RadNet, Inc. (RDNT) Earnings & Analysis

Latest quarter

RadNet reported Q2 FY2026 revenue of $622.7 million, above the consensus estimate of $613.9 million. Adjusted earnings per share, as counted by the consensus, were $0.29 versus an estimate of $0.21.

Revenue rose 25.0% from $498.2 million a year earlier. The filing attributed an 11.1% increase in imaging-center same-center revenue to higher fees and procedure volumes, including growth in advanced imaging. Digital Health revenue rose to $32.4 million from $20.7 million, with the filing citing growth in clinical AI and enterprise informatics and contributions from acquisitions.

RadNet reported diluted earnings per share of $0.10, down from $0.19 a year earlier. Gross margin was 14.1%, compared with 13.9%, while operating margin was 6.34%, compared with 6.20%. The filing said total operating expenses rose to $547.7 million from $449.2 million, including higher salaries and professional fees. Free cash flow was $38.3 million, down from $67.4 million.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

CEO Howard Berger said demand for advanced imaging reflected both industry trends and RadNet’s investments to expand capacity. Same-center advanced imaging procedure volumes rose 9.6% year over year, he said, while a greater proportion of advanced procedures and cost controls contributed to an imaging-center adjusted EBITDA margin of 16.1%.

CFO Mark Stolper said faster MRI scanners, remote technologists and operational changes had helped RadNet accommodate more patients. He added that prostate PSMA and brain amyloid studies represented over 25% of PET-CT volume in the quarter. Stolper also said shortages of technologists and radiologists continued to put pressure on salaries.

On capacity, Stolper said RadNet still faced backlogs in many markets and was building new centers to meet demand. He said long waits could send patients and referral sources elsewhere, prompting the company to monitor backlogs and invest in equipment or new centers.

Digital Health CEO Case Westdorp said the segment closed approximately $21 million of total contract value in the quarter and ended it with $105.5 million in annual recurring revenue. He said quarterly adjusted EBITDA fell to $2.5 million from $3.4 million a year earlier, reflecting hiring for commercial and implementation teams and temporary margin dilution from acquisitions. Westdorp said the acquired iCAD and See-Mode businesses had moved from losses to profitability, with Gleamer on the same trajectory.

Discussing radiologist efficiency, Berger said draft reporting could reduce the time spent dictating reports. Westdorp said over 90% of automated drafts for thyroid ultrasound exams had been accepted by a radiologist for final sign-off without changes.

Stolper said RadNet funded a $250 million incremental term loan and intended to use the proceeds for acquisitions, expansion, health-system partnerships and general corporate purposes. He said the company ended the quarter with $726.3 million in cash.

Guidance

RadNet raised its FY2026 imaging-center revenue guidance to $2,370,000,000 to $2,420,000,000, according to CFO Mark Stolper. He said the company also raised its adjusted EBITDA range to $345 million to $358 million and free cash flow range to $115 million to $125 million.

Stolper said RadNet raised its cash interest expense guidance to $48 to $53 million, reflecting incremental borrowing from its debt repricing transactions.