RadNet expects to open 12 new imaging centers in 2024 and potentially enter additional markets, company officials said Thursday.
The decision comes amid strong demand for the publicly traded, Los Angeles-based radiology provider’s services. RadNet’s imaging center segment collected a company “record” $68.3 million worth of earnings (before interest, taxes, depreciation and amortization, or EBITDA) in 2023’s fourth quarter, up 11% from the same period in 2022. Quarterly revenue increased nearly 9% year-over-year, at $415.3 million, the company said in an earnings release.
RadNet recently announced its expansion into Houston, and officials said Thursday they’re also eyeing additional hospital joint-venture partnerships.
“The demand for diagnostic imaging remains robust moving into 2024,” President and CEO Howard Berger, MD, said in a Feb. 29 announcement. “Our solid financial position and multifaceted operating model have presented us with opportunities to expand our business, particularly through the construction of new centers to meet the growing demand and utilization in our target markets.”
Berger did not specify where RadNet might expand but said it would do so “when conditions and opportunities support such moves.” Currently, the company owns or operates 366 outpatient imaging centers across states including California, Maryland, Delaware, New Jersey, New York and Florida.
On a same-center basis (meaning including only imaging locations operating both Q4s of 2022 and 2023) procedural volumes increased by 5.5%. Adjusted EBITDA margins in the imaging center segment improved, rising 0.30 percentage points, up to 16.4%. Same-center imaging volumes also swelled, RadNet reported. In the three months ending Dec. 31, MRI procedure counts leapt nearly 11%, while CT increased 8% and PET/CT soared more than 17%. Overall same-center volume—which includes X-ray, ultrasound, mammography and other exams—climbed 5.5% in Q4 compared to the same period in 2022.
Amid strong demand, RadNet is predicting upward of 8.5% growth in revenue for its imaging center segment in 2024, up to roughly $1.7 billion. Berger and colleagues are forecasting up to 15.8% year-over-year growth in adjusted earnings, at about $260 million total. They also anticipate more than double free cash flow, increasing from $34.4 million last year to upward of $75 million in 2024.
“We expect to benefit from a continued focus on same-center performance, [smaller] tuck-in acquisitions, increased reimbursement, expanded and new health system joint ventures and de novo center openings,” Berger said in the announcement. “Combining these opportunities with diligent expense management, we are projecting to drive double digit growth in imaging center adjusted EBITDA.”
When including RadNet’s AI reporting segment, total company revenue was roughly $420 million in the fourth quarter, up 9.8% versus Q4 2022. AI losses totaled about $2.5 million (down from $4.3 million in Q4 of 2022). Total company EBITDA was $65.8 million, up 15%. And on an adjusted basis, RadNet reported a net loss of about $1.9 million compared to a loss of $934,000 the same period in 2022.
You can read more about the company’s financial earnings, including 2024 full-year results here. RadNet plans to host a quarterly earnings call at 10:30 a.m. Eastern Time on Friday, March 1. Live and archived broadcasts can be found here.
Marty Stempniak has covered healthcare since 2012, with his byline appearing in the American Hospital Association's member magazine, Modern Healthcare and McKnight's. Prior to that, he wrote about village government and local business for his hometown newspaper in Oak Park, Illinois. He won a Peter Lisagor and Gold EXCEL awards in 2017 for his coverage of the opioid epidemic.