Fonar 2026 Q1 Earnings Net Income Dips 33.3% Despite Revenue Growth

FONAR (FONR) reported fiscal 2026 Q1 earnings on Nov 10, 2025, with mixed results. While revenue rose 4.3% year-over-year to $26.04 million, net income and EPS both declined sharply, reflecting higher expenses and margin pressures. The company did not provide forward guidance, leaving investors to assess sustainability of current trends.

Revenue

Patient fee revenue—net of contractual allowances and discounts—contributed $7.57 million, while management and other fees totaled $15.93 million, split between $12.94 million from general fees and $2.99 million from related medical practices. Product sales and service fees combined for $2.63 million, with service and repair fees reaching $2.22 million. Total revenue growth was driven by strong performance in management services, though product and repair segments lagged behind.

Earnings/Net Income

Fonar’s EPS fell 23.1% to $0.10, and net income dropped 33.3% to $2.67 million. The decline underscores margin compression amid rising SG&A expenses, which surged 33% year-over-year to $6.8 million. The EPS and net income reductions highlight ongoing profitability challenges despite top-line growth.

Post-Earnings Price Action Review

The stock edged up 0.60% during the latest trading day but faced downward momentum in the broader timeframe, dropping 0.33% for the week and 3.42% month-to-date. The mixed price action reflects investor caution around earnings quality and uncertainty surrounding the company’s strategic direction.

CEO Commentary

Dr. William Feinberg emphasized growth in MRI systems and software solutions, citing innovation and customer-centric strategies. However, the earnings report suggests operational headwinds may offset near-term gains.

Additional News

A proposed "take private" transaction led by CEO Timothy Damadian remains under review, with a special board committee evaluating terms. The board also appointed Robert M. Carrino as an independent director, bolstering governance during the potential transition. Meanwhile, the company suspended its stock repurchase program to focus on the acquisition proposal.

Guidance

FONAR did not issue updated financial guidance for the remainder of fiscal 2026, leaving analysts to project performance based on current trends and strategic initiatives.

Balance Sheet Highlights

Cash and equivalents fell 4% to $54.3 million as of September 30, 2025, with total assets reaching $218.4 million. The company maintains a strong current ratio of 8.6 but faces elevated liabilities of $57.0 million.

Industry Context

The medical imaging sector remains competitive, with FONAR’s UPRIGHT® Multi-Position MRI differentiating through unique weight-bearing imaging capabilities. However, rising operational costs and margin pressures pose risks to long-term growth.