FONAR Stock Falls Post Q4 Earnings on Lower Profit and Higher Costs

FONAR Corporation reported FY25 earnings with revenue rising 1.4% to $104.4 million, but profitability under pressure due to higher costs. Net income fell 24.3% to $10.7 million, and diluted earnings per share declined 19.6% to $1.23. Cash and cash equivalents remained stable at $56.3 million, and stockholders' equity rose to $160.1 million. Scan volume at HMCA-managed centers reached a record 216,317, representing a 3.3% increase from FY24.

FONAR Corporation (FONR) reported its fiscal year 2025 (FY25) earnings, showing mixed results with revenue growth but significant profitability pressures. The company's revenue rose by 1.4% to $104.4 million, driven primarily by diagnostic imaging management services and product-related fees. However, total costs and expenses increased by 7.4% to $92.8 million, leading to a decline in income from operations by 29.9% to $11.6 million and a 24.3% drop in net income to $10.7 million. Diluted earnings per share (EPS) fell by 19.6% to $1.23.

Cash and cash equivalents remained stable at $56.3 million, while stockholders' equity rose to $160.1 million. The company's wholly owned subsidiary, Health Management Company of America (HMCA), continued to be its primary income driver, with scan volume at HMCA-managed centers reaching a record 216,317, a 3.3% increase from FY24. Management highlighted the addition of high-field MRIs to existing Stand-Up MRI centers and plans to open an additional center in Nassau County during FY26.

Despite these gains, external factors such as regulatory changes in Florida have weighed on utilization and reimbursements, contributing to margin pressures. Higher administrative costs, particularly insurance-related reserves, further compressed profitability. FONAR's board-approved stock repurchase plan remains active, with 373,942 shares repurchased for approximately $6.1 million. However, repurchases have been suspended due to a potential "take private" transaction.

FONAR did not provide formal financial guidance for FY26 but indicated plans to expand its MRI network, including the installation of another high-field MRI in Nassau County in the first half of FY26 and the opening of an additional HMCA-managed center later in the year. These moves suggest a focus on strategic network growth to support future revenue streams.