RadNet sees rocky 2025 start, with severe weather leading to $22M revenue loss

Imaging center operator RadNet Inc. has seen a rocky start to 2025, with Mother Nature helping produce a $22 million revenue loss, leaders said Thursday. 

In January and February, the publicly traded, Los Angeles company was impacted by severe winter weather conditions on the East Coast and in Texas. Coupled with “catastrophic” fires in Southern California, RadNet’s adjusted earnings (before interest, taxes, depreciation and amortization) are about $15 million short of expectations.

“These unanticipated events had a significant impact on the utilization of healthcare services in these regions…,” President and CEO Howard Berger, MD, said in a statement Feb. 27. 

RadNet has adjusted its 2025 guidance ranges to account for these setbacks. The company is now anticipating at least $1.825 billion in revenue this year, with adjusted earnings of $265 million or more. Factors that could impact these numbers include imaging center performance, possible tuck-in acquisitions, efforts to increase reimbursement, potential new hospital joint-venture partnerships, and the opening of new locations. 

RadNet also is budgeting for salary, wage and benefit increases this year, which is “indicative of broader industry trends.” 

“To address the labor challenges, we will be focused in 2025 on the implementation of the digital health solutions intended to drive automation and efficiencies in the utilization of labor,” Berger added. 

RadNet is anticipating revenue of at least $80 million in its digital health segment, which includes artificial intelligence and other technology offerings, with adjusted earnings of $15 million or more. 

Strong finish to 2024

Meanwhile, RadNet saw a strong finish to 2024, with a company record of $477 million in fourth quarter revenue. That represents a roughly $57 million (or 13.5%) increase over the same three months in 2023. Quarterly adjusted earnings increased $9 million or (14%) year over year, up to $75 million. 

Berger touted booming interest in its imaging segment, which helped drive these numbers upward. On a same-center basis—only counting locations RadNet operated in Q4 of 2023 and 2024—MRI volume increased 8.5% year over year. CT climbed 8.7%, while PET/CT was a bright spot up 16.3%. Overall same-center volume—including routine exams such as X-ray, ultrasound and mammography—increased 4% compared to Q4 of 2023. 

“During the fourth quarter, we continued to experience increased demand in virtually all of our markets,” Berger said. “This demand was the primary catalyst for the investments made to expand capacity by the opening of nine new centers during the year.”

RadNet currently operates a total of 398 outpatient imaging centers. In 2024, the number of locations held through hospital system partnerships grew from 130 in January up to 153 by December. Altogether, joint ventures now account for about 38% of all RadNet locations. 

Berger and colleagues reported progress in the company’s growing digital health division that includes AI and technologies to aid in imaging workflows. The segment recorded revenue of nearly $19 million in Q4, up about $4 million (or 28%) year over year. Adjusted earnings were $4.5 million, up nearly $2 million (or 62%) compared to 2023. Much of this was driven by RadNet’s Enhanced Breast Cancer Detection program, which charges women $40 to have AI read over their mammograms. 

Total company net income was $5.3 million compared to a net loss of $1.9 million the previous year. RadNet experienced several unusual, one-time occurrences that impacted these numbers. These included $1.1 million in severance expenses related to “cost savings initiatives,” a $2.5 million impairment charge for abandoned leases, and $1.1 million for renting new centers that hadn’t yet opened. Correcting for these one-off items, adjusted earnings were $16.7 million or $0.22 per share (compared to $9.9 million and $0.15, respectively, in Q4 2023). As of Dec. 31, the company had a cash balance of about $740 million with a debt to earnings ratio of under 1x. 

RadNet plans to host a company earnings call at 9:30 a.m. Central Time on Friday, Feb. 28. Those interested can listen in at 844-826-3035 or find a simultaneous archived and live webcast here.