RadNet's Record Q3 Performance and Revised 2024 Guidance

RadNet, Inc. (NASDAQ: RDNT), a leading national provider of freestanding, fixed-site diagnostic imaging services, reported impressive third-quarter financial results, with record quarterly revenue and adjusted EBITDA. The company also revised its 2024 financial guidance ranges upwards, reflecting its strong performance and positive outlook.
**Record Quarterly Revenue and Adjusted EBITDA**
RadNet's total company revenue increased by 14.7% year-over-year (YoY) to $461.1 million in the third quarter of 2024, driven by a 34.3% increase in Digital Health segment revenue to $16.4 million. The Digital Health segment's growth was primarily driven by a 75.8% increase in AI Revenue, which climbed to $5.1 million.
Adjusted EBITDA(1) for the total company increased by 27.2% YoY to $73.7 million, while Digital Health reportable segment Adjusted EBITDA(1) surged by 41.7% to $3.3 million. Total Company Adjusted EBITDA(1) margins improved by 156 basis points (bps) to 16.0% compared to the same quarter last year.

**Improved Reimbursement and Cost Controls**
RadNet's strong financial performance was supported by improved reimbursement from commercial and capitated payors, as well as effective cost controls. Despite inflation in staffing costs, the company maintained profitability and increased Adjusted EBITDA margins. Aggregate procedural volumes increased by 9.0% YoY, with same-center volumes up 5.5%.

**Revised 2024 Financial Guidance**
Given the positive trends and strong financial performance in the third quarter, RadNet revised its 2024 financial guidance ranges upwards. The company increased its guidance ranges for Revenue, Adjusted EBITDA(1), and Free Cash Flow(2). This revision reflects RadNet's confidence in its ability to exceed original expectations and previously adjusted guidance ranges.
**Expansion and Partnerships**
RadNet's expansion strategy, including the opening of new imaging centers and strategic partnerships with health systems, has contributed to its growth. As of the second quarter of 2024, 37.4% of RadNet's centers were held in partnership with leading health systems. The company anticipates opening approximately six new centers by year-end 2024 and an additional 15 centers in 2025, with half of these new centers within existing health system partnerships.

**DeepHealth OS Launch**
RadNet remains on pace for the commercial launch of DeepHealth OS at the Radiological Society of North America (RSNA) conference in December 2024. The company will demonstrate the capabilities of its integrated end-to-end workflow solutions and clinical AI tools at the event, showcasing its commitment to innovation and growth.
In conclusion, RadNet's record-breaking third-quarter performance, driven by strong revenue growth, improved margins, and effective cost controls, positions the company for continued success. With revised 2024 financial guidance ranges and a robust expansion strategy, RadNet is well-positioned to capitalize on growth opportunities in the diagnostic imaging and digital health sectors.