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RadNet, Inc. (RDNT)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 delivered record revenue and Adjusted EBITDA, beating consensus on both revenue and adjusted EPS; management raised full‑year Imaging Center revenue and Adjusted EBITDA guidance on strong advanced imaging mix and cost control .
  • Revenue grew 8.4% YoY to $498.2M; Adjusted EBITDA rose 12.3% YoY to $81.2M with margin expanding 57 bps to 16.3% as advanced imaging volumes and pricing improved, and Digital Health added growth .
  • Adjusted diluted EPS was $0.31 vs $0.16 YoY; GAAP diluted EPS was $0.19; non‑GAAP adds included swap losses, de novo rent, lease abandonment, acquisition costs, and non‑capitalized AI R&D .
  • Near‑term catalysts: accelerated rollout of TechLive remote scanning (reducing closures and extending hours), See‑Mode ultrasound AI capacity gains, and cross‑sell/portfolio expansion from the iCAD acquisition; management also flagged a proposed 2026 Medicare fee uplift of ~$4–$5M .

What Went Well and What Went Wrong

  • What Went Well

    • Record quarter: “Both the Imaging Center and Digital Health…achieved record quarterly results,” with revenue +8.4% and Digital Health revenue +30.9% YoY .
    • Mix/pricing tailwinds: Advanced imaging rose to 27.5% of total volumes (+102 bps YoY); management cited capacity initiatives (MRI software upgrades), CT program expansion (e.g., CCTA with AI analytics), and PET/CT growth on prostate/Alzheimer’s/oncology tracers .
    • Tech leverage: TechLive remote scanning “recently cleared by the FDA” reduced MRI room closures by ~42% in a NY pilot; over 300 MR/CT/PET/US systems connected, targeting substantially all advanced imaging equipment by early 2026 .

  • What Went Wrong

    • Non‑GAAP adjustments: Q2 had $2.0M non‑cash swap loss, $0.5M de novo lease expense, $0.1M lease abandonment, $2.3M acquisition costs, and $4.8M non‑capitalized DeepHealth Cloud OS & gen‑AI R&D .
    • Ongoing labor/capacity challenges: The company continues to address technologist shortages with TechLive and software efficiency tools; capacity still being added via de novos (1 opened in Q2; 9 more targeted for 2H25) .
    • Capitation mix drift: Capitation payments were 6.1% of payor mix in Q2 and continue to trend down as some contracts are converted to higher‑priced fee‑for‑service; management framed this as intentional to improve pricing .

Financial Results

Sequential trend (oldest → newest)

MetricQ4 2024Q1 2025Q2 2025
Revenue ($M)477.1 471.4 498.2
Adjusted EBITDA ($M)75.0 46.4 81.2
GAAP Diluted EPS ($)0.07 (0.51) 0.19
Adjusted Diluted EPS ($)0.22 (0.35) 0.31

YoY comparison

MetricQ2 2024Q2 2025
Revenue ($M)459.7 498.2
Adjusted EBITDA ($M)72.3 81.2
Adjusted EBITDA Margin (%)15.7% 16.3%
Adjusted Diluted EPS ($)0.16 0.31

Actual vs. Wall Street consensus (Q2 2025)

MetricQ2 2025 Consensus*Q2 2025 Actual
Revenue ($M)488.1*498.2
Adjusted Diluted EPS ($)0.157*0.31

Values retrieved from S&P Global.*

Segment performance (Q2 2025)

SegmentRevenue ($M)YoY %Adj. EBITDA ($M)YoY %
Digital Health (incl. intersegment)20.7 30.9% 3.4 4.1%
Imaging Centern/an/a77.8 12.7% vs 69.1
Total Company498.2 8.4% 81.2 12.3%

Key KPIs

KPIQ2 2024Q2 2025
Advanced imaging as % of total procedures26.5% 27.5%
MRI volume YoY—+9.0% agg; +6.6% same‑center
CT volume YoY—+8.1% agg; +5.9% same‑center
PET/CT volume YoY—+22.4% agg; +16.2% same‑center
Payments by payor (Commercial/Medicare/Capitation)—58.3% / 23.3% / 6.1%
Cash & Equivalents ($M)—833.2
Net Debt / Adjusted EBITDA (x)—0.96x
Centers (owned/operated)—405
Procedures by modality (units)See detailMRI 490,299; CT 291,820; PET/CT 22,155; US 701,917; Mammo 508,000; X‑ray & Other 900,095

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Imaging Center Total Net RevenueFY 2025$1,835–$1,885B (post‑Q1) $1,850–$1,900B Raised
Imaging Center Adjusted EBITDAFY 2025$268–$276M (post‑Q1) $271–$279M Raised
Imaging Center Capital ExpendituresFY 2025$145–$155M (post‑Q1) $152–$162M Raised
Imaging Center Cash Interest ExpenseFY 2025$35–$40M (post‑Q1) $35–$40M Maintained
Imaging Center Free Cash FlowFY 2025$70–$80M (post‑Q1) $70–$80M Maintained
Digital Health Total Revenue (incl. intersegment)FY 2025$80–$90M (post‑Q1) $80–$90M Maintained
Digital Health Adj. EBITDA (Before Non‑Cap R&D)FY 2025$15–$17M (post‑Q1) $15–$17M Maintained
Digital Health Non‑Cap R&D (Cloud OS & Gen‑AI)FY 2025$16–$18M (post‑Q1) $17–$19M Raised
Digital Health Capital ExpendituresFY 2025$3–$5M (post‑Q1) $2–$4M Lowered
Digital Health FCF Before Non‑Cap R&DFY 2025$11–$13M (post‑Q1) $11–$13M Maintained
Digital Health FCF After Non‑Cap R&DFY 2025$(5)–$(8)M (post‑Q1) $(5)–$(8)M Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024)Previous Mentions (Q1 2025)Current Period (Q2 2025)Trend
AI/Technology (TechLive, DeepHealth OS)Commercial launch of DeepHealth OS; TechLive commercialization; OEM partnerships Continued TechLive deployment; 255 MRIs enabled; EBCD >40% adoption TechLive FDA‑cleared; 300+ systems connected; 42% cut in MRI room closures in NY pilot; Digital Health revenue +30.9% Accelerating deployment/impact
Capacity & De novos9 de novos in 2024; JV growth to 153 centers Weather/wildfire hit Q1; pipeline solid 1 new center opened; 9 more targeted in 2H25; 11 projects for 2026 Expanding footprint
Payor/Medicare—2025 Medicare cuts ~$7–$8M absorbed Proposed 2026 CMS fee schedule implies ~$4–$5M uplift on ~$1.9B revenue Improving 2026 outlook
Mix & Product PerformanceAdvanced imaging 26.8% of volume (Q4) PET/CT +~23% YoY (Q1) Advanced imaging share 27.5%; PET/CT +22.4% (agg) Favorable mix
Capitation vs FFS——Intentional shift to FFS where pricing superior; capitation now ~6% Price/mix optimization
Digital Health M&A—Announced iCAD deal; building DH infrastructure Closed iCAD (7/17); closed See‑Mode (6/4); cross‑sell and product suite expansion underway Portfolio expansion

Management Commentary

  • “Advanced imaging as a percentage of total procedures increased to 27.5%…an improvement of 102 basis points,” driven by MRI software upgrades, CT expansion (e.g., CCTA with AI), and PET/CT growth in prostate/Alzheimer’s and new tracers .
  • “TechLive…enabling remote control of advanced imaging equipment to expand hours of operation,” with a NY pilot reducing MRI room closures ~42%; >300 systems connected; targeting substantially all advanced imaging equipment by early 2026 .
  • Digital Health growth: EBCD adoption approaching ~45% nationally; iCAD adds 1,500+ provider locations and >8M annual mammograms across 50 countries; See‑Mode ultrasound AI shows up to ~30% scan‑time reduction in early deployment .
  • Liquidity: “As of 06/30/2025, our cash balance was $833,000,000 and net debt to adjusted EBITDA ratio was 0.96” .

Q&A Highlights

  • Capacity and efficiency gains: Management quantified TechLive’s impact (42% fewer MRI room closures in NY pilot) and See‑Mode ultrasound AI (up to ~30% scan‑time reduction), emphasizing high flow‑through margins from pushing more scans through existing fixed cost base .
  • De novo pipeline: 11 facilities targeted in 2025 (2 opened YTD; 9 to go) and 11 slated for 2026, implying ~5% center growth vs 405 sites .
  • iCAD integration: Early days but aiming to blend ProFound Breast Suite with DeepHealth products into a more comprehensive offering, with cross‑sell across extensive global installed base .
  • Medicare 2026: Initial CPT/GPCI analysis implies ~$4–$5M uplift vs 2025; final rule due around Nov 1, 2025 .
  • Payor strategy: Capitation remains profitable but RadNet is converting some contracts to FFS for better pricing; despite lower capitation mix, total revenue rises .
  • Cost structure: Contact center costs exceed $60M annually; DeepHealth OS and automation aim to lower handling times and boost productivity .

Estimates Context

  • Q2 2025 beats: Revenue $498.2M vs $488.1M consensus*; Adjusted diluted EPS $0.31 vs $0.157 consensus* .
  • Consensus trajectory (forward):
    • Q3 2025 EPS $0.227*; Revenue $494.0M*
    • Q4 2025 EPS $0.205*; Revenue $515.6M*
      Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Advanced imaging mix shift, improved payer rates, and TechLive‑driven capacity are expanding margins; Adjusted EBITDA margin rose to 16.3% (+57 bps YoY) and could continue to benefit as Digital Health tools scale .
  • Full‑year Imaging Center guidance was raised for revenue and Adjusted EBITDA; capex was also raised to support growth—expect continued investment in capacity and tech .
  • Digital Health is a structural growth vector (revenue +30.9% YoY in Q2), with iCAD and See‑Mode likely to accelerate adoption and external commercialization in 2H25/2026 .
  • Intentional mix pivot from capitation to fee‑for‑service should support pricing/margins despite lower capitation share, consistent with stronger commercial rates .
  • Balance sheet strength enables M&A and de novos (cash $833M; net leverage ~0.96x), positioning RadNet to compound growth while funding Digital Health build‑out .
  • Watch the 2026 Medicare final rule (~Nov. 2025) and TechLive/DeepHealth OS rollout pace; both are medium‑term earnings drivers .
  • Non‑GAAP adds (notably non‑capitalized AI R&D) and definition differences (Adjusted EBITDA vs “EBITDA” in consensus) matter for comps; stick to adjusted EPS/EBITDA for apples‑to‑apples .

Citations:

  • Q2 2025 press release and 8‑K:
  • Q2 2025 earnings call transcript:
  • Q1 2025 8‑K (prior quarter):
  • Q4 2024 8‑K (two quarters prior):

Estimates: Values retrieved from S&P Global.*