RadNet (NASDAQ:RDNT) reported record third-quarter revenue and adjusted EBITDA as demand for advanced imaging, acquisitions and growth in its Digital Health business helped drive results. The company also raised its full-year outlook for its imaging center segment.
Revenue rose 22.1% to $638.3 million from $522.9 million a year earlier, while adjusted EBITDA increased 23.8% to $105 million, President and CEO Howard Berger said on the earnings call. Adjusted diluted earnings per share rose to $0.30 from $0.24.
Berger attributed the growth to initiatives to expand capacity at existing centers, new center openings, acquisitions, higher commercial reimbursement and an expanding network of health system partnerships. The company ended the quarter with 439 centers, including 161 held in health system partnerships.
Advanced Imaging Drives Growth
Overall procedure volume increased 10.8% in aggregate and 3.2% on a same-center basis, CFO Mark Stolper said. Advanced imaging accounted for 30.6% of total procedural volume, up from 28.2% a year earlier, as MRI, CT and PET/CT procedures grew faster than routine imaging.
Imaging center adjusted EBITDA rose 25.3% to $102 million, despite continued pressure on salaries for technologists and radiologists, Stolper said. He cited faster MRI scanners, remote technologists and operational changes as contributors to increased capacity. Prostate PSMA and brain amyloid studies represented almost 26% of PET/CT volume during the quarter.
Berger said newer PET/CT scanners can complete a scan in less than 15 minutes, compared with an hour previously. He also cited growth in CT coronary angiography and breast MRI, and said the company’s challenge is adding enough capacity to meet demand.
Stolper said roughly 13% of RadNet’s MRI exams in the quarter used remote technologists through its TechLive program. The company plans to expand that use to help address staffing shortages and reduce exam room closures.
Digital Health Builds Contract Pipeline
Digital Health revenue rose 33% to $32.9 million, including $21.4 million from customers outside RadNet. Segment adjusted EBITDA was $3 million, down from $3.5 million a year earlier, reflecting investments in commercial and implementation staff and temporary dilution from acquisitions, management said.
Kees Wesdorp, president and CEO of Digital Health, said the segment closed approximately $71 million in total contract value during the quarter. That included a roughly $53 million long-term agreement with a U.S. teleradiology provider covering enterprise informatics and clinical AI products.
Annual recurring revenue ended the quarter at $112.6 million, up 67% from a year earlier. Wesdorp said the segment remains on track to exceed $140 million by year-end and expects fourth-quarter revenue to rise about 20% sequentially as customer implementations come online.
Sham Sokka, Digital Health’s chief operating and technology officer, said RadNet’s Reporting Pro product now covers more than 30% of its exams and is on track for full deployment across the company by the end of the first quarter of 2027. The company is targeting automation of reports for more than 50% of imaging volume by the third quarter of 2027.
Guidance and ONRAD Acquisition
RadNet raised its 2026 imaging center revenue guidance by $15 million at both ends to $2.385 billion–$2.435 billion. It also increased the segment’s adjusted EBITDA outlook by $5 million at both ends to $350 million–$363 million and raised its free cash flow range to $120 million–$130 million.
The company reaffirmed Digital Health revenue guidance of $135 million–$145 million. Wesdorp gave an updated segment adjusted EBITDA range of $10 million–$13 million, while Stolper later cited $11 million–$13 million before non-capitalized research and development.
RadNet’s pending acquisition of ONRAD would establish a third reportable segment, Radiology Professional Services. Berger said ONRAD has more than 130 contracted radiologists serving over 225 hospitals across 26 states. RadNet expects the business to contribute $190 million–$200 million in revenue and $60 million–$65 million in adjusted EBITDA in its first year after closing.
Stolper said RadNet will pay $350 million in cash and 5 million shares at closing. An earnout provides for a payment of 15 times each dollar of ONRAD’s 2027 EBITDA above $56 million, payable in cash or stock at RadNet’s election.
On reimbursement, Stolper estimated that the final 2027 Medicare physician fee schedule would reduce RadNet’s revenue by approximately $5 million. He said the company’s budget will reflect the published rule, while noting that Congress could act to change the reduction.
RadNet ended the quarter with $750.6 million in cash and a net debt-to-adjusted EBITDA ratio of 1.66 times. Management said the company plans to continue investing in capacity and pursuing acquisitions and health system partnerships.
About RadNet (NASDAQ:RDNT)
RadNet, Inc operates outpatient diagnostic imaging centers in the United States. Its centers provide services including magnetic resonance imaging (MRI), computed tomography (CT), positron emission tomography (PET), mammography, ultrasound, X-ray and nuclear medicine imaging.
The company serves patients, physicians and healthcare organizations, with operations across several states, including California, Delaware, Florida, Maryland, New Jersey and New York. Its imaging centers offer diagnostic services for a range of medical needs, from routine screening to specialized examinations.
RadNet also develops digital health and artificial intelligence solutions through its subsidiary DeepHealth, including technology intended to support imaging workflows and assist with image analysis.
