Fonar 2025 Q3 Earnings Mixed Results with Net Income Up 25%

Fonar (FONR) reported its fiscal 2025 Q3 earnings on May 15th, 2025. The total revenue of Fonar increased by 5.6% to $27.16 million in 2025 Q3, up from $25.72 million in 2024 Q3, with specific segment revenue listed as follow:

Fonar delivered mixed results for its fiscal Q3 2025 earnings. Net income rose 25% to $3.1 million, while income from operations declined 2%, showcasing effective tax management. The company experienced a 6% increase in revenue to $27.2 million, driven by a record MRI scan volume at its subsidiary HMCA. Fonar has set ambitious guidance for the next quarter, aiming for $30 million in revenue and an EPS of $0.40.

Revenue

The total revenue of Fonar saw a 5.6% increase to $27.16 million in Q3 2025 compared to $25.72 million in Q3 2024. Patient fee revenue, after accounting for contractual allowances and discounts, brought in $8.85 million. Product sales contributed $55,000, while service and repair fees added $2.29 million, including $45,000 from related parties. Management and other fees amounted to $12.93 million, with related medical practices contributing $2.99 million, culminating in total net revenues of $27.16 million.

Earnings/Net Income

Fonar's EPS rose 35.7% to $0.38 in 2025 Q3 from $0.28 in 2024 Q3, marking continued earnings growth. Meanwhile, the company's profitability strengthened with net income of $3.12 million in 2025 Q3, marking 25.8% growth from $2.48 million in 2024 Q3. The Company has sustained profitability for 15 years over the corresponding fiscal quarter, reflecting stable business performance. The EPS growth indicates robust performance.

Price Action

The stock price of Fonar has climbed 6.36% during the latest trading day, has climbed 7.89% during the most recent full trading week, and has jumped 12.18% month-to-date.

Post-Earnings Price Action Review

The strategy of buying Fonar shares after its revenue increase on the financial report release date and holding for 30 days underperformed the market. The annualized return was -1.83%, compared to the market average of 8.66% over the same period. This suggests that the strategy failed to capitalize on broader market gains and incurred losses, likely due to earnings release volatility and inadequate recovery time. Investors may need to consider longer holding periods or alternative strategies to better align with market trends and mitigate risks associated with earnings volatility.

CEO Commentary

Timothy Damadian, Chairman and CEO of FONAR, expressed satisfaction with the company's performance, noting that the Health Management Company of America (HMCA) achieved a record of 54,612 MRI scans in Q3 of Fiscal 2025, marking a 3.4% increase year-over-year. He highlighted the strategic addition of high-field MRI scanners to their facilities, enhancing their service capacity and addressing patient backlogs. Damadian emphasized the unique advantages of their Stand-Up® MRI, which caters to patient comfort and diagnostic needs, positioning FONAR favorably in the market. The CEO conveyed optimism about future growth, citing ongoing efforts to expand their network in New York and Florida.

Guidance

FONAR expects continued revenue growth, aiming for approximately $30 million in revenue for the next quarter, with a projected diluted EPS of $0.40. The company anticipates further operational improvements and an increase in MRI scan volumes as new facilities become operational. Damadian indicated that they will continue to invest in expanding their scanner network and enhancing service capabilities, reinforcing their market position and aiming to sustain profitability amid evolving industry dynamics.

Additional News

Fonar Corporation continues its stock repurchase plan, having bought back 373,942 shares for $6.07 million out of the authorized $9 million. This move reflects management's confidence in the company's future prospects and its commitment to returning value to shareholders. Additionally, the company is furthering its strategic expansion efforts by installing high-field MRI scanners in Nassau County, Long Island, expected to be operational in the fourth quarter of Fiscal 2025. These initiatives aim to address patient backlogs and enhance diagnostic capabilities, supporting Fonar's growth in its established regions. No significant mergers or acquisitions, nor CEO changes, have been reported in the past three weeks.