RadNet Inc.
08/10/2026 | Press release | Distributed by Public on 08/10/2026 15:07
Quarterly Report for Quarter Ending June 30, 2026 (Form 10-Q)
Management's Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our unaudited condensed consolidated financial statements and notes thereto included in Part I, Item 1 of this Quarterly Report on Form 10-Q (this "report") and with our audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K, as amended, for the fiscal year ended December 31, 2025 (the "Annual Report") filed with the U.S. Securities and Exchange Commission (the "SEC").
As used in this Quarterly Report on Form 10-Q, the terms "RadNet," "we," "us," and "our" refer to RadNet, Inc., a Delaware corporation, and where appropriate, our consolidated subsidiaries.
Forward-Looking Statements
This report contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act") and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements reflect current views about future events and are based on our currently available financial, economic and competitive data and on current business plans. Actual events or results may differ materially depending on risks and uncertainties that may affect our operations, markets, services, prices and other factors.
In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "expect," "intend," "plan," "anticipate," "believe," "estimate," "predict," "potential," "continue," "assumption" or the negative of these terms or other comparable terminology. Forward-looking statements in this report include, among others, statements we make regarding:
•expectations concerning domestic and global economic conditions, rates of inflation, or changes in interest rates;
•anticipated trends in our revenues, operating expenses or capital expenditures, and our financial guidance;
•expected timing and potential impact of regulatory changes affecting our business;
•expected future market acceptance for our products or services, and our competitive strengths in the markets we serve;
•our ability to successfully acquire and integrate new businesses, and achieve expected benefits, synergies or operating results from those acquisitions; and
•economics and cost savings anticipated to be derived from our investments in artificial intelligence and machine learning products and solutions.
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 known and unknown risks, uncertainties and other factors that are difficult to predict and out of our control. Our actual results, level of activity, performance or achievements may be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Important factors that could cause our actual results to differ materially from those indicated or implied in our forward-looking statements include the factors included in "Risk Factors" in our Annual Report as supplemented by the information in Part II- Item 1A below. You should consider the inherent limitations on, and risks associated with, forward-looking statements and not unduly rely on the accuracy of predictions contained in such forward-looking statements.
Any forward-looking statement in this report is based on information currently available to us and speaks only as of the date of this report. We do not undertake any responsibility to release publicly any revisions to these forward-looking statements to take into account events or circumstances that occur after the date of this report or any unanticipated events which may cause actual results to differ from those expressed or implied by the forward-looking statements contained in this report, except as required by law.
Overview
Our operations comprise two segments for financial reporting purposes for this reporting period, Imaging Centers and Digital Health.
Within our Imaging Centers segment, we are a national provider of diagnostic imaging services in the United States. As of June 30, 2026, we operated directly, or indirectly through joint ventures with hospitals and health system partners, 442 centers located in Arizona, California, Delaware, Florida, Idaho, Indiana, Maryland, New Jersey, New York, Texas, and Virginia. Our centers provide physicians with imaging capabilities to facilitate the diagnosis and treatment of diseases and disorders and may reduce unnecessary invasive procedures, often reducing the cost and amount of care for patients. Internationally, our subsidiary The HLH Imaging Group Limited ("HLH Imaging"), provides teleradiology services for remote interpretation of images on behalf of providers within the framework of the United Kingdom's National Health Service.
We established a Digital Health business segment during our 2024 fiscal year under the umbrella brand "DeepHealth." The Digital Health segment combines our former Artificial Intelligence ("AI") business with our workflow solutions, including those previously marketed under the eRAD brand. This includes providing AI-powered health informatics aimed at empowering breakthroughs in care through imaging. It leverages advanced AI to improve operational efficiency and clinical outcomes in breast, chest, musculoskeletal, neuro, prostate and thyroid health. At the heart of the portfolio is a cloud-native operating system-DeepHealth OS-that unifies data across clinical and operational workflows. By integrating AI, workflow orchestration and data management into a single operating system, the Digital Health segment enables health systems to better automate radiology, guide patient journeys, stage-shift disease and advance acute care. The Digital Health segment provides these solutions to RadNet and to 2,983 customers in the United States and internationally.
The Digital Health segment's solutions have been clinically validated and are already delivering measurable impact at scale. Our technology is deployed worldwide, including at thousands of screening sites in the United States and Europe, and is the most widely used solution for lung cancer screening in the United Kingdom. Clinical outcomes demonstrate strong performance, including a 21% increase in cancer detection rates in breast screening. Our end-to-end solutions are widely adopted in real-world settings, including by RadNet and external customers, and support more than 24 million scans worldwide.
As part of our continued strategic expansion in Digital Health, in 2025 we completed three acquisitions: iCAD, Inc. ("iCAD"), a provider of AI-powered breast health solutions; See-Mode Technologies Pte. Ltd. ("See-Mode"), a medical technology company focused on enhancing ultrasound-based diagnostics through artificial intelligence; and CIMAR (UK) Limited ("CIMAR"), a cloud-native provider of image-exchange solutions. In the first quarter of 2026, we acquired Gleamer SAS ("Gleamer"), a radiology AI company with a portfolio of AI solutions across X-ray, magnetic resonance imaging ("MRI"), computed tomography ("CT"), and mammography. iCAD and See-Mode are already fully integrated into the Digital Health segment, with See-Mode's technology deployed at 345 RadNet imaging services centers to improve the efficiency of thyroid ultrasound exams across the network. The CIMAR integration has also been completed, including the expansion of solution deployment for HLH Imaging, RadNet's subsidiary in the United Kingdom. We expect to complete the integration of Gleamer in the third quarter of 2026. Gleamer products have already been deployed at RadNet imaging centers in California, Arizona, Maryland, New York and Florida, and we expect them to be rolled out across most RadNet centers by the end of 2026.
For further financial information about these segments, see Note 5, Segment Reporting, in the notes accompanying our financial statements included in this report.
Recent Developments
The following table presents the total number of imaging centers in operation, including both consolidated and non-consolidated centers, and our consolidated revenues for the six months ended June 30, 2026 and 2025:
| Six Months Ended June 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Centers in operation | 442 | 405 | |||||||||
| Net consolidated revenues (millions) | $ | 1,198 | $ | 970 | |||||||
Our imaging services include MRI, CT, positron emission tomography ("PET"), nuclear medicine, mammography, ultrasound, X-ray, fluoroscopy and other related procedures. The vast majority of our centers offer multi-modality imaging services, a key point of differentiation from our competitors. The multi-modality offering provides a "one-stop" solution for our customers and referral sources. It also diversifies our revenue base, and reduces our exposure to changes in reimbursement rates for certain imaging modalities.
Our revenue is derived from a diverse mix of payors, including private payors and commercial insurance companies, managed care capitated payors, and government payors, such as Medicare and Medicaid. We believe our payor diversity mitigates our exposure to possible unfavorable reimbursement trends within any one payor class. Our total service fee revenue,
net of contractual allowances and discounts, and implicit price concessions for the three and six months ended June 30, 2026 and 2025 received from our various payors is summarized in the following table (in thousands):
| In Thousands |
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Commercial insurance | $ | 339,401 | $ | 278,902 | $ | 655,367 | $ | 541,410 | |||||||||||||||
| Medicare | 150,821 | 116,331 | 287,923 | 224,499 | |||||||||||||||||||
| Medicaid | 14,452 | 12,597 | 28,468 | 24,283 | |||||||||||||||||||
| Workers' compensation/personal injury | 13,533 | 10,642 | 25,830 | 21,114 | |||||||||||||||||||
| Other payors | 36,831 | 29,394 | 70,383 | 57,087 | |||||||||||||||||||
| Management fee revenue | 7,858 | 6,688 | 15,339 | 12,967 | |||||||||||||||||||
| Other revenue | 29,693 | 13,509 | 54,497 | 26,052 | |||||||||||||||||||
| Revenue under capitation arrangements | 30,131 | 30,167 | 60,544 | 62,217 | |||||||||||||||||||
| Total service revenue | $ | 622,720 | $ | 498,230 | $ | 1,198,351 | $ | 969,629 | |||||||||||||||
Our revenue is not always consistent across each quarter. We generally experience the lowest volumes of procedures and the lowest level of revenue during the first quarter of each year. This is primarily the result of two factors. First, our volumes and revenue are typically impacted by winter weather conditions in our northeastern operations. It is common for snowstorms and other inclement weather to result in patient appointment cancellations and, in some cases, imaging center closures. Second, in recent years, we have observed greater participation in high deductible health plans by patients. Because these deductibles reset in January for most of these patients, a patient's out-of-pocket cost for a given procedure is generally highest during the first quarter and declines over the course of the year as the deductible is satisfied. As a significant portion of our outpatient imaging procedures are elective or schedulable, we have observed that patients defer these procedures to later quarters.
Imaging Centers Acquisitions
During the six months ended June 30, 2026, we completed the acquisition of certain assets of entities which engage directly in the practice of radiology or in associated businesses for an aggregate consideration of $86.0 million. These acquisitions include:
Regional Radiology Center: 13 imaging centers in Florida;
Northwest Radiology Network PC: 6 imaging centers in Indiana; and
Intermountain Medical Imaging: 5 Centers in Idaho
See Note 4, Business Combinations and Related Activity, in the notes accompanying our financial statements in this report for additional information, including the fair value determination of the acquired assets and assumed liabilities, associated with these acquisitions.
Joint Venture Activity
At June 30, 2026, 157 of our imaging centers were operating as joint ventures with hospital and health system partners. On behalf of the joint ventures, we manage the day-to-day operations and perform most management and support services in exchange for a management fee. We charged management service fees from the centers underlying these joint ventures of approximately $7.9 million and $6.5 million for the three months ended June 30, 2026 and 2025, respectively, and $15.3 million and $12.6 million for the six months ended June 30, 2026 and 2025, respectively.
For information on our investment in unconsolidated joint ventures, key balance sheet data and income statement data for the unconsolidated joint ventures, see Note 2, Significant Accounting Policies - Investment in Joint Ventures in the notes accompanying our financial statements included in this report.
Critical Accounting Policies
The SEC defines critical accounting estimates as those that (a) are most important to the portrayal of a company's financial condition and results of operations and (b) require management's most difficult, subjective or complex judgment, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods. In Note 2 , Significant Accounting Policies, in the notes accompanying our financial statements included in this report and in our Annual Report, we discuss our significant accounting policies, including those that do not require management to make difficult, subjective or complex judgments or estimates. The most significant areas involving management's judgments and estimates are described below.
Use of Estimates
The financial statements included in this report were prepared in accordance with U.S. generally accepted accounting principles ("GAAP"), which requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. These estimates and assumptions affect various matters, including our reported amounts of assets and liabilities in our consolidated balance sheets at the dates of the financial statements, our disclosure of contingent assets and liabilities at the dates of the financial statements, and our reported amounts of revenues and expenses in our consolidated statements of operations during the reporting periods. These estimates involve judgments with respect to numerous factors that are difficult to predict and are beyond management's control. As a result, actual amounts could materially differ from these estimates.
Revenues
Our revenues generally relate to net patient fees received from various payors and patients themselves under contracts of which our performance obligations are to provide diagnostic services to the patients. Revenue is recorded during the period our obligations to provide diagnostic services are satisfied, which is generally over a period of less than one day. The contractual relationships with patients, in most cases, also involve a third-party payor (Medicare, Medicaid, managed care health plans and commercial insurance companies, including plans offered through the health insurance exchanges) and the transaction prices for the services provided are dependent upon the terms provided by (in cases of Medicare and Medicaid) or negotiated with (in cases of managed care health plans and commercial insurance companies) the third-party payors. The payment arrangements with third-party payors for the services we provide to the related patients typically specify payments at amounts less than our standard charges and generally provide for payments based upon predetermined rates per diagnostic services or discounted fee-for-service rates. Management continually reviews the contractual estimation process to consider and incorporate updates to laws and regulations, changes in business and economic conditions, and the frequent changes in managed care contractual terms resulting from contract re-negotiations and renewals.
As it relates to the Consolidated Medical Group (as defined in Note 1, Nature of Business and Basis of Presentation, of the notes accompanying our financial statements included in this report), this service fee revenue includes payments for both the professional medical interpretation revenue recognized by our Consolidated Medical Group as well as the payment for all other aspects related to the technical and administrative imaging services that we provide, for which we earn management fees. As it relates to other centers, this service fee revenue is earned through providing the use of our diagnostic imaging equipment and the provision of technical services as well as providing administration services such as clerical and administrative personnel, bookkeeping and accounting services, billing and collection, provision of medical and office supplies, secretarial, reception and transcription services, maintenance of medical records, and advertising, marketing and promotional activities.
Our service fee revenue is based upon our management's estimate of amounts we expect to be entitled to receive from patients and third-party payors. Estimates of contractual allowances under Medicare, Medicaid, managed care and commercial insurance plans are based upon historical collection experience of the payments received from such payors in accordance with the underlying contractual agreements. Revenue related to uninsured patients and uninsured copayment and deductible amounts
for patients who have health care coverage may have price concessions applied. We also record estimated implicit price concessions (based primarily on historical collection experience) related to uninsured accounts to record self-pay revenue at the estimated amounts we expect to collect.
Under capitation arrangements with various health plans, we earn a per-enrollee amount each month for making available diagnostic imaging services to all plan enrollees under the capitation arrangement. Revenue under capitation arrangements is recognized in the period in which we are obligated to provide services to plan enrollees under contracts with various health plans. Our estimates and assumptions related to revenue recognition did not change materially for the quarter ended June 30, 2026.
Accounts Receivable
The vast majority of our accounts receivable are due under fee-for-service contracts from third party payors, such as insurance companies and government-sponsored healthcare programs, or directly from patients. Services are generally provided pursuant to one-year contracts with healthcare providers. Receivables generally are collected within industry norms for third-party payors. We continuously monitor collections from our payors and maintain an allowance for bad debts based upon specific payor collection issues that we have identified and our historical experience. Our estimates and assumptions for allowances on our account receivable did not change materially during the quarter ended June 30, 2026.
Business Combination
We evaluate all acquisitions in accordance with the accounting guidance under ASC 805, Business Combinations. Once a purchase has been determined to be the acquisition of a business, we are required to recognize the assets acquired and the liabilities assumed at their acquisition date fair values. Any portion of the purchase consideration transferred in excess of the net of the acquisition date fair values of the assets acquired and the liabilities assumed is allocated to goodwill. The allocation requires our management to make estimates of the value of various assets acquired and liabilities assumed. While we use our best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date, our estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, we record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to our consolidated statements of operations.
Recent Accounting Standards
See Note 3, Recent Accounting and Reporting Standards to the financial statements included in this report for further information.
Results of Operations
Result Summary
The following table summarizes our consolidated results of operations and other financial information:
| In Thousands | Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Operating Revenue | |||||||||||||||||||||||
| Imaging Center | $ | 601,819 | $ | 487,216 | $ | 1,158,807 | $ | 948,594 | |||||||||||||||
| Digital Health | 32,427 | 20,726 | 61,547 | 39,947 | |||||||||||||||||||
| Intersegment eliminations | (11,526) | (9,712) | (22,003) | (18,912) | |||||||||||||||||||
| Total service revenue | $ | 622,720 | $ | 498,230 | $ | 1,198,351 | $ | 969,629 | |||||||||||||||
| Segment profit | |||||||||||||||||||||||
| Imaging Center | $ | 92,755 | $ | 73,056 | $ | 129,015 | $ | 88,704 | |||||||||||||||
| Digital Health | $ | (5,981) | $ | (4,034) | $ | (17,122) | $ | (7,151) | |||||||||||||||
| Total Segment profit | $ | 86,774 | $ | 69,022 | $ | 111,893 | $ | 81,553 | |||||||||||||||
Three Months Ended June 30, 2026 Compared to the Three Months Ended June 30, 2025
Imaging Centers Segment
We have developed our Imaging Centers segment through a combination of organic same center growth, new center build-outs, acquisitions and joint venture formations. In the discussion below, "same center" metrics are based on imaging centers that we operate and were in operation throughout the period of April 1, 2025 through June 30, 2026, excluding amounts relating to imaging centers that were acquired or divested between April 1, 2025 through June 30, 2026, unless the procedural volumes of closed centers were relocated into centers that existed throughout such period. The revenue analysis presented below includes intersegment revenue prior to elimination.
Total Revenue
| In Thousands | Three Months Ended June 30, | |||||||||||||
| Revenue | 2026 | 2025 | $ Increase | % Change | ||||||||||
| Total | $601,819 | $487,216 | $114,603 | 23.5% | ||||||||||
| Same Center | $539,056 | $485,413 | $53,643 | 11.1% | ||||||||||
| Excluded | $62,763 | $1,803 | - | - | ||||||||||
Our 11.1% increase in Imaging Center same center revenue compared to the same period last year was driven by higher fees per imaging procedure and increased procedure volumes. This is a function of procedural volume growth at our existing consolidated centers.
The increase in Imaging Center same center total revenue was largely attributable to the procedural volume growth, increased reimbursement from commercial and capitated payors and favorable changes in product mix, as advanced imaging represented a greater proportion of total procedures. A significant contributor to this shift was the increase in PET and CT procedures related to prostate cancer and Alzheimer's-related studies, which are included within advanced modality imaging procedures. Additionally, the increase in same center revenue was the result of net increases in reimbursement from commercial and capitated payors.
Operating Expenses
Total operating expenses for the three months ended June 30, 2026 increased approximately $98.5 million, or 21.9%, to $547.7 million for the three months ended June 30, 2026 from $449.2 million for the three months ended June 30, 2025. The following table breaks down our cost of operations and total operating expenses for the three months ended June 30, 2026 and 2025 (in thousands):
|
Three Months Ended June 30, |
|||||||||||
| 2026 | 2025 | ||||||||||
| Salaries, excluding stock-based compensation and severance | 226,298 | 188,766 | |||||||||
| Professional reading fees | 93,266 | 69,381 | |||||||||
| Stock-based compensation | 7,762 | 6,091 | |||||||||
| Building and equipment rental | 37,181 | 32,006 | |||||||||
| Medical supplies | 44,218 | 31,196 | |||||||||
| Lease abandonment charges | 1,306 | 123 | |||||||||
|
Other operating expenses *
|
99,033 | 86,597 | |||||||||
| Cost of operations | 509,064 | 414,160 | |||||||||
| Depreciation and amortization | 37,090 | 32,941 | |||||||||
| Loss on sale and disposal of equipment | 1,168 | 1,812 | |||||||||
| Severance costs | 392 | 309 | |||||||||
| Total operating expenses | $ | 547,714 | $ | 449,222 | |||||||
*Includes billing fees, office supplies, repairs and maintenance, insurance, business tax and license, outside services, telecom, utilities, marketing, travel and other expenses.
The discussion below provides additional information and analysis on changes in our various operating expenses for the three months ended June 30, 2026 and 2025 (in thousands):
Salaries, excluding stock-based compensation and severance
| In Thousands | Three Months Ended June 30, | |||||||||||||
|
Salaries, excluding stock-based compensation and severance
|
2026 | 2025 | $ Increase | % Change | ||||||||||
| Total | $226,298 | $188,766 | $37,532 | 19.9% | ||||||||||
| Same Center | $197,910 | $185,364 | $12,546 | 6.8% | ||||||||||
| Excluded | $28,388 | $3,402 | - | - | ||||||||||
In response to higher procedural volumes, we increased staffing levels across clinical, administrative and technical functions to support patient demand. Same center salary expense increased 6.8%, compared with an 11.1% increase in same center revenue. The lower rate of salary expense growth reflects improved labor efficiency, workflow optimization technologies, including early benefits from the deployment of DeepHealth technology, and operating leverage from higher procedural volumes.
Professional reading fees
| In Thousands | Three Months Ended June 30, | |||||||||||||
| Professional Fees | 2026 | 2025 | $ Increase | % Change | ||||||||||
| Total | $93,266 | $69,381 | $23,885 | 34.4% | ||||||||||
| Same Center | $83,034 | $69,064 | $13,970 | 20.2% | ||||||||||
| Excluded | $10,232 | $317 | - | - | ||||||||||
The increase in same center professional fees was primarily attributable to higher procedural volumes. Professional fees increased at a higher rate than the 11.1% increase in same center revenue, primarily due to (i) a greater mix of advanced imaging procedures, for which professional fees generally represent a higher proportion of revenue, and (ii) disproportionately higher growth at imaging centers in California and New York staffed by radiologists affiliated with BRMG and Lenox Hill Radiology, respectively, whose professional fees are consolidated within our financial results. At many imaging centers outside California and New York, revenue is reported net of professional fees and, accordingly, the related professional fees are not consolidated within our financial results.
Stock-based compensation
Stock-based compensation for the three months ended June 30, 2026 increased approximately $1.7 million, or 27.4%, to $7.8 million from $6.1 million for the three months ended June 30, 2025. The increase is primarily due to a greater number of shares granted and higher grant-date fair values compared to prior-year period.
Building and equipment rental
| In Thousands | Three Months Ended June 30, | |||||||||||||
| Building & Equipment Rental | 2026 | 2025 | $ Increase | % Change | ||||||||||
| Total | $37,181 | $32,006 | $5,175 | 16.2% | ||||||||||
| Same Center | $31,954 | $31,289 | $665 | 2.1% | ||||||||||
| Excluded | $5,227 | $717 | - | - | ||||||||||
Building and equipment rental expense on a same center basis increased slightly, primarily due to higher rent and common area maintenance charges.
Medical supplies
| In Thousands | Three Months Ended June 30, | |||||||||||||
| Medical Supplies Expense | 2026 | 2025 | $ Increase | % Change | ||||||||||
| Total | $44,218 | $31,196 | $13,022 | 41.7% | ||||||||||
| Same Center | $33,146 | $31,087 | $2,059 | 6.6% | ||||||||||
| Excluded | $11,072 | $109 | - | - | ||||||||||
Consistent with the shift in our procedural mix toward more advanced imaging, medical supplies expense increased at a higher rate than revenue growth. The growth in PET and CT procedures, particularly for prostate cancer and suspected Alzheimer's studies, drove higher utilization of high-cost isotope tracers, contributing to the increase. In addition, price increases for these tracers further elevated medical supplies expense compared to the prior year.
Other operating expenses
| In Thousands | Three Months Ended June 30, | |||||||||||||
| Other Operating Expenses | 2026 | 2025 | $ Increase | % Change | ||||||||||
| Total | $99,033 | $86,597 | $12,436 | 14.4% | ||||||||||
| Same Center | $88,562 | $86,156 | $2,406 | 2.8% | ||||||||||
| Excluded | $10,471 | $441 | - | - | ||||||||||
Other operating expenses, which include outside services, software licensing fees, including approximately $11.5 million of intersegment license fees paid to Digital Health, repair and maintenance, and utilities, have increased $12.4 million, or 14.4%, to approximately $99.0 million for the three months ended June 30, 2026 compared to $86.6 million for three months ended June 30, 2025.
The increase was primarily attributable to higher outside service costs associated with acquisition activity, increased contractor services, and higher equipment and maintenance costs. In addition, certain increases relate to intersegment software licensing fees from the Digital Health segment, which are eliminated in consolidation and therefore impact segment operating results but not consolidated operating income.
Additional segment operating and non-operating expenses
| In Thousands | Three Months Ended June 30, | |||||||||||||
| Depreciation and amortization | 2026 | 2025 | $ Increase | % Change | ||||||||||
| Total | $37,090 | $32,941 | $4,149 | 12.6% | ||||||||||
| Same Center | $33,844 | $32,721 | $1,123 | 3.4% | ||||||||||
| Excluded | $3,246 | $220 | - | - | ||||||||||
The increase in depreciation expense was the result of our higher depreciable asset base.
| In Thousands | Three Months Ended June 30, | |||||||||||||
| Severance | 2026 | 2025 | $ Increase | % Change | ||||||||||
| Total | $392 | $309 | $83 | 26.9% | ||||||||||
| Same Center | $221 | $309 | $(88) | (28.5)% | ||||||||||
| Excluded | $171 | $- | - | - | ||||||||||
| In Thousands | Three Months Ended June 30, | |||||||||||||
| 2026 | 2025 | $ Increase/(Decrease) | % Change | |||||||||||
| Other income, net | ($820) | ($7,767) | 6,947 | (89.4)% | ||||||||||
Other income for the three months ended June 30, 2025 included $7.8 million of money market interest income.
Six Months Ended June 30, 2026 Compared to the Six Months Ended June 30, 2025
In the discussion below, same center metrics are based on imaging centers that were in operation throughout the period of January 1, 2025 through June 30, 2026. Excluded amounts relate to imaging centers that were acquired or divested between January 1, 2025 through June 30, 2026.
Imaging Center Revenue
| In Thousands | Six Months Ended June 30, | |||||||||||||
| Revenue | 2026 | 2025 | $ Increase | % Change | ||||||||||
| Total | $1,158,807 | $948,593 | $210,214 | 22.2% | ||||||||||
| Same Center | $1,039,813 | $946,001 | $93,812 | 9.9% | ||||||||||
| Excluded | $118,994 | $2,592 | - | - | ||||||||||
Our 9.9% increase in Imaging Center same center revenue compared to the same period last year was driven by higher fees per imaging procedure and increased procedure volumes. This is a function of procedural volume growth at our existing consolidated centers.
The increase in Imaging Center same center revenue was largely attributable to the procedural volume growth, increased reimbursement from commercial and capitated payors and favorable changes in product mix, as advanced imaging represented a greater proportion of total procedures. A significant contributor to this shift was the increase in PET and CT procedures related to prostate cancer and Alzheimer's-related studies, which are included within advanced modality imaging procedures. Additionally, the increase in same center revenue was the result of net increases in reimbursement from commercial and capitated payors.
Operating Expenses
Total operating expenses for the six months ended June 30, 2026 increased approximately $182.3 million, or 19.6%, to $1,110.9 million for the six months ended June 30, 2026 from $928.6 million for the six months ended June 30, 2025. The following table breaks down our cost of operations and total operating expenses for the six months ended June 30, 2026 and 2025 (in thousands):
| Six Months Ended June 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Salaries, excluding stock-based compensation | $ | 450,040 | $ | 382,355 | |||||||
| Professional reading fees | 189,116 | 146,485 | |||||||||
| Stock-based compensation | 33,818 | 31,319 | |||||||||
| Building and equipment rental | 73,013 | 62,930 | |||||||||
| Medical supplies | 87,414 | 60,922 | |||||||||
| Lease abandonment charges | 1,306 | 5,511 | |||||||||
|
Other operating expenses *
|
195,084 | 170,367 | |||||||||
| Cost of operations | 1,029,791 | 859,889 | |||||||||
| Depreciation and amortization | 75,590 | 65,480 | |||||||||
| Loss on sale and disposal of equipment | 3,736 | 2,211 | |||||||||
| Severance costs | 1,804 | 1,005 | |||||||||
| Total operating expenses | $ | 1,110,921 | $ | 928,585 | |||||||
*Includes billing fees, office supplies, repairs and maintenance, insurance, business tax and license, outside services, telecom, utilities, marketing, travel and other expenses.
Salaries, excluding stock-based compensation and severance
| In Thousands | Six Months Ended June 30, | |||||||||||||
|
Salaries, excluding stock-based compensation and severance
|
2026 | 2025 | $ Increase/(Decrease) | % Change | ||||||||||
| Total | $450,040 | $382,355 | $67,685 | 17.7% | ||||||||||
| Same Center | $396,274 | $375,971 | $20,303 | 5.4% | ||||||||||
| Excluded | $53,766 | $6,384 | - | - | ||||||||||
In response to higher procedural volumes, we increased staffing levels across clinical, administrative and technical functions to support patient demand. Same center salary expense increased 5.4%, compared with a 9.9% increase in same center revenue. The lower rate of salary expense growth reflects improved labor efficiency, workflow optimization technologies, including early benefits from the deployment of DeepHealth technology, and operating leverage from higher procedural volumes.
Professional reading fees
| In Thousands | Six Months Ended June 30, | |||||||||||||
| Professional Fees | 2026 | 2025 | $ Increase | % Change | ||||||||||
| Total | $189,116 | $146,485 | $42,631 | 29.1% | ||||||||||
| Same Center | $170,051 | $146,026 | $24,025 | 16.5% | ||||||||||
| Excluded | $19,065 | $459 | - | - | ||||||||||
The increase in same center professional fees was primarily attributable to higher procedural volumes. Same center professional fees of 16.5% increased at a higher rate than the 9.9% increase in same center revenue, primarily due to (i) a greater mix of advanced imaging procedures, for which professional fees generally represent a higher proportion of revenue, and (ii) disproportionately higher growth at imaging centers in California and New York staffed by radiologists affiliated with Beverly Radiology Medical Group III ("BRMG") and Lenox Hill Radiology and Medical Imaging Associates, P.C. ("Lenox Hill Radiology"), respectively, whose professional fees are consolidated within our financial results. At many imaging centers outside California and New York, revenue is reported net of professional fees and, accordingly, the related professional fees are not consolidated within our financial results.
Stock-based compensation
Stock-based compensation for the six months ended June 30, 2026 increased approximately $2.5 million, or 8.0%, to $33.8 million from $31.3 million for the six months ended June 30, 2025. The increase is primarily due to a greater number of shares granted and higher grant-date fair values compared to prior-year period.
Building and equipment rental
| In Thousands | Six Months Ended June 30, | |||||||||||||
| Building & Equipment Rental | 2026 | 2025 | $ Increase/(Decrease) | % Change | ||||||||||
| Total | $73,013 | $62,930 | $10,083 | 16.0% | ||||||||||
| Same Center | $62,880 | $61,892 | $988 | 1.6% | ||||||||||
| Excluded | $10,133 | $1,038 | - | - | ||||||||||
Building and equipment rental expense on a same center basis increased slightly, primarily due to higher rent and common area maintenance charges.
Medical supplies
| In Thousands | Six Months Ended June 30, | |||||||||||||
| Medical Supplies Expense | 2026 | 2025 | $ Increase/(Decrease) | % Change | ||||||||||
| Total | $87,414 | $60,922 | $26,492 | 43.5% | ||||||||||
| Same Center | $66,859 | $60,795 | $6,064 | 10.0% | ||||||||||
| Excluded | $20,555 | $127 | - | - | ||||||||||
Consistent with the shift in our procedural mix toward more advanced imaging, medical supplies expense increased at a higher rate than revenue growth. The growth in PET and CT procedures, particularly for prostate cancer and suspected Alzheimer's studies, drove higher utilization of high-cost isotope tracers, contributing to the increase. In addition, price increases for these tracers further elevated medical supplies expense compared to the prior year.
Other operating expenses
| In Thousands | Six Months Ended June 30, | |||||||||||||
| Other Operating Expenses | 2026 | 2025 | $ Increase/(Decrease) | % Change | ||||||||||
| Total | $195,084 | $170,367 | $24,717 | 14.5% | ||||||||||
| Same Center | $176,118 | $169,516 | $6,602 | 3.9% | ||||||||||
| Excluded | $18,966 | $851 | - | - | ||||||||||
Other operating expenses, which include outside services, software licensing fees, including approximately $22.0 million of intersegment license fees paid to Digital Health, repair and maintenance, and utilities, have increased $24.7 million, or 14.5%, to approximately $195.1 million for the six months ended June 30, 2026 compared to $170.4 million for six months ended June 30, 2025.
The increase was primarily attributable to higher outside service costs associated with acquisition activity, increased contractor services, and higher equipment and maintenance costs. In addition, certain increases relate to intersegment software licensing fees from the Digital Health segment, which are eliminated in consolidation and therefore impact segment operating results but not consolidated operating income.
Additional segment operating and non-operating expenses
| In Thousands | Six Months Ended June 30, | |||||||||||||
| Depreciation and amortization | 2026 | 2025 | $ Increase | % Change | ||||||||||
| Total | $75,590 | $65,480 | $10,110 | 15.4% | ||||||||||
| Same Center | $69,142 | $65,190 | $3,952 | 6.1% | ||||||||||
| Excluded | $6,448 | $290 | ||||||||||||
The increase in depreciation expense was the result of our higher depreciable asset base.
| In Thousands | Six Months Ended June 30, | |||||||||||||
| Severance | 2026 | 2025 | $ Increase | % Change | ||||||||||
| Total | $1,804 | $1,005 | $799 | 79.5% | ||||||||||
| Same Center | $1,543 | $1,005 | $538 | 53.5% | ||||||||||
| Excluded | $261 | $- | ||||||||||||
| In Thousands | Six Months Ended June 30, | |||||||||||||
| 2026 | 2025 | $ Increase/(Decrease) | % Change | |||||||||||
| Other income, net | $(5,875) | $(15,485) | $9,610 | (62.1)% | ||||||||||
Other income for the six months ended June 30, 2025 included $15.5 million of money market interest income.
Digital Health Segment
The breakdown of revenue and expenses of the Digital Health segment for the three and six months ended June 30, 2026 and 2025 are as follows:
| In Thousands | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||
| 2026 | 2025 | $ Change | % Change | 2026 | 2025 | $ Change | % Change | |||||||||||||||||||
| Statement of Operations | ||||||||||||||||||||||||||
| Revenue | $ | 32,427 | $ | 20,726 | $ | 11,701 | 56.5 | % | $ | 61,547 | $ | 39,947 | $ | 21,600 | 54.1 | % | ||||||||||
| Salaries and Wages | 18,501 | 9,819 | 8,682 | 88.4 | % | 34,330 | 18,513 | 15,817 | 85.4 | % | ||||||||||||||||
| Stock Compensation | 2,778 | 2,649 | 129 | 4.9 | % | 8,098 | 5,916 | 2,182 | 36.9 | % | ||||||||||||||||
| Other operating | 12,019 | 7,506 | 4,513 | 60.1 | % | 26,570 | 14,321 | 12,249 | 85.5 | % | ||||||||||||||||
| Non-Capitalized R&D - DeepHealth Cloud OS & Generative AI | 5,110 | 4,787 | 323 | 7 | % | 9,670 | 8,349 | 1,321 | 16 | % | ||||||||||||||||
| Depreciation & Amort. | 8,440 | 3,052 | 5,388 | 176.5 | % | 14,906 | 5,996 | 8,910 | 148.6 | % | ||||||||||||||||
| (Gain) loss on sale and disposal of equipment and other | (51) | (88) | 37 | (42.0) | % | (28) | (85) | 57 | (67.1) | % | ||||||||||||||||
| Severance | 267 | 117 | 150 | 128.2 | % | 320 | 168 | 152 | 90.5 | % | ||||||||||||||||
| Total operating expenses | $ | 47,064 | $ | 27,842 | $ | 19,222 | 69.0 | % | $ | 93,866 | $ | 53,178 | $ | 40,688 | 76.5 | % | ||||||||||
| Loss from Operations | $ | (14,637) | $ | (7,116) | $ | (7,521) | 105.7 | % | $ | (32,319) | $ | (13,231) | $ | (19,088) | 144.3 | % | ||||||||||
| Other expense | 199 | 4 | 195 | 4875.0 | % | 370 | 8 | 362 | 4525.0 | % | ||||||||||||||||
| Loss before taxes | (14,836) | (7,120) | (7,716) | 108.4 | % | (32,689) | (13,239) | (19,450) | 146.9 | % | ||||||||||||||||
| Income taxes | $ | (3,325) | $ | (2,249) | $ | (1,076) | 47.8 | % | $ | (6,294) | $ | (2,981) | $ | (3,313) | 111.1 | % | ||||||||||
| Segment net loss | (11,511) | (4,871) | (6,640) | 136.3 | % | (26,395) | (10,258) | (16,137) | 157.3 | % | ||||||||||||||||
Revenues for the Digital Health segment increased significantly for both the three and six months ended June 30, 2026 compared with the corresponding prior-year periods. The increases reflected strong organic growth across our Clinical AI and Enterprise Informatics portfolios, as well as inorganic growth resulting from the acquisitions of Gleamer, iCAD, See-Mode and CIMAR.
For the three months ended June 30, 2026, Digital Health segment revenues increased $11.7 million, or 56.5%, to $32.4 million, compared with $20.7 million for the three months ended June 30, 2025. The increase was primarily driven by a 135.9% increase in Clinical AI-related revenue and a 17.3% increase in Enterprise Informatics revenue.
For the six months ended June 30, 2026, Digital Health segment revenues increased $21.6 million, or 54.1%, to $61.5 million, compared with $39.9 million for the six months ended June 30, 2025. The increase was primarily driven by a 130.3% increase in Clinical-related revenue and a 17% increase in Enterprise Informatics revenue.
External revenue represented 64.5% and 64.3% of total segment revenue for the three and six months ended June 30, 2026, respectively, compared with 53.1% and 52.7% for the corresponding prior-year periods.
As of June 30, 2026, the segment's customer base had expanded to 2,983 customers, compared with 463 as of June 30, 2025. Procedure volumes supported by Digital Health solutions increased from 5.3 million to 17.3 million for the three months ended June 30, 2026 and from 10.2 million to 27.7 million for the six months ended June 30, 2026, in each case compared with the corresponding prior-year period. These increases primarily reflected organic growth and the additions of iCAD, See-Mode, Gleamer and CIMAR.
Digital Health segment operating expenses increased for both the three and six months ended June 30, 2026 compared with the corresponding prior-year periods. The increases primarily reflected additional costs associated with the acquisitions of iCAD, See-Mode, CIMAR and Gleamer; investments in personnel to establish foundational capabilities and support the segment's growth; increased software and cloud-computing costs; higher stock-based compensation expense associated with the expansion of the organization; and higher non-capitalized research and development costs reflecting continued investment in scaling our platforms for broader deployment.
We expect the segment to continue operating at a net loss in the near term as we continue integrating iCAD, See-Mode, CIMAR and Gleamer and investing in the segment's growth.
Annual Recurring Revenue
We use Annual Recurring Revenue ("ARR") as a key operating metric and supplemental performance indicator to evaluate the scale, growth, stability and health of the recurring component of our Digital Health business. Management uses ARR to monitor the growth and trajectory of our recurring business, measure the progress of our business initiatives and assess the effectiveness of our strategies over time. We believe ARR provides investors with additional insight into the annual run rate of our recurring business and highlights trends that may be less apparent from our financial statements due to the timing and pattern of revenue recognition.
We define ARR as the normalized annualized value of contracted recurring revenue attributable to active customer contracts as of the measurement date. ARR was $105.5 million as of June 30, 2026, compared with $53.5 million as of June 30, 2025. The increase primarily reflected ARR added through the acquisitions of Gleamer, iCAD, and CIMAR, together with organic growth from new and existing customers.
ARR is determined from the contractual terms of active customer arrangements and is not calculated by reference to revenue recognized or unearned under GAAP, deferred revenue or any other GAAP financial measure. ARR does not necessarily reflect the timing or pattern of revenue recognition in accordance with GAAP and has no direct relationship to revenue recognized in accordance with ASC 606. Accordingly, ARR is a supplemental operating metric that is not prepared in accordance with GAAP, and no reconciliation to a GAAP financial measure is provided. ARR should be viewed independently of GAAP revenue and deferred revenue and is not intended to be combined with, or to replace, either measure.
ARR is not a forecast, guarantee or prediction of future revenue, and active customer contracts included in ARR may not be renewed. Actual revenue recognized under GAAP may differ materially from ARR as a result of contract commencement and termination dates, implementation schedules, cancellations, non-renewals, changes in customer usage, contract modifications, pricing adjustments and other factors. ARR does not have a standardized meaning or calculation methodology, and our calculation of ARR may differ from similarly titled measures presented by other companies.
Consolidated Expense
The following discussion relates to consolidated interest expense and other items managed at the corporate level, which are not separately allocated to our reportable segments.
Interest expense
| In Thousands | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||
| Interest expense | 2026 | 2025 | $ Increase/(Decrease) | % Change | 2026 | 2025 | $ Increase/(Decrease) | % Change | ||||||||||||||||||
| Total interest expense | $ | 18,153 | $ | 17,189 | $964 | 5.6 | % | $ | 35,810 | $ | 34,428 | $1,382 | 4.0 | % | ||||||||||||
| Interest related to derivatives* | - | (1,040) | - | (2,058) | ||||||||||||||||||||||
| Interest expense related to amortization** | 771 | 743 | 1,550 | 1,471 | ||||||||||||||||||||||
| Adjusted interest expense*** | 17,382 | 17,486 | (104) | (0.6) | % | 34,260 | 35,015 | (755) | (2.2) | % | ||||||||||||||||
*Includes payments from 2019 Swaps (as defined in the notes to our condensed consolidated financial statements) and Swaps amortization
**Includes noncash amortization of deferred loan costs and discount on issuance of debt
***Includes interest related to our term loans, revolving credit line, notes, and other
The decrease in adjusted interest expense was primarily driven by lower SOFR-based interest rates during the three and six months ended June 30, 2026 compared with the corresponding prior-year periods, including the impact of the 0.25% reduction in the applicable margin resulting from the June 2026 repricing of our term loan. These benefits were partially offset by higher average outstanding debt balances during the 2026 periods, including the $250.0 million incremental term loan funded on June 10, 2026.
In addition, our 2019 interest rate swap agreements matured in 2025. As a result, there were no interest related to the 2026 period, whereas prior periods included the impact of such swap-related amounts.
Non-cash change in fair value of interest rate hedge
No non-cash change in fair value of interest rate hedge was recognized during the three and six months ended June 30, 2026, as our 2019 Swaps matured in 2025.
Equity in earnings from unconsolidated joint ventures
For the three months ended June 30, 2026 and 2025, we recognized equity in earnings from unconsolidated joint ventures in the amount of $4.7 million and $4.4 million, respectively. The increase was primarily driven by lower losses from Arizona Diagnostic Radiology Group, LLC and improved income from Franklin Imaging, LLC and Montgomery Community Magnetic Imaging Center, LLC, partially offset by lower income from Santa Monica Imaging Group, LLC.
For the six months ended June 30, 2026 and 2025, we recognized equity in earnings from unconsolidated joint ventures in the amount of $8.5 million and $7.0 million, respectively. The increase was primarily driven by lower losses from Arizona Diagnostic Radiology Group, LLC and improved income from Santa Monica Imaging Group, LLC.
Net Income Attributable to Noncontrolling Interests
At June 30, 2026, our consolidated subsidiaries operated 392 diagnostic imaging centers of which 107 were not wholly-owned. At June 30, 2025, our consolidated subsidiaries included 353 imaging centers, of which 103 were not wholly-owned. Thus, a portion of the operating results of our consolidated subsidiaries were attributable to noncontrolling interests.
For the three months ended June 30, 2026, we recognized net income attributable to noncontrolling interests of $12.7 million versus $8.6 million for the three months ended June 30, 2025, respectively. The increases were primarily driven by improved performance at The New Jersey Imaging Network, LLC and our California majority-owned joint ventures, together with the addition of Intermountain Medical Imaging, LLC, which had no comparable prior year results.
For the six months ended June 30, 2026, we recognized net income attributable to noncontrolling interests of $21.5 million versus $16.8 million for the six months ended June 30, 2025, respectively. The increases were primarily driven by improved performance at The New Jersey Imaging Network, LLC and our California majority-owned joint ventures, together with the addition of Intermountain Medical Imaging, LLC, which had no comparable prior year results.
As noncontrolling interests only represent a portion of our imaging center business, and excludes our Digital Health segment, which generated operating losses of $14.6 million and $32.3 million for the three and six months ended June 30, 2026, we do not expect changes in net income attributable to noncontrolling interests to correlate with changes in consolidated operating income or pretax income.
Non-GAAP Financial Measures
We use both GAAP and non-GAAP metrics to measure our financial results. We believe that, in addition to GAAP metrics, non-GAAP metrics such as Adjusted EBITDA assist us in measuring our core operations from period to period. We also utilize systemwide measures and other supplemental operating metrics that include both consolidated and unconsolidated affiliates to provide further insight into the overall scale and performance of our diagnostic imaging centers.
Adjusted EBITDA
Our Adjusted EBITDA metric removes non-cash and non-recurring charges that occur in the affected period and provides a basis for measuring the Company's core financial performance against other periods.
We define Adjusted EBITDA as earnings before interest, taxes, depreciation and amortization, as adjusted to exclude income taxes, interest expense, severance costs, depreciation and amortization, non-cash employee stock-based compensation, loss on sale and disposal of equipment and other, non-cash change in fair value of interest rate hedge, other income, non-capitalized research and development expenses related to DeepHealth Cloud OS and Generative AI, lease abandonment charges, and acquisition transaction costs. 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 one-time events that take place during the period.
Adjusted EBITDA is a non-GAAP financial measure used as an analytical indicator by us and the healthcare industry to assess business performance. Adjusted EBITDA should not be considered a measure of financial performance under GAAP, and Adjusted EBITDA should not be considered in isolation or as alternatives to net income, or other financial statement data presented in the consolidated financial statements as an indicator of financial performance. Adjusted EBITDA is not a measurement determined in accordance with GAAP and is therefore susceptible to varying methods of calculation and this metric, as presented, may not be comparable to other similarly titled measures of other companies.
The following is a reconciliation of the nearest comparable GAAP financial measure, net income, to Adjusted EBITDA for the three and six months ended June 30, 2026 and 2025, respectively.
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Net income (loss) attributable to RadNet, Inc. common stockholders | $ | 7,530 | $ | 14,454 | $ | (25,936) | $ | (23,472) | |||||||||||||||
| Income taxes | 6,363 | 820 | (1,733) | (2,578) | |||||||||||||||||||
| Interest expense | 18,153 | 17,189 | 35,810 | 34,428 | |||||||||||||||||||
| Severance costs | 660 | 426 | 2,124 | 1,173 | |||||||||||||||||||
| Depreciation and amortization | 45,529 | 35,993 | 90,496 | 71,476 | |||||||||||||||||||
| Non-cash employee stock-based compensation | 10,539 | 8,741 | 41,915 | 37,235 | |||||||||||||||||||
| Loss on sale and disposal of equipment and other | 1,117 | 1,724 | 3,708 | 2,126 | |||||||||||||||||||
| Non-cash change in fair value of interest rate hedge | - | 1,956 | - | 4,062 | |||||||||||||||||||
| Other income | (3,960) | (7,764) | (8,867) | (15,476) | |||||||||||||||||||
| Non-Capitalized R&D - DeepHealth Cloud OS & Generative AI | 5,110 | 4,787 | 9,670 | 8,349 | |||||||||||||||||||
| Lease abandonment charges | 1,306 | 123 | 1,306 | 5,511 | |||||||||||||||||||
| Loss (gain) on extinguishment of debt and related expenses | 3,368 | - | 3,368 | - | |||||||||||||||||||
| Non-cash change to contingent consideration | (3,157) | - | (393) | - | |||||||||||||||||||
| Non-operational rent expenses | 498 | 496 | 1,398 | 1,838 | |||||||||||||||||||
| Acquisition transaction costs | 6,599 | 2,301 | 10,053 | 2,973 | |||||||||||||||||||
|
Adjusted EBITDA - Total Company
|
$ | 99,655 | $ | 81,246 | $ | 162,919 | $ | 127,645 | |||||||||||||||
| NOTE | |||||||||||||||||||||||
|
Adjusted EBITDA - Imaging Center
|
$ | 97,177 | $ | 77,843 | $ | 159,138 | $ | 120,531 | |||||||||||||||
| Adjusted EBITDA - Digital Health Segment | $ | 2,478 | $ | 3,403 | $ | 3,781 | $ | 7,114 | |||||||||||||||
The following table is a reconciliation of GAAP net income for our Digital Health segment to Adjusted EBITDA for the three months ended June 30, 2026 and 2025, respectively.
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Segment net loss | $ | (11,511) | $ | (4,871) | $ | (26,395) | $ | (10,258) | |||||||||||||||
| Stock Compensation | 2,778 | 2,650 | 8,098 | 5,916 | |||||||||||||||||||
| Depreciation & Amortization | 8,440 | 3,053 | 14,906 | 5,997 | |||||||||||||||||||
| Other operating loss | (51) | (88) | (28) | (85) | |||||||||||||||||||
| Other expense | 227 | 4 | 377 | 8 | |||||||||||||||||||
| Severance | 267 | 117 | 320 | 168 | |||||||||||||||||||
| Interest | (27) | - | (7) | - | |||||||||||||||||||
| Income taxes | (3,325) | (2,249) | (6,294) | (2,981) | |||||||||||||||||||
| Non-Capitalized R&D - DeepHealth Cloud OS & Generative AI | 5,110 | 4,787 | 9,670 | 8,349 | |||||||||||||||||||
| Non-cash change to contingent consideration | 570 | - | 3,134 | - | |||||||||||||||||||
|
Adjusted EBITDA - Digital Health Segment
|
$ | 2,478 | $ | 3,403 | $ | 3,781 | $ | 7,114 | |||||||||||||||
Systemwide Operating Metrics
At June 30, 2026, 157 of our imaging centers were operating as joint ventures with hospital and health system partners, including 12 unconsolidated joint ventures operating 50 diagnostic imaging centers that represent partnerships with hospitals or health systems and were formed for the purpose of owning and operating diagnostic imaging centers. Professional services at the joint venture diagnostic imaging centers are performed by contracted radiology practices or a radiology practice that participates in the joint venture. Our investment in these joint ventures is accounted for under the equity method, as we do not have a controlling financial interest in such ventures. We evaluate our investment in joint ventures, including cost in excess of book value (equity method goodwill) for impairment whenever indicators of impairment exist.
We charged management service fees from the centers underlying these joint ventures of approximately $7.9 million and $6.5 million for the three months ended June 30, 2026 and 2025 and $15.3 million and $12.6 million for the six months ended June 30, 2026 and 2025, respectively. These management fees are expenses of the unconsolidated joint ventures and are recognized as service fee revenue. These management fees are earned for providing to the unconsolidated joint venture centers, among other things, day-to-day operational oversight, revenue cycle, human resources, finance, accounting and information systems. These joint ventures are considered related parties. Amounts transacted between us and the entities are in the ordinary course of business and are disclosed on our balance sheet in the due from/to affiliate accounts.
Given the significance of these unconsolidated joint ventures to our business, in addition to our consolidated results, management evaluates performance on a systemwide basis that includes both our consolidated operations and the operations of our unconsolidated joint ventures. We refer to metrics derived solely from entities we consolidate for financial reporting purposes as "consolidated," and metrics that incorporate the results of our unconsolidated joint ventures at 100% basis, without adjustment to our ownership percentage, as "Systemwide."
Systemwide measures are non-GAAP financial measures and should not be considered substitutes for, or superior to, our consolidated GAAP results. Because Systemwide measures combine amounts derived from our consolidated results with amounts derived from entities that are not consolidated, they do not represent our consolidated revenue or other financial measures determined in accordance with GAAP. Investors should not rely on Systemwide measures in isolation and should review them only in conjunction with our consolidated financial statements and related notes as supplemental information regarding the overall scale and performance of our diagnostic imaging center network (the "Network").
Management uses Systemwide revenue to assess the performance and growth of the Network. Because a significant portion of the Network operates through unconsolidated joint ventures, consolidated revenue alone does not reflect the full revenue-generating activity of the Network that management considers when evaluating the business. Systemwide revenue is calculated as consolidated imaging center revenue, plus 100% of the revenue of our unconsolidated joint ventures, without adjustment for our ownership percentage.
Management also uses Systemwide procedural volumes by modality, which are important operating measures to evaluate patient demand, utilization trends and the composition of services provided across the Network. Changes in procedural volumes, including changes in the mix between advanced and routine imaging modalities, may affect revenue, reimbursement, staffing requirements, medical supply costs and professional reading fees. Accordingly, management reviews procedural volumes by modality together with revenue and other financial measures when assessing operational performance and allocation of resources. Systemwide procedural volumes by modality is calculated as procedural volumes by modality occurred at consolidated imaging centers, plus 100% of the procedural volumes by modality occurred at our unconsolidated joint ventures, without adjustment for our ownership percentage.
We believe Systemwide revenue, together with Systemwide procedural volumes by modality, provide investors with additional insight into the scale, growth and operating activity of the Network, including both consolidated centers and centers operated through unconsolidated joint ventures.
Systemwide Aggregate Revenue and Procedural Volumes by Modality
The tables presented below set forth the Systemwide aggregate revenue and procedural volumes by modality for both consolidated centers and centers operated through unconsolidated joint ventures at 100% basis without adjustment for our ownership percentage, and included the effects of acquisitions, dispositions, new center development, joint venture formations, and other changes in the composition of the Network for the three- and six-months ended June 30, 2025 and 2026, which are consistent with the information and periods over which management reviews to evaluate the aggregate performance and growth of the Network.
The following table reconciles Systemwide imaging center revenue to total service revenue as reported under GAAP for the periods presented:
| Three months ended June 30, | ||||||||||||||||||||
| 2026 | 2025 | $ Increase/(Decrease) | % Change | |||||||||||||||||
| Total service revenue | $ | 622,720 | $ | 498,230 | 124,490 | 25.0 | % | |||||||||||||
| Add Intersegment revenue | 11,526 | 9,712 | 1,814 | 18.7 | % | |||||||||||||||
| Less: Digital Health revenue | (32,427) | (20,726) | (11,701) | 56.5 | % | |||||||||||||||
| Consolidated imaging center revenue | 601,819 | 487,216 | 114,603 | 23.5 | % | |||||||||||||||
| Unconsolidated affiliates revenue (1) | 76,970 | 72,438 | 4,532 | 6.3 | % | |||||||||||||||
| Systemwide revenue | $ | 678,789 | $ | 559,654 | 119,135 | 21.3 | % | |||||||||||||
| Six months ended June 30, | ||||||||||||||||||||
| 2026 | 2025 | $ Increase/(Decrease) | % Change | |||||||||||||||||
| Total service revenue | $ | 1,198,351 | $ | 969,629 | 228,722 | 23.6 | % | |||||||||||||
| Add Intersegment revenue | 22,003 | 18,912 | 3,091 | 16.3 | % | |||||||||||||||
| Less: Digital Health revenue | (61,547) | (39,947) | (21,600) | 54.1 | % | |||||||||||||||
| Consolidated imaging center revenue | 1,158,807 | 948,594 | 210,213 | 22.2 | % | |||||||||||||||
| Unconsolidated affiliates revenue (1) | 150,299 | 138,711 | 11,588 | 8.4 | % | |||||||||||||||
| Systemwide revenue | $ | 1,309,106 | $ | 1,087,305 | 221,801 | 20.4 | % | |||||||||||||
1. "Unconsolidated affiliates revenue" represents revenue generated by unconsolidated joint ventures that are accounted for under the equity method and therefore not included in our consolidated GAAP revenue.
The following tables present our systemwide procedural volumes by modality:
| SYSTEMWIDE PROCEDURAL VOLUMES BY MODALITY | |||||||||||||||||
|
Three Months Ended June 30, |
|||||||||||||||||
| 2026 | 2025 | % Change | |||||||||||||||
| MR | 593,143 | 490,299 | 21.0 | % | |||||||||||||
| CT | 352,734 | 291,820 | 20.9 | % | |||||||||||||
| PET/CT | 29,027 | 22,155 | 31.0 | % | |||||||||||||
| Nuclear Medicine | 10,460 | 9,377 | 11.5 | % | |||||||||||||
| Ultrasound | 776,541 | 701,917 | 10.6 | % | |||||||||||||
| Mammography | 537,732 | 508,000 | 5.9 | % | |||||||||||||
| X-ray and Other | 962,376 | 900,095 | 6.9 | % | |||||||||||||
| 3,262,013 | 2,923,663 | 11.6 | % | ||||||||||||||
| SYSTEMWIDE PROCEDURAL VOLUMES BY MODALITY | |||||||||||||||||
| Six months ended June 30, | |||||||||||||||||
| 2026 | 2025 | % Change | |||||||||||||||
| MR | 1,131,186 | 937,629 | 20.6 | % | |||||||||||||
| CT | 671,935 | 562,990 | 19.4 | % | |||||||||||||
| PET/CT | 56,599 | 42,544 | 33.0 | % | |||||||||||||
| Nuclear Medicine | 20,855 | 18,954 | 10.0 | % | |||||||||||||
| Ultrasound | 1,494,547 | 1,358,344 | 10.0 | % | |||||||||||||
| Mammography | 1,042,493 | 984,378 | 5.9 | % | |||||||||||||
| X-ray and Other | 1,865,353 | 1,761,797 | 5.9 | % | |||||||||||||
| 6,282,968 | 5,666,636 | 10.9 | % | ||||||||||||||
Systemwide Same Center Revenue and Procedural Volumes by Modality
The tables presented below set forth the Systemwide same center revenue and procedural volumes by modality for both consolidated centers and centers operated through unconsolidated joint ventures at 100% basis without adjustment for our ownership percentage, but excluded the effects of acquisitions, dispositions, new center development, joint venture formations, and other changes in the composition of the Network for the three months ended June 30, 2026 and 2025.
Management reviews these measures to evaluate organic growth and operating trends within the established imaging center network. Management evaluates Systemwide same center revenue and procedural volumes by modality on a quarterly basis, rather than year-to-date basis, because of the rapid pace at which we have expanded the Network. The population of imaging centers included in a year-to-date Systemwide same center calculations may differ modestly from the population included in the most recently completed quarter. Thus, management believes year-to-date results may be less indicative of the underlying patient demand, utilization and revenue trends of the current same center network and the quarterly results provide a more timely view thereof. Furthermore, management compares the most recently completed quarter with the corresponding prior-year quarter in order to account for seasonal and other quarter-specific variations.
Accordingly, the Systemwide same center information presented below is limited to the three months ended June 30, 2026 and 2025 and is consistent with the information management reviews to manage the business. These quarterly measures should be considered together with the three- and six-month Systemwide aggregate measures presented above, which provide information regarding the overall scale and growth of the Network.
The following table reconciles Systemwide same center imaging center revenue to consolidated imaging center revenue for the periods presented:
| Three months ended June 30, | ||||||||||||||||||||
| 2026 | 2025 | $ Increase/(Decrease) | % Change | |||||||||||||||||
| Consolidated imaging center revenue | $ | 601,819 | $ | 487,216 | 114,603 | 23.5 | % | |||||||||||||
| Less: Excluded Consolidated Imaging center revenue | (62,763) | (1,803) | (60,960) | 3381.0 | % | |||||||||||||||
| Consolidated same center revenue | 539,056 | 485,413 | 53,643 | 11.1 | % | |||||||||||||||
| Unconsolidated affiliates same center revenue (2) | 76,970 | 72,183 | 4,787 | 6.6 | % | |||||||||||||||
| Systemwide same center revenue | $ | 616,026 | $ | 557,596 | 58,430 | 10.5 | % | |||||||||||||
2. "Unconsolidated affiliates same center revenue" represents same center revenue generated by unconsolidated joint ventures included in Systemwide measures and not included in consolidated GAAP revenue.
The following tables present our systemwide same center procedural volumes by modality:
| SYSTEMWIDE SAME CENTER PROCEDURAL VOLUMES BY MODALITY | |||||||||||||||||
|
Three Months Ended June 30, |
|||||||||||||||||
| 2026 | 2025 | % Change | |||||||||||||||
| MR | 537,894 | 488,168 | 10.2 | % | |||||||||||||
| CT | 315,226 | 290,174 | 8.6 | % | |||||||||||||
| PET/CT | 23,980 | 22,050 | 8.8 | % | |||||||||||||
| Nuclear Medicine | 8,442 | 9,377 | (10.0) | % | |||||||||||||
| Ultrasound | 723,473 | 699,829 | 3.4 | % | |||||||||||||
| Mammography | 505,871 | 507,920 | (0.4) | % | |||||||||||||
| X-ray and Other | 912,993 | 897,473 | 1.7 | % | |||||||||||||
| 3,027,879 | 2,914,991 | 3.9 | % | ||||||||||||||
Liquidity and Capital Resources
We expect our existing capital resources, anticipated cash from operations and our borrowing capacity under our credit facilities will be sufficient to sustain our operations for the next twelve months and the foreseeable future.
Our principal capital requirements are for the development of new diagnostic imaging centers, the acquisition of existing diagnostic imaging centers and the acquisition of new diagnostic imaging equipment. On a continuing basis, we evaluate various transactions to increase shareholder value and enhance our business results, including acquisitions, divestitures and joint ventures. We expect to fund any future acquisitions primarily with cash flow from operations and borrowings, including borrowing available under our secured credit facilities or through new equity or debt issuances.
We and our subsidiaries or affiliates may from time to time, in our sole discretion, purchase, repay, redeem or retire any of our outstanding debt or equity securities in privately negotiated or open market transactions, by tender offer or otherwise.
The following table summarizes key balance sheet data related to our liquidity as of June 30, 2026 and December 31, 2025 and income statement data for the six months ended June 30, 2026 and 2025 (in thousands):
| Balance Sheet Data: | June 30, 2026 | December 31, 2025 | |||||||||
| Cash and cash equivalents | $ | 726,272 | $ | 767,215 | |||||||
| Accounts receivable | 241,845 | 200,317 | |||||||||
| Working capital (exclusive of current operating lease liabilities) | 407,491 | 507,298 | |||||||||
| Total equity | 1,394,051 | 1,355,886 | |||||||||
|
Income statement data for the six months ended June 30,
|
2026 | 2025 | |||||||||
| Total net revenue | $ | 1,198,351 | $ | 969,629 | |||||||
|
Net loss attributable to RadNet common stockholders
|
(25,936) | (23,472) | |||||||||
Sources and Uses of Cash
The following table summarizes key components of our sources and uses of cash for the six months ended June 30, 2026 and 2025 (in thousands):
| Cash Flow Data | June 30, 2026 | June 30, 2025 | |||||||||
| Cash provided by operating activities | $ | 173,071 | $ | 161,829 | |||||||
| Cash used in investing activities | (434,527) | (154,201) | |||||||||
| Cash provided by financing activities | 222,715 | 84,918 | |||||||||
Cash provided by operating activities for the six months ended June 30, 2026 increased by $11.2 million compared with the six months ended June 30, 2025. The increase was primarily attributable to a $2.2 million improvement in net income and a $14.3 million net increase in noncash adjustments, principally depreciation and amortization and stock-based compensation, partially offset by a $5.3 million unfavorable change in operating assets and liabilities, driven primarily by changes in other current assets and accounts receivable and partially offset by a favorable change in accounts payable, accrued expenses and other.
Cash used in investing activities for the six months ended June 30, 2026 increased $280.3 million compared to the six months ended June 30, 2025. The increase was primarily due to a $283.7 million increase in purchases of imaging facilities and other acquisitions, mainly related to the acquisition of Gleamer, a digital health business, as well as imaging facilities.
Cash provided by financing activities for the six months ended June 30, 2026 increased by $137.8 million compared with the six months ended June 30, 2025. The increase was primarily attributable to higher incremental term loan borrowings in 2026, partially offset by the repayment of notes payable assumed in connection with acquisitions.
Financing activities in 2026 primarily consisted of $248.9 million of net proceeds from the $250.0 million incremental term loan issued under the Third Amendment (as defined below) to the Third Amended and Restated First Lien Credit and Guaranty Agreement (the "Barclays Credit Agreement"), with Barclays Bank Plc ("Barclays") and the lenders and financial institutions named therein. Financing activities in 2025 primarily consisted of $99.0 million of net proceeds from the $100.0 million incremental term loan issued under the Second Amendment to the Barclays Credit Agreement.
Secured Credit Facilities
We maintain secured credit facilities with Barclays and with Truist Bank ("Truist").
On June 10, 2026, we entered into Incremental Amendment No. 3 to the Barclays Credit Agreement (the "Third Amendment"). Pursuant to the Third Amendment, certain term lenders under the Barclays Credit Agreement funded an incremental term loan in the aggregate principal amount of $250.0 million, which was added to and forms a part of the existing term loan (together with the incremental term loan, (the "term loan") under the Barclays Credit Agreement of approximately $958.7 million. The interest rate applicable to the term loan was reduced by 0.25% to, at RadNet's election, either Term SOFR (as defined in the Barclays Credit Agreement) plus 2.00% or the Alternate Base Rate (as defined in the Barclays Credit Agreement) plus 1.00%. In addition, the interest rate applicable to the existing $282 million revolving credit facility was reduced by 0.25%.
On June 11, 2025, we entered into Incremental Amendment No. 2 to the Barclays Credit Agreement, pursuant to which Barclays, as lender, provided an additional $100.0 million of incremental term loan borrowings under our existing senior secured term loan facility, all other terms remained the same. We recognized $1.0 million as discount and deferred finance cost. Amounts capitalized will be amortized over the remaining terms of the respective credit facilities under the Barclays Credit Agreement. Pursuant to the Second Amendment, we are required to make quarterly principal payments of approximately $2.4 million, compared to $2.2 million prior to the amendment.
On November 26, 2024, we entered into Amendment No. 1 to the Barclays Credit Agreement (the "First Amendment") with the Barclays and the lenders and financial institutions named therein. Pursuant to the First Amendment, the interest rates on the term loans and revolving credit facility provided under the Barclays Credit Agreement have been reduced by 0.25%.
On April 18, 2024, we refinanced our Barclays revolving credit facility, replacing the prior facility with an $875.0 million term loan and a $282.0 million revolving credit facility. The refinance transaction reduced our interest rates on the Barclays term loan and revolving credit facility and extended the maturity date for the term loan to April 18, 2031 and for the
revolving credit facility to April 18, 2029. The new term loan calls for quarterly principal payments of $2.2 million, compared to $1.8 million under the prior credit facility.
Our condensed consolidated balance sheets at June 30, 2026 include $1,323.7 million of total term loan debt (exclusive of unamortized discounts of $11.6 million) in thousands:
| Face Value | Discount |
Total Carrying Value |
|||||||||||||||
| Barclays Term Loan | $ | 1,205,604 | $ | (11,283) | $ | 1,194,321 | |||||||||||
| Truist Term Loan | 118,125 | (330) | 117,795 | ||||||||||||||
| Total Term Loans | $ | 1,323,729 | $ | (11,613) | $ | 1,312,116 | |||||||||||
At June 30, 2026, we had no borrowings under our Barclays or Truist revolving credit facilities. After reserves for outstanding letters of credit of $8.6 million, we had $273.4 million available for borrowing under our Barclays revolving credit facility and $50.0 million available under our Truist revolving credit facility.
Please see Note 6, Credit Facilities, Notes Payable, and Finance Lease in the notes accompanying our financial statements included in this report for more information on our secured credit facilities.
RadNet Inc. published this content on August 10, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on August 10, 2026 at 21:07 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]