RadNet raises 2025 revenue guidance as advanced imaging volumes and digital health drive growth

Earnings Call Insights: RadNet, Inc. (RDNT) Q3 2025

MANAGEMENT VIEW

* CEO Howard Berger opened by stating, "I am very pleased with the performance in the third quarter. Revenue and adjusted EBITDA were both quarterly records and exceeded internal budgets set at the beginning of 2025. Total company revenue increased 13.4% and adjusted EBITDA increased 15.2% relative to last year's third quarter, resulting in a 26 basis point improvement in adjusted EBITDA margins."
* Berger highlighted robust same-center procedural volume, especially in advanced imaging, which increased 13.0% on an aggregate basis and 9.9% on a same-center basis. He attributed this performance to equipment and software upgrades, AI-driven scheduling and capacity expansion, and a continuing shift from hospital to ambulatory imaging.
* Berger discussed the ongoing integration of iCAD, completed in July, and the implementation of See-Mode's thyroid ultrasound technology across 240+ centers, noting a "30% reduction in scan time" and new reimbursement streams.
* Berger announced the acquisition of Alpha RT, a remote technologist staffing and AI safety platform, emphasizing its dual benefit for both Digital Health and Imaging Center segments.
* CFO Mark Stolper stated, "During this year's third quarter, the 13.4% increase in total company revenue relative to the same period last year was highlighted by strong growth in advanced imaging. Aggregate MRI volume increased 14.8% CT volume increased 9.4% and PET/CT volume increased 21.1% from last year's third quarter."
* Stolper added, "Within our Digital Health operating segment, revenue increased 51.6% from last year's third quarter, which was partially the result of iCAD's revenue contribution since its acquisition on July 17. AI revenue within Digital Health, inclusive of iCAD revenue from its ProFound AI and Deep Health solutions in breast, lung, prostate, and neuro increased 112% from last year's third quarter."

OUTLOOK

* Stolper reported, "We elected to increase revenue and adjusted EBITDA guidance for our imaging center business. We increased revenue by $50 million at the low end and $30 million at the high end of the guidance range and increased adjusted EBITDA by $5 million, both at the low and high end of the range."
* For Digital Health, Stolper noted the revenue guidance increased by $5 million to include iCAD's contribution, while adjusted EBITDA guidance was maintained due to faster-than-expected cost synergies and expense performance.
* Stolper provided an update on 2026 Medicare reimbursement: "Our initial analysis in July of all the various variables of the proposal indicated that RadNet on roughly $2 billion of revenue will benefit from an approximately $4 million to $5 million Medicare revenue uplift in 2026."

FINANCIAL RESULTS

* Berger stated, "As of September 30, 2025, cash balance was $804.7 million and net debt to adjusted EBITDA ratio approximately 1.0."
* Stolper highlighted continued improvement in revenue cycle management with DSOs reduced to 31.9 days, the lowest historical level.
* Digital Health segment revenue was up 51.6% year-over-year, with AI revenue specifically growing 112%. EBCD AI revenue rose 28.7%, and See-Mode contributed external ultrasound AI revenue.
* Stolper reported adjusted EBITDA margins increased by 26 basis points from 16% to 16.2% year-over-year.
* During the quarter, one new center was opened, bringing the total to 407 locations as of September 30, 2025.

Q&A

* David MacDonald, Truist: Asked about TechLive rollout and dynamic scheduling. Stolper responded, "With respect to the TechLive rollout, we should be substantially complete by the end of the year... we reduced exam closure hours by about 42% relative to last year." On dynamic scheduling, Stolper explained the use of AI for predictive modeling to overbook and increase throughput.
* MacDonald inquired about EBCD payer adoption and capitated contracts. Berger replied, "We're in discussions. It's a big ship and they turn slowly, but the conversations, I think, are positive... we're getting more and more traction here."
* Brian Tanquilut, Jefferies: Questioned joint venture outlook and labor costs. Berger noted increasing inbound calls from health systems for partnership opportunities and said, "Labor still remains a challenge... we have seen it stabilize a little bit in our industry with respect to radiology technologists."
* John Ransom, Raymond James: Asked about virtual radiology and DeepHealth enterprise sales. Berger indicated virtual radiology is an inevitability and described DeepHealth as a platform to bundle and integrate multiple AI modules for both internal and external customers.
* Andrew Mok, Barclays: Questioned sales force needs post-iCAD and margin flow-through. Berger acknowledged a need for more sales personnel and emphasized margin expansion will increasingly be driven by digital health tools.
* Yuan Zhi, B. Riley: Asked about Digital Health revenue and PET/CT growth. Stolper specified iCAD contributed about $3.9 million this quarter, and PET/CT growth is driven by PSMA and amyloid brain studies, now making up 20% of PET/CT volume.
* James Sidoti, Sidoti: Inquired about center count, same-center volume, and Alpha RT acquisition cost. Stolper confirmed 407 centers, 4.9% total same-center procedure volume growth, and a $5 million all-stock deal for Alpha RT.

SENTIMENT ANALYSIS

* Analyst questions reflected a positive but probing tone, focusing on scalability of digital solutions, margin sustainability, and payer adoption. Multiple analysts pressed on specifics of growth, cost control, and the pace of AI and digital health integration.
* Management maintained a confident and optimistic tone throughout, repeatedly emphasizing strong performance, operational improvements, and future digital health-driven margin expansion. Stolper and Berger both used phrases like "we are confident" and "we have been successful" when discussing strategic initiatives and guidance increases.
* Compared to the previous quarter, analysts' tone was more focused on execution and the sustainability of digital transformation, while management’s tone shifted from recovery and catch-up to expansion and acceleration of growth strategies.

QUARTER-OVER-QUARTER COMPARISON

* Guidance language shifted from cautious optimism in Q2 to a more assertive outlook in Q3, with explicit upward revisions to revenue and adjusted EBITDA targets.
* Strategic focus in Q3 broadened, with greater emphasis on integration and monetization of recent acquisitions (iCAD, See-Mode, Alpha RT), and the operationalization of AI tools across more centers.
* Analysts in Q3 asked more about the practical impact of digital health initiatives on margins and capacity, compared to Q2’s focus on recovery from weather disruptions and initial integration of acquisitions.
* Key metrics such as revenue, adjusted EBITDA, and digital health revenue all showed accelerated year-over-year growth in Q3 versus Q2.
* Management’s confidence appeared higher in Q3, as evidenced by guidance raises and strong statements about industry leadership and the existential need for AI in healthcare.
* Analysts’ tone remained constructive but increasingly detail-oriented as the company’s digital strategy matured.

RISKS AND CONCERNS

* Management reiterated ongoing challenges in labor markets, particularly for radiology technologists, but reported stabilization and proactive strategies including in-house training and talent acquisition programs.
* Stolper cited exposure to Medicaid and health insurance exchanges as minimal, reducing risk from policy changes.
* Berger acknowledged that payer adoption of EBCD is slow but progressing, with ongoing education efforts and growing patient opt-in rates.
* Analysts expressed concern about the pace of external sales for DeepHealth and the sustainability of margin improvements given labor and technology investments.

FINAL TAKEAWAY

RadNet’s third quarter 2025 results underscore record revenue and adjusted EBITDA, driven by strong advanced imaging volumes, successful integration of digital health acquisitions, and expanded operational capacity. Management raised full-year revenue and EBITDA guidance, highlighting continued momentum in both core imaging and digital health segments. With cost efficiencies, a robust acquisition pipeline, and ongoing innovation in AI-enabled workflow solutions, RadNet signals confidence in sustaining growth and margin expansion into 2026 and beyond.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/rdnt/earnings/transcripts]

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