RadNet(RDNT) - 2025 Q2 - Quarterly Report

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