Form 8-K - Current report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) November 10, 2024

RadNet, Inc.

(Exact name of registrant as specified in its charter)

Delaware		001-33307		13-3326724
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification No.)

1510 Cotner Avenue
Los Angeles, California		90025
(Address of Principal Executive Offices)		(Zip Code)

(310) 478-7808

Registrant’s Telephone Number, Including Area Code

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.0001 par value	RDNT	NASDAQ

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02

RESULTS OF OPERATIONS AND FINANCIAL CONDITION

On November 10, 2024 RadNet, Inc. (“RadNet”) issued a press release and, on November 11, 2024, held a conference call regarding its 2024 financial results for the third quarter ended September 30, 2024. A copy of the press release is furnished as Exhibit 99.1 and a copy of the transcript of the conference call is furnished as Exhibit 99.2 to this Current Report.

The information in this Current Report, including Exhibit 99.1 and Exhibit 99.2 is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that Section. The information in this Current Report, including Exhibit 99.1 and Exhibit 99.2 shall not be incorporated by reference into any registration statement or other document filed with the Commission.

Item 9.01

FINANCIAL STATEMENTS AND EXHIBITS

(d) Exhibits

Exhibit No.	Description of Exhibit

99.1	Press Release dated November 10, 2024 relating to RadNet, Inc.’s financial results for the quarter and full fiscal year ended September 30, 2024.

99.2	Transcript of conference call.

104	Cover Page Interactive Data File (embedded within the inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: November 12, 2024	RADNET, INC.


	By:	/s/ Mark D. Stolper
	Name:	Mark D. Stolper
	Title:	Chief Financial Officer

EXHIBIT INDEX

Exhibit No.	Description

99.1	Press Release dated November 10, 2024.

99.2	Transcript of conference call.

104	Cover Page Interactive Data File (embedded within the inline XBRL document)

Exhibit 99.1

FOR IMMEDIATE RELEASE

RadNet Reports Third Quarter Financial Results with Record Quarterly Revenue and Adjusted EBITDA⁽¹⁾ and Revises Upwards 2024 Financial Guidance Ranges

Total Company Revenue increased 14.7% to $461.1 million in the third quarter of 2024 from $402.0 million in the third quarter of 2023; Revenue from the Digital Health reportable segment (inclusive of intersegment revenue) increased 34.3% to $16.4 million in the third quarter of 2024 from $12.2 million in the third quarter of 2023

Digital Health Revenue growth resulted in part from a $2.2 million (or 75.8%) increase in AI Revenue, which climbed to $5.1 million during the third quarter of 2024 from $2.9 million in the third quarter of 2023

Total Company Adjusted EBITDA⁽¹⁾was $73.7 million in the third quarter of 2024 as compared with $57.9 million in the third quarter of 2023, an increase of 27.2%; Digital Health reportable segment Adjusted EBITDA⁽¹⁾ increased 41.7% to $3.3 million in the third quarter of 2024 from $2.3 million in the third quarter of 2023

Total Company Adjusted EBITDA⁽¹⁾ margins increased by 156 bps to 16.0% in the third quarter of 2024 as compared with 14.4% in the third quarter of 2023

Adjusting for unusual or one-time items in the quarter, Adjusted Diluted Earnings Per Share⁽³⁾ was $0.18 for the third quarter of 2024; This compares with Adjusted Earnings Per Share⁽³⁾ of $0.13 for the third quarter of 2023

Aggregate procedural volumes in the third quarter of 2024 increased 9.0% and same-center procedural volumes increased 5.5% compared with the third quarter of 2023

As of September 30, 2024, we had a cash balance of $748.9 million and Net Debt to Adjusted EBITDA⁽¹⁾ ratio of below 1.0x

On pace for the commercial launch of DeepHealth OS on December 1^st at the Radiological Society of North America (RSNA) conference

RadNet revises full-year 2024 guidance levels to increase Revenue, Adjusted EBITDA⁽¹⁾ and Free Cash Flow⁽²⁾ ranges

LOS ANGELES, California, November 10, 2024 – RadNet, Inc. (NASDAQ: RDNT), a national leader in providing high-quality, cost-effective, fixed-site outpatient diagnostic imaging services through a network of 399 owned and operated outpatient imaging centers, today reported financial results for its third quarter of 2024.

Dr. Howard Berger, President and Chief Executive Officer of RadNet, commented, “We continue to demonstrate strong growth and record results in each of our Imaging Center and Digital Health reportable operating segments. Total Company Revenue grew 14.7% as compared with last year’s third quarter to a record $461.1 million. The Digital Health segment Revenue of $16.4 million increased 34.3% from last year’s same quarter. The strong growth in Digital Health was, in part, driven by the AI businesses, whose Revenue increased 75.8% as compared with last year’s third quarter, mainly from the continuing success of the rollout of the Enhanced Breast Cancer Detection (EBCD) DeepHealth AI-powered screening mammography program.”

“Despite continued inflation in staffing costs, improved reimbursement from commercial and capitated payors, strong demand for advanced imaging modalities, the growth of the Digital Health businesses and effective cost controls resulted in an increase to Adjusted EBITDA⁽¹⁾ margins. Total Company Adjusted EBITDA⁽¹⁾ margin of 16.0% during this third quarter increased by 156 basis points over last year’s third quarter.” added Dr. Berger.

“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. We have increased 2024 guidance ranges for Revenue, Adjusted EBITDA⁽¹⁾ and Free Cash Flow⁽²⁾,” added Dr. Berger.

Dr. Berger continued, “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. Since the start of the year, we have opened five new centers, and we anticipate opening an additional three centers before year end. Furthermore, we have 15 centers in various stages of construction and development which we intend to open during 2025.”

“We remain on pace for the commercial launch of DeepHealth OS at the RSNA convention this year taking place December 1^st through 4^th in Chicago. At our DeepHealth booth, we will be demonstrating the capabilities of the DeepHealth OS integrated end-to-end workflow solutions as well as our clinical AI tools. Last week, we announced our first customer for the DeepHealth OS software platform, and we are eager to introduce our DeepHealth solutions to prospective customers and partners at the convention, explained Dr. Berger.

“RadNet’s balance sheet continues to strengthen as our focus remains on driving same-center revenue performance and effective cost management. At quarter end, we had a cash balance of $748.9 million, and our leverage ratio of Net Debt to Adjusted EBITDA⁽¹⁾ was at a record low, slightly below 1.0,” concluded Dr. Berger.

Third Quarter Financial Results

For the third quarter of 2024, RadNet reported Total Company Revenue of $461.1 million and Adjusted EBITDA⁽¹⁾ of $73.7 million. Revenue increased $59.2 million (or 14.7%) and Adjusted EBITDA⁽¹⁾ increased $15.7 million (or 27.2%) as compared with the third quarter of 2023.

For the third quarter of 2024, RadNet reported Digital Health Revenue (inclusive of intersegment revenue) of $16.4 million and Adjusted EBITDA⁽¹⁾ of $3.2 million. Revenue increased $4.2 million (or 34.3%) and Adjusted EBITDA⁽¹⁾ increased $950,000 (or 41.7%) as compared with the third quarter of 2023. Digital Health Revenue and Adjusted EBITDA⁽¹⁾ growth was due in part from a $2.2 million (or 75.8%) increase in AI Revenue, which climbed to $5.1 million during the third quarter of 2024.

Unadjusted for unusual or one-time items impacting the third quarter, Total Company Net Income for the third quarter of 2024 was $3.2 million as compared with a Total Company Net Income of $17.5 million for the third quarter of 2023. Fully diluted Net Income Per Share for the third quarter of 2024 was $0.04, compared with a fully diluted Net Income per share of $0.25 in the third quarter of 2023, based upon a weighted average number of diluted shares outstanding of 75.2 million shares in 2024 and 68.8 million shares in 2023.

There were a number of unusual or one-time items impacting the third quarter including: $8.1 million of non-cash loss from interest rate swaps; $304,000 in severance expense related to cost-savings initiatives; $1.3 million expense related to leases for de novo facilities under construction that have yet to open their operations; $3.3 million of non-capitalized research and development expenses related to the DeepHealth Cloud OS and generative AI; $417,000 of acquisition transaction costs; and $147,000 loss in conjunction with extinguishment of debt and related expenses. Adjusting for the above items, Total Company Adjusted Earnings⁽³⁾ was $13.3 million and diluted Adjusted Earnings Per Share⁽³⁾ was $0.18 during the third quarter of 2024. This compares with Total Company Adjusted Earnings⁽³⁾ of $8.8 million and diluted Adjusted Earnings Per Share⁽³⁾ of $0.13 during the third quarter of 2023.

For the third quarter of 2024, as compared with the prior year’s third quarter, MRI volume increased 14.6%, CT volume increased 15.5% and PET/CT volume increased 23.8%. Overall volume, taking into account routine imaging exams, inclusive of x-ray, ultrasound, mammography and other exams, increased 9.0% over the prior year’s third quarter. On a same-center basis, including only those centers which were part of RadNet for both the third quarters of 2024 and 2023, MRI volume increased 9.9%, CT volume increased 9.8% and PET/CT volume increased 16.8%. Overall same-center volume, taking into account routine imaging exams, inclusive of x-ray, ultrasound, mammography and other exams, increased 5.5% over the prior year’s same quarter

Nine Month Financial Results

For the first nine months of 2024, RadNet reported Total Company Revenue of $1,352.6 million and Adjusted EBITDA⁽¹⁾ of $204.5 million. Revenue increased $156.3 million (or 13.1%) and Adjusted EBITDA⁽¹⁾ increased $37.9 million (or 22.8%) as compared with the first nine months of 2023.

For the first nine months of 2024, RadNet reported Digital Health Revenue (inclusive of intersegment revenue) of $46.9 million and Adjusted EBITDA⁽¹⁾ of $10.0 million. Revenue increased $12.0 million (or 34.4%) and Adjusted EBITDA⁽¹⁾ increased $6.3 million (or 171.6%) as compared with the first nine months of 2023. Digital Health Revenue and Adjusted EBITDA⁽¹⁾ growth was due in part to a $8.0 million (or 107.8%) increase in AI Revenue, which climbed to $15.4 million during the nine month period of 2024.

Unadjusted for one-time or unusual items, Total Company Net Loss for the first nine months of 2024 was $2.6 million as compared with a Total Company Net Income of $4.9 million for the first nine months of 2023. Fully diluted Net Loss Per Share for the nine month period of 2024 was $(0.04), compared with a Net Income per share of $0.08 in the nine month period of 2023, based upon a weighted average number of diluted shares outstanding of 72.6 million shares in 2024 and 63.2 million shares in 2023.

2024 Guidance Update

RadNet amends its previously announced guidance levels as follows:

Imaging Center Segment


	Original Guidance Range	Revised Guidance Range After Q1 Results	Revised Guidance Range After Q2 Results	Revised Guidance Range After Q3 Results
Total Net Revenue	$1,650 - $1,700 million	$1,675 - $1,725 million	$1,685 - $1,735 million	$1,710 - $1,760 million
Adjusted EBITDA⁽¹⁾	$250 - $260 million	$255 - $265 million	$257 - $267 million	$262 - $270 million
Capital Expenditures^(a)	$125 - $135 million	$130 - $140 million	$135 - $145 million	$145 - $155 million
Cash Interest Expense^(b)	$40 - $45 million	$37 - $42 million	$32 - $37 million	$25 - $30 million
Free Cash Flow ⁽²⁾	$65 - $75 million	$68 - $78 million	$72 - $80 million	$83 - $93 million

(a)

Net of proceeds from the sale of equipment, imaging centers and joint venture interests and New Jersey Imaging Network capital expenditures.

(b)

Includes payments to and from counterparties on interest rate swaps and nets interest income from our cash balance as recorded in Other Income.

Digital Health Segment

	Original Guidance Range	Revised Guidance Range After Q1 Results	Revised Guidance Range After Q2 Results	Revised Guidance Range After Q3 Results

Total Net Revenue (inclusive of intersegment revenue)	$60 - $70 million	$60 - $70 million	$60 - $70 million	$60 - $70 million

Adjusted EBITDA⁽¹⁾ Before Non-Capitalized R&D - DeepHealth Cloud OS & Generative AI	$12 - $14 million	$13 - $15 million	$13 - $15 million	$13 - $15 million

Non-Capitalized R&D - DeepHealth Cloud OS & Generative AI	$11 - $13 million	$12 - $14 million	$12 - $14 million	$13 - $15 million

Capital Expenditures⁽ⁱ⁾	$3 - $5 million	$3 - $5 million	$3 - $5 million	$3 - $5 million

Free Cash Flow⁽²⁾ Before Non-Capitalized R&D - DeepHealth Cloud OS & Generative AI	$8 - $10 million	$8 - $10 million	$8 - $10 million	$8 - $10 million

Free Cash Flow⁽²⁾ After Non-Capitalized R&D - DeepHealth Cloud OS & Generative AI	$(2) - $(5) million	$(2) - $(5) million	$(2) - $(5) million	$(2) - $(5) million

(i)

Excludes a $9 million purchase of software code and other intellectual property from a vender.

“Based upon the consistent outperformance of the first three quarters of this year relative to our projections, we have increased guidance ranges of our core Imaging Center reporting segment for Revenue and Adjusted EBITDA⁽¹⁾. Furthermore, despite increasing the Capital Expenditures guidance range by $10 million, we are expecting Free Cash Flow⁽²⁾ to be higher for the year. This is the result of the projected increase in Adjusted EBITDA⁽¹⁾ and lower Cash Interest Expense. With respect to the Digital Health reportable segment, we remain on track to meet our original guidance levels for Revenue, Adjusted EBITDA⁽¹⁾ and Free Cash Flow⁽²⁾.”

Conference Call for Tomorrow

Dr. Howard Berger, President and Chief Executive Officer, and Mark Stolper, Executive Vice President and Chief Financial Officer, will host a conference call to discuss its third quarter 2024 results on Monday, November 11th, 2024 at 7:30 a.m. Pacific Time (10:30 a.m. Eastern Time).

Conference Call Details:

Date: Monday, November 11, 2024

Time: 10:30 a.m. Eastern Time

Dial In-Number: 844-826-3035

International Dial-In Number: 412-317-5195

It is recommended that participants dial in approximately 5 minutes prior to the start of the 10:30 a.m. call. There will also be simultaneous and archived webcasts available at https://viavid.webcasts.com/starthere.jsp?ei=1691984&tp_key=8cbf05cc88 or http://www.radnet.com under the “Investors” menu section and “News Releases” sub-menu of the website. An archived replay of the call will also be available and can be accessed by dialing 844-512-2921 from the U.S., or 412-317-6671 for international callers, and using the passcode 10193306.

About RadNet, Inc.

RadNet, Inc., is the leading national provider of freestanding, fixed-site diagnostic imaging services and related information technology solutions (including artificial intelligence) in the United States based on the number of locations and annual imaging revenue. RadNet has a network of 399 owned and/or operated outpatient imaging centers. RadNet’s markets include Arizona, California, Delaware, Florida, Maryland, New Jersey, New York and Texas. In addition, RadNet provides radiology information technology and artificial intelligence solutions marketed under the DeepHealth brand and other related products and services to customers in the diagnostic imaging industry. Together with affiliated radiologists, and inclusive of full-time and per diem employees and technologists, RadNet has a total of over 10,000 employees. For more information, visit http://www.radnet.com.

Forward Looking Statements

This press release contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are expressions of our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, and anticipated future conditions, events and trends. Forward-looking statements can generally be identified by words such as: “anticipate,” “intend,” “plan,” “goal,” “seek,” “believe,” “project,” “estimate,” “expect,” “strategy,” “future,” “likely,” “may,” “should,” “will” and similar references to future periods. Forward-looking statements in this press release include, among others, statements about our anticipated business results, balance sheet and liquidity and our future liquidity, burn rate and our continuing ability to service or refinance our current indebtedness.

Forward-looking statements are neither historical facts nor assurances of future performance. Because forward-looking statements relate to the future, they are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not place undue reliance on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following:

the availability and terms of capital to fund our business;

our ability to service our indebtedness, make principal and interest payments as those payments become due and remain in compliance with applicable debt covenants, in addition to our ability to refinance such indebtedness on acceptable terms;

changes in general economic conditions nationally and regionally in the markets in which we operate;

the availability and terms of capital to fund the expansion of our business and improvements to our existing facilities;

our ability to maintain our current credit rating and the impact on our funding costs and competitive position if we do not do so;

our ability to acquire, develop, implement and monetize technology, digital health initiatives, artificial intelligence algorithms and applications;

volatility in interest and exchange rates, or credit markets;

the adequacy of our cash flow and earnings to fund our current and future operations;

changes in service mix, revenue mix and procedure volumes;

delays in receiving payments for services provided;

increased bankruptcies among our partner physicians or joint venture partners;

the impact of the political environment and related developments on the current healthcare marketplace and on our business, including with respect to the future of the Affordable Care Act;

the extent to which the ongoing implementation of healthcare reform, or changes in or new legislation, regulations or guidance, enforcement thereof by federal and state regulators or related litigation result in a reduction in coverage or reimbursement rates for our services, or other material impacts to our business;

closures or slowdowns and changes in labor costs and labor difficulties, including stoppages affecting either our operations or our suppliers' abilities to deliver supplies needed in our facilities;

the occurrence of hostilities, political instability or catastrophic events;

the emergence or reemergence of and effects related to future pandemics, epidemics and infectious diseases; and

noncompliance by us with any privacy or security laws or any cybersecurity incident or other security breach by us or a third party involving the misappropriation, loss or other unauthorized use or disclosure of confidential information.

Any forward-looking statement contained in this current report is based on information currently available to us and speaks only as of the date on which it is made. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that we may make from time to time, whether as a result of changed circumstances, new information, future developments or otherwise, except as required by applicable law.

Regulation G: GAAP and Non-GAAP Financial Information

This release contains certain financial information not reported in accordance with GAAP. The Company uses both GAAP and non-GAAP metrics to measure its financial results. The Company believes that, in addition to GAAP metrics, these non-GAAP metrics assist the Company in measuring its cash-based performance. The Company believes this information is useful to investors and other interested parties because it removes unusual and nonrecurring charges that occur in the affected period and provides a basis for measuring the Company's financial condition against other quarters. Such information should not be considered as a substitute for any measures calculated in accordance with GAAP, and may not be comparable to other similarly titled measures of other companies. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Reconciliation of this information to the most comparable GAAP measures is included in this release in the tables which follow.

CONTACTS:

RadNet, Inc.

Mark Stolper, 310-445-2800

Executive Vice President and Chief Financial Officer

RADNET, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)

	September 30, 2024			December 31, 2023
	(unaudited)
ASSETS
CURRENT ASSETS
Cash and Cash equivalents	$	748,916		$	342,570
Accounts receivable		199,076			163,707
Due from affiliates		30,210			25,342
Prepaid expenses and other current assets		38,051			47,657
Total current assets		1,016,253			579,276
PROPERTY, EQUIPMENT AND RIGHT-OF-USE ASSETS
Property and equipment, net		663,867			604,401
Operating lease right-of-use assets		646,750			596,032
Total property, plant, equipment and right-of-use assets		1,310,617			1,200,433
OTHER ASSETS
Goodwill		711,841			679,463
Other intangible assets		84,441			90,615
Deferred financing costs		2,416			1,643
Investment in joint ventures		104,514			92,710
Deposits and other		45,260			46,333
Total Assets	$	3,275,342		$	2,690,473

LIABILITIES AND EQUITY
CURRENT LIABILITIES
Accounts payable, accrued expenses and other	$	338,737		$	342,940
Due to affiliates		44,872			15,910
Deferred revenue		4,392			4,647
Current operating lease liability		58,751			55,981
Current portion of notes payable		23,378			17,974
Total current liabilities		470,130			437,452
LONG-TERM LIABILITIES
Long-term operating lease liability		658,434			605,097
Notes payable, net of current portion		996,272			812,068
Deferred tax liability, net		20,795			15,776
Other non-current liabilities		10,077			6,721
Total liabilities		2,155,708			1,877,114
EQUITY
RadNet, Inc. stockholders' equity:
Common stock - $0.0001 value, 200,000,000 shares authorized; 73,976,284 and 67,956,318 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively		7			7
Additional paid-in-capital		979,279			722,750
Accumulated other comprehensive loss		(1,843	)		(12,484	)
Accumulated deficit		(82,130	)		(79,578	)
Total RadNet, Inc.'s Stockholders' equity:		895,313			630,695
Noncontrolling interests		224,321			182,664
Total Equity		1,119,634			813,359
Total liabilities and equity	$	3,275,342		$	2,690,473

RADNET, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(IN THOUSANDS EXCEPT FOR SHARE AND PER SHARE DATA)

(unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023

REVENUE
Service fee revenue	$	427,579		$	361,927		$	1,247,513		$	1,078,265
Revenue under capitation arrangements		33,563			40,041			105,050			117,982
Total service revenue		461,142			401,968			1,352,563			1,196,247
OPERATING EXPENSES
Cost of operations, excluding depreciation and amortization		391,800			341,635			1,169,113			1,038,647
Depreciation and amortization		34,979			32,210			101,822			95,705
Loss (gain) on sale and disposal of equipment and other		148			527			735			1,183
Loss (gain) on contribution of imaging centers into joint venture		–			(16,808	)		–			(16,808	)
Severance costs		304			1,153			797			3,157
Total operating expenses		427,231			358,717			1,272,467			1,121,884
INCOME (LOSS) FROM OPERATIONS		33,911			43,251			80,096			74,363
OTHER INCOME AND EXPENSES
Interest expense		19,427			16,115			61,776			47,876
Equity in earnings of joint ventures		(3,595	)		(1,084	)		(11,308	)		(3,935	)
Non-cash change in fair value of interest rate hedge		6,755			1,015			7,429			949
Debt restructuring and extinguishment expenses		147			–			8,909			–
Other expenses (income)		(5,414	)		(4,081	)		(16,248	)		(2,609	)
Total other (income) expenses		17,320			11,965			50,558			42,281
INCOME (LOSS) BEFORE INCOME TAXES		16,591			31,286			29,538			32,082
Provision for income taxes		(4,335	)		(7,220	)		(4,927	)		(7,741	)
NET INCOME (LOSS)		12,256			24,066			24,611			24,341
Net income (loss) attributable to noncontrolling interests		9,047			6,526			27,163			19,437
NET INCOME (LOSS) ATTRIBUTABLE TO RADNET, INC. COMMON STOCKHOLDERS	$	3,209		$	17,540		$	(2,552	)	$	4,904

BASIC NET INCOME (LOSS) PER SHARE ATTRIBUTABLE TO RADNET, INC. COMMON STOCKHOLDERS	$	0.04		$	0.26		$	(0.04	)	$	0.08

DILUTED NET INCOME (LOSS) PER SHARE ATTRIBUTABLE TO RADNET, INC. COMMON STOCKHOLDERS	$	0.04		$	0.25		$	(0.04	)	$	0.08
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic		73,494,709			67,793,404			72,587,321			62,113,707
Diluted		75,165,435			68,809,818			72,587,321			63,221,251

RADNET, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASHFLOWS

(IN THOUSANDS)

(unaudited)

	Nine Months Ended September 30,
	2024			2023
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$	24,611		$	24,341
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		101,822			95,705
Amortization of operating lease assets		45,516			47,542
Equity in earnings of joint ventures		(10,308	)		5,012
Amortization deferred financing costs and loan discount		2,336			2,240
Loss (Gain) on sale and disposal of equipment		735			1,183
Loss on extinguishment of debt		2,080			–
Gain on contribution of imaging centers into joint venture		–			(16,808	)
Amortization of cash flow hedge		8,242			2,765
Non-cash change in fair value of interest rate hedge		7,429			949
Stock-based compensation		21,368			21,380
Loss on impairment		1,200			3,949
Change in fair value of contingent consideration		1,974			(4,112	)
Changes in operating assets and liabilities, net of assets acquired and liabilities assumed in purchase transactions:
Accounts receivable		(35,369	)		(1,379	)
Other current assets		4,738			5,754
Other assets		(7,388	)		(16,641	)
Deferred taxes		4,834			7,389
Operating lease liability		(40,497	)		(43,390	)
Deferred revenue		(255	)		1,155
Accounts payable, accrued expenses and other		57,426			(5,091	)
Net cash provided by operating activities		190,494			131,943
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of imaging facilities and other acquisitions		(37,748	)		(10,915	)
Purchase of property and equipment and other		(145,164	)		(136,537	)
Proceeds from sale of equipment		151			82
Equity contributions in existing and purchase of interest in joint ventures		(1,496	)		(5,453	)
Net cash used in investing activities		(184,257	)		(152,823	)
CASH FLOWS FROM FINANCING ACTIVITIES
Principal payments on notes and leases payable		(4,296	)		(1,929	)
Payments on Term Loan Debt		(688,375	)		(11,062	)
Proceeds from issuance of new debt, net of issuing costs		863,815			–
Contribution from noncontrolling interests		7,569			–
Payments on contingent consideration		(3,614	)		(3,390	)
Distributions paid to noncontrolling interests		(2,423	)		(3,523	)
Proceeds from sale of economic interests in majority owned subsidiary, net of taxes		8,641			5,102
Proceeds from issuance of common stock		218,385			245,831
Proceeds from issuance of common stock upon exercise of options		367			72
Net cash provided by financing activities		400,069			231,101
EFFECT OF EXCHANGE RATE CHANGES ON CASH		40			(171	)
NET DECREASE IN CASH AND CASH EQUIVALENTS		406,346			210,050
CASH AND CASH EQUIVALENTS, beginning of period		342,570			127,834
CASH AND CASH EQUIVALENTS, end of period		748,916			337,884

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the period for interest	$	51,520		$	59,421
Cash paid during the period for income taxes	$	2,202		$	225

RADNET, INC. AND SUBSIDIARIES

RECONCILIATION OF GAAP NET INCOME ATTRIBUTABLE TO RADNET, INC. COMMON SHAREHOLDERS TO ADJUSTED EBITDA

(IN THOUSANDS)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023

Net income (loss) attributable to Radnet, Inc. common stockholders	$	3,209		$	17,540		$	(2,552	)	$	4,904
Income taxes		4,335			7,220			4,927			7,741
Interest expense		19,427			16,115			61,776			47,876
Severance costs		304			1,153			797			3,157
Depreciation and amortization		34,979			32,210			101,822			95,705
Non-cash employee stock-based compensation		4,723			4,325			21,369			21,381
Loss (gain) on sale and disposal of equipment and other		148			527			735			1,183
Non-cash change in fair value of interest rate hedge		6,755			1,015			7,429			949
Other expenses (income)		(5,414	)		(4,081	)		(16,248	)		(2,609	)
Non-Capitalized R&D - DeepHealth Cloud OS & Generative AI		3,345			–			9,977			–
Loss (gain) on contribution of imaging centers into joint venture		–			(16,808	)		–			(16,808	)
Loss (gain) on extinguishment of debt and related expenses		147			–			8,909			–
Non-cash change to contingent consideration		–			(6,276	)		1,974			(3,646	)
Acquisition related non-cash intangible adjustment		–			3,950			–			3,950
Non-operational rent expenses		1,287			1,030			3,119			2,748
Acquisition transaction costs		417			–			417			–

Adjusted EBITDA Including EBITDA from Digital Health	$	73,662		$	57,920		$	204,451		$	166,531

EBITDA from Digital Health		3,229			2,279			10,018			3,689

Adjusted EBITDA excluding EBITDA from Digital Health	$	70,433		$	55,641		$	194,433		$	162,842

PAYMENTS BY PAYOR CLASS

	Third Quarter
	2024

Commercial Insurance		57.7%
Medicare		22.3%
Capitation		7.3%
Medicaid		2.4%
Workers Compensation/Personal Injury		2.2%
Other*		8.2%
Total		100.0%

* Includes management fee, teleradiology and Digital Health financial reporting unit revenue.

PAYMENTS BY MODALITY

	Third Quarter		Full Year		Full Year		Full Year
	2024		2023		2022		2021

MRI		37.1%		36.8%		36.8%		36.0%
CT		16.0%		16.8%		17.5%		17.2%
PET/CT		7.1%		6.4%		5.8%		5.5%
X-ray		6.1%		6.5%		6.7%		3.9%
Ultrasound		13.7%		12.9%		12.6%		12.7%
Mammography		16.2%		16.0%		15.3%		16.1%
Nuclear Medicine		1.0%		0.8%		0.9%		1.0%
Other		2.7%		3.9%		4.5%		4.6%
		100.0%		100.0%		100.0%		100.0%

PROCEDURES BY MODALITY*

	Third Quarter		Third Quarter
	2024		2023

MRI		446,596		389,566
CT		265,874		230,276
PET/CT		18,844		15,216
Nuclear Medicine		9,282		8,533
Ultrasound		650,322		607,995
Mammography		484,357		452,756
X-ray and Other		862,732		806,677

Total		2,738,007		2,511,019

* Volumes include wholy owned and joint venture centers.

RADNET, INC. AND SUBSIDIARIES

SCHEDULE OF ADJUSTED EARNINGS AND EARNINGS PER SHARE ⁽³⁾

(IN THOUSANDS EXCEPT SHARE DATA)

(unaudited)

	Three Months Ended
	September 30,			September 30,
	2024			2023(v)

NET INCOME (LOSS) ATTRIBUTABLE TO RADNET, INC.
COMMON STOCKHOLDERS	$	3,209		$	17,540

Add non-cash impact of cash flow hedges (i)		8,111			2,260
Add severance costs		304			1,153
Subtract gain on contribution of imaging centers into joint venture		–			(16,808	)
Add non-operational rent expenses (iii)		1,287			1,030
Non-capitalized R&D - DeepHealth cloud OS & generative AI		3,345			–
Acquisition transaction costs		417			–
Debt amendment fee		147			–
Subtract non-cash change to contingent consideration - Heart Lung Health		–			915
Total adjustments - loss (gain)		13,611			(11,450	)
Subtract tax impact of Adjustments (ii)		(3,552	)		2,759
Tax effected impact of adjustments		10,059			(8,691	)

TOTAL ADJUSTMENT TO NET INCOME ATTRIBUTABLE
TO RADNET, INC. COMMON SHAREHOLDERS		10,059			(8,691	)

ADJUSTED NET INCOME (LOSS) ATTRIBUTABLE TO RADNET, INC.		13,268			8,849
COMMON STOCKHOLDERS

WEIGHTED AVERAGE SHARES OUTSTANDING
Diluted		75,165,435			68,809,818

ADJUSTED DILUTED NET INCOME PER SHARE
ATTRIBUTABLE TO RADNET, INC. COMMON STOCKHOLDERS	$	0.18		$	0.13

(i)

Impact is the combination of (a) the loss in fair value of the hedges during the quarter of $6,755 in 2024 and loss of $1,015 in 2023 and (b) the amortization of the accumulation of the changes in fair value out of Other Comprehensive Income that existed prior to the hedges becoming ineffective of $1,356 in 2024 and $1,245 in 2023.

(ii)

Tax effected using 26.1% blended federal and state effective tax rate for 2023 and 24.1% for 2023.

(iii)

Represents rent expense associated with de novo sites under construction prior to them becoming operational.

(iv)

Represents pre-tax net income losses before income taxes from Artificial Intelligence reporting segment.

(v)

Restated from what was presented in 2023 to include the losses of the AI businesses (ie, not add the losses back to earnings as was the case in 2023). The restated Adjusted Earnings for 2023 is due to the fact that AI is no longer its own reportable operating segment and is now embedded in the Digital Health reportable operating segment.

Footnotes

⁽¹⁾ The Company defines Adjusted EBITDA as earnings before interest, taxes, depreciation and amortization, each from continuing operations and adjusted for losses or gains on the sale of equipment, other income or loss, debt extinguishments and non-cash equity compensation. Adjusted EBITDA includes equity earnings in unconsolidated operations and subtracts allocations of earnings to non-controlling interests in subsidiaries, and is adjusted for non-cash or extraordinary and one-time events taken place during the period.

Adjusted EBITDA is reconciled to its nearest comparable GAAP financial measure. Adjusted EBITDA is a non-GAAP financial measure used as analytical indicator by RadNet management and the healthcare industry to assess business performance, and is a measure of leverage capacity and ability to service debt. Adjusted EBITDA should not be considered a measure of financial performance under GAAP, and the items excluded from Adjusted EBITDA should not be considered in isolation or as alternatives to net income, cash flows generated by operating, investing or financing activities or other financial statement data presented in the consolidated financial statements as an indicator of financial performance or liquidity. As Adjusted EBITDA is not a measurement determined in accordance with GAAP and is therefore susceptible to varying methods of calculation, this metric, as presented, may not be comparable to other similarly titled measures of other companies.

⁽²⁾ As noted above, the Company defines Free Cash Flow as Adjusted EBITDA less total Capital Expenditures (whether completed with cash or financed) and Cash Interest Expense. Free Cash Flow is a non-GAAP financial measure. The Company uses Free Cash Flow because the Company believes it provides useful information for investors and management because it measures our capacity to generate cash from our operating activities. Free Cash Flow does not represent total cash flow since it does not include the cash flows generated by or used in financing activities. In addition, our definition of Free Cash Flow may differ from definitions used by other companies.

Free Cash Flow should not be considered a measure of financial performance under GAAP, and the items excluded from Adjusted EBITDA should not be considered in isolation or as alternatives to net income, cash flows generated by operating, investing or financing activities or other financial statement data presented in the consolidated financial statements as an indicator of financial performance or liquidity. As Adjusted EBITDA is not a measurement determined in accordance with GAAP and is therefore susceptible to varying methods of calculation, this metric, as presented, may not be comparable to other similarly titled measures of other companies.

⁽³⁾ The Company defines Adjusted Earnings (Loss) Per Share as net income or loss attributable to RadNet, Inc. common stockholders and excludes losses or gains on the disposal of equipment, loss on debt extinguishments, bargain purchase gains, severance costs, loss on impairment, loss or gain on swap valuation, gain on extinguishment of debt, unusual or non-recurring entries that impact the Company’s tax provision and any other non-recurring or unusual transactions recorded during the period.

Adjusted Earnings (Loss) Per Share is reconciled to its nearest comparable GAAP financial measure. Adjusted Earnings (Loss) Per Share is a non-GAAP financial measure used as analytical indicator by RadNet management and the healthcare industry to assess business performance. Adjusted Earnings Per Share should not be considered a measure of financial performance under GAAP, and the items excluded from Adjusted Earnings Per Share should not be considered in isolation or as alternatives to net income, cash flows generated by operating, investing or financing activities or other financial statement data presented in the consolidated financial statements as an indicator of financial performance or liquidity. As Adjusted Earnings Per Share is not a measurement determined in accordance with GAAP and is therefore susceptible to varying methods of calculation, this metric, as presented, may not be comparable to other similarly titled measures of other companies.

Exhibit 99.2

C O R P O R A T E P A R T I C I P A N T S

Howard Berger, President, Chief Executive Officer

Mark Stolper, Chief Financial Officer

C O N F E R E N C E C A L L P A R T I C I P A N T S

Brian Tanquilut, Jefferies

John Ransom, Raymond James

Evan, Barclays

Larry Solow, CJS Securities

Jim Sidoti, Sidoti & Co.

P R E S E N T A T I O N

Operator

Good day and welcome to the RadNet Inc. Third Quarter 2024 Financial Results Conference Call.

All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today’s presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touchtone phone. To withdraw your question, please press star then two. Please note that this event is being recorded.

I would like to turn the conference over to Mark Stolper, Executive Vice President and CFO of RadNet. Please go ahead.

Mark Stolper

Thank you.

Good morning ladies and gentlemen, and thank you for joining Dr. Howard Berger and me today to discuss RadNet’s third quarter 2024 financial results.

Before we begin today, we'd like to remind everyone of the Safe Harbor statement under the Private Securities Litigation Reform Act of 1995. This presentation contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Specifically, statements concerning anticipated future financial and operating performance, RadNet’s ability to continue to grow the business by generating patient referrals and contracts with radiology practices, recruiting and retaining technologists, receiving third party reimbursement for diagnostic imaging services, successfully integrating acquired operations, generating revenue and Adjusted EBITDA for the acquired operations as estimated, among others, are forward-looking statements within the meaning of the Safe Harbor.

Forward-looking statements are based on Management's current preliminary expectations and are subject to risks and uncertainties which may cause RadNet’s actual results to differ materially from the statements contained herein. These risks and uncertainties include those risks set forth in RadNet’s reports filed with the SEC from time to time, including RadNet's annual report on Form 10-K for the year ended December 31, 2023. Undue reliance should not be placed on forward-looking statements, especially guidance on future financial performance which speaks only as of the date it is made. RadNet undertakes no obligation to update publicly any forward-looking statements to reflect new information, events or circumstances after the date they were made, or to reflect the occurrence of unanticipated events.

With that, I'd like to turn the call over to Dr. Berger.

Howard Berger

Thank you Mark.

Good morning everyone, and thank you for joining us today. On today’s call, Mark and I plan to provide you with highlights from our third quarter 2024 results, give you more insight into factors which affected this performance, and discuss our future strategy. After our prepared remarks, we will open the call to your questions.

I’d like to thank all of you for your interest in our Company and for dedicating a portion of your day to participate in our conference call this morning.

To begin, I am very pleased with our performance in the third quarter. It was the strongest quarter in our Company’s history with record revenue and Adjusted EBITDA. Relative to last year’s third quarter, total Company revenue increased 14.7% and our digital health revenue increased 34.3%. Imaging center revenue growth was driven by heavy demand in virtually all of our markets benefiting from the increasing utilization of diagnostic imaging within healthcare, as well as the continuing shift to procedural volumes away from the more expensive hospital alternatives to ambulatory freestanding centers like the ones we operate.

Also contributing to the strong revenue performance was the positive impact of improved reimbursement from our payors, who recognize the important role we are playing as a lower priced alternative to hospital -based imaging. Lastly, our top line is benefiting from a continuing shift in modality mix towards advanced imaging, MRI, CT and PET CT, where our revenue per scan is substantially higher than with routine imaging.

During the third quarter, advanced imaging represented 26.7% of our procedural volume, an increase of 142 basis points from last year’s same quarter. This is both a function of the overall industry trend of more of these exams being ordered as a result of technology advances in these modalities, and the significant capital investments we have made in the last several years in the advanced imaging equipment for growth and replacement. Contributing to the strong revenue growth within digital health were the AI businesses, including our AI-powered EBCD breast cancer screening program, which grew 75.8% quarter-over-quarter for the past year.

Adjusted EBITDA was also a quarterly record. While the strong revenue results which I just discussed contributed to more EBITDA, our focus on operational efficiency, improved management and utilization of labor, investments in information technology and effective cost controls contributed to a 27.2% increase from last year’s third quarter. Another contributing factor to Adjusted EBITDA growth was the disproportionate growth in the higher profit margin digital health businesses. Cumulatively, these factors drove a 156 basis point increase in our Adjusted EBITDA margin as compared with last year’s third quarter. While we are pleased with this margin expansion, I remain convinced we have further opportunity to improve margins in the future.

The strong operating results in the third quarter relative to our internal budget resulted in our decision to increase 2024 full-year guidance ranges for revenue, Adjusted EBITDA and free cash flow, which we also increased after reporting our first and second quarter financial results. Mark will discuss this in more detail in his prepared remarks.

Twenty twenty-four continues to be a year of investment in our business. Year to date, we have opened five de novo facilities and we have three additional anticipated site openings for the remainder of 2024. Moreover, we have 15 additional projects in development which we intend to open during 2025. These de novo facilities are split almost equally between wholly owned and JV centers and are located in markets where we have patient backlogs, require additional capacity, or where we currently lack access points to service identified patient populations. While these projects are requiring us to make capital investments above our normal spending, we are confident that these centers will be material contributors to our long term performance and growth.

We continue to grow our hospital and health system joint venture businesses. Currently, 152 of our 399 centers, or 38.1% are held within health system partnerships, which includes two imaging centers that were jointly opened in the third quarter with the University of Maryland medical system and one inside our three-way joint venture in the San Fernando Valley and Los Angeles with Cedars Sinai and the Providence Health system. These and other systems are seeking long term strategies around outpatient imaging and have recognized that cost effective and efficient freestanding centers will continue to capture market share from hospitals as payors and patients both migrate their site of care towards lower cost, high quality solutions. Our hospital and health system partners have been instrumental in increasing our procedural volumes with their physician relationships.

We continue to gain momentum with initiatives inside the digital health segment. Some of you may have seen last week that we announced the first customer for a suite of solutions powered by the DeepHealth OS. ONRAD, a full service radiology provider to more than 120 hospitals, radiology groups and imaging centers, will implement a variety of DeepHealth OS solutions to streamline its clinical and operational workflow, including deploying the DeepHealth OS advanced viewer and smart reporting features. ONRAD, who is a new customer to us, meaning that it does not use any of the legacy eRAD or DeepHealth solutions, will begin implementation of the DeepHealth OS solutions in the first quarter of 2025.

Additionally, earlier this morning we announced a collaboration with GE Healthcare aimed at accelerating the adoption of AI-powered workflows and clinical solutions through smart technologies. This collaboration brings together GE’s healthcare legacy in bringing innovative hardware solutions to our industry with DeepHealth’s leading edge AI-powered digital solutions. Our shared objective is to make imaging hardware more capable, enriching diagnostic equipment with AI-powered workflow and critical solutions to better service clinicians and patients in all imaging settings.

Our first offering with GE is in the area of mammography, where bringing together DeepHealth’s SmartMammo solution and GE’s Senographe Pristina mammography unit will improve speed, clinical accuracy, operational efficiency, and improve patient care. SmartMammo is a DeepHealth AI-powered SaaS solution designed to seamlessly integrate into existing breast cancer diagnostic workflows, enhancing diagnostic accuracy and workflow efficiency. By incorporating imaging informatics into advanced mammography systems, the SmartMammo solution can support high volume breast center cancer screening programs. SmartMammo can prioritize cases based on suspicion level and ensure seamless integration and interoperability with existing healthcare IT infrastructure.

As one of its advanced features, integration of SmartMammo with GE’s Senographe Pristina mammography unit will include smart alerts, a workflow solution that alerts rapid AI processing with the goal of alerting imaging sites to cases with potentially suspicious lesions in minutes. This kind of solution aims to empower earlier diagnostic examination follow-up compliance and reduced anxiety for women with potentially suspicious findings.

The GE-DeepHealth collaboration agreement will enable GE Healthcare to distribute SmartMammo and other DeepHealth solutions to imaging providers in the United States as part of GE Healthcare’s comprehensive portfolio of imaging technologies. In addition to collaborating on SmartMammo, we and GE Healthcare intend to explore areas of further collaboration for smart technology solutions in other modalities and clinical domains, expanding the access to and impact of AI-based workflows.

In our booth at the RSNA convention in Chicago, we will be demonstrating, among other things, SmartMammo with a GE Pristina unit, DeepHealth OS workflow solutions, our breast, prostate and lung AI solutions, as well as other technologies. DeepHealth solutions will also be demonstrated in the booths of GE Healthcare and Siemens, where we are demonstrating an ultrasound integration with DeepHealth technology. We are meeting with dozens of potential customers and partners at the convention and through Barclays and Jefferies will be hosting investor presentations at our booth on December 2 and December 3. We encourage anyone listening today to reach out to Barclays or Jefferies should you want to join one of these investor presentations at our booth.

At this time, I’d like to turn the call back over to Mark to discuss some of the highlights of our third quarter 2024 results. When he is finished, I will make some closing remarks.

Mark Stolper

Thank you, Howard.

I’m now going to briefly review our third quarter 2024 performance and attempt to highlight what I believe to be some material items. I will also give some further explanation of certain items in our financial statements, as well as provide some insights into some of the metrics that drove our third quarter performance. I will also provide an update on 2024 financial guidance levels which were released in conjunction with our 2023 year-end results in March of this year and revised in May and August in conjunction with our first and second quarter 2024 financial results.

In my discussion today, I will use the term, Adjusted EBITDA, which is a non-GAAP financial measure. The Company defines Adjusted EBITDA as earnings before interest, taxes, depreciation and amortization, and excludes losses or gains on the disposal of equipment, other income or loss, loss on debt extinguishments, and non-cash equity compensation. Adjusted EBITDA includes equity and earnings in unconsolidated operations and subtracts allocations of earnings to non-controlling interests and subsidiaries, and is adjusted for non-cash or extraordinary and one-time events taking place during the period. A full quantitative reconciliation of Adjusted EBITDA to net income or loss attributable to RadNet Inc.’s common shareholders is included in our earnings release.

With that said, I’d now like to review our third quarter 2024 results.

For the third quarter of 2024, RadNet reported total Company revenue of $461.1 million and Adjusted EBITDA of $73.7 million. Revenue increased $59.2 million or 14.7% and Adjusted EBITDA increased $15.7 million or 27.2% as compared with the third quarter of 2023. Breaking this performance down to the individual operating segments, our imaging center segment reported revenue of $452.4 million and Adjusted EBITDA of $70.4 million. This was an increase of $56.8 million or 14.3% in revenue and an increase of $14.8 million or 26.6% in Adjusted EBITDA as compared with last year’s third quarter. Driving this performance were strong aggregate and same center procedure volumes, the impact of higher reimbursement we are receiving from commercial and capitated payors, the gradual movement towards advanced imaging, and tight expense control.

The digital health segment reported revenue of $16.4 million and Adjusted EBITDA of $3.2 million. Revenue increased $4.2 million or 34.3% and Adjusted EBITDA increased $950,000 or 41.7% as compared with the third quarter of 2023. Digital health’s significant growth was due in part from a $2.2 million or 75.8% increase in AI revenue, which climbed to $5.1 million during the third quarter of 2023.

Total Company net income for the third quarter of 2024 was $3.2 million as compared with total Company net income of $17.5 million for the third quarter of 2023. Fully diluted net income per share for the third quarter of 2024 was $0.04 compared with a fully diluted net income per share of $0.25 in the third quarter of 2023.

There were a number of unusual or one-time items impacting the third quarter, including the following: $8.1 million of non-cash loss from interest rate swaps; $304,000 in severance expense related to cost savings initiatives; $1.3 million expense related to leases for de novo facilities under construction that have yet to open their operations; $3.3 million of non-capitalized research and development expenses related to the DeepHealth Cloud OS in generative AI; $417,000 of acquisition transaction costs; and $147,000 loss in conjunction with the extinguishment of debt and related expenses.

Adjusting for the above items, total Company adjusted earnings were $3.3 million and diluted adjusted earnings per share was $0.18 during the third quarter of 2024. This compares with total Company adjusted earnings of $8.8 million and diluted adjusted earnings per share of $0.13 during the third quarter of 2023.

For the third quarter of 2024 as compared with the prior year’s third quarter, MRI volume increased 14.6%, CT volume increased 15.5%, and PET CT volume increased 23.8%. Overall volume, taking into account routine imaging exams inclusive of X-ray, ultrasound, mammography, and all other exams, increased 9.0% over the prior year’s third quarter.

On a same center basis, including only those centers which were part of RadNet for both the third quarter of 2024 and 2023, MRI volume increased 9.9%, CT volume increased 9.8%, and PET CT volume increased 16.8%. Overall same center volume, taking into account routine imaging exams, increased 5.5% over the prior year same quarter.

In the third quarter of 2024, we’ve performed 2,738,007 total procedures. The procedures were consistent with our multi-modality approach whereby 73.3% of all the work we did by volume was from routine imaging. As we now have a table of our aggregate procedure volumes broken down by modality, I won’t go through the numbers but will make the following point. In his remarks, Dr. Berger mentioned that we are experiencing a continuing shift to higher acuity procedures, or what we call advanced imaging. In the third quarter, 26.7% of our procedures were from MRI, CT and PET CT. In last year’s third quarter, this metric was 25.3%, a shift of 1.4% of our procedure volumes toward advanced imaging. With higher pricing and better margins, more advanced imaging improves our financial results, including our operating margins.

Overall GAAP interest expense for the third quarter of 2024 was $19.4 million as compared with $16.1 million during the last year’s third quarter. In the third quarter of 2024, cash interest expense, which includes payments to and from counterparties on interest rate swaps and net interest income earned from our cash balance, was $4.3 million. This compares with $11.7 million in the third quarter of 2023. The lower cash interest expense this quarter is primarily the result of a significantly higher interest income on the much larger cash balance.

With regards to our balance sheet as of September 30, 2024, unadjusted for bond and term loan discounts, we had $261 million of net debt, which is our total debt at par value less our cash balance. Note that this debt balance includes our 49% ownership portion of New Jersey Imaging Network’s debt of $136.9 million, for which RadNet is neither a borrower nor a guarantor, and it also includes our 49% ownership of NJIN’s cash balance of $86.4 million. This Company-wide net debt compares with $498.3 million of net debt as of September 30 of last year.

As of September 30, 2024, we were undrawn on our $282 million revolving line of credit and had a cash balance of $748.9 million. At September 30, 2024, our accounts receivable balance was $199 million, an increase of $35.4 million from year end 2023. The increase in accounts receivable is primarily the result of increased business and revenue. Our days sales outstanding, or DSO was at 35.7 days at September 30, 2024, near a historical low.

Through September 30, 2024, we had total capital expenditures net of proceeds from the sale of imaging equipment of $127.5 million. This total includes $6.9 million spent under equipment notes and the remainder spent in cash, and excludes $15.5 million of New Jersey Imaging Network capital expenditures and a one-time $9 million purchase of software code from a vendor.

At this time, I’d like to revise and update our 2024 financial guidance levels.

Given the positive trends we are experiencing in virtually all aspects of our business and the strong financial performance of the first nine months of the year, we are revising upwards certain guidance levels in anticipation of financial results that we believe will exceed our original and revised expectations. For revenue, we have increased our guidance range to $1,710,000,000 to $1,760,000,000, which is roughly a $25 million increase to our revenue guidance. We’ve also increased for the imaging center segment our EBITDA guidance by $5 million now to $262 million to $270 million of Adjusted EBITDA.

For capital expenditures, we have increased our guidance level to $145 million to $155 million, which was done in conjunction with increased spending on our de novo facilities, which we be opening three by the end of this year and 15 locations sometime in 2025. Our cash interest expense we’ve decreased to $25 million to $30 million as a result of having a larger cash balance than anticipated and having more interest income. Our free cash flow guidance range, we’ve increased our level to $83 million to $93 million, which is roughly a $10 million to $13 million increase in our free cash flow guidance. For the digital health segment, our guidance remains substantially the same. We did increase our spend by $1 million on non-capitalized R&D related to the DeepHealth cloud-based OS and generative AI initiatives.

I’ll conclude my remarks with an update on 2025 Medicare reimbursement. As a reminder, Medicare reimbursement represents 22% of our business mix. With respect to Medicare reimbursement in July of this year, we received a major proposed rate by CPT code, which is typically part of the physician fee schedule proposal that is released about that time every year. At that time, we completed an initial analysis and compared those rates to 2024 rates. We volume-weighted our analysis using expected 2025 procedure volumes.

As you may recall four years ago, CMS moved forward with increased reimbursement for evaluation and management CPT codes which favored certain physician (inaudible) that regularly bill for these services, particularly primary care doctors. CMS proposed doing so at the time with budget neutrality, meaning that as opposed to reallocating reimbursement from physicians who rarely bill for these E&M codes to physicians who regularly bill for these codes. As a result, radiology and most other specialties experienced cuts in reimbursement from 2021 through 2024, an intentional phase-in of reimbursement cuts to pay for the reimbursement benefit provided to the primary care physicians.

The cuts we are currently experiencing in 2024 were substantially mitigated by Congressional legislation that was passed in March of this year as part of the consolidated and appropriated (audio interference). In the proposed (audio interference) in July of this year governing 2025 reimbursement, Medicare will effectively be phasing in the remainder of the E&M code related cut (inaudible) this year. The cut proposed for 2025 results from a decrease in the conversion factor in the Medicare fee schedule by about 2.8%, along with certain minor changes to RVUs of certain radiology CPT codes.

Our initial analysis of the proposal for next year implies that RadNet on roughly $1.8 billion in revenue would face an approximately $6 million to $8 million revenue hit in 2025 from its Medicare business. Medicare’s final rule, which was released at the very end of October, a few weeks ago, was consistent with the initial proposal in July. Because the proposed decrease in the conversion factor affects all physicians, not just radiologists, there have been many lobbying groups from various medical specialties aggressively opposing the cut.

In response to the cuts, Representative Greg Murphy, a Republican from North Carolina along with seven bipartisan co-sponsors, introduced the Medicare Patient Access and Practice Stabilization Act. The bill would provide a 4.73% increase to the Medicare fee schedule conversion factor for calendar year 2025, essentially mitigating the 2.8% final rule that Medicare just released and increasing Medicare reimbursement in 2025 by 1.93%. We expect that this bill will be put forth for vote in Congress sometime next month, at which time we will have more clarity on 2025 Medicare reimbursement rates.

I’d now like to turn the call back over to Dr. Berger, who will make some closing remarks.

Howard Berger

Thank you, Mark.

This is most definitely the most exciting time I’ve seen in our industry. Diagnostic imaging is entering a time of transformation and RadNet seeks to move the industry forward during this dynamic period. The trends for RadNet and the rest of the outpatient imaging industry are strong and are projected to be sustainable for years to come. We continue to experience growing procedural volumes driven by advances in equipment, contrast materials, radioactive isotopes, post-processing software, and more recently artificial intelligence. Patients are more frequently being directed away from hospitals to more cost effective ambulatory sites of care, like the centers RadNet operates. There is greater focus on using diagnostic imaging for population health, preventative medicine, and screening programs.

Most importantly, we are at the beginning of an acceleration in technology from generative and clinical AI that will transform the way our industry operates and delivers its services. These advances will increase patient access, improve the patient experience, increase the productivity and accuracy of radiologists, and most importantly improve patient outcomes. It is our intent to position RadNet to be on the leading edge of this transformation by doing (inaudible) in our core imaging center business and within our digital health initiatives.

Inside our core business, we are focusing on growth areas such as prostate, Alzheimer’s and cardiac imaging, which are being enabled by advances in equipment software and radiopharmaceuticals. We are partnering with health systems to provide patients with better access and lower cost solutions, advancing population health screening programs for breast, lung, prostate and cardiac disease, and testing alternative site opportunities within Wal-Marts and retail malls.

Digital health is making significant progress with initiatives that are poised to help us drive more revenue, reduce costs, and increase margins. To this end, we are excited about the commercial launch of DeepHealth OS in a few weeks, which is a delivery platform for solutions that automate office processes and more effectively manage patient and clinical data, including automating patient scheduling, clinical reporting, medical coding, sales and marketing, and clinical workflows.

In parallel to the DeepHealth OS development, we continue to grow revenue from clinical AI solutions for breast, lung and prostate cancer screening. Our breast AI is improving the productivity and accuracy of our radiologists while providing a valuable benefit to our patients, for which they are willing to pay out of pocket.

We are formulating similar screening programs for prostate, lung and other chronic diseases for both domestic and international markets, as we firmly believe that healthcare needs to shift towards prevention and early detection and not just focus on treating patients that are already sick.

Finally, as we discussed this morning with the GE Healthcare announcement, we are also working with imaging equipment manufacturers to bring smart technology solutions to the equipment marketplace that will greatly benefit all stakeholders: radiologists, technologists, imaging center staff, referring physicians, and patients.

Operator, we are now ready for the question and answer portion of the call.

Operator

Thank you. We will begin the question and answer session. To ask a question, you may press star, then one on your touchtone telephone. If you are using a speakerphone, we do ask that you please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we will pause for just a moment to assemble our roster.

Our first question today will come from Brian Tanquilut with Jefferies. Please go ahead.

Brian Tanquilut

Hey, good morning, guys, and congrats on the GE deal and the quarter. Maybe Howard and Mark as well, just on the GE announcement this morning, if you could share with us just more details on how that contract or that agreement actually works and what exactly does SmartMammo cover? How different is this from your EBCD offering in terms of what the eventual client/radiology clinics would have access to, or be able to offer in terms of clinical services through your AI platform? Thanks.

Howard Berger

Good morning, Brian, I hope you’re well. First, let me start by saying that the major component of smart mammography is the embedding of the DeepHealth operating system onto, in this case, the GE Senographe Pristina mammography system. What that means is that the capabilities of the AI solutions, both clinical and generative, will be embedded onto the gantry of the GE mammography system, allowing essentially for a turnkey operation. As you are well aware, we have begun, for example, deploying mammography systems in malls and Wal-Mart locations, and basically this system will allow us to plug and play. We will be able to install these systems and simply need a power source and a connection to the internet to essentially make this function in the same way that a patient coming into a RadNet center would experience. In other words, all of the information systems and clinical tools, which would include the EBCD program as part of our AI clinical package, will be available a part of an offering that the GE Healthcare system and their marketing and sales force will help distribute for us.

This will allow more or greater, faster if you will, deployment of these systems not only perhaps in the more conventional way that people are used to getting their mammography, but in non-conventional sites where imaging can be performed, like in the Wal-Mart and mall locations. We believe that there’s other opportunities for distribution of this type of network of equipment that will help facilitate access and compliance and make what is estimated to be about a third of the female population more accessible to getting early breast cancer screening.

I think the best way to look at this is it’s a collaboration between, in this case, GE with their mammography system and RadNet with their DeepHealth AI tools to essentially create an environment that will allow not only easy access but also facilitate the results and distribution of information, since the DeepHealth system is a cloud-native based system. Things like faster turnaround time for the reporting results and to the patient will allow us more rapid opportunities to navigate people into the next appropriate step for their mammography or breast screening programs.

Did I leave something out there, Brian, that you’d like me to elaborate on further?

Brian Tanquilut

No, that’s really helpful, Howard. Then maybe just one comment that you made earlier, that you see opportunity to drive margins further up. Just curious how you’re thinking about the composition or the drivers of that. Thanks.

Howard Berger

The improving of margins is really where we expect the DeepHealth operating system, which we have already begun to deploy some of the modules inside RadNet centers, will streamline activities which are manual processes right now relative to things like scheduling, reporting tools, data migration to the cloud, (inaudible) medical records, revenue cycle management, coding—I could go on and on. But things that are both currently dependent on a limited labor force to try to help keep up with the demands that we have.

What we’d expect to do is be able to process a lot more in the way of our patient demands and needs that will be not only faster but even more accurate, and make all of our employees that much more efficient in their use of these systems. I think the response of the DeepHealth platform is one to which is an existential problem that everybody in healthcare has, but particularly in radiology with the shortage of both radiologists, technological staff and office staff to help facilitate the patient experience.

Brian Tanquilut

All right, got it. Thank you, Howard.

Howard Berger

Thanks Brian.

Operator

Our next question today will come from John Ransom with Raymond James. Please go ahead.

John Ransom

Hey, good morning. Just want to unpack this GE deal a little bit. Who are your primary targets for selling the solution to, and who’s going to be responsible for that selling? Is it going to be yourself, is it going to be GE? Should we think about maybe Wal-Mart being one of the top potential suspects in terms of getting this rolled out?

Howard Berger

The prospects for this are obviously current hospitals and imaging center outpatient or ambulatory imaging center providers, but I think there’s a bigger market beyond that in what we like to refer to as alternative or non-traditional imaging locations, much like what Wal-Mart and the retail malls that we are experiencing and piloting for this kind of access. When you stop to think of what that market could look like, it’s substantially larger than just the existing conventional market.

In addition, we think that there’s other market opportunities. There are companies out there, and we’ll be one of them, that will be looking at providing mammography in OBGYN offices, where women come for their wellness visits on an annual basis and for which that market is already being tapped into, and which this is a particularly good opportunity. Given that, as I mentioned just a moment ago, this is a turnkey operation that will allow RadNet to install these with just the need for a power source and a connection to the internet in order to provide not only the equipment and doing the mammogram itself, but registering patients, billing for patients, facilitating the storage of medical records and retrieval, doing the actual interpretation by using clinical AI such as the Saige-Dx program, access to the EBCD program, and all being able to do this with a goal of trying to give results to a woman while they’re still in the office. These are the kinds of transformative changes, I think that the technology will allow us to achieve while doing a better job of compliance and access for early detection, and ultimately get better outcomes.

This will be a dual role for both GE and RadNet to help. First the RadNet team through the DeepHealth division, try and enable and educate the GE marketing and sales force, which is quite extensive not only here in the U.S. but globally too, where these kinds of products will even be more embraced for large scale screening programs. I look at this as truly being a collaboration not just in terms of creating the product and deploying it, but educating and giving a greater opportunity for making this type of inroads as quickly as possible.

We will of course, meaning RadNet, will look to sell the DeepHealth platform, which is something that can be integrated with other mammography systems, but none that will have what the current integration between the GE Pristina mammography system and the DeepHealth, to be embedded and fully integrated so that there is not a variety of AI and IT tools that all have different vendors and require far more cost, as well as difficulty in implementing.

John Ransom

Okay. Then just switching gears - Mark, I know we’re not giving ’25 guidance today, but I know you talked about the Medicare headwind, you’ve talked about the de novos. What are some of the other puts and takes we should think about when we build out our ’25 models?

Mark Stolper

Sure, and obviously we issue guidance—we will issue 2025 guidance at the end of February of next year, and we’re going through our budgeting process today, so I don’t want to go too deep into it. But I will say, as you mentioned, the headwinds are potentially on Medicare side that could be a much as a $6 million to $8 million headwind should the final rule go into effect as proposed. But we do think, and our experts think, that that will be either partially mitigated or fully mitigated with this Congressional bill that I talked about in my prepared remarks.

The other challenge I think that we’re facing, like every other healthcare company within radiology and outside of radiology, is the increasing cost and availability of labor. We’ve been managing through that as best we can. We’ve certainly—it’s been inflationary as we’ve had to pay more to attract talent and to retain talent, but on the positives, the business continues to experience heavy demand. We have backlogs in virtually every market in which we operate. We are in the process, as we mentioned, of building new facilities aggressively to build our capacity, to meet the heavy demand that we know exists out there. We’ve got three centers that we’re anticipating opening before year end. We’ve got 15 de novo projects on the docket for 2025, and we’ll have additional projects after 2025.

We’ve also—we’re aggressively expanding our hospital joint ventures, as we said in the prepared remarks. We had three additional sites that went into joint ventures in the third quarter, two within the University of Maryland system, one here in Los Angeles with Cedars and the Providence Health system. We’re going to be announcing new relationships with new partners. We’ll have new joint ventures with existing partners and expansions with our joint venture, so that will be built into next year’s budget.

We’re also experiencing, as we noted in our prepared remarks, a shift towards advanced imaging modalities. We had over a 140 basis point shift in this third quarter relative to last year’s third quarter in favor of MRI, CT and PET CT. That comes with higher revenue, higher margins and profitability. We don’t see a—we think that that trend is sustainable going forward, not because we’re driving it, although we are aggressively investing in this technology in terms of our growth CapEx and our replacement CapEx. But that’s just what’s going on in the industry with all the technology advances around the equipment itself, post-processing software, contrast materials, radioactive isotopes. It’s driving more indications for physicians to order these types of diagnostic tests, so we think that that trend will be positive for our guidance next year.

We’ll continue to be doing some small tuck-in acquisitions. We’ve got an active pipeline today as we speak, and that will continue to be a part of the strategy going forward. Of course, all of the growth that we see within digital health, not just this GE SmartMammo announcement but the continuing growth and penetration of our EBCD program, further growth in the U.K. and in Europe with our lung AI product, the DeepHealth lung product where we’re rolling out a program in the U.K. called the targeted lung health check program with the National Health Service there that will continue to drive revenue. As many investors will see at the RSNA in few weeks, that we’re going to be working in other areas with other modalities, other equipment manufacturers around embedding smart technology tools and solutions into other equipment and other ultimately alternative imaging locations.

I think we’re excited about the next 12 months, and most importantly we’re coming out with the DeepHealth OS commercialized product, which we have to start marketing and selling aggressively within 2025.

John Ransom

Just lastly from me, the structure of your deal with GE, is this a software license? Just how does that work?

Howard Berger

Hi John, it’s Dr. Berger again. Yes, this is a software licensing arrangement with GE, and they will through their sales and marketing force distribute that for us on their equipment. We will, of course as I said, also be doing some of that ourselves directly to other providers and in other opportunities, where the benefits of our DeepHealth program. It is a licensing product or program right now which has the capability of also being SaaS-based. We’re playing with all of the models because some people might want to do this more as a capital investment, some people might want to do it as a variable expense. We’re capable of doing that because we not only put the clinical AI tools on there, like the EBCD program and reporting tools, but also the office-based generative AI tools, which are the radiology products that manage the rest of the other office requirements, like scheduling and billing in a turnkey operation.

John Ransom

Okay, thank you.

Howard Berger

Thank you, John.

Operator

Our next question today will come from Andrew Mok with Barclays. Please go ahead.

Evan

Hi, good morning, this is Evan on for Andrew. During the quarter, we saw AI revenue decrease nearly 10% sequentially versus 2Q, while mammography volumes remained largely constant. What were the underlying drivers of that, and do you still expect the AI business to exit the year profitable? Thank you.

Mark Stolper

Yes, thank you for the question. Yes, it was a little—I guess I should have pointed this out in the script, in Q2 we had a $600,000 implementation fee within our AI businesses that was not recurring in 2023. If you adjust for that, the AI business went up sequentially, I think, $100,000 to $200,000. I probably should have called that out. The answer to the second part of your question is yes, we do still anticipate that the AI business will reach profitability here in the fourth quarter and entering into 2025.

Evan

Just a quick follow-up, what is the current EBCD adoption rate on both the east and west coast? Thanks.

Howard Berger

Yes, the adoption rate on the east coast, where it’s now been implemented for approaching two years, is approaching 45%. Our goal is to get it at 50%, and there seems to be good trends that make us confident that we can get there in 2025. On the west coast, the adoption rate is closer to 30%, but that’s weighed down somewhat because of the large capitation program that we have here, and for which we are negotiating with all of the capitated providers to have the EBCD program become part of their capitation by providing us higher revenue. We expect to have progress that we can talk about that in 2025 also. If you were to strip away the capitation portion of our business, our adoption rate here on the west coast, where it’s only been implemented now for a little over a year, would probably be closer to 40%.

Evan

Thanks for the color.

Operator

Our next question today will come from Larry Solow with CJS Securities . Please go ahead.

Larry Solow

Great, thanks, and good morning, Howard and good morning, Mark. I guess just following up on the digital health question, just on the GE collaboration, just any timelines on when—I guess they’re rolling in your software into an existing machine, right, so take that usual OEM length of time, but could you just give us an idea of when these products actually will be available for commercialization?

Howard Berger

I’ll answer that one, Larry, good morning. The commercialization efforts will begin really at the RSNA, where we will have the SmartMammo both at our booth and the GE booth at McCormick Place, where the meeting is held in Chicago, on demonstration, and which we are able to deliver today. There are some upgrades that are coming to the GE system that will further enhance the viewing and resolution that are in for FDA approval, that hopefully will be an upgrade to the systems that they may sell today, sometime in the second quarter of next year. But essentially, the tools are tested and pending a final FDA approval that DeepHealth will be getting about adoption or application of the EBCD—excuse me, not the EBCD but the AI tool in the GE systems, which we expect this month, will be ready for a rollout of these systems in the first quarter of 2025.

Larry Solow

Got you, and then just—Howard, just give us an update just on your efforts to build out both on the hospital partnership side and on the collaborations with large healthcare institutions, and also just acquisitions, maybe an update on how Houston is coming along. Obviously, you made a couple of nice-sized tuck-in acquisitions there to build out, start building out a new location. Just maybe give us a little update on those elements there. Thanks.

Howard Berger

I think Larry, as Mark mentioned, we have an active pipeline of acquisition opportunities, both small and large, that we’re considering. As you are well aware, we have a rather substantial cash balance and are looking to deploy that capital both on the DeepHealth side as well as on the imaging services side. We’ve got 15 more de novo centers which are in various stages of construction that will open throughout the course of 2025 as well as three more that will be operational in this quarter. We are deploying our capital in every aspect that we can to drive more revenue.

We believe we’re also going to see opportunities that may drive opportunities in the AI space, where we may have critical AI tools that we may feel that we can acquire in a very attractive manner, rather than build ourselves. While the AI tools that we have today are primarily screening tools, cancer screening tools for breast, lung and prostate, there are other work efficiency tools and improvement in diagnostic accuracy in other areas of our business for more of the routine work that we do, for example in ultrasound and in X-ray, that we will be looking for, that will help drive productivity and accuracy for our radiologists.

I think that is a pretty big—there are a lot of things on the plate for us to look at in 2025. Along with increasing the number and breadth of joint ventures—centers that are in joint ventures with hospital systems, that I believe once we—they become more aware of what the DeepHealth and smart technologies allow us to do, will make them even more excited about driving their relationships and partnerships with RadNet further into their hospital systems, even if it’s not with centers that we currently enjoy in a partnership arrangement with them.

Larry Solow

Great, thank you. I appreciate all that color.

Operator

Our next question today will come from Jim Sidoti with Sidoti & Co. Please go ahead.

Jim Sidoti

Hi, good morning, and thanks again for taking the questions. You talked about the program in the U.K. for screening for lung cancer. What are the hurdles you need to implement that in the U.S.?

Howard Berger

That’s a question, Jim, that unfortunately doesn’t have a great answer right now . Part of the problem here in the U.S., as opposed to, let’s say the U.K., the U.K., I think as most people know, has a national health service, the NHS, that manages over 90% of the healthcare for the population. Therefore, once they adopt something, it’s a lot easier for them to push it down. We really don’t have a similar model here, and even though lung cancer in the U.K. has already been determined to be of extraordinary value in terms of better outcomes, for those people who are at risk, which right now the United States public service task force has said is 50 years of age and 20 years of smoking history. Still, only about less than 5% of the patients eligible are accessing it. To be perfectly blunt, it’s the hurdles that are placed in front of patients who are at risk; they have to go through a consultation, they have to get authorization, and there’s a substantially different problem than what women face when they’re at risk. One out of every eight women will experience breast cancer in their lifetime, and they can self-refer. There is no such thing as self-referral for lung cancer, and I believe there is more and more advocates that are recognizing this as a hurdle.

What’s happened in the U.K. is that the patients can now go directly to an appropriate provider in the U.K. and get their lung screening without having to get an authorization or a consultation. Somewhere, sometime, something similar to that has to be adopted here if we’re truly going to get the number of people who should be scanned into the system. I think this is something that’s tantamount to almost a type of epidemic here, where people who would qualify and get their lung screening at an earlier stage (audio interference) their outcomes if there a lot of these screening tools available. The very things that we’ve put together and continue to put together, like access and compliance, are what needs to be revamped here in the U.S. The expectation is with the efforts that we see that the NHS is making in the U.K., within another two years, perhaps 80% or more of the at-risk patients there will be getting annual lung screening, annual or biannual lung screening. This is a case where a socialized healthcare program certainly has achieved a lot better results than we can here, or we have here, despite having all the technological skills to do something which can certainly provide better outcomes for patients.

Mark Stolper

Yes, I think having said that, right, the idea here is to be—is to use these models, like in the U.K., to talk to the payors here about widespread population health screening for lung cancer. We are in the process of getting FDA approval on the Aidence lung—or the DeepHealth Aidence lung product here, which we’re anticipating receiving sometime midyear 2025. We’ll have the tools, as Dr. Berger said, to be able to launch similar programs here, and obviously we’re going to share the success of the U.K. with the payors and see if we can get some traction.

Jim Sidoti

With the new administration coming in, in general, not just lung cancer, but in general do you see any new risks for your business, any new opportunities for your business, and how do you think you’ll adapt?

Mark Stolper

Yes, I’m not sure the new administration coming in really impacts our business in a big way. I think when we were under the Trump administration from 2016 to 2020, they were supportive of a lot of the programs that the current administration has been pushing; you know, cancer programs, cancer (inaudible). We’ll see, I don’t know—you know, reimbursement might change. Howard, what’s your perspective?

Howard Berger

I think there’s one area where we may, and healthcare in general benefit from the new administration, and that is regulatory issues. Right now, there is a substantial hurdle that any growth, and particularly with mergers and acquisitions, has to pass in order to do sizeable acquisitions. My strong belief is that those burdens will be lower and make, I think, available what needs to continue in healthcare, and that is creating scale for businesses that can deliver cost effective healthcare. If it’s one area that I think we can point to that I believe does need some changes, if you will, are regulatory, and that seems to be a major effort that the Trump administration will be focusing on.

Jim Sidoti

Right, thank you.

Operator

This concludes our question and answer session. I would like to turn the conference back over to Dr. Berger for any closing remarks.

Howard Berger

Again, I would like to take this opportunity to thank all of our shareholders for their continued support and the employees of RadNet for their dedication and hard work. Management will continue to endeavor to be a market leader that provides great services with an appropriate return on investment for all stakeholders.

Thank you all for your time today and sharing this important and exciting journey with us. I look forward to our next call. Good day.

Operator

The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.

Cover	Nov. 10, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Nov. 10, 2024
Entity File Number	001-33307
Entity Registrant Name	RadNet, Inc.
Entity Central Index Key	0000790526
Entity Tax Identification Number	13-3326724
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	1510 Cotner Avenue
Entity Address, City or Town	Los Angeles
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	90025
City Area Code	310
Local Phone Number	478-7808
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, $0.0001 par value
Trading Symbol	RDNT
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false

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