RDNT

RadNet is executing on the top line — FY2025 revenue grew 11.5% to $2.04B, the fifth straight year of growth, with center count expanding from 366 in 2023 to 418 in 2025 and commercial insurance revenue (the highest-margin payor mix) up to $1.13B from $1.02B. The MD&A frames a credible two-segment story: a scaling Imaging Centers business plus a Digital Health segment housing 22 FDA-cleared AI solutions, 2,000+ external customers, and three recently closed acquisitions (iCAD, See-Mode, CIMAR). Operating cash flow of $299M (+28.2% YoY) confirms the core business throws off real cash, and the $767M cash balance gives ample runway.

But the income statement quietly broke in FY2025. Net income flipped to -$18.7M from +$2.8M, operating income fell 40.7% to $62M, and operating margin compressed to 3.0% — meaning D&A of $152M is now eating roughly 2.5x operating profit, which is what happens when you bolt on acquisitions and 20 net new centers while reimbursement and labor inflation pressure the base. Management explicitly flags inflation, rising rates, high-deductible plan headwinds, and budget pressure on Medicare/Medicaid (which together are ~26% of revenue). Capitation revenue actually fell to $125.5M from $136.6M, hinting at managed-care mix shift working against them.