Executive Summary

Revenue rose 9.2% year over year to $471.4M; Adjusted EBITDA fell 20.6% to $46.4M, primarily due to severe winter weather in the Northeast/Houston and Southern California wildfires that reduced revenue by ~$22M and Adjusted EBITDA by ~$15M in Q1. Management reported recovery in March and through April/early May.
RadNet raised full-year 2025 guidance ranges for Imaging Center segment Revenue (+$10M) and Adjusted EBITDA (+$3M), and increased capex by $5M; Digital Health guidance was maintained.
Wall Street consensus: Q1 revenue beat by ~6.4% ($471.4M actual vs $443.0M*), but EPS missed (−$0.35 actual vs −$0.136*), reflecting seasonality and extraordinary events; revenue and volume strength resumed post-February.
Strategic catalysts: accelerating AI adoption (EBCD blended adoption >40%), TechLive remote scanning on ~255 MRIs, and announced iCAD acquisition to add >1,500 provider locations globally to DeepHealth.

What Went Well and What Went Wrong

What Went Well

Advanced imaging mix and PET/CT volumes surged: PET/CT +22.9% YoY; MRI +8.4% and CT +8.3%, supporting stronger revenue per scan and margin mix longer-term.
Digital Health momentum: Revenue +31.1% to $19.2M; Adjusted EBITDA +5.4% to $3.7M; EBCD adoption >40% blended and AI revenue growth key drivers.
Guidance raised: Imaging Center segment total net revenue and Adjusted EBITDA ranges increased, reflecting post-weather rebound and demand trends; capex raised to fund growth.
Management quote: “The cumulative strength of these trends has provided us the confidence to increase 2025 guidance ranges for Revenue and Adjusted EBITDA(1).” — Dr. Berger.

What Went Wrong

Weather/wildfire impact: ~$22M revenue and ~$15M Adjusted EBITDA lost in Q1; Adjusted diluted EPS swung to −$0.35 from +$0.07 YoY (GAAP diluted −$0.51 vs −$0.04).
Same-center volumes down slightly (−0.3%) overall despite March recovery, reflecting January–February disruptions.
Elevated stock-based compensation ($28.5M) and implementation/one-time charges (lease abandonment $5.4M; non-capitalized R&D $3.6M; de novo rent $1.3M) weighed on profitability in the seasonally weakest quarter.

Financial Results

Consolidated performance and trend

Metric	Q3 2024	Q4 2024	Q1 2025
Revenue ($USD Millions)	$461.1	$477.1	$471.4
Adjusted EBITDA ($USD Millions)	$73.7	$75.0	$46.4
GAAP Diluted EPS ($USD)	$0.04	$0.07	$(0.51)
Adjusted Diluted EPS ($USD)	$0.18	$0.22	$(0.35)
DSO (Days)	35.7	32.3	33.3
Cash And Equivalents ($USD Millions)	$748.9	$740.0	$717.3

Year-over-year comparison (Q1)

Metric	Q1 2024	Q1 2025
Revenue ($USD Millions)	$431.7	$471.4
Adjusted EBITDA ($USD Millions)	$58.5	$46.4
GAAP Diluted EPS ($USD)	$(0.04)	$(0.51)
Adjusted Diluted EPS ($USD)	$0.07	$(0.35)
Total Procedures (Units)	2,646,951	2,742,973

Segment breakdown

Segment	Q3 2024	Q4 2024	Q1 2025
Digital Health Revenue ($USD Millions)	$16.4	$18.9	$19.2
Adjusted EBITDA – Digital Health ($USD Millions)	$3.2	$4.5	$3.7
Adjusted EBITDA – Imaging Centers ($USD Millions)	$70.4	$70.5	$42.7

KPIs and modality/payor mix

KPI	Q1 2024	Q1 2025
MRI Procedures (Units)	412,821	447,330
CT Procedures (Units)	250,365	271,170
PET/CT Procedures (Units)	16,594	20,389
Mammography Procedures (Units)	472,514	476,378
Ultrasound Procedures (Units)	639,221	656,427
X-ray & Other (Units)	846,841	861,702
Commercial Insurance (% of payments)	—	58.0%
Medicare (% of payments)	—	23.0%
Capitation (% of payments)	—	6.8%
PET/CT share of payments (%)	—	8.5%
EBCD Adoption (blended)	—	>40%

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Imaging Centers: Total Net Revenue ($)	FY 2025	$1,825–$1,875M	$1,835–$1,885M	Raised
Imaging Centers: Adjusted EBITDA ($)	FY 2025	$265–$273M	$268–$276M	Raised
Imaging Centers: Capital Expenditures ($)	FY 2025	$140–$150M	$145–$155M	Raised
Imaging Centers: Cash Interest Expense ($)	FY 2025	$35–$40M	$35–$40M	Maintained
Imaging Centers: Free Cash Flow ($)	FY 2025	$70–$80M	$70–$80M	Maintained
Digital Health: Total Net Revenue ($)	FY 2025	$80–$90M	$80–$90M	Maintained
Digital Health: Adj. EBITDA (before non-cap R&D) ($)	FY 2025	$15–$17M	$15–$17M	Maintained
Digital Health: Non-cap R&D ($)	FY 2025	$16–$18M	$16–$18M	Maintained
Digital Health: Capital Expenditures ($)	FY 2025	$3–$5M	$3–$5M	Maintained
Digital Health: FCF before non-cap R&D ($)	FY 2025	$11–$13M	$11–$13M	Maintained
Digital Health: FCF after non-cap R&D ($)	FY 2025	$(5)–$(8)M	$(5)–$(8)M	Maintained

Earnings Call Themes & Trends

Topic	Q3 2024 (Prior-2)	Q4 2024 (Prior-1)	Q1 2025 (Current)	Trend
AI/Technology (DeepHealth OS, TechLive, SmartMammo)	Announced RSNA launch; GE/Siemens collabs; advanced imaging mix rising	DeepHealth OS commercialization; DSO progress; guidance laid out	TechLive ~255 MRIs; EBCD blended adoption >40%; iCAD acquisition announced	Accelerating
Advanced Imaging & PET/CT	PET/CT +23.8% YoY; advanced imaging share up 142 bps	Continued elevated advanced imaging; record revenue	PET/CT +22.9% YoY; advanced imaging share up 126 bps YoY	Strong momentum
Labor/Staffing & Costs	Industry-wide pressure; margin expansion despite costs	2025 includes wage/benefit increases; DSO at ~32 days	$45M labor headwind embedded in ’25; TechLive and hiring easing reliance on outside staffing	Improving operationally, cost pressure persists
Medicare/Reimbursement	2025 proposal/mitigation risks discussed	2025 final rule consistent with proposal; potential congressional relief	Awaiting 2026 prelim; pursuing payer reimbursement for EBCD (commercial first)	Mixed—policy uncertainty, commercial momentum
Capitation vs FFS mix	Capitation ~7.3% payments; shift toward FFS	Capitation down; revenue overall up	Continued pivot to FFS; renegotiations ongoing	Transitioning
Regional Trends/Exogenous Events	Strong demand across markets; JV expansion	De novo pipeline; JV growth	Severe weather/wildfires impacted Jan–Feb; recovery in Mar–May	One-off disruption, resolved

Management Commentary

“Advanced imaging…grew 1.26% relative to last year’s first quarter. Most notably, PET/CT procedural volume grew…almost 23%…The cumulative strength of these trends has provided us the confidence to increase 2025 guidance ranges for Revenue and Adjusted EBITDA(1).” — Dr. Berger (Q1 PR)
“We…have approximately 255 of our MRIs enabled [with TechLive]…EBCD…is now experiencing a blended adoption rate of over 40% nationwide…we remain confident…we will see adoption by some third-party payors by year end.” — Dr. Berger (Q1 PR)
“Adding back…the $22 million impact…revenue would have increased 14.3%…Adding back…the $15 million impact…adjusted EBITDA would have increased 5%…As a reminder…the first quarter…is always our most challenged quarter.” — CFO Stolper (Call)
“We ended the first quarter with a cash balance of $717 million and a net debt to adjusted EBITDA ratio of slightly more than 1.” — Dr. Berger (Call)

Q&A Highlights

Advanced imaging growth durability: Management expects sustained growth aided by AI tools and newer techniques (cardiac CT angiography), with PET/CT up ~23% YoY even in a disrupted quarter.
JVs/M&A pipeline robust: Strategic focus on hospital partnerships and selective acquisitions; significant cash available to deploy across Imaging and Digital Health.
Labor headwinds: ~$45M added labor costs embedded in ’25 guidance; TechLive rollout (~255 MRIs) expected to mitigate outside staffing costs over time; hiring environment improving.
Revenue vs consensus: Barclays noted revenue ~6.5% above consensus; management attributed profitability softness to Q1 seasonality and Jan–Feb disruptions, with strong March–May.
PET/CT tracer economics: Pricing pass-through limits margin sensitivity; expect lower tracer prices over time as usage scales, but limited direct profitability impact.
Capitation cadence: Continued migration to fee-for-service at higher rates where appropriate; expect some contracts to return at improved capitation terms later.

Estimates Context

Metric	Q3 2024	Q4 2024	Q1 2025
Revenue Consensus Mean ($USD Millions)	433.9	459.4	443.0
Revenue Actual ($USD Millions)	461.1	477.1	471.4
Primary EPS Consensus Mean ($USD)	0.17	0.1875	−0.136
Primary EPS Actual ($USD)	0.18	0.22	−0.35

Values with asterisks are from S&P Global consensus. Results indicate revenue beats in Q3, Q4, and Q1; Q1 EPS missed consensus due to seasonality and extraordinary weather/wildfire impacts embedded in Q1.
Disclaimer: Values retrieved from S&P Global.*

Key Takeaways for Investors

Q1 headwinds were transitory; underlying demand and volumes resumed in March with guidance raised for FY25 revenue and Adjusted EBITDA, supporting medium-term trajectory.
Advanced imaging and PET/CT growth, plus Digital Health/AI adoption (EBCD >40% blended) are structural drivers of revenue/margins over 2025–2026.
TechLive remote scanning and DeepHealth OS implementations should improve staffing efficiency and throughput, mitigating labor inflation into 2026.
Strategic iCAD acquisition is a meaningful accelerator for global AI distribution and installed base (>1,500 providers across 50+ countries), enhancing DeepHealth’s commercialization.
Reimbursement path: Commercial payer adoption for EBCD appears likely near year-end; Medicare trajectory remains uncertain but 2026 outlook to be clarified mid-2025.
Mix shift away from capitation toward higher-rate fee-for-service in select markets could support pricing and margins despite labor cost headwinds.
Near-term trading: Expect sentiment to focus on execution vs raised guidance, AI adoption milestones, TechLive rollout progress, and iCAD close/integration; watch any updates on payer reimbursement for EBCD as a catalyst.

RadNet, Inc. (RDNT)·Q1 2025 Earnings Summary