American Shared Hospital Services: A Pivot to Profitability?

American Shared Hospital Services (AMS) reported its Q4 2024 earnings on April 4, 2025, revealing a company in transition. The leading provider of stereotactic radiosurgery equipment and advanced radiation therapy cancer treatment services has been navigating a strategic shift from equipment leasing to direct patient services. The results are a mixed bag, with significant revenue growth offset by operational challenges and one-time charges.



The numbers tell a story of a company in flux. Revenue for the full year 2024 surged 32.9% to $28.3 million, driven by a 253.4% increase in direct patient services revenue to $12.6 million. This growth was fueled by the acquisition of three radiation therapy centers in Rhode Island and the opening of a new facility in Puebla, Mexico. However, the leasing segment, once the company's bread and butter, saw a 12.1% decline in revenue to $15.6 million.

The transition to direct patient services has not been without its challenges. The company reported a net loss of $1.3 million in Q4 2024, largely due to increased reserves for impaired assets and removal costs in the leasing segment. This one-time charge masks the underlying operational strength, with gross margin improving sequentially from Q3.



The strategic shift is not just about numbers; it's about a fundamental change in the company's business model. As Gary Delanois, the newly appointed CEO, put it, "We are rapidly evolving beyond our traditional leasing model to a direct provider of radiation therapy treatment services to cancer patients. This transition aligns with our long-term strategy of revenue growth through increased patient volumes rather than equipment utilization."

The company's international expansion, particularly in Mexico, Peru, and Ecuador, presents both opportunities and risks. On one hand, it offers significant potential for revenue growth and strategic partnerships. On the other, it comes with operational challenges, regulatory compliance issues, and higher operating costs.

The earnings call also highlighted the company's commitment to innovation and operational efficiency. Investments in technology, staffing, and improved operational efficiencies have led to gross margin improvement in the fourth quarter compared to the third quarter. This positions AMS well for future profitability.

However, the company faces challenges in maintaining growth momentum amidst industry complexities and evolving market conditions. The expiration of contracts in the leasing segment and natural disasters affecting volumes are just a few of the hurdles AMS must overcome.

In conclusion, American Shared Hospital Services is at a crossroads. The strategic shift to direct patient services has shown promising results, but the company must navigate operational challenges and market uncertainties to achieve sustainable long-term growth. The earnings call provided a glimpse into the company's future, one that is filled with both opportunities and risks. Only time will tell if AMS can successfully pivot to profitability.