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RadNet Reports Third Quarter Financial Results with Record Quarterly Revenue and Adjusted EBITDA⁽¹⁾ and Revises Upwards 2024 Financial Guidance Ranges

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RadNet (RDNT) reported strong Q3 2024 financial results with record quarterly performance. Total revenue increased 14.7% to $461.1 million, while Adjusted EBITDA grew 27.2% to $73.7 million. Digital Health segment revenue rose 34.3% to $16.4 million, driven by a 75.8% increase in AI revenue. The company reported adjusted diluted EPS of $0.18, up from $0.13 in Q3 2023. Aggregate procedural volumes increased 9.0%, with same-center volumes up 5.5%. Based on strong performance, RadNet revised upward its 2024 guidance for Revenue, Adjusted EBITDA, and Free Cash Flow. The company maintained a strong balance sheet with $748.9 million in cash and a Net Debt to Adjusted EBITDA ratio below 1.0x.

RadNet (RDNT) ha riportato risultati finanziari forti per il terzo trimestre del 2024, con prestazioni record. I ricavi totali sono aumentati del 14,7% a 461,1 milioni di dollari, mentre l'EBITDA rettificato è cresciuto del 27,2% a 73,7 milioni di dollari. I ricavi del segmento Salute Digitale sono saliti del 34,3% a 16,4 milioni di dollari, grazie a un aumento del 75,8% nei ricavi dell'IA. L'azienda ha riportato un utile per azione diluito rettificato di 0,18 dollari, in aumento rispetto a 0,13 dollari nel terzo trimestre del 2023. I volumi procedurali aggregati sono aumentati del 9,0%, con i volumi nello stesso centro in crescita del 5,5%. Basandosi sulle forti prestazioni, RadNet ha rivisto al rialzo le previsioni per il 2024 riguardanti ricavi, EBITDA rettificato e flusso di cassa libero. L'azienda ha mantenuto un solido bilancio con 748,9 milioni di dollari in liquidità e un rapporto di Debito Netto su EBITDA rettificato inferiore a 1,0x.

RadNet (RDNT) reportó resultados financieros sólidos para el tercer trimestre de 2024, con un rendimiento trimestral récord. Los ingresos totales aumentaron un 14,7% a 461,1 millones de dólares, mientras que el EBITDA ajustado creció un 27,2% a 73,7 millones de dólares. Los ingresos del segmento de Salud Digital aumentaron un 34,3% a 16,4 millones de dólares, impulsados por un incremento del 75,8% en los ingresos de IA. La compañía reportó ganancias por acción diluidas ajustadas de 0,18 dólares, en comparación con 0,13 dólares en el tercer trimestre de 2023. Los volúmenes de procedimientos agregados aumentaron un 9,0%, con volúmenes en el mismo centro subiendo un 5,5%. Basándose en un sólido rendimiento, RadNet revisó al alza sus guías de 2024 para Ingresos, EBITDA Ajustado y Flujo de Caja Libre. La compañía mantuvo un balance sólido con 748,9 millones de dólares en efectivo y una relación de Deuda Neta a EBITDA Ajustado por debajo de 1,0x.

RadNet (RDNT)는 2024년 3분기 강력한 재무 실적을 보고했으며, 분기 성과는 기록적인 수준입니다. 총 수익은 14.7% 증가하여 4억 6,110만 달러에 달했으며, 조정된 EBITDA는 27.2% 증가하여 7,370만 달러에 이르렀습니다. 디지털 헬스 부문의 수익은 34.3% 증가한 1,640만 달러로, AI 수익이 75.8% 증가한 데 기인합니다. 회사는 조정된 희석 EPS가 0.18달러에 달하며, 이는 2023년 3분기의 0.13달러에서 증가한 것입니다. 절차적 총 볼륨은 9.0% 증가했으며, 동일한 센터의 볼륨은 5.5% 증가했습니다. 강력한 성과를 바탕으로 RadNet는 2024년 수익, 조정 EBITDA 및 무료 현금 흐름에 대한 가이던스를 상향 조정했습니다. 회사는 현금 7억 4,890만 달러와 1.0배 이하의 조정 EBITDA 대비 순부채 비율을 유지하는 강력한 재무 구조를 보였습니다.

RadNet (RDNT) a annoncé des résultats financiers solides pour le troisième trimestre 2024, avec des performances trimestrielles record. Les revenus totaux ont augmenté de 14,7 % pour atteindre 461,1 millions de dollars, tandis que l'EBITDA ajusté a progressé de 27,2 % à 73,7 millions de dollars. Les revenus du segment Santé Numérique ont bondi de 34,3 % pour atteindre 16,4 millions de dollars, soutenus par une augmentation de 75,8 % des revenus liés à l'IA. L'entreprise a déclaré un bénéfice par action dilué ajusté de 0,18 dollar, contre 0,13 dollar au troisième trimestre 2023. Les volumes procéduraux agrégés ont augmenté de 9,0 %, avec des volumes au même centre en hausse de 5,5 %. Sur la base de cette solide performance, RadNet a relevé ses prévisions pour 2024 concernant les revenus, l'EBITDA ajusté et le flux de trésorerie libre. L'entreprise a maintenu un solide bilan avec 748,9 millions de dollars en liquidités et un ratio de dette nette à EBITDA ajusté inférieur à 1,0x.

RadNet (RDNT) hat starke finanzielle Ergebnisse für das dritte Quartal 2024 gemeldet, mit einer rekordverdächtigen Quartalsleistung. Der Gesamtumsatz stieg um 14,7% auf 461,1 Millionen Dollar, während das angepasste EBITDA um 27,2% auf 73,7 Millionen Dollar wuchs. Die Einnahmen der Digital Health-Sparte erhöhten sich um 34,3% auf 16,4 Millionen Dollar, was durch einen Anstieg der KI-Umsätze um 75,8% gefördert wurde. Das Unternehmen berichtete von einem angepassten verwässerten EPS von 0,18 Dollar, ein Anstieg von 0,13 Dollar im dritten Quartal 2023. Die aggregierten Verfahrensvolumina stiegen um 9,0%, mit einem Anstieg der Volumina im gleichen Zentrum um 5,5%. Basierend auf der starken Leistung hob RadNet seine Prognosen für 2024 hinsichtlich Umsatz, angepasstem EBITDA und freiem Cashflow an. Das Unternehmen hielt eine solide Bilanz mit 748,9 Millionen Dollar in bar und einem Verhältnis von Nettoschulden zu angepasst EBITDA von unter 1,0x.

Positive
  • Record quarterly revenue of $461.1 million, up 14.7% YoY
  • Adjusted EBITDA increased 27.2% to $73.7 million
  • AI revenue grew 75.8% to $5.1 million
  • Adjusted EBITDA margins improved by 156 basis points to 16.0%
  • Strong cash position of $748.9 million with Net Debt to Adjusted EBITDA below 1.0x
  • Same-center procedural volumes increased 5.5%
  • Upward revision of 2024 financial guidance
Negative
  • Unadjusted net income decreased to $3.2 million from $17.5 million YoY
  • $8.1 million non-cash loss from interest rate swaps
  • Increased R&D expenses of $3.3 million for DeepHealth Cloud OS

Insights

RadNet delivered an impressive Q3 2024 performance with significant growth metrics: $461.1M revenue (14.7% YoY increase) and $73.7M Adjusted EBITDA (27.2% YoY increase). The Digital Health segment showed remarkable growth with 75.8% increase in AI revenue to $5.1M.

Key financial strengths include improved EBITDA margins at 16.0% (up 156 bps), strong cash position of $748.9M and Net Debt to EBITDA ratio below 1.0x. The company's upward revision of 2024 guidance, particularly in revenue and free cash flow, signals management's confidence in sustained growth.

Operational metrics are equally strong with same-center volume growth of 5.5% and significant increases in high-margin services like MRI (14.6%) and PET/CT (23.8%). The expansion plans with 15 new centers in development for 2025 indicate strong market demand and growth potential.

The successful rollout of Enhanced Breast Cancer Detection (EBCD) AI program and upcoming DeepHealth OS launch represent significant technological advancement in diagnostic imaging. The 34.3% revenue growth in Digital Health segment to $16.4M demonstrates strong market adoption of AI solutions.

The planned commercial launch of DeepHealth OS at RSNA, with its first customer already secured, positions RadNet at the forefront of AI-powered diagnostic imaging. The investment in non-capitalized R&D for DeepHealth Cloud OS and generative AI ($3.3M in Q3) shows commitment to innovation and long-term technological leadership.

  • Total Company Revenue increased 14.7% to $461.1 million in the third quarter of 2024 from $402.0 million in the third quarter of 2023; Revenue from the Digital Health reportable segment (inclusive of intersegment revenue) increased 34.3% to $16.4 million in the third quarter of 2024 from $12.2 million in the third quarter of 2023
  • Digital Health Revenue growth resulted in part from a $2.2 million (or 75.8%) increase in AI Revenue, which climbed to $5.1 million during the third quarter of 2024 from $2.9 million in the third quarter of 2023
  • Total Company Adjusted EBITDA(1) was $73.7 million in the third quarter of 2024 as compared with $57.9 million in the third quarter of 2023, an increase of 27.2%; Digital Health reportable segment Adjusted EBITDA(1) increased 41.7% to $3.3 million in the third quarter of 2024 from $2.3 million in the third quarter of 2023
  • Total Company Adjusted EBITDA(1) margins increased by 156 bps to 16.0% in the third quarter of 2024 as compared with 14.4% in the third quarter of 2023
  • Adjusting for unusual or one-time items in the quarter, Adjusted Diluted Earnings Per Share(3) was $0.18 for the third quarter of 2024; This compares with Adjusted Earnings Per Share(3) of $0.13 for the third quarter of 2023  
  • Aggregate procedural volumes in the third quarter of 2024 increased 9.0% and same-center procedural volumes increased 5.5% compared with the third quarter of 2023
  • As of September 30, 2024, we had a cash balance of $748.9 million and Net Debt to Adjusted EBITDA(1) ratio of below 1.0x
  • On pace for the commercial launch of DeepHealth OS on December 1st at the Radiological Society of North America (RSNA) conference
  • RadNet revises full-year 2024 guidance levels to increase Revenue, Adjusted EBITDA(1) and Free Cash Flow(2) ranges

LOS ANGELES, Nov. 10, 2024 (GLOBE NEWSWIRE) -- RadNet, Inc. (NASDAQ: RDNT), a national leader in providing high-quality, cost-effective, fixed-site outpatient diagnostic imaging services through a network of 399 owned and operated outpatient imaging centers, today reported financial results for its third quarter of 2024.

Dr. Howard Berger, President and Chief Executive Officer of RadNet, commented, “We continue to demonstrate strong growth and record results in each of our Imaging Center and Digital Health reportable operating segments. Total Company Revenue grew 14.7% as compared with last year’s third quarter to a record $461.1 million. The Digital Health segment Revenue of $16.4 million increased 34.3% from last year’s same quarter. The strong growth in Digital Health was, in part, driven by the AI businesses, whose Revenue increased 75.8% as compared with last year’s third quarter, mainly from the continuing success of the rollout of the Enhanced Breast Cancer Detection (EBCD) DeepHealth AI-powered screening mammography program.”

“Despite continued inflation in staffing costs, improved reimbursement from commercial and capitated payors, strong demand for advanced imaging modalities, the growth of the Digital Health businesses and effective cost controls resulted in an increase to Adjusted EBITDA(1) margins. Total Company Adjusted EBITDA(1) margin of 16.0% during this third quarter increased by 156 basis points over last year’s third quarter,” added Dr. Berger.

“Given the positive trends we continue to experience in virtually all aspects of our business and the strong financial performance of the third quarter, we are revising upwards certain guidance levels in anticipation of financial results that we believe will exceed both our original expectations and the adjustments we made to the guidance ranges upon releasing our first and second quarter 2024 results. We have increased 2024 guidance ranges for Revenue, Adjusted EBITDA(1) and Free Cash Flow(2),” added Dr. Berger.

Dr. Berger continued, “In response to continued high demand for our services and notable patient backlogs in many of RadNet’s local markets, we continue to expand capacity through the development and construction of new imaging centers. Since the start of the year, we have opened five new centers, and we anticipate opening an additional three centers before year end. Furthermore, we have 15 centers in various stages of construction and development which we intend to open during 2025.”

“We remain on pace for the commercial launch of DeepHealth OS at the RSNA convention this year taking place December 1st through 4th in Chicago. At our DeepHealth booth, we will be demonstrating the capabilities of the DeepHealth OS integrated end-to-end workflow solutions as well as our clinical AI tools. Last week, we announced our first customer for the DeepHealth OS software platform, and we are eager to introduce our DeepHealth solutions to prospective customers and partners at the convention,” explained Dr. Berger.

“RadNet’s balance sheet continues to strengthen as our focus remains on driving same-center revenue performance and effective cost management. At quarter end, we had a cash balance of $748.9 million, and our leverage ratio of Net Debt to Adjusted EBITDA(1) was at a record low, slightly below 1.0,” concluded Dr. Berger.

Third Quarter Financial Results

For the third quarter of 2024, RadNet reported Total Company Revenue of $461.1 million and Adjusted EBITDA(1) of $73.7 million. Revenue increased $59.2 million (or 14.7%) and Adjusted EBITDA(1) increased $15.7 million (or 27.2%) as compared with the third quarter of 2023.  

For the third quarter of 2024, RadNet reported Digital Health Revenue (inclusive of intersegment revenue) of $16.4 million and Adjusted EBITDA(1) of $3.2 million. Revenue increased $4.2 million (or 34.3%) and Adjusted EBITDA(1) increased $950,000 (or 41.7%) as compared with the third quarter of 2023. Digital Health Revenue and Adjusted EBITDA(1) growth was due in part from a $2.2 million (or 75.8%) increase in AI Revenue, which climbed to $5.1 million during the third quarter of 2024.

Unadjusted for unusual or one-time items impacting the third quarter, Total Company Net Income for the third quarter of 2024 was $3.2 million as compared with a Total Company Net Income of $17.5 million for the third quarter of 2023. Fully diluted Net Income Per Share for the third quarter of 2024 was $0.04, compared with a fully diluted Net Income per share of $0.25 in the third quarter of 2023, based upon a weighted average number of diluted shares outstanding of 75.2 million shares in 2024 and 68.8 million shares in 2023.

There were a number of unusual or one-time items impacting the third quarter including: $8.1 million of non-cash loss from interest rate swaps; $304,000 in severance expense related to cost-savings initiatives; $1.3 million expense related to leases for de novo facilities under construction that have yet to open their operations; $3.3 million of non-capitalized research and development expenses related to the DeepHealth Cloud OS and generative AI; $417,000 of acquisition transaction costs; and $147,000 loss in conjunction with extinguishment of debt and related expenses. Adjusting for the above items, Total Company Adjusted Earnings(3) was $13.3 million and diluted Adjusted Earnings Per Share(3) was $0.18 during the third quarter of 2024. This compares with Total Company Adjusted Earnings(3) of $8.8 million and diluted Adjusted Earnings Per Share(3) of $0.13 during the third quarter of 2023.

For the third quarter of 2024, as compared with the prior year’s third quarter, MRI volume increased 14.6%, CT volume increased 15.5% and PET/CT volume increased 23.8%. Overall volume, taking into account routine imaging exams, inclusive of x-ray, ultrasound, mammography and other exams, increased 9.0% over the prior year’s third quarter. On a same-center basis, including only those centers which were part of RadNet for both the third quarters of 2024 and 2023, MRI volume increased 9.9%, CT volume increased 9.8% and PET/CT volume increased 16.8%. Overall same-center volume, taking into account routine imaging exams, inclusive of x-ray, ultrasound, mammography and other exams, increased 5.5% over the prior year’s same quarter

Nine Month Financial Results

For the first nine months of 2024, RadNet reported Total Company Revenue of $1,352.6 million and Adjusted EBITDA(1) of $204.5 million. Revenue increased $156.3 million (or 13.1%) and Adjusted EBITDA(1) increased $37.9 million (or 22.8%) as compared with the first nine months of 2023.  

For the first nine months of 2024, RadNet reported Digital Health Revenue (inclusive of intersegment revenue) of $46.9 million and Adjusted EBITDA(1) of $10.0 million. Revenue increased $12.0 million (or 34.4%) and Adjusted EBITDA(1) increased $6.3 million (or 171.6%) as compared with the first nine months of 2023. Digital Health Revenue and Adjusted EBITDA(1) growth was due in part to a $8.0 million (or 107.8%) increase in AI Revenue, which climbed to $15.4 million during the nine month period of 2024.

Unadjusted for one-time or unusual items, Total Company Net Loss for the first nine months of 2024 was $2.6 million as compared with a Total Company Net Income of $4.9 million for the first nine months of 2023. Fully diluted Net Loss Per Share for the nine month period of 2024 was $(0.04), compared with a Net Income per share of $0.08 in the nine month period of 2023, based upon a weighted average number of diluted shares outstanding of 72.6 million shares in 2024 and 63.2 million shares in 2023.

2024 Guidance Update

RadNet amends its previously announced guidance levels as follows:

Imaging Center Segment
 
 Original
Guidance Range
Revised Guidance
Range After Q1 Results
Revised Guidance
Range After Q2 Results
Revised Guidance
Range After Q3 Results
Total Net Revenue$1,650 - $1,700 million$1,675 - $1,725 million$1,685 - $1,735 million$1,710 - $1,760 million
Adjusted EBITDA(1)$250 - $260 million$255 - $265 million$257 - $267 million$262 - $270 million
Capital Expenditures(a)$125 - $135 million$130 - $140 million$135 - $145 million$145 - $155 million
Cash Interest Expense(b)$40 - $45 million$37 - $42 million$32 - $37 million$25 - $30 million
Free Cash Flow(2)$65 - $75 million$68 - $78 million$72 - $80 million$83 - $93 million

(a)   Net of proceeds from the sale of equipment, imaging centers and joint venture interests and New Jersey Imaging Network capital expenditures.
(b)   Includes payments to and from counterparties on interest rate swaps and nets interest income from our cash balance as recorded in Other Income.


Digital Health Segment
  
Original
Guidance Range

Revised
Guidance Range After
Q1 Results

Revised
Guidance Range After
Q2 Results

Revised
Guidance Range After
Q3 Results
     
Total Net Revenue (inclusive of intersegment revenue)$60 - $70 million$60 - $70 million$60 - $70 million$60 - $70 million
     
Adjusted EBITDA(1)Before Non-Capitalized R&D - DeepHealth Cloud OS & Generative AI$12 - $14 million$13 - $15 million$13 - $15 million$13 - $15 million
     
Non-Capitalized R&D - DeepHealth Cloud OS & Generative AI$11 - $13 million$12 - $14 million$12 - $14 million$13 - $15 million
     
Capital Expenditures(i)$3 - $5 million$3 - $5 million$3 - $5 million$3 - $5 million
     
Free Cash Flow(2)Before Non-Capitalized R&D - DeepHealth Cloud OS & Generative AI$8 - $10 million$8 - $10 million$8 - $10 million$8 - $10 million
     
Free Cash Flow(2)After Non-Capitalized R&D - DeepHealth Cloud OS & Generative AI$(2) - $(5) million$(2) - $(5) million$(2) - $(5) million$(2) - $(5) million

(i)   Excludes a $9 million purchase of software code and other intellectual property from a vender.

“Based upon the consistent outperformance of the first three quarters of this year relative to our projections, we have increased guidance ranges of our core Imaging Center reporting segment for Revenue and Adjusted EBITDA(1). Furthermore, despite increasing the Capital Expenditures guidance range by $10 million, we are expecting Free Cash Flow(2) to be higher for the year. This is the result of the projected increase in Adjusted EBITDA(1) and lower Cash Interest Expense. With respect to the Digital Health reportable segment, we remain on track to meet our original guidance levels for Revenue, Adjusted EBITDA(1) and Free Cash Flow(2).”

Conference Call for Tomorrow

Dr. Howard Berger, President and Chief Executive Officer, and Mark Stolper, Executive Vice President and Chief Financial Officer, will host a conference call to discuss its third quarter 2024 results on Monday, November 11th, 2024 at 7:30 a.m. Pacific Time (10:30 a.m. Eastern Time).

Conference Call Details:

Date: Monday, November 11, 2024
Time: 10:30 a.m. Eastern Time
Dial In-Number: 844-826-3035
International Dial-In Number: 412-317-5195

It is recommended that participants dial in approximately 5 minutes prior to the start of the 10:30 a.m. call. There will also be simultaneous and archived webcasts available at https://viavid.webcasts.com/starthere.jsp?ei=1691984&tp_key=8cbf05cc88 or http://www.radnet.com under the “Investors” menu section and “News Releases” sub-menu of the website. An archived replay of the call will also be available and can be accessed by dialing 844-512-2921 from the U.S., or 412-317-6671 for international callers, and using the passcode 10193306.

About RadNet, Inc.

RadNet, Inc., is the leading national provider of freestanding, fixed-site diagnostic imaging services and related information technology solutions (including artificial intelligence) in the United States based on the number of locations and annual imaging revenue. RadNet has a network of 399 owned and/or operated outpatient imaging centers. RadNet’s markets include Arizona, California, Delaware, Florida, Maryland, New Jersey, New York and Texas. In addition, RadNet provides radiology information technology and artificial intelligence solutions marketed under the DeepHealth brand and other related products and services to customers in the diagnostic imaging industry. Together with affiliated radiologists, and inclusive of full-time and per diem employees and technologists, RadNet has a total of over 10,000 employees. For more information, visit http://www.radnet.com.

Forward Looking Statements

This press release contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are expressions of our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, and anticipated future conditions, events and trends. Forward-looking statements can generally be identified by words such as: “anticipate,” “intend,” “plan,” “goal,” “seek,” “believe,” “project,” “estimate,” “expect,” “strategy,” “future,” “likely,” “may,” “should,” “will” and similar references to future periods. Forward-looking statements in this press release include, among others, statements about our anticipated business results, balance sheet and liquidity and our future liquidity, burn rate and our continuing ability to service or refinance our current indebtedness.

Forward-looking statements are neither historical facts nor assurances of future performance. Because forward-looking statements relate to the future, they are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not place undue reliance on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following:

  • the availability and terms of capital to fund our business;
  • our ability to service our indebtedness, make principal and interest payments as those payments become due and remain in compliance with applicable debt covenants, in addition to our ability to refinance such indebtedness on acceptable terms;
  • changes in general economic conditions nationally and regionally in the markets in which we operate;
  • the availability and terms of capital to fund the expansion of our business and improvements to our existing facilities;
  • our ability to maintain our current credit rating and the impact on our funding costs and competitive position if we do not do so;
  • our ability to acquire, develop, implement and monetize technology, digital health initiatives, artificial intelligence algorithms and applications;
  • volatility in interest and exchange rates, or credit markets;
  • the adequacy of our cash flow and earnings to fund our current and future operations;
  • changes in service mix, revenue mix and procedure volumes;
  • delays in receiving payments for services provided;
  • increased bankruptcies among our partner physicians or joint venture partners;
  • the impact of the political environment and related developments on the current healthcare marketplace and on our business, including with respect to the future of the Affordable Care Act;
  • the extent to which the ongoing implementation of healthcare reform, or changes in or new legislation, regulations or guidance, enforcement thereof by federal and state regulators or related litigation result in a reduction in coverage or reimbursement rates for our services, or other material impacts to our business;
  • closures or slowdowns and changes in labor costs and labor difficulties, including stoppages affecting either our operations or our suppliers' abilities to deliver supplies needed in our facilities;
  • the occurrence of hostilities, political instability or catastrophic events;
  • the emergence or reemergence of and effects related to future pandemics, epidemics and infectious diseases; and
  • noncompliance by us with any privacy or security laws or any cybersecurity incident or other security breach by us or a third party involving the misappropriation, loss or other unauthorized use or disclosure of confidential information.

Any forward-looking statement contained in this current report is based on information currently available to us and speaks only as of the date on which it is made. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that we may make from time to time, whether as a result of changed circumstances, new information, future developments or otherwise, except as required by applicable law.

Regulation G: GAAP and Non-GAAP Financial Information

This release contains certain financial information not reported in accordance with GAAP. The Company uses both GAAP and non-GAAP metrics to measure its financial results. The Company believes that, in addition to GAAP metrics, these non-GAAP metrics assist the Company in measuring its cash-based performance. The Company believes this information is useful to investors and other interested parties because it removes unusual and nonrecurring charges that occur in the affected period and provides a basis for measuring the Company's financial condition against other quarters. Such information should not be considered as a substitute for any measures calculated in accordance with GAAP, and may not be comparable to other similarly titled measures of other companies. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Reconciliation of this information to the most comparable GAAP measures is included in this release in the tables which follow.

CONTACTS:

RadNet, Inc.
Mark Stolper, 310-445-2800
Executive Vice President and Chief Financial Officer


RADNET, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)
     
 September 30, 2024 December 31, 2023 
 (unaudited)   
ASSETS    
CURRENT ASSETS    
Cash and Cash equivalents$748,916  $342,570  
Accounts receivable 199,076   163,707  
Due from affiliates 30,210   25,342  
Prepaid expenses and other current assets 38,051   47,657  
Total current assets 1,016,253   579,276  
PROPERTY, EQUIPMENT AND RIGHT-OF-USE ASSETS    
Property and equipment, net 663,867   604,401  
Operating lease right-of-use assets 646,750   596,032  
Total property, plant, equipment and right-of-use assets 1,310,617   1,200,433  
OTHER ASSETS    
Goodwill 711,841   679,463  
Other intangible assets 84,441   90,615  
Deferred financing costs 2,416   1,643  
Investment in joint ventures 104,514   92,710  
Deposits and other 45,260   46,333  
Total Assets$3,275,342  $2,690,473  
     
LIABILITIES AND EQUITY    
CURRENT LIABILITIES    
Accounts payable, accrued expenses and other$338,737  $342,940  
Due to affiliates 44,872   15,910  
Deferred revenue 4,392   4,647  
Current operating lease liability 58,751   55,981  
Current portion of notes payable 23,378   17,974  
Total current liabilities 470,130   437,452  
LONG-TERM LIABILITIES    
Long-term operating lease liability 658,434   605,097  
Notes payable, net of current portion 996,272   812,068  
Deferred tax liability, net 20,795   15,776  
Other non-current liabilities 10,077   6,721  
Total liabilities 2,155,708   1,877,114  
EQUITY    
RadNet, Inc. stockholders' equity:    
Common stock - $0.0001 value, 200,000,000 shares authorized; 73,976,284 and 67,956,318 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively 7   7  
Additional paid-in-capital 979,279   722,750  
Accumulated other comprehensive loss (1,843)  (12,484) 
Accumulated deficit (82,130)  (79,578) 
Total RadNet, Inc.'s Stockholders' equity: 895,313   630,695  
Noncontrolling interests 224,321   182,664  
Total Equity 1,119,634   813,359  
Total liabilities and equity$3,275,342  $2,690,473  
     


RADNET, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(IN THOUSANDS EXCEPT FOR SHARE AND PER SHARE DATA)
(unaudited)
 Three Months Ended September 30, Nine Months Ended September 30,
 2024
 2023
 2024
 2023
        
REVENUE       
Service fee revenue$427,579  $361,927  $1,247,513  $1,078,265 
Revenue under capitation arrangements 33,563   40,041   105,050   117,982 
Total service revenue 461,142   401,968   1,352,563   1,196,247 
OPERATING EXPENSES       
Cost of operations, excluding depreciation and amortization 391,800   341,635   1,169,113   1,038,647 
Depreciation and amortization 34,979   32,210   101,822   95,705 
Loss (gain) on sale and disposal of equipment and other 148   527   735   1,183 
Loss (gain) on contribution of imaging centers into joint venture -   (16,808)  -   (16,808)
Severance costs 304   1,153   797   3,157 
Total operating expenses 427,231   358,717   1,272,467   1,121,884 
INCOME (LOSS) FROM OPERATIONS 33,911   43,251   80,096   74,363 
OTHER INCOME AND EXPENSES       
Interest expense 19,427   16,115   61,776   47,876 
Equity in earnings of joint ventures (3,595)  (1,084)  (11,308)  (3,935)
Non-cash change in fair value of interest rate hedge 6,755   1,015   7,429   949 
Debt restructuring and extinguishment expenses 147   -   8,909   - 
Other expenses (income) (5,414)  (4,081)  (16,248)  (2,609)
Total other (income) expenses 17,320   11,965   50,558   42,281 
INCOME (LOSS) BEFORE INCOME TAXES 16,591   31,286   29,538   32,082 
Provision for income taxes (4,335)  (7,220)  (4,927)  (7,741)
NET INCOME (LOSS) 12,256   24,066   24,611   24,341 
Net income (loss) attributable to noncontrolling interests 9,047   6,526   27,163   19,437 
NET INCOME (LOSS) ATTRIBUTABLE TO RADNET, INC. COMMON STOCKHOLDERS$3,209  $17,540  $(2,552) $4,904 
        
BASIC NET INCOME (LOSS) PER SHARE ATTRIBUTABLE TO RADNET, INC. COMMON STOCKHOLDERS$0.04  $0.26  $(0.04) $0.08 
        
DILUTED NET INCOME (LOSS) PER SHARE ATTRIBUTABLE TO RADNET, INC. COMMON STOCKHOLDERS$0.04  $0.25  $(0.04) $0.08 
WEIGHTED AVERAGE SHARES OUTSTANDING       
Basic 73,494,709   67,793,404   72,587,321   62,113,707 
Diluted 75,165,435   68,809,818   72,587,321   63,221,251 
        


RADNET, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASHFLOWS
(IN THOUSANDS)
(unaudited)
 Nine Months Ended September 30,
  2024  2023
CASH FLOWS FROM OPERATING ACTIVITIES   
Net income (loss)$24,611  $24,341 
Adjustments to reconcile net income to net cash provided by operating activities:   
Depreciation and amortization 101,822   95,705 
Amortization of operating lease assets 45,516   47,542 
Equity in earnings of joint ventures (10,308)  5,012 
Amortization deferred financing costs and loan discount 2,336   2,240 
Loss (Gain) on sale and disposal of equipment 735   1,183 
Loss on extinguishment of debt 2,080   - 
Gain on contribution of imaging centers into joint venture -   (16,808)
Amortization of cash flow hedge 8,242   2,765 
Non-cash change in fair value of interest rate hedge 7,429   949 
Stock-based compensation 21,368   21,380 
Loss on impairment 1,200   3,949 
Change in fair value of contingent consideration 1,974   (4,112)
Changes in operating assets and liabilities, net of assets acquired and liabilities assumed in purchase transactions:   
Accounts receivable (35,369)  (1,379)
Other current assets 4,738   5,754 
Other assets (7,388)  (16,641)
Deferred taxes 4,834   7,389 
Operating lease liability (40,497)  (43,390)
Deferred revenue (255)  1,155 
Accounts payable, accrued expenses and other 57,426   (5,091)
Net cash provided by operating activities 190,494   131,943 
CASH FLOWS FROM INVESTING ACTIVITIES   
Purchase of imaging facilities and other acquisitions (37,748)  (10,915)
Purchase of property and equipment and other (145,164)  (136,537)
Proceeds from sale of equipment 151   82 
Equity contributions in existing and purchase of interest in joint ventures (1,496)  (5,453)
Net cash used in investing activities (184,257)  (152,823)
CASH FLOWS FROM FINANCING ACTIVITIES   
Principal payments on notes and leases payable (4,296)  (1,929)
Payments on Term Loan Debt (688,375)  (11,062)
Proceeds from issuance of new debt, net of issuing costs 863,815   - 
Contribution from noncontrolling interests 7,569   - 
Payments on contingent consideration (3,614)  (3,390)
Distributions paid to noncontrolling interests (2,423)  (3,523)
Proceeds from sale of economic interests in majority owned subsidiary, net of taxes 8,641   5,102 
Proceeds from issuance of common stock 218,385   245,831 
Proceeds from issuance of common stock upon exercise of options 367   72 
Net cash provided by financing activities 400,069   231,101 
EFFECT OF EXCHANGE RATE CHANGES ON CASH 40   (171)
NET DECREASE IN CASH AND CASH EQUIVALENTS 406,346   210,050 
CASH AND CASH EQUIVALENTS, beginning of period 342,570   127,834 
CASH AND CASH EQUIVALENTS, end of period 748,916   337,884 
    
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION   
Cash paid during the period for interest$51,520  $59,421 
Cash paid during the period for income taxes$2,202  $225 
    


RADNET, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP NET INCOME ATTRIBUTABLE TO RADNET, INC. COMMON SHAREHOLDERS TO ADJUSTED EBITDA
(IN THOUSANDS)
 Three Months Ended September 30, Nine Months Ended September 30,
 2024
 2023
 2024
 2023
        
Net income (loss) attributable to Radnet, Inc. common stockholders$3,209  $17,540  $(2,552) $4,904 
Income taxes 4,335   7,220   4,927   7,741 
Interest expense 19,427   16,115   61,776   47,876 
Severance costs 304   1,153   797   3,157 
Depreciation and amortization 34,979   32,210   101,822   95,705 
Non-cash employee stock-based compensation 4,723   4,325   21,369   21,381 
Loss (gain) on sale and disposal of equipment and other 148   527   735   1,183 
Non-cash change in fair value of interest rate hedge 6,755   1,015   7,429   949 
Other expenses (income) (5,414)  (4,081)  (16,248)  (2,609)
Non-Capitalized R&D - DeepHealth Cloud OS & Generative AI 3,345   -   9,977   - 
Loss (gain) on contribution of imaging centers into joint venture -   (16,808)  -   (16,808)
Loss (gain) on extinguishment of debt and related expenses 147   -   8,909   - 
Non-cash change to contingent consideration -   (6,276)  1,974   (3,646)
Acquisition related non-cash intangible adjustment -   3,950   -   3,950 
Non-operational rent expenses 1,287   1,030   3,119   2,748 
Acquisition transaction costs 417   -   417   - 
        
Adjusted EBITDA Including EBITDA from Digital Health$73,662  $57,920  $204,451  $166,531 
        
EBITDA from Digital Health 3,229   2,279   10,018   3,689 
        
Adjusted EBITDA excluding EBITDA from Digital Health$70,433  $55,641  $194,433  $162,842 
        


PAYMENTS BY PAYOR CLASS
   
   
  Third Quarter
  2024
   
Commercial Insurance 57.7%
Medicare 22.3%
Capitation 7.3%
Medicaid 2.4%
Workers Compensation/Personal Injury2.2%
Other* 8.2%
Total 100.0%
   
* Includes management fee, teleradiology and Digital Health financial reporting unit revenue.
   


PAYMENTS BY MODALITY
         
         
  Third Quarter Full Year Full Year Full Year
  2024
 2023
 2022
 2021
         
MRI 37.1% 36.8% 36.8% 36.0%
CT 16.0% 16.8% 17.5% 17.2%
PET/CT 7.1% 6.4% 5.8% 5.5%
X-ray 6.1% 6.5% 6.7% 3.9%
Ultrasound 13.7% 12.9% 12.6% 12.7%
Mammography 16.2% 16.0% 15.3% 16.1%
Nuclear Medicine 1.0% 0.8% 0.9% 1.0%
Other 2.7% 3.9% 4.5% 4.6%
  100.0% 100.0% 100.0% 100.0%
         


PROCEDURES BY MODALITY*
      
   Third Quarter Third Quarter
   2024 2023
      
MRI 446,596 389,566
CT  265,874 230,276
PET/CT 18,844 15,216
Nuclear Medicine9,282 8,533
Ultrasound 650,322 607,995
Mammography484,357 452,756
X-ray and Other862,732 806,677
      
 Total 2,738,007 2,511,019
      
      
* Volumes include wholy owned and joint venture centers.
      


RADNET, INC. AND SUBSIDIARIES
SCHEDULE OF ADJUSTED EARNINGS AND EARNINGS PER SHARE (3)
(IN THOUSANDS EXCEPT SHARE DATA)
(unaudited)
            
            
        Three Months Ended 
        September 30, September 30,
         2024 2023 (v) 
            
NET INCOME (LOSS) ATTRIBUTABLE TO RADNET, INC.     
  COMMON STOCKHOLDERS  $3,209  $17,540  
            
            
  Add non-cash impact of cash flow hedges (i)  8,111   2,260  
  Add severance costs    304   1,153  
  Subtract gain on contribution of imaging centers into joint venture -   (16,808) 
  Add non-operational rent expenses (iii)   1,287   1,030  
  Non-capitalized R&D - DeepHealth cloud OS & generative AI 3,345   -  
  Acquisition transaction costs   417   -  
  Debt amendment fee    147   -  
  Subtract non-cash change to contingent consideration - Heart Lung Health -   915  
   Total adjustments - loss (gain)   13,611   (11,450) 
  Subtract tax impact of Adjustments (ii)   (3,552)  2,759  
   Tax effected impact of adjustments   10,059   (8,691) 
            
TOTAL ADJUSTMENT TO NET INCOME ATTRIBUTABLE    
  TO RADNET, INC. COMMON SHAREHOLDERS 10,059   (8,691) 
            
ADJUSTED NET INCOME (LOSS) ATTRIBUTABLE TO RADNET, INC.  13,268   8,849  
  COMMON STOCKHOLDERS      
            
WEIGHTED AVERAGE SHARES OUTSTANDING    
  Diluted     75,165,435   68,809,818  
            
ADJUSTED DILUTED NET INCOME PER SHARE     
  ATTRIBUTABLE TO RADNET, INC. COMMON STOCKHOLDERS$0.18  $0.13  
            
(i) Impact is the combination of (a) the loss in fair value of the hedges during the quarter of $6,755 in 2024 and   
loss of $1,015 in 2023 and (b) the amortization of the accumulation of the changes in fair value out of Other Comprehensive Income 
that existed prior to the hedges becoming ineffective of $1,356 in 2024 and $1,245 in 2023.    
(ii) Tax effected using 26.1% blended federal and state effective tax rate for 2023 and 24.1% for 2023.   
(iii) Represents rent expense associated with de novo sites under construction prior to them becoming operational.  
(iv) Represents pre-tax net income losses before income taxes from Artificial Intelligence reporting segment.   
(v) Restated from what was presented in 2023 to include the losses of the AI businesses (ie, not add the losses back to earnings as was 
      the case in 2023). The restated Adjusted Earnings for 2023 is due to the fact that AI is no longer its own reportable operating segment
      and is now embedded in the Digital Health reportable operating segment.    
            

Footnotes

(1) The Company defines Adjusted EBITDA as earnings before interest, taxes, depreciation and amortization, each from continuing operations and adjusted for losses or gains on the sale of equipment, other income or loss, debt extinguishments and non-cash equity compensation. Adjusted EBITDA includes equity earnings in unconsolidated operations and subtracts allocations of earnings to non-controlling interests in subsidiaries, and is adjusted for non-cash or extraordinary and one-time events taken place during the period.

Adjusted EBITDA is reconciled to its nearest comparable GAAP financial measure. Adjusted EBITDA is a non-GAAP financial measure used as analytical indicator by RadNet management and the healthcare industry to assess business performance, and is a measure of leverage capacity and ability to service debt. Adjusted EBITDA should not be considered a measure of financial performance under GAAP, and the items excluded from Adjusted EBITDA should not be considered in isolation or as alternatives to net income, cash flows generated by operating, investing or financing activities or other financial statement data presented in the consolidated financial statements as an indicator of financial performance or liquidity. As Adjusted EBITDA is not a measurement determined in accordance with GAAP and is therefore susceptible to varying methods of calculation, this metric, as presented, may not be comparable to other similarly titled measures of other companies.

(2) As noted above, the Company defines Free Cash Flow as Adjusted EBITDA less total Capital Expenditures (whether completed with cash or financed) and Cash Interest Expense. Free Cash Flow is a non-GAAP financial measure. The Company uses Free Cash Flow because the Company believes it provides useful information for investors and management because it measures our capacity to generate cash from our operating activities. Free Cash Flow does not represent total cash flow since it does not include the cash flows generated by or used in financing activities. In addition, our definition of Free Cash Flow may differ from definitions used by other companies.

Free Cash Flow should not be considered a measure of financial performance under GAAP, and the items excluded from Adjusted EBITDA should not be considered in isolation or as alternatives to net income, cash flows generated by operating, investing or financing activities or other financial statement data presented in the consolidated financial statements as an indicator of financial performance or liquidity. As Adjusted EBITDA is not a measurement determined in accordance with GAAP and is therefore susceptible to varying methods of calculation, this metric, as presented, may not be comparable to other similarly titled measures of other companies.

(3) The Company defines Adjusted Earnings (Loss) Per Share as net income or loss attributable to RadNet, Inc. common stockholders and excludes losses or gains on the disposal of equipment, loss on debt extinguishments, bargain purchase gains, severance costs, loss on impairment, loss or gain on swap valuation, gain on extinguishment of debt, unusual or non-recurring entries that impact the Company’s tax provision and any other non-recurring or unusual transactions recorded during the period.

Adjusted Earnings (Loss) Per Share is reconciled to its nearest comparable GAAP financial measure. Adjusted Earnings (Loss) Per Share is a non-GAAP financial measure used as analytical indicator by RadNet management and the healthcare industry to assess business performance. Adjusted Earnings Per Share should not be considered a measure of financial performance under GAAP, and the items excluded from Adjusted Earnings Per Share should not be considered in isolation or as alternatives to net income, cash flows generated by operating, investing or financing activities or other financial statement data presented in the consolidated financial statements as an indicator of financial performance or liquidity. As Adjusted Earnings Per Share is not a measurement determined in accordance with GAAP and is therefore susceptible to varying methods of calculation, this metric, as presented, may not be comparable to other similarly titled measures of other companies.


FAQ

What was RadNet's (RDNT) revenue growth in Q3 2024?

RadNet's total revenue grew 14.7% to $461.1 million in Q3 2024 compared to $402.0 million in Q3 2023.

How much did RadNet's (RDNT) AI revenue increase in Q3 2024?

RadNet's AI revenue increased by 75.8% to $5.1 million in Q3 2024 from $2.9 million in Q3 2023.

What was RadNet's (RDNT) adjusted EBITDA margin in Q3 2024?

RadNet's adjusted EBITDA margin increased by 156 basis points to 16.0% in Q3 2024 compared to 14.4% in Q3 2023.

What was RadNet's (RDNT) cash position at the end of Q3 2024?

RadNet had a cash balance of $748.9 million with a Net Debt to Adjusted EBITDA ratio below 1.0x as of September 30, 2024.

RadNet, Inc.

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5.85B
66.04M
10.63%
87.13%
4.69%
Diagnostics & Research
Services-medical Laboratories
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United States of America
LOS ANGELES