• Total Revenue: Increased 13.5% to $477.1 million in Q4 2024.
• Adjusted EBITDA: Increased 14% to $75 million in Q4 2024.
• Digital Health Revenue: Increased 28.1% to $18.9 million in Q4 2024.
• Digital Health Adjusted EBITDA: Increased 61.6% to $4.5 million in Q4 2024.
• Procedural Volume Growth: 8% aggregate and 4% same-center growth in Q4 2024.
• Advanced Imaging Volume: Represented 26.8% of procedural volume, up 137 basis points from last year.
• Cash Balance: $740 million at year-end 2024.
• Net Debt to Adjusted EBITDA Ratio: Below 1x at year-end 2024.
• Adjusted Earnings Per Share: Increased to $0.22 per share from $0.15 per share in Q4 2023.
• New Facilities: Opened nine de novo facilities in 2024.
• Joint Venture Centers: 153 centers held within system partnerships, an increase of 23 centers from 2023.

• Warning! GuruFocus has detected 4 Warning Sign with RDNT.

Release Date: February 28, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• RadNet Inc (NASDAQ:RDNT) reported record revenue and adjusted EBITDA for the fourth quarter of 2024, with revenue increasing by 13.5% to $477.1 million and adjusted EBITDA rising by 14% to $75 million.
• The Digital Health segment showed strong growth, with revenues increasing by 28.1% and adjusted EBITDA growing by 61.6% compared to the previous year's fourth quarter.
• RadNet Inc (NASDAQ:RDNT) experienced an 8% aggregate and 4% same-center procedural volume growth, driven by increased demand for diagnostic imaging and a shift from hospital-based to ambulatory freestanding imaging centers.
• The company successfully launched the DeepHealth OS operational and diagnostic software suites and announced partnerships with GE and Siemens, enhancing their Digital Health offerings.
• RadNet Inc (NASDAQ:RDNT) maintained a strong financial position with a cash balance of $740 million and a net debt to adjusted EBITDA leverage ratio of under 1x, following strategic financial transactions in 2024.

Negative Points

• RadNet Inc (NASDAQ:RDNT) faced significant revenue and adjusted EBITDA losses in early 2025 due to severe winter weather conditions and Southern California wildfires, impacting operations in key regions.
• The company anticipates approximately $20 million of investment in 2025 for building sales, marketing, customer support, and implementation capabilities within the Digital Health segment, which may affect short-term profitability.
• Labor shortages and inflationary pressures in the radiology sector continue to pose challenges, with RadNet Inc (NASDAQ:RDNT) projecting $45 million in salary and wage increases for 2025.
• The capitation revenue for RadNet Inc (NASDAQ:RDNT) declined, reflecting a strategic shift towards fee-for-service arrangements, which may impact revenue stability in the short term.
• The implementation of the DeepHealth OS platform is expected to take time, with full benefits anticipated in 2026, potentially delaying immediate operational efficiencies and cost reductions.

Q & A Highlights

Q: Can you confirm if the impact of the Southern California wildfires and winter storms will be resolved by the end of the first quarter? A: Howard Berger, CEO, explained that the impact of the wildfires and winter storms was significant, likening it to a massive snowstorm. However, operations have returned to normal, and March is expected to be a typical month without further weather-related disruptions. The company is confident in meeting its budget projections for the rest of the year.

Q: Are there any early insights from the rollout of the DeepHealth OS? A: Howard Berger, CEO, mentioned that while it's early, there is enthusiasm among staff for the DeepHealth OS. The system is expected to bring substantial changes and improvements in efficiency. The rollout is on target for implementation throughout the year, with valuable feedback being incorporated from various stakeholders.

Q: Can you provide more details on the Palm Beach OB/GYN deal and the pipeline for future deals? A: Howard Berger, CEO, stated that the OB/GYN group approached RadNet due to dissatisfaction with previous services. RadNet quickly integrated its Digital Health solutions, including scheduling and AI tools. This collaboration is seen as a case study for future opportunities, particularly in the OB/GYN space, to improve access and quality of imaging services.

Q: What are the expected growth rates for 2025, and how do labor trends impact this? A: Mark Stolper, CFO, indicated that the guidance implies about a 7% growth rate, with a 3% same-store sales growth. The company is confident in achieving these targets despite labor market challenges, which have been managed better than industry averages. The implementation of Digital Health solutions is expected to drive future efficiencies.

Q: How will the $20 million investment in Digital Health infrastructure impact future growth? A: Howard Berger, CEO, explained that the investment is primarily for building sales, marketing, and implementation teams. This is necessary to support external growth and address industry challenges like labor shortages. The investment is expected to yield significant benefits in 2026 and beyond, with no immediate impact on 2025 guidance.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.