RadNet’s PET/CT volume jumps 17%, with imaging backlogs in many of its markets

Outpatient imaging center operator RadNet. Inc. saw same-center PET/CT volumes leap 17% in the third quarter, with heavy demand for radiology services in many of its markets.

Meanwhile, MRI and CT volumes both increased nearly 10% in Q3 when compared to the same period in 2023, the Los Angeles-based company reported Sunday. Routine imaging—which includes X-ray, ultrasound and mammography—also climbed 5.5% when comparing only the same centers that operated both quarters. 

If you include acquired imaging centers in the count, PET/CT volumes increased 24%, with sizable bumps for MRI (15%) and CT (nearly 16%). 

“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,” President and CEO Howard Berger, MD, said in a statement shared Nov. 10. 

Since the start of the year, RadNet has opened five new centers and expects to launch three more before the end of December. Another 15 are in varying stages of construction and development, with Berger expecting them to open sometime in 2025. Altogether, the company has roughly 400 outpatient centers concentrated in Arizona, California, Delaware, Florida, Maryland, New Jersey, New York and Texas. 

RadNet said it saw another “record” quarter for the company, with total company revenue increase nearly 15%, up to $461 million in Q3. Adjusted earnings (before interest, taxes, depreciation and amortization) also climbed over 27% compared to the same three months last year, up to nearly $74 million. Total adjusted profit margin increased 156 basis points, up to 16%. 

Along with success in its imaging center segment, RadNet highlighted ongoing success in its Digital Health division, which includes artificial intelligence solutions. Revenues leapt 34% year-over-year, up to more than $16 million in Q3. Digital Health adjusted earnings increased 42%, up to over $3 million. This was due in part to a $2 million (or nearly 76%) increase in AI revenue, climbing to $5 million. This mainly stemmed from the success of RadNet’s Enhanced Breast Cancer Detection program, which charges women an extra $40 to have AI read over their mammograms. 

RadNet and its DeepHealth AI subsidiary are slated to launch a new operating system at the RSNA 2024 meeting in Chicago next month. Ahead of the conference, RadNet announced its first customer commitment Nov. 7, signing a partnership with OnRad Inc. The Phoenix-based radiology services provider manages more than 1.4 million exams annually and provides comprehensive radiology services to over 120 customer facilities in the U.S. 

“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,” Berger said in the statement. 

RadNet now expects to collect 2024 revenues in its imaging center segment at upward of $1.76 billion, revised from its original estimate of $1.7 billion. Adjusted earnings, meanwhile, are forecasted at up to $270 million versus the original estimate of $260 million. 

Unadjusted for unusual, one-time items impacting its financial results, RadNet collected Q3 net income of about $3.2 million versus $17.5 million the same period last year. These one-off expenses included $8 million in noncash losses from interest rate swaps, $304,000 in employee severance stemming from cost-saving initiatives, and $1.3 million for leasing centers that did not yet open. Another $3 million-plus went toward research and development costs in the Digital Health segment, RadNet reported. Adjusting for these items, total company earnings were about $13 million compared to about $9 million in Q3 of 2023. 

RadNet plans to host a company earnings call on Monday, Nov. 11, at 10:30 a.m. Eastern Time. Those interested in attending can dial 844-826-3035 in the U.S. or find a simultaneous and archived webcast here.