RadNet Reports Record Q2 Revenue, Boosted by AI Integration and Advanced Imaging Growth

RadNet Posts Record Q2 Revenue Up 8% | The Motley Fool

RadNet (RDNT 1.37%), a major operator of outpatient diagnostic imaging centers, published its second quarter 2025 results on August 11, 2025. The company reported record revenue of $498.2 million and non-GAAP earnings per share (EPS) of $0.31, exceeding analyst expectations of $489.0 million and $0.16, respectively. This translates to a revenue beat of $9.2 million (GAAP) and an EPS beat of $0.15 (non-GAAP). Key drivers of outperformance included higher advanced imaging volumes and significant growth within its digital health business. Management characterized the period as one of operational and financial strength, raising full-year 2025 guidance for both Imaging Center revenue and Adjusted EBITDA (non-GAAP). Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report. RadNet runs a national network of 405 outpatient imaging centers, offering scans such as MRI, CT, PET/CT, ultrasound, and mammography. RadNet's core business is providing outpatient diagnostic imaging services through its centers. It also operates a growing digital health division that creates artificial intelligence (AI) tools for radiologists and workflow software for imaging centers. Recently, the company has focused on expanding its advanced imaging capacity, rolling out new technology such as TechLive (an AI-powered remote scanning system), and boosting adoption of its Enhanced Breast Cancer Detection (EBCD) AI tool. Key metrics watched by leadership include procedure volume, payer mix, cost control, and digital health uptake. Investment in new centers, AI-based diagnostic solutions, and internal workflow improvements are central to RadNet's strategy. The quarter saw robust financial results, setting records in both revenue (GAAP) and adjusted EBITDA (non-GAAP). Revenue (GAAP) climbed 8.4%, driven by a 9.0% rise in advanced imaging volumes -- spanning MRI, CT, and PET/CT modalities. Advanced imaging procedures contributed 27.5% of the total procedural mix, up 102 basis points from the prior year. The company also saw strong growth in PET/CT procedures, particularly in prostate and Alzheimer's scans, reflecting higher demand for advanced diagnostics and new clinical indications. On the digital health front, sales reached $20.7 million, up 30.9% from the previous year. Notably, adjusted EBITDA for digital health grew by only 4.1%. Non-capitalized R&D spend for these efforts grew to $4.8 million. The EBCD product -- an AI tool for detecting breast cancer during screening mammography -- was used by nearly 45% of eligible screening patients. Profitability rebounded: adjusted EBITDA rose 12.3%, and net income turned positive year over year. The adjusted EBITDA margin improved by 57 basis points, supported by increased advanced and higher-margin imaging volumes and operational leverage. Management reported that PET/CT now accounts for 8.7% of revenue. On the balance sheet, the company ended the period with $833.2 million in cash and maintained a net debt to Adjusted EBITDA ratio of 0.96x, giving it flexibility for further investments and acquisitions. There were several notable items: the company incurred one-time expenses including a $2.0 million loss on interest rate swaps, $2.3 million for acquisition costs, and $4.8 million R&D expense tied to digital health development. These items were adjusted out of non-GAAP results. The company's strategic progress was evident across several fronts. Expansion plans remain on track, with one new imaging center opened in the quarter and nine more planned for 2025. Total centers in operation reached 405. Leadership has prioritized both regional growth and joint ventures with health systems, seeking to deepen partnerships and widen market reach. About 154 centers are now part of joint venture structures -- a model seen as attractive for hospital partners. Technology advancement remains pivotal. The TechLive system, which allows radiology technologists to perform scans remotely, expanded across the network, easing persistent labor shortages and enabling extended operating hours. This technology supports MRI and is being piloted on ultrasound systems. Adoption of AI-driven workflow tools and software suites (such as DeepHealth OS) continues across more centers, with expectations that efficiency and productivity gains will be visible into 2026. Digital health investments yielded significant topline growth but less progress on margins. While sales of digital health products -- mostly workflow software and AI for radiologist interpretation -- jumped sharply, increased non-capitalized R&D caused segment Adjusted EBITDA to rise by only a small margin. Management plans continued investment in AI, including generative AI and cloud-based workflow operating systems. The recent acquisition of iCAD, a company focused on AI for breast cancer diagnosis (announced April 15, 2025), remains subject to customary closing conditions and has not yet been completed. The company made progress in reducing reliance on capitation contracts (where providers are paid a fixed amount per patient), favoring higher-rate fee-for-service arrangements. This transition primarily affects California and introduces some revenue variability. Market demand for diagnostic imaging remains strong. The company cited rising labor expenses, with $45 million in additional labor costs built in for FY2025, partly offset by workflow technology and training programs. Following strong results, management raised FY2025 guidance. The new Imaging Center revenue target is $1,850-$1,900 million for full-year 2025, up from prior forecasts, and Imaging Center adjusted EBITDA is now expected to reach $271-$279 million. Digital Health revenue guidance remains at $80-$90 million, but R&D spending for the segment has been increased to $17-$19 million for FY2025 as new products are developed and rolled out. Free cash flow expectations for the imaging segment remain stable at $70-$80 million (non-GAAP) for full-year 2025. RadNet does not currently pay a dividend. Investors should watch several trends going forward: Any material shift in reimbursement rates for imaging -- especially from Medicare -- would also be noteworthy, but at this stage, management describes the regulatory outlook as stable with no major rate changes anticipated in the near term.

RadNet Reports Record Q2 Revenue

RadNet (RDNT 19.53%) reported its Q2 2025 results on Aug. 11, 2025, posting record revenue of $498.2 million, up 8.4% year-over-year and record adjusted EBITDA (non-GAAP) of $81.2 million, up 12.3% YoY. Management raised full-year 2025 guidance for both revenue and adjusted EBITDA (non-GAAP) and highlighted margin improvement from tech-enabled productivity gains, recent acquisitions, and AI rollouts integrated across core and digital health operations. RadNet advances AI-enabled productivity and margin expansion Record quarterly adjusted EBITDA margin (non-GAAP) improved by 57 basis points year-over-year to 16.3%, propelled by rapid adoption of TechLive remote scanning and AI-driven workflow upgrades. The pilot program for TechLive in New York reduced MRI room closures by 42%, with more than 300 imaging systems now connected and company-wide integration on track for early 2026. Capital allocation continues to favor high-return investments in advanced imaging capacity and clinical workflow technologies. "The most significant impact we are experiencing with TechLive is its ability to expand hours of operation by staffing exam rooms, which previously would have been closed. As an example, in a pilot deployment at 64 locations, inside of RadNet's New York area facilities, TechWise significantly contributed to a 42% decrease in MRI room closures during the second quarter of 2025 as compared with the same period of 2024. Currently, more than 300 of RadNet's MR, CT, PETCT, and ultrasound systems are connected with DeepHealth's TechLive solution and are targeting to substantially all of RadNet's advanced imaging equipment to be connected with TechLive in early 2026." -- Howard Berger, CEO The successful scaling of remote scanning has rapidly unlocked latent capacity with limited capital investment, setting the stage for continued operating leverage and offering a defensible solution to industry-wide technologist shortages. Acquisition strategy and integration accelerate digital health growth RadNet reported digital health segment revenue of $20.7 million, up 30.9% year-over-year, anchored by the iCAD and C Mode acquisitions in July and June, respectively. These deals provide access to over 1,500 new health care provider locations (iCAD) following the July 17, 2025, acquisition completion. and introduce AI-powered ultrasound tools showing up to a 30% scan time reduction in early deployment after the June 2025 acquisition of C Mode Technology. Digital health EBITDA grew 4.1% year-over-year despite infrastructure investment, and management signals meaningful external commercialization potential and organizational efficiencies from these integrations. "On July 17, the previously announced acquisition of iCAD, a global leader in clinically proven AI-powered breast health solutions was completed. ICAD's profound breast health suite and RadNet DeepHealth AI-powered screening solutions together can materially expand and improve patient diagnosis and outcomes on a global basis to further enabling accuracy and early detection. With over 1,500 health care provider locations, facilitating over 8 million annual mammograms in 50 countries ICAD's installed base and strong sales, engineering, and marketing capabilities, will provide immediate broad, and valuable customer relationships and commercialization capabilities that can accelerate detailed objectives. On June 4th, the acquisition of C Mode Technology a global innovator in AI for ultrasound imaging was completed. -- Howard Berger, CEO These strategic acquisitions enhance both RadNet's proprietary workflow and provide a platform for external revenue streams, diversifying its growth drivers and fortifying competitive differentiation in AI-driven diagnostics. RadNet balances core center expansion with disciplined capital management Management continues to shift low-margin capitation contracts to higher-paying fee-for-service models, a trend observed over the last four to six quarters, while carefully calibrating investment between de novo center openings, M&A, and digital health. "... we are targeting to build 11 facilities and we've opened two thus far. We've got nine that are, on the docket, for the second half of the year to open. And we have 11 projects in the works, for additional de novo facilities in 2026. So if you add those two together, you're talking about 22 additional centers on 405 current locations. So that's about a 5% increase in centers or additional potential capacity, to be filled going forward." -- Mark Stolper, CFO This measured expansion paired with a solid capital base positions RadNet to capture growing demand while sustaining flexibility for future acquisitions and strategic investments. Looking Ahead Management raised 2025 imaging center revenue guidance by $15 million and adjusted EBITDA (non-GAAP) by $3 million. This now reflects sustained margin improvement (adjusted EBITDA margin increased to 16.3% in Q2 2025, non-GAAP) and successful AI scale-up. Full-year guidance for the digital health segment will be updated after Q3 2025 results to incorporate early contributions from iCAD and C Mode. Preliminary 2026 Medicare reimbursement proposals would result in a $4 million to $5 million revenue increase for 2026. This marks the first positive adjustment in Medicare reimbursement for 2026 after about five years of annual cuts, with a final rule expected in November 2025.

RadNet Reports Second Quarter Financial Results with Record Quarterly Revenue and Adjusted EBITDA¹ and Revises Upwards 2025 Financial Guidance Ranges

, (GLOBE NEWSWIRE) -- (NASDAQ: RDNT), a national leader in providing high-quality, cost-effective, fixed-site outpatient diagnostic imaging services through a network of 405 owned and operated outpatient imaging centers, today reported financial results for its second quarter of 2025. Dr. , President and Chief Executive Officer of , commented, "Both the reportable operating segments demonstrated strong growth and achieved record quarterly results. In the second quarter of 2025, total Company Revenue grew 8.4% and segment Revenue increased 30.9% from last year's same quarter. Growth was driven by strong increases in aggregate and same center procedural volumes, improved reimbursement from commercial and capitated payors, a continuing shift in procedural volumes towards advanced imaging modalities and incremental sales and licenses of workflow software and AI solutions." continued, "Our focus has been on driving more advanced imaging procedures (MRI, CT and PET/CT) and increasing advanced imaging capacity at the imaging centers through a variety of initiatives. Within MRI, the 9.0% aggregate and 6.6% same center growth in the second quarter as compared with last year's second quarter is partially the result of capacity created from investments made in MRI software upgrades and operating protocols which enable shorter scan times. CT programs have expanded on both coasts to offer more complex procedures, such as Cardiac CT Angiography, which is often enhanced with AI-assisted analytics. Within PET/CT, our fastest growing modality with 22.4% growth from last year's second quarter, emphasis has been on newer diagnostic and screening offerings for prostate cancer, Alzheimer's disease and dementia and new procedures with leading-edge tumor-specific radioactive tracers. The growth in advanced imaging, particularly MRI, has been furthered by the implementation of Digital Health's , our remote screening technology recently cleared by the FDA. is assisting with ongoing technologist staffing challenges by enabling remote control of advanced imaging equipment to expand hours of operation and by staffing exam rooms which otherwise would have been closed." "The growth in advanced imaging from these initiatives along with effective cost management contributed to an increase in our Adjusted EBITDA margin to 16.3% during the second quarter of 2025, which compares with 15.7% in last year's second quarter, an improvement of 57 basis points. Adjusted EBITDA during the second quarter of 2025 increased by 12.3% to from in last year's second quarter," added . continued, "In response to high demand and patient backlogs in many of RadNet's local markets, we continue to pursue capacity expansion through the development and construction of new imaging centers. One new facility was opened during the second quarter in , and nine additional de novo facility openings are projected for the remainder of 2025. Within , we continue to see growth from the nationwide expansion of the AI-powered Enhanced Breast Cancer Detection program, where today almost 45% of screening mammography patients are electing to participate for a out-of-pocket charge. We continue to make progress with the internal implementation of the remote scanning solution, elements of the DeepHealth Operations and Diagnostic suites and the newly acquired See-Mode ultrasound AI capabilities." "Given the sustainable positive trends we are experiencing and the strong financial performance of the second quarter, we are revising upwards 2025 guidance levels for Revenue and Adjusted EBITDA in anticipation of financial results that we believe will exceed both our original expectations and the amendments we made to the guidance ranges upon releasing first quarter 2025 results in May," concluded . Unadjusted for unusual or one-time items impacting the second quarter of 2025, Total Company Net Income for the second quarter of 2025 was as compared with a Total Company Net Loss of for the second quarter of 2024. Net Income Per Share for the second quarter of 2025 was , compared with a Net Loss per share of in the second quarter of 2024, based upon a weighted average number of diluted shares outstanding of 75.5 million shares in 2025 and 73.4 million shares in 2024. There were a number of unusual or one-time items impacting the second quarter including: of non-cash loss from interest rate swaps; expense related to leases for de novo facilities under construction that have yet to open their operations; of lease abandonment charge; of acquisition transaction costs; and of non-capitalized research and development expenses related to the DeepHealth Cloud OS and generative AI. Adjusting for the above items, Total Company Adjusted Earnings was and diluted Adjusted Earnings Per Share was during the second quarter of 2025. This compares with Total Company Adjusted Earnings of and diluted Adjusted Earnings Per Share of during the second quarter of 2024. For the second quarter of 2025, as compared with the prior year's second quarter, MRI volume increased 9.0%, CT volume increased 8.1%, PET/CT volume increased 22.4% and routine imaging (inclusive of nuclear medicine, ultrasound, mammography, x-ray and other exams) increased 3.5% over the prior year's second quarter. On a same-center basis, including only those centers which were part of for both the second quarters of 2025 and 2024, MRI volume increased 6.6%, CT volume increased 5.9%, PET/CT volume increased 16.2% and routine imaging increased 1.4% over the prior year's second quarter. Unadjusted for one-time or unusual items, Total Company Net Loss for the first six months of 2025 was as compared with a Total Company Net Loss of for the first six months of 2024. Net Loss Per Share for the six-month period of 2025 was , compared with a Net Loss per share of in the six-month period of 2024, based upon a weighted average number of diluted shares outstanding of 74.1 million shares in 2025 and 71.8 million shares in 2024. It is recommended that participants dial in approximately 5 minutes prior to the start of the call. There will also be simultaneous and archived webcasts available at https://viavid.webcasts.com/starthere.jsp?ei=1729070&tp_key=3a3e8702a3 or http://www.radnet.com under the "Investors" menu section and "News Releases" sub-menu of the website. An archived replay of the call will also be available and can be accessed by dialing 844-512-2921 from the , or 412-317-6671 for international callers, and using the passcode 10201853. About is a leading national provider of freestanding, fixed-site diagnostic imaging services in based on the number of locations and annual imaging revenue. has a network of 405 owned and/or operated outpatient imaging centers. RadNet's markets include , , , , , , and . In addition, provides radiology information technology and artificial intelligence solutions marketed under the DeepHealth brand, teleradiology professional services and other related products and services to customers in the diagnostic imaging industry. Together with contracted radiologists, and inclusive of full-time and per diem employees and technologists, has a total of over 11,000 team members. For more information, visit http://www.radnet.com. Forward Looking Statements This press release contains "forward-looking statements" within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are expressions of our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, and anticipated future conditions, events and trends. Forward-looking statements can generally be identified by words such as: "anticipate," "intend," "plan," "goal," "seek," "believe," "project," "estimate," "expect," "strategy," "future," "likely," "may," "should," "will" and similar references to future periods. Forward-looking statements in this press release include, among others, statements about our anticipated business results, balance sheet and liquidity and our future liquidity, burn rate and our continuing ability to service or refinance our current indebtedness. Forward-looking statements are neither historical facts nor assurances of future performance. Because forward-looking statements relate to the future, they are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not place undue reliance on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: Any forward-looking statement contained in this current report is based on information currently available to us and speaks only as of the date on which it is made. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that we may make from time to time, whether as a result of changed circumstances, new information, future developments or otherwise, except as required by applicable law. Regulation G: GAAP and Non-GAAP Financial Information This release contains certain financial information not reported in accordance with GAAP. The Company uses both GAAP and non-GAAP metrics to measure its financial results. The Company believes that, in addition to GAAP metrics, these non-GAAP metrics assist the Company in measuring its cash-based performance. The Company believes this information is useful to investors and other interested parties because it removes unusual and nonrecurring charges that occur in the affected period and provides a basis for measuring the Company's financial condition against other quarters. Such information should not be considered as a substitute for any measures calculated in accordance with GAAP, and may not be comparable to other similarly titled measures of other companies. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Reconciliation of this information to the most comparable GAAP measures is included in this release in the tables which follow. The Company defines Adjusted EBITDA as earnings before interest, taxes, depreciation and amortization, each from continuing operations and adjusted for losses or gains on the sale of equipment, other income or loss, debt extinguishments and non-cash equity compensation. Adjusted EBITDA includes equity earnings in unconsolidated operations and subtracts allocations of earnings to non-controlling interests in subsidiaries, and is adjusted for non-cash or extraordinary and one-time events taken place during the period. Adjusted EBITDA is reconciled to its nearest comparable GAAP financial measure. Adjusted EBITDA is a non-GAAP financial measure used as analytical indicator by management and the healthcare industry to assess business performance, and is a measure of leverage capacity and ability to service debt. Adjusted EBITDA should not be considered a measure of financial performance under GAAP, and the items excluded from Adjusted EBITDA should not be considered in isolation or as alternatives to net income, cash flows generated by operating, investing or financing activities or other financial statement data presented in the consolidated financial statements as an indicator of financial performance or liquidity. As Adjusted EBITDA is not a measurement determined in accordance with GAAP and is therefore susceptible to varying methods of calculation, this metric, as presented, may not be comparable to other similarly titled measures of other companies. As noted above, the Company defines Free Cash Flow as Adjusted EBITDA less total Capital Expenditures (whether completed with cash or financed) and Cash Interest Expense. Free Cash Flow is a non-GAAP financial measure. The Company uses Free Cash Flow because the Company believes it provides useful information for investors and management because it measures our capacity to generate cash from our operating activities. Free Cash Flow does not represent total cash flow since it does not include the cash flows generated by or used in financing activities. In addition, our definition of Free Cash Flow may differ from definitions used by other companies. Free Cash Flow should not be considered a measure of financial performance under GAAP, and the items excluded from Adjusted EBITDA should not be considered in isolation or as alternatives to net income, cash flows generated by operating, investing or financing activities or other financial statement data presented in the consolidated financial statements as an indicator of financial performance or liquidity. As Adjusted EBITDA is not a measurement determined in accordance with GAAP and is therefore susceptible to varying methods of calculation, this metric, as presented, may not be comparable to other similarly titled measures of other companies. The Company defines Adjusted Earnings (Loss) Per Share as net income or loss attributable to common stockholders and excludes losses or gains on the disposal of equipment, loss on debt extinguishments, bargain purchase gains, severance costs, loss on impairment, loss or gain on swap valuation, gain on extinguishment of debt, unusual or non-recurring entries that impact the Company's tax provision and any other non-recurring or unusual transactions recorded during the period. Adjusted Earnings (Loss) Per Share is reconciled to its nearest comparable GAAP financial measure. Adjusted Earnings (Loss) Per Share is a non-GAAP financial measure used as analytical indicator by management and the healthcare industry to assess business performance. Adjusted Earnings Per Share should not be considered a measure of financial performance under GAAP, and the items excluded from Adjusted Earnings Per Share should not be considered in isolation or as alternatives to net income, cash flows generated by operating, investing or financing activities or other financial statement data presented in the consolidated financial statements as an indicator of financial performance or liquidity. As Adjusted Earnings Per Share is not a measurement determined in accordance with GAAP and is therefore susceptible to varying methods of calculation, this metric, as presented, may not be comparable to other similarly titled measures of other companies.