RadNet(RDNT) - 2025 Q2 - Quarterly Results

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