666 | $8,995 | $826,875 | $1,029,921 | | Interest and fees on notes payable | $70,402 | $68,689 | $65,858 | $59,569 | $58,726 | $77,086 | $400,330 | | Operating leases (1) | $102,111 | $98,773 | $99,572 | $96,436 | $86,789 | $536,087 | $1,019,768 | | Total | $199,538 | $194,382 | $293,870 | $167,671 | $154,510 | $1,440,048 | $2,450,019 | - RadNet has minimum payment commitments of approximately **$35.4 million in 2025** for service agreements with vendors for equipment maintenance and repair[349](index=349&type=chunk) [Key Accounting Judgments and Estimates](index=58&type=section&id=Critical%20Accounting%20Policies) Financial statements require significant estimates for revenues and business combinations, with goodwill and intangibles totaling **$710.7 million** and **$13.0 million** respectively in 2024, tested annually for impairment - Financial statements require management to make significant estimates and assumptions, particularly for revenues (net patient fees, contractual allowances, implicit price concessions) and business combinations (fair value of acquired assets and liabilities)[351](index=351&type=chunk)[352](index=352&type=chunk)[354](index=354&type=chunk)[357](index=357&type=chunk) - Goodwill and indefinite-lived intangibles (totaling **$710.7 million** and **$13.0 million** respectively in 2024) are tested annually for impairment, using market or income approaches for fair value determination[358](index=358&type=chunk)[359](index=359&type=chunk) - In September 2023, an impairment charge of **$3.9 million** was recognized for an IPR&D asset related to Aidence's Ai Veye Lung Nodule and Veye Clinic due to delays and additional expenditures for FDA authorization[359](index=359&type=chunk) [New Accounting Pronouncements](index=59&type=section&id=Recent%20Accounting%20Standards) RadNet adopted ASU 2023-07 (Segment Reporting) retrospectively in 2024 and will adopt ASU 2023-09 (Income Tax Disclosures) in 2025, while evaluating ASU 2024-03 - RadNet adopted ASU 2023-07 (Segment Reporting) retrospectively for the year ended December 31, 2024, requiring enhanced disclosures about significant segment expenses[484](index=484&type=chunk)[485](index=485&type=chunk) - ASU 2023-09 (Income Tax Disclosures) will be adopted prospectively in fiscal 2025, impacting disclosures but not financial condition or results of operations[486](index=486&type=chunk) - ASU 2024-03 (Expense Disaggregation Disclosures) is effective for public entities for annual periods beginning after December 15, 2026, and RadNet is currently evaluating its impact[487](index=487&type=chunk) [Market Risk Disclosures](index=59&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) RadNet faces minimal foreign currency risk but is sensitive to interest rate changes; a **1% SOFR increase** would raise annual interest expense by **$4.7 million** for Barclays and **$1.4 million** for Truist - RadNet's financial results are unlikely to be materially affected by foreign currency exchange rates as substantially all revenues and expenses are in United States dollars[363](index=363&type=chunk) - The company has foreign exchange risk exposure to the Euro, Canadian Dollar, Hungarian Forint, and Pound Sterling due to AI operations in the Netherlands, radiology services in the UK, and R&D centers in Canada and Hungary[364](index=364&type=chunk) - A hypothetical **1% decline** in these currency exchange rates against the U.S. dollar would result in an annual increase of approximately **$0.4 million** in operating expenses[364](index=364&type=chunk) - RadNet's interest expense is affected by changes in short-term interest rates on its variable-rate debt, primarily under the Barclays and Truist credit facilities[365](index=365&type=chunk) - A hypothetical **1% increase** in SOFR rates would increase annual interest expense by **$4.7 million** for the Barclays term loan (**$470.6 million outstanding** subject to SOFR) and **$1.4 million** for the Truist term loan (**$135.0 million outstanding**)[366](index=366&type=chunk)[367](index=367&type=chunk) [Financial Statements and Supplementary Data](index=61&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents RadNet's audited consolidated financial statements for 2022-2024, with Ernst & Young LLP issuing an unqualified opinion, showing **$3.29 billion in total assets** and **$2.15 billion in liabilities** as of December 31, 2024 - Ernst & Young LLP, the independent registered public accounting firm, issued an unqualified opinion on RadNet's consolidated financial statements and internal control over financial reporting as of December 31, 2024[372](index=372&type=chunk)[373](index=373&type=chunk) Consolidated Balance Sheet Highlights (in thousands) | ASSETS | As of December 31, 2024 | As of December 31, 2023 | |---|---|---| | Total current assets | $1,019,252 | $579,276 | | Total property, equipment and right-of-use assets | $1,334,531 | $1,200,433 | | Goodwill | $710,663 | $679,463 | | Total assets | $3,286,690 | $2,690,473 | | LIABILITIES AND EQUITY | | | | Total current liabilities | $479,712 | $437,452 | | Total liabilities | $2,153,280 | $1,877,114 | | Total equity | $1,133,410 | $813,359 | Consolidated Statements of Operations Highlights (in thousands) | | Years Ended December 31, | |---|---|---| | | 2024 | 2023 | 2022 | | Total service revenue | $1,829,664 | $1,616,630 | $1,430,061 | | Income from operations | $104,621 | $98,697 | $46,363 | | Net income attributable to RadNet, Inc. common stockholders | $2,793 | $3,044 | $10,650 | | Basic net income per share | $0.04 | $0.05 | $0.19 | | Diluted net income per share | $0.04 | $0.05 | $0.17 | Consolidated Statements of Cash Flows Highlights (in thousands) | | Years Ended December 31, | |---|---|---| | | 2024 | 2023 | 2022 | | Net cash provided by operating activities | $233,023 | $220,863 | $146,417 | | Net cash used in investing activities | $(233,070) | $(201,470) | $(246,949) | | Net cash provided by financing activities | $397,950 | $195,635 | $93,647 | | Cash and cash equivalents, end of period | $740,020 | $342,570 | $127,834 | [Auditor's Report](index=62&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) Ernst & Young LLP issued an unqualified opinion on RadNet's 2024 financial statements and internal controls, noting accounts receivable valuation as a critical audit matter - Ernst & Young LLP audited RadNet's consolidated financial statements and internal control over financial reporting for the period ended December 31, 2024[372](index=372&type=chunk)[373](index=373&type=chunk) - The firm expressed an unqualified opinion on the financial statements, confirming fair presentation in conformity with U.S. GAAP[372](index=372&type=chunk) - A critical audit matter identified was the valuation of accounts receivable, due to significant data inputs and subjective assumptions in determining contractual allowances and implicit price concessions[377](index=377&type=chunk) [Balance Sheet](index=64&type=section&id=Consolidated%20Balance%20Sheets) RadNet's consolidated balance sheets show total assets of **$3.29 billion** and total liabilities of **$2.15 billion** as of December 31, 2024 Consolidated Balance Sheets (in thousands) | ASSETS | As of December 31, 2024 | As of December 31, 2023 | |---|---|---| | Cash and cash equivalents | $740,020 | $342,570 | | Accounts receivable, net | $185,821 | $163,707 | | Total current assets | $1,019,252 | $579,276 | | Property and equipment, net | $694,791 | $604,401 | | Operating lease right-of-use assets | $639,740 | $596,032 | | Goodwill | $710,663 | $679,463 | | Total assets | $3,286,690 | $2,690,473 | | LIABILITIES AND EQUITY | | | | Accounts payable, accrued expenses and other | $351,464 | $342,940 | | Current portion of notes payable | $24,692 | $17,974 | | Total current liabilities | $479,712 | $437,452 | | Notes payable, net of current portion | $991,574 | $812,068 | | Total liabilities | $2,153,280 | $1,877,114 | | Total RadNet, Inc.'s stockholders' equity | $902,308 | $630,695 | | Noncontrolling interests | $231,102 | $182,664 | | Total equity | $1,133,410 | $813,359 | [Statements of Operations](index=65&type=section&id=Consolidated%20Statements%20of%20Operations) RadNet reported total service revenue of **$1.83 billion** and net income attributable to common stockholders of **$2.79 million** for the year ended December 31, 2024 Consolidated Statements of Operations (in thousands, except per share data) | | Years Ended December 31, | |---|---|---| | | 2024 | 2023 | 2022 | | Total service revenue | $1,829,664 | $1,616,630 | $1,430,061 | | Total operating expenses | $1,725,043 | $1,517,933 | $1,383,698 | | Income from operations | $104,621 | $98,697 | $46,363 | | Total other expenses, net | $59,759 | $59,887 | $3,394 | | Income before income taxes | $44,862 | $38,810 | $42,969 | | Provision for income taxes | $(6,026) | $(8,473) | $(9,361) | | NET INCOME | $38,836 | $30,337 | $33,608 | | Net income attributable to noncontrolling interest | $36,043 | $27,293 | $22,958 | | NET INCOME ATTRIBUTABLE TO RADNET, INC. COMMON STOCKHOLDERS | $2,793 | $3,044 | $10,650 | | BASIC NET INCOME PER SHARE | $0.04 | $0.05 | $0.19 | | DILUTED NET INCOME PER SHARE | $0.04 | $0.05 | $0.17 | [Statements of Comprehensive Income](index=66&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) RadNet's comprehensive income attributable to common stockholders was **$6.22 million** for the year ended December 31, 2024 Consolidated Statements of Comprehensive Income (in thousands) | | Years Ended December 31, | |---|---|---| | | 2024 | 2023 | 2022 | | NET INCOME | $38,836 | $30,337 | $33,608 | | Currency translation adjustments | $(5,929) | $4,617 | $(3,943) | | Change in fair value of cash flow hedge from prior periods reclassified to earnings | $9,352 | $3,576 | $3,687 | | COMPREHENSIVE INCOME | $42,259 | $38,530 | $33,352 | | Less comprehensive income attributable to noncontrolling interests | $36,043 | $27,293 | $22,958 | | COMPREHENSIVE INCOME ATTRIBUTABLE TO RADNET, INC. COMMON STOCKHOLDERS | $6,216 | $11,237 | $10,394 | [Statement of Equity](index=67&type=section&id=Consolidated%20Statement%20of%20Equity) RadNet's total equity increased to **$1.13 billion** as of December 31, 2024, primarily due to a **$218.4 million** public offering of common stock Consolidated Statement of Equity Highlights (in thousands, except share data) | | December 31, 2024 | December 31, 2023 | |---|---|---| | Common Stock (Shares) | 74,036,993 | 67,956,318 | | Common Stock (Amount) | $7 | $7 | | Additional Paid-In Capital | $988,147 | $722,750 | | Accumulated Other Comprehensive Loss | $(9,061) | $(12,484) | | Accumulated Deficit | $(76,785) | $(79,578) | | Total RadNet, Inc.'s Stockholders' Equity | $902,308 | $630,695 | | Noncontrolling Interests | $231,102 | $182,664 | | Total Equity | $1,133,410 | $813,359 | - Stockholders' equity increased significantly in 2024, primarily due to the issuance of common stock from a public offering (**$218.4 million**) and stock-based compensation expense (**$29.99 million**)[387](index=387&type=chunk) [Statements of Cash Flows](index=69&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) RadNet's cash and cash equivalents increased to **$740 million** by December 31, 2024, with **$233 million** from operations and **$398 million** from financing activities Consolidated Statements of Cash Flows (in thousands) | | Years Ended December 31, | |---|---|---| | | 2024 | 2023 | 2022 | | Net cash provided by operating activities | $233,023 | $220,863 | $146,417 | | Net cash used in investing activities | $(233,070) | $(201,470) | $(246,949) | | Net cash provided by financing activities | $397,950 | $195,635 | $93,647 | | NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | $397,450 | $214,736 | $(6,772) | | CASH AND CASH EQUIVALENTS, end of period | $740,020 | $342,570 | $127,834 | - Cash provided by operating activities increased by **$12.2 million in 2024**, primarily due to an increase in income from operations[342](index=342&type=chunk) - Cash used in investing activities increased by **$31.6 million in 2024**, driven by higher purchases of imaging facilities (**$43.7 million**) and property and equipment (**$188.1 million**)[343](index=343&type=chunk) - Cash provided by financing activities in 2024 was significantly boosted by **$218.4 million** from a public offering of common stock and approximately **$167.9 million** from refinancing the Barclays credit facility[344](index=344&type=chunk) [Notes to Consolidated Financial Statements](index=71&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) These notes provide detailed disclosures on RadNet's business, accounting policies, segment reporting, and financial instruments, supporting the consolidated financial statements [Nature of Business](index=71&type=section&id=NOTE%201%20%E2%80%93%20NATURE%20OF%20BUSINESS) RadNet is a national provider of diagnostic imaging services with **398 centers**, segmented into Imaging Centers and Digital Health, and consolidates Variable Interest Entities - RadNet is a national provider of freestanding, fixed-site outpatient diagnostic imaging services in the U.S., operating **398 centers** as of December 31, 2024[402](index=402&type=chunk) - The company's operations are divided into two reportable segments: Imaging Centers and Digital Health, with the latter combining eRad business and former AI segment[402](index=402&type=chunk)[403](index=403&type=chunk) - In March 2024, RadNet completed a public offering of **5,232,500 shares of common stock**, generating **$230.2 million** in gross proceeds[404](index=404&type=chunk) - RadNet consolidates Variable Interest Entities (VIEs), such as the Consolidated Medical Group, which provides professional medical services, due to its controlling financial interest[406](index=406&type=chunk)[407](index=407&type=chunk) [Summary of Significant Accounting Policies](index=72&type=section&id=NOTE%202%20-%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note details RadNet's accounting policies for revenue recognition, goodwill, intangible assets, operating leases, and financial instruments, including a **$3.9 million impairment charge** in 2023 - Financial statements are prepared in accordance with U.S. GAAP, requiring management to make estimates and assumptions that affect reported amounts[412](index=412&type=chunk) - Revenues are recognized when performance obligations for diagnostic services are satisfied, typically over less than one day, with transaction prices dependent on third-party payor terms[413](index=413&type=chunk) Total Revenue by Payor (in thousands) | In Thousands | 2024 | 2023 | 2022 | |---|---|---|---| | Commercial insurance | $1,018,327 | $879,792 | $769,753 | | Medicare | $410,072 | $356,506 | $305,031 | | Medicaid | $44,736 | $42,302 | $37,530 | | Workers' compensation/personal injury | $43,666 | $46,406 | $50,333 | | Other payors | $104,888 | $87,675 | $65,911 | | Management fee revenue | $24,676 | $17,936 | $22,235 | | Other revenue | $46,724 | $32,580 | $27,223 | | Revenue under capitation arrangements | $136,575 | $153,433 | $152,045 | | Total revenue | $1,829,664 | $1,616,630 | $1,430,061 | - Goodwill and indefinite-lived intangible assets (trade names, IPR&D) are recorded from business combinations and tested annually for impairment; a **$3.9 million impairment charge** was recognized in 2023 for an IPR&D asset[431](index=431&type=chunk)[432](index=432&type=chunk) - Operating leases are recognized as right-of-use (ROU) assets and liabilities, with lease expense recognized on a straight-line basis; lease abandonment charges of **$2.5 million** and **$5.1 million** were recorded in 2024 and 2023, respectively[435](index=435&type=chunk)[438](index=438&type=chunk) - RadNet uses interest rate swaps to mitigate floating-rate debt risk, but these were deemed ineffective as cash flow hedges in 2020, with fair value changes recognized in earnings[449](index=449&type=chunk)[450](index=450&type=chunk) - Contingent consideration related to acquisitions (Aidence, Quantib, Heart & Lung Imaging) is subject to fair value adjustments based on milestone achievements, with a **$7.2 million gain** recognized in 2023 for Aidence due to unmet milestones[453](index=453&type=chunk)[454](index=454&type=chunk)[456](index=456&type=chunk)[458](index=458&type=chunk) [Recent Accounting Standards](index=79&type=section&id=NOTE%203%20-%20RECENT%20ACCOUNTING%20STANDARDS) RadNet adopted ASU 2023-07 (Segment Reporting) retrospectively in 2024 and will adopt ASU 2023-09 (Income Tax Disclosures) in 2025, while evaluating ASU 2024-03 - RadNet adopted ASU 2023-07 (Segment Reporting) retrospectively for the year ended December 31, 2024, enhancing disclosures about significant segment expenses[484](index=484&type=chunk)[485](index=485&type=chunk) - ASU 2023-09 (Income Tax Disclosures) will be adopted prospectively in fiscal 2025, impacting disclosures but not financial condition or results of operations[486](index=486&type=chunk) - ASU 2024-03 (Expense Disaggregation Disclosures) is effective for public entities for annual periods beginning after December 15, 2026, and RadNet is currently evaluating its impact[487](index=487&type=chunk) [Business Combinations and Related Activity](index=80&type=section&id=NOTE%204%20%E2%80%93%20BUSINESS%20COMBINATIONS%20AND%20RELATED%20ACTIVITY) In 2024, RadNet completed **nine imaging center acquisitions** for **$59 million**, adding **$34.7 million in goodwill**, and acquired Kheiron Medical Technologies for **$2.3 million** for AI capabilities - In 2024, RadNet completed **nine imaging center asset acquisitions** for a total purchase consideration of **$59.0 million**, adding **$34.7 million in goodwill** and **$2.6 million in intangible assets**[488](index=488&type=chunk)[489](index=489&type=chunk) - On October 14, 2024, RadNet acquired Kheiron Medical Technologies LTD for approximately **$2.3 million**, recording **$2.7 million in IPR&D intangible assets**[491](index=491&type=chunk)[492](index=492&type=chunk) - RadNet formed Tri Valley Imaging Group, LLC in February 2024, retaining a **52% controlling interest** after PHS purchased an economic interest for **$9.6 million**, resulting in a **$0.0 million gain** to additional paid-in capital[494](index=494&type=chunk)[495](index=495&type=chunk) - In September 2023, RadNet formed Los Angeles Imaging Group, LLC, retaining a **65% controlling interest** after Cedars-Sinai Medical Center purchased a **35% noncontrolling interest** for **$5.9 million**[498](index=498&type=chunk) [Segment Reporting](index=82&type=section&id=NOTE%205%20%E2%80%93%20SEGMENT%20REPORTING) RadNet revised its reportable segments to Imaging Center and Digital Health in Q1 2024, with total consolidated revenues of **$1.83 billion** in 2024 - RadNet revised its reportable segments in Q1 2024 to Imaging Center and Digital Health, combining eRad with the former AI segment, with prior periods adjusted retrospectively[500](index=500&type=chunk) - The Imaging Center segment provides diagnostic imaging services, while the Digital Health segment develops clinical AI applications and underlying IT systems[501](index=501&type=chunk)[502](index=502&type=chunk) Segment Revenues and Profit (2024, in thousands) | | Imaging Center | Digital Health | Total | |---|---|---|---| | Revenues from external customers | $1,792,319 | $37,345 | $1,829,664 | | Intersegment revenues | — | $28,361 | $28,361 | | Total | $1,792,319 | $65,706 | $1,858,025 | | Segment profit (loss) | $250,045 | $(3,408) | $246,637 | - Total consolidated revenues were **$1.83 billion in 2024**, with **$1.79 billion** from Imaging Centers and **$37.3 million** from Digital Health (external customers)[505](index=505&type=chunk) Service Revenue by Country (in thousands) | | 2024 | 2023 | 2022 | |---|---|---|---| | United States | $1,802,422 | $1,599,745 | $1,423,232 | | United Kingdom | $24,359 | $14,245 | $4,432 | | Other countries | $2,883 | $2,640 | $2,397 | | Total | $1,829,664 | $1,616,630 | $1,430,061 | [Goodwill and Other Intangible Assets](index=90&type=section&id=NOTE%206%20%E2%80%93%20GOODWILL%20AND%20OTHER%20INTANGIBLE%20ASSETS) Goodwill increased to **$710.7 million** in 2024 due to acquisitions, with other intangible assets including service agreements and developed technology, incurring **$12.5 million** in amortization expense Goodwill by Segment (in thousands) | | Imaging Center | Digital Health | Total | |---|---|---|---| | Balance as of December 31, 2023 | $594,257 | $85,206 | $679,463 | | Goodwill from acquisitions | $34,697 | — | $34,697 | | Currency translation | $(417) | $(3,080) | $(3,497) | | Balance as of December 31, 2024 | $628,537 | $82,126 | $710,663 | - Goodwill increased to **$710.7 million in 2024** from **$679.5 million in 2023**, primarily due to acquisitions in the Imaging Center segment[513](index=513&type=chunk) - Other intangible assets include service agreements, customer lists, covenants not to compete, acquired technologies, and trade names, with total amortization expense of **$12.5 million in 2024**[514](index=514&type=chunk)[515](index=515&type=chunk) Annual Amortization Expense by Asset Class (in thousands) | | 2025 | 2026 | 2027 | 2028 | 2029 | Thereafter | Total | |---|---|---|---|---|---|---|---| | Management Service Contracts | $2,287 | $2,287 | $2,287 | $2,287 | $2,291 | $4,384 | $15,823 | | Covenant not to compete and other contracts | $947 | $660 | $365 | $275 | $106 | — | $2,353 | | Customer Relationships | $1,084 | $962 | $786 | $750 | $750 | $9,628 | $13,960 | | Patent and Trademarks | $293 | $293 | $293 | $293 | $51 | $121 | $1,344 | | Developed Technology & Software | $7,329 | $7,289 | $6,755 | $6,755 | $1,848 | $4,610 | $34,586 | | Trade Names amortized | $77 | $77 | $77 | $63 | $19 | $8 | $321 | | Trade Names indefinite life | — | — | — | — | — | $8,500 | $8,500 | | IPR&D | — | — | — | — | — | $4,464 | $4,464 | | Total Annual Amortization | $12,017 | $11,568 | $10,563 | $10,423 | $5,065 | $31,715 | $81,351 | [Property and Equipment](index=92&type=section&id=NOTE%207%20-%20PROPERTY%20AND%20EQUIPMENT) Total property and equipment, net, increased to **$694.8 million** in 2024, with **$56.6 million** in construction in process and **$125.3 million** in depreciation and amortization expense Property and Equipment, Net (in thousands) | | December 31, 2024 | December 31, 2023 | |---|---|---| | Medical equipment | $807,624 | $714,400 | | Computer and office equipment, furniture and fixtures | $134,355 | $127,540 | | Software costs | $56,261 | $47,286 | | Leasehold improvements | $618,725 | $537,853 | | Total property and equipment cost | $1,630,450 | $1,441,300 | | Accumulated depreciation | $(935,659) | $(836,899) | | Total property and equipment | $694,791 | $604,401 | - Total property and equipment, net, increased to **$694.8 million in 2024** from **$604.4 million in 2023**[518](index=518&type=chunk) - Construction in process amounted to **$56.6 million** at December 31, 2024, including **$31.3 million** in medical equipment and **$24.4 million** in leasehold improvements[518](index=518&type=chunk) - Depreciation and amortization expense for property and equipment was **$125.3 million in 2024**, up from **$116.2 million in 2023**[520](index=520&type=chunk) [Credit Facilities and Notes Payable](index=93&type=section&id=NOTE%208%20-%20CREDIT%20FACILITIES%20AND%20NOTES%20PAYABLE) RadNet refinanced its Barclays credit facility in April 2024, with total term loan debt of **$992 million** and **$324.4 million** available under revolving credit facilities as of December 31, 2024 - RadNet maintains secured credit facilities with Barclays Bank PLC and Truist Bank, both including term loan and revolving credit components[521](index=521&type=chunk) - On April 18, 2024, RadNet refinanced its Barclays credit facility, replacing it with an **$875.0 million term loan** and a **$282.0 million revolving credit facility**, reducing interest rates and extending maturities[522](index=522&type=chunk) - The Barclays Term Loan matures on April 18, 2031, with quarterly principal payments of **$2.2 million**, and bears interest at SOFR plus **2.25%** (after a November 2024 amendment)[526](index=526&type=chunk) - As of December 31, 2024, RadNet had no outstanding balance on its **$282.0 million** Barclays Revolving Credit Facility (**$274.4 million available**) or its **$50.0 million** Truist Revolving Credit Facility (full amount available)[529](index=529&type=chunk)[535](index=535&type=chunk) Debt Obligations (in thousands) | | December 31, 2024 | December 31, 2023 | |---|---|---| | Barclays Term Loans | $870,625 | $678,687 | | Discount on Barclays Term Loans | $(12,929) | $(9,041) | | Truist Term Loan Agreement | $135,000 | $144,375 | | Discount on Truist Term Loan Agreement | $(726) | $(990) | | Equipment notes payable | $24,296 | $17,011 | | Total debt obligations | $1,016,266 | $830,042 | | Less: current portion | $(24,692) | $(17,974) | | Long term portion of debt obligations | $991,574 | $812,068 | [Leases](index=95&type=section&id=NOTE%209%20%E2%80%93%20LEASES) RadNet's material lease contracts for facilities and equipment have initial terms of **5-15 years**, with total operating lease liabilities of **$712.6 million** as of December 31, 2024 - RadNet's material lease contracts are for facilities and advanced radiology equipment, with facility lease terms ranging from **5 to 15 years** initially, and up to **35 years** with renewal options[538](index=538&type=chunk) Components of Lease Expense (in thousands) | (In thousands) | Years ended December 31, | |---|---|---| | | 2024 | 2023 | 2022 | | Operating lease cost | $111,966 | $106,954 | $107,475 | | Finance lease cost: Depreciation of leased equipment | $109 | $1,204 | $2,896 | | Total finance lease cost | $109 | $1,204 | $2,896 | - Operating lease costs for 2024 and 2023 included **$1.8 million** and **$2.7 million**, respectively, in lease abandonment charges[540](index=540&type=chunk) Operating Lease Liabilities Maturities (in thousands) | Year Ending December 31, | Operating Leases | |---|---| | 2025 | $102,111 | | 2026 | $98,773 | | 2027 | $99,572 | | 2028 | $96,436 | | 2029 | $86,789 | | Thereafter | $536,087 | | Total Lease Payments | $1,019,768 | | Less imputed interest | $(307,171) | | Total | $712,597 | - As of December 31, 2024, RadNet had additional operating leases not yet commenced totaling approximately **$54.2 million**, with terms of **1 to 15 years**, set to begin in 2025[542](index=542&type=chunk) [Income Taxes](index=97&type=section&id=NOTE%2010%20%E2%80%93%20INCOME%20TAXES) RadNet reported **$44.86 million** income before taxes in 2024, with **$6.03 million** in income tax expense, and federal NOL carryforwards of **$128.2 million** Income (Loss) Before Income Taxes (in thousands) | | December 31, | |---|---|---| | | 2024 | 2023 | | US Domestic | $60,704 | $60,374 | | Foreign | $(15,842) | $(21,564) | | Income before income taxes | $44,862 | $38,810 | Income Tax Expense (in thousands) | | December 31, | |---|---|---| | | 2024 | 2023 | | Federal current tax | $— | $— | | State current tax | $2,375 | $3,442 | | Foreign current tax | $1,302 | $638 | | Federal deferred tax | $3,269 | $8,960 | | State deferred tax | $(246) | $(2,724) | | Foreign deferred tax | $(674) | $(1,843) | | Income tax expense | $6,026 | $8,473 | - As of December 31, 2024, RadNet had federal net operating loss carryforwards of **$128.2 million** (*