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Item 7. Management’s Discussion and Analysis

2026-03-02 compared with 2025-03-03 · 213 added, 309 removed, 285 unchanged (65% of the section changed)

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The MD&A is provided as a supplement to, and should be read in conjunction with, our consolidated financial statements and the accompanying notes included in this annual report on Form 10-K.

We are a national provider of diagnostic imaging services in the United States.

As of December 31, 2024, we operated directly or indirectly through joint ventures with hospitals, 398 centers located in Arizona, California, Delaware, Florida, Maryland, New Jersey, New York and Texas.

We are a national provider of freestanding, fixed-site outpatient diagnostic imaging services in the United States.

As of December 31, 2025, we operated directly or indirectly through hospital and health system joint ventures, 418 centers located in Arizona, California, Delaware, Florida, Maryland, Virginia, New Jersey, New York, and Texas.

Internationally, our subsidiary, The HLH Imaging Group Limited fka Heart & Lung Imaging Limited, provides teleradiology services for remote interpretation of images on behalf of providers within the framework of the United Kingdom's National Health Service.

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Our imaging centers provide physicians with imaging capabilities to facilitate the diagnosis and treatment of diseases and disorders and may reduce unnecessary invasive procedures, often reducing the cost and amount of care for patients.

In addition to our imaging business, we established a Digital Health business segment in our 2024 fiscal year, which combines our former Artificial Intelligence (“AI”) business segment with our eRad, Inc.

Our digital health segment develops and delivers AI-powered health informatics solutions to drive quality, efficiency, and outcomes in imaging and radiology.

The portfolio of software solutions is anchored by eRad, Inc.'s RIS/PACS, informatics designed specifically for outpatient radiology and DeepHealth OS, a cloud-native operating system that helps operate all aspects of the radiology service line from scheduling and patient preparation to technologist workflow to interpretation and referral management.

Further, we are using AI to develop solutions that employ machine learning to assist radiologists and other clinicians in interpreting images and improving radiologist efficiency and patient care.

These AI solutions will initially be focused in the fields of screening for breast, prostate, lung and colon cancers.

Our DeepHealth, Inc.

subsidiary received FDA clearance for use of its SaigeQ "triage"/workflow product, SaigeDX advanced diagnostic product and Saige-Density breast density assessment software for screening breast mammography, which we have begun to roll out in certain markets as an Enhanced Breast Cancer Detection solution.

Our Aidence Holding B.V.

subsidiary is developing solutions for interpretation of chest and lung CT scans for lung cancer screening.

The Aidence Holding B.V.

subsidiary has received the CE marking for these solutions and has existing customers in seven European countries, with its largest concentration in the United Kingdom, and plans to submit an application for FDA clearance to sell in the United States.

Our Quantib B.V.

subsidiary is primarily focused on interpretation of prostate MRI for widespread prostate cancer screening.

Quantib’s prostate MRI post-processing software has both FDA clearances and European CE marking.

Our digital health segment provides these solutions to RadNet and to over 400 customers in the United States and Europe.

The following table shows our imaging centers in operation at year end and revenues for the years ended December 31, 2024, 2023 and 2022:

In addition to our imaging business, we established a Digital Health business segment during our 2024 fiscal year, which combines our former AI businesses with our eRad, Inc.

Our Digital Health segment develops and delivers AI-powered health informatics solutions to improve quality, efficiency, and diagnostic outcomes in diagnostic imaging and radiology.

We are using AI to develop solutions to assist radiologists and other clinicians in interpreting images and improving radiologist efficiency and patient care.

The portfolio of AI and software solutions is anchored by Enterprise Operations solutions (traditionally knowns as RIS), Enterprise Imaging solutions (traditionally known as PACS), and Clinical AI solutions, enabled by the DeepHealth OS, a cloud-native operating system that connects critical aspects of the radiology service line from scheduling and patient preparation to technologist workflow to interpretation and referral management.

Our Clinical AI solutions currently cover the fields of diagnosis and screening in the domain of breast, prostate, lung, thyroid, and brain.

Across our portfolio of AI solutions, we have 22 FDA clearances and 15 CE marks.

Our Digital Health segment provides these solutions to RadNet and to over 2000 customers in the U.S.

and outside of the U.S.

As part of our continued strategic expansion in Digital Health, we recently completed three acquisitions:

iCAD, Inc., an AI-powered breast health solutions company;

See-Mode Technologies, which enhances ultrasound-based diagnostics through artificial intelligence;

and CIMAR (UK) Limited, which provides cloud-based medical image storage, PACS, and AI-enabled imaging workflow solutions.

We are currently integrating these businesses into our Digital Health segment

The following table presents the total number of imaging centers in operation at year end, including both consolidated and non-consolidated centers, and our consolidated revenues for the years ended December 31, 2025, 2024 and 2023.

Revenue from non-consolidated centers is not included in consolidated revenues.

Years Ended December 31,

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Centers in operation 418 398 366

Imaging Center revenue (millions) $ 1,830 $ 1,617 $ 1,430

Total consolidated revenue $ 2,040 $ 1,830 $ 1,617

Our revenue is derived from a diverse mix of payors, including private payors and commercial insurance companies, managed care capitated payors, and government payors such as Medicare and Medicaid.

We believe our payor diversity mitigates our exposure to possible unfavorable reimbursement trends within any one payor class.

Our service fee revenue, net of contractual allowances and discounts, implicit price concessions, and revenue under capitation arrangements for the years ended December 31, 2024, 2023 and 2022 are summarized in the following table (in thousands):

Our total revenue for the years ended December 31, 2025, 2024 and 2023 is summarized in the following table (in thousands):

In Thousands 2025 2024 2023

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Radiology Imaging Center Asset Acquisitions:

During the years ended 2024 and 2023, we completed the acquisition of certain assets of the following entities, which either engage directly in the practice of radiology or associated businesses.

During the years ended 2025 and 2024, we completed the acquisition of certain assets of the following entities, which engage directly in the practice of radiology or associated businesses.

The primary reason for these acquisitions was to strengthen our presence in many of our geographic markets.

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We made a fair value determination of the acquired assets and assumed liabilities and the following were recorded (in thousands):

Entity Date Acquired Total Consideration Property & Equipment Right of Use Assets Goodwill Intangible Assets Other Assets Right of Use Liabilities Finance lease

HALO Centers LLC 1/2/2025 $ 4,200 587 3,238 3,563 50 — (3,238) —

Hillcroft Medical Clinic 3/7/2025 $ 734 278 — 406 50 — — —

North County Radiology Oceanside LLC 4/1/2025 $ 1,702 238 599 1,307 150 7 (599) —

Faculty Physicians and Surgeons of LLUSM (Palm Imaging) 5/1/2025 $ 1,400 648 — 702 50 — — —

California MSK MSO, LLC (OSS Burbank) 5/1/2025 $ 500 330 — 70 100 — — —

HALO Centers LLC (Indian Wells) 5/1/2025 $ 7,850 1,714 2,439 6,072 50 15 (2,439) —

Kolb Radiology P.C.

7/1/2025 $ 26,659 6,887 5,355 22,396 79 155 (6,125) (2,088)

Schonholz and Drossman, LLP 9/1/2025 $ 30,101 2,921 5,566 26,790 295 95 (5,566) —

Laser Assets, Inc.* 11/1/2025 $ 29,058 7,145 4,529 22,170 134 (32) (4,889) —

Woodburn Nuclear Medicine, Ltd.* 11/1/2025 $ 29,705 1,658 4,292 27,902 1,105 — (5,252) —

River Radiology, PLLC* 11/3/2025 $ 1,200 798 1,908 244 150 8 (1,908) —

Total 133,109 23,204 27,925 111,622 2,213 248 (30,015) (2,088)

*Fair Value Determination is preliminary and subject to change

Entity Date Acquired Total Purchase Consideration Property & Equipment Right of Use Assets Goodwill Intangible Assets Other Right of Use Liabilities Notes payable and other liabilities

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Imaging, Inc.

6/1/2024 4,200 4,025 5,597 — 175 — (5,597) —

Global Imaging LLP 9/1/2024 2,900 1,266 — 1,584 50 — — —

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Total $ 59,045 $ 28,289 $ 25,709 $ 34,697 $ 2,565 $ 161 $ (26,079) $ (6,297)

*Fair Value Determination is Final

Entity Date Acquired Total Consideration Property & Equipment Right of Use Assets Goodwill Intangible Assets Other Right of Use Liabilities

& S Services Inc.* 1/1/2023 3,500 435 1,689 3,015 50 — (1,689)

Southern California Diagnostic Imaging, Inc.* 1/1/2023 1,815 466 1,184 1,272 50 27 (1,184)

Inglewood Imaging Center, LLC* 2/1/2023 2,600 877 1,188 1,658 50 15 (1,188)

Ramapo Radiology Associates, P.C.* 2/1/2023 2,000 1,663 3,775 229 100 8 (3,775)

Madison Radiology Medical Group, Inc.* 4/1/2023 250 100 — 150 — — —

Delaware Diagnostic Imaging, P.A.* 8/1/2023 600 401 337 149 50 — (337)

Total $10,765 $3,942 $8,173 $6,473 $300 $50 $(8,173)

*Fair Value Determination is Final

Digital Health Segment

See-Mode Technologies

On June 2, 2025, through our wholly owned subsidiary DH AI International Holdings, B.V, we acquired all of the equity interest in See-Mode Technologies (“See-Mode”), a medical technology company focused on using artificial intelligence to enhance ultrasound-based diagnostics.

See-Mode’s operations are included in our Digital Health segment for reporting purposes.

The transaction was accounted for as the acquisition of a business with a total purchase consideration of approximately of $28.9 million, including:

(i) cash of $17.9 million, (ii) a holdback of $2.0 million cash to be released 18 months after acquisition, and (iii) contingent consideration with a fair value of $9.0 million related to three performance milestones payable 50% in cash and 50% in shares of our common stock.

We recorded $0.2 million in other net assets, $5.5 million in developed technology, $5.4 million in IPR&D, $20.0 million in goodwill, and $2.2 million in deferred tax liabilities in connection with this transaction.

In performing the purchase price allocation, we considered, among other factors, the intended future use of the acquired assets, the historical financial performance, and estimates of the future performance of the See-Mode business.

On July 17, 2025, we completed the acquisition of all of the outstanding equity interests of iCAD, Inc.

(“iCAD”), a global leader in AI-powered breast health solutions.

The acquisition integrates iCAD’s commercial, technology, and regulatory capabilities with those of DeepHealth, our wholly owned subsidiary within the Digital Health segment.

The transaction strengthens DeepHealth’s position as an industry leader in AI-enabled breast cancer image interpretation and workflow optimization and expands its global market reach.

The transaction was accounted for as the acquisition of a business and was completed through an all-stock exchange, with total purchase consideration of approximately $110.7 million based on the fair value of our common stock issued to iCAD shareholders and the fair value of our options issued in exchange for outstanding iCAD options.

We allocated the purchase price to the assets acquired and liabilities assumed based on their estimated fair values, which resulted in the recognition of goodwill of approximately $36.6 million, primarily reflecting expected synergies from integrating iCAD’s technology portfolio, established customer relationships, and assembled workforce.

In addition, we recorded identifiable intangible assets related to backlog, developed technology, customer relationships, and trade name totaling

approximately $38.3 million, consisting of $1.8 million, $0.7 million, $6.8 million, and $29.0 million, respectively, deferred tax asset, net of $20.6 million, Cash, deposits and others of $14.2 million, and property and equipment of $1.1 million.

In connection with the iCAD acquisition, the Company identified and measured the fair values of acquired intangible assets, including backlog, trade names, developed technology, in-process research and development (“IPR&D”), and customer relationships.

The valuations were performed using the income approach, consistent with market participant assumptions.

The income approach incorporated assumptions such as projected revenues, estimated customer attrition, royalty rates, and discount rates reflecting market participant expectations.

IPR&D projects were determined to have no material fair value as of the acquisition date.

The identified intangible assets were assigned estimated useful lives as follows:

backlog — approximately 4 years;

trade names — approximately 1 year;

developed technology — approximately 7 years;

and customer relationships — approximately 15 years.

In performing the purchase price allocation, we considered, among other factors, the intended future use of the acquired assets, the historical financial performance, and the expected future contributions of the iCAD business.

As of December 31, 2025, the valuation of assets acquired and liabilities assumed is preliminary and subject to change, primarily with respect to the valuation of deferred taxes.

The fair value determination will be updated as additional information becomes available during the measurement period.

CIMAR UK Limited

On November 10, 2025, the Company completed the acquisition of all outstanding shares of CIMAR (UK) Limited (“CIMAR”), a United Kingdom–based provider of medical image storage and cloud-based PACS solutions.

The acquisition was accounted for as a business combination.

The total purchase consideration was approximately $37.0 million, consisting of $13.2 million in cash, $14.8 million in RadNet common stock issued after year end, a holdback of $3.2 million, and contingent consideration with a fair value of approximately $5.8 million as of the acquisition date, payable upon the achievement of specified recurring revenue targets.

The purchase consideration was preliminarily allocated to the assets acquired and liabilities assumed based on their estimated fair values, resulting in the recognition of goodwill of approximately $20.1 million, which is primarily attributable to expected synergies from integrating CIMAR’s technology and operations with the Company’s Digital Health platform.

Identifiable intangible assets recognized totaled approximately $22.3 million, consisting primarily of customer relationships of approximately $19.7 million, National Health Service ("NHS") and International Organization for Standardization ("ISO") certifications of approximately $2.2 million, and trade names of approximately $0.5 million.

In addition, the Company recorded current net liabilities of approximately $0.3 million.

The Company also recognized deferred tax liabilities of approximately $5.7 million in connection with the acquisition..

The identifiable intangible assets were valued using income- and cost-based valuation methodologies in accordance with ASC 805.

Customer relationships were valued using the multi-period excess earnings method, which considers projected revenues, customer attrition, contributory asset charges, and a market-based discount rate.

Trade names were valued using the relief-from-royalty method, based on projected revenues, an estimated royalty rate, and a market-based discount rate.

NHS and ISO certifications were valued using a cost approach based on estimated replacement cost.

The estimated useful lives are approximately 21 years for customer relationships, 4 years for trade names, and 1 years for certifications.

As of December 31, 2025, the purchase price allocation is preliminary and subject to change during the measurement period, primarily related to refinements in the valuation of intangible assets, contingent consideration, deferred taxes, and other customary purchase accounting adjustments.

Kheiron Medical Technologies LTD

On October 14, 2024, we acquired a all of the equity interest in Kheiron Medical Technologies LTD (“Kheiron”), which uses deep learning AI to help radiologists detect breast cancer.

On October 14, 2024, we acquired all of the equity interest in Kheiron Medical Technologies LTD (“Kheiron”), which uses deep learning AI to help radiologists detect breast cancer.

Kheiron’s operations are included in our Digital Health segment for reporting purposes.

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In performing the purchase price allocation, we considered, among other factors, the intended future use of acquired assets, analysis of historical financial performance and estimates of future performance of the Kheiron business.

The valuation of assets acquired and liabilities assumed has not yet been finalized as of December 31, 2024, fair value determination is preliminary and subject to change.

Subsidiary activity

Formation of majority owned subsidiaries

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As a result of the transaction, we retained 47.5% controlling economic interest in VGIC .

Los Angeles Imaging Group, LLC.

On September 1, 2023, we formed our wholly-owned subsidiary, Los Angeles Imaging Group, LLC ("LAIG").

The operation offers multi-modality imaging services out of three locations in Los Angeles, California.

We contributed the operations of 3 centers to the subsidiary.

Cedars-Sinai Medical Center purchased from us a 35% noncontrolling economic interest in LAIG for a cash payment of $5.9 million.

As a result of the transaction, we retain a 65% controlling economic interest in LAIG.

Joint venture investment contribution

Pacific Diagnostic Imaging Group, LLC.

On March 21, 2025, we formed Pacific Diagnostic Imaging Group, LLC (“PDRG”), a Delaware limited liability company.

On April 1, 2025, we entered into a partnership with Tri-City Healthcare District (“Tri-City”) by selling a 20% membership interest in PDRG for cash consideration of $337,500.

We retained an 80% controlling interest in PDRG.

The joint venture operates outpatient imaging centers in Southern California.

The transaction did not result in a change of control, and no gain or loss was recognized.

Joint venture investment contributions

Santa Monica Imaging Group, LLC

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We recorded a gain of $16.8 million, within gain on contribution of imaging centers into joint venture in our consolidated statement of operations representing the difference between the fair value and carrying value of the business contributed.

Joint venture investment contributions to Arizona Diagnostic Radiology Group

Arizona Diagnostic Radiology Group

During the years ended December 31, 2025 and 2024, we made additional equity contributions of $20.5 million and $1.4 million, respectively, to Arizona Diagnostic Radiology Group ("ADRG", our joint venture with Dignity Health).

On November 1, 2022 we contributed eight of our imaging centers to ADRG of $12.7 million and recorded a loss of $0.5 million which was calculated as the difference between the transaction price and carrying value of such imaging centers which included equipment and other assets and an allocation of goodwill to such imaging centers.

We recorded $4.5 million of the transaction price as an offset to due to affiliates while the remaining $8.3 million was recorded as investment in joint venture on our balance sheet.

We accounted for the transaction as an adjustment to our equity investment for the value of the

assets contributed.

On June 12, 2025, we executed a $17.0 million promissory note with Dignity Health, a related party and joint venture member of ADRG.

Monthly principal payments of $0.9 million began July 1, 2025, with interest accruing at the Wall Street Journal Prime Rate plus 2%.

Future distributions from ADRG to Dignity will be applied to the note balance until fully repaid.

The note is expected to mature on December 1, 2026.

As of December 31, 2025, we recorded the note balance of $11.4 million in Due from Affiliates on our Consolidated Balance Sheet.

On November 1, 2022 we contributed eight of our imaging centers to ADRG for $12.7 million and recorded a loss of $0.5 million which was calculated as the difference between the transaction price and carrying value of such imaging centers which included equipment and other assets and an allocation of goodwill to such imaging centers.

We recorded $4.5 million of the transaction price as an offset due to affiliates while the remaining $8.3 million was recorded as investment in joint venture on our balance sheet.

We accounted for the transaction as an adjustment to our equity investment for the value of the assets contributed.

To maintain our 49% economic interest in ADRG, we received a distribution from the partnership of $4.5 million to reduce our overall investment to $8.3 million.

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Net income attributable to noncontrolling interest 1.7 % 2.0 % 1.7 %

NET INCOME ATTRIBUTABLE TO RADNET, INC.

NET (LOSS) INCOME ATTRIBUTABLE TO RADNET, INC.

COMMON STOCKHOLDERS (0.9) % 0.2 % 0.1 %

Result Summary

The following table summarizes our consolidated revenue by segments:

In Thousands Years Ended December 31,

2025 2024 2023

Operating Revenue

Imaging Center $ 1,988,193 $ 1,792,319 $ 1,415,513

Digital Health 92,691 65,706 38,058

Intersegment eliminations (40,674) (28,361) (23,510)

Total service revenue $ 2,040,210 $ 1,829,664 $ 1,430,061

Imaging Center Segment

Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024

We grow our imaging center business through a combination of organic growth as well as acquisitions and joint ventures.

In the discussion below, the "same center" metrics are based on imaging centers that were in operation throughout the period of January 1, 2023 through December 31, 2024.

Excluded amounts relate to imaging centers that were acquired or divested between January 1, 2023 through December 31, 2024.

Total Revenue

In Thousands Year Ended December 31,

Revenue 2024 2023 $ Increase/(Decrease) % Change

In Thousands Years Ended December 31,

2025 2024 $ Increase/(Decrease) % Change

Total Revenue $1,988,193 $1,792,319 $195,874 10.9%

Same Center Revenue $1,644,721 $1,498,160 $146,561 9.8%

Excluded $119,237 $68,894 — —

Our 9.8% increase in same center revenue over the same period last year was driven by increases in fees charged per imaging procedure and an increase in procedures volumes.

Same center total procedure volume grew at an overall rate of 3.2% which was comprised of a 1.7% increase in routine imaging and an 8.1% increase in advanced modality imaging procedures.

The increase in revenue was largely attributable to product mix, as advanced imaging was a greater portion of overall procedures.

A significant contributor to the change in product mix was the increase in PETHC procedures related to prostate cancer and suspect Alzheimer’s studies, which are included in advanced modality imaging procedures.

Our 10.9% increase in Imaging Center revenue compared to the same period last year was driven by higher fees per imaging procedure and increased procedure volumes.

This is a function of procedural volume growth at our consolidated centers.

This growth reflects both organic increases at existing centers and incremental volumes from centers acquired since the prior-year period.

The increase in revenue was largely attributable to the procedural volume growth, increased reimbursement from commercial and capitated payors and favorable changes in product mix, as advanced imaging represented a greater proportion of total procedures.

A significant contributor to this shift was the increase in PET CT procedures related to prostate cancer and Alzheimer’s-related studies, which are included within advanced modality imaging procedures.

Operating Expenses

Total operating expenses for the year ended December 31, 2024 increased approximately $178.6 million, or 12.2%, from $1.47 billion for the year ended December 31, 2023 to $1.64 billion for the year ended December 31, 2024, primarily due to increase in procedures volumes.

The following table sets forth our cost of operations and total operating expenses for the year ended December 31, 2024 and 2023 (in thousands):

Total Imaging Center operating expenses for the year ended December 31, 2025 increased approximately $221.1 million, or 13.2%, from $1.67 billion for the year ended December 31, 2024 to $1.89 billion for the year ended December 31, 2025, primarily due to increase in procedures volumes.

The following table sets forth our cost of operations and total operating expenses for the years ended December 31, 2025 and 2024 (in thousands):

Years Ended December 31,

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Depreciation and amortization 136,297 127,142

Gain on contribution of imaging centers into joint venture — (16,808)

Lease abandonment charges 8,563 2,478

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Salaries and professional reading fees, excluding stock-based compensation and severance

In Thousands Year Ended December 31,

Salaries and Professional Fees 2024 2023 $ Increase/(Decrease) % Change

Total $984,281 $853,327 $130,954 15.3%

Same Center $929,364 $823,015 $106,349 12.9%

Excluded $54,917 $30,312 — —

Consistent with the higher procedure volumes noted above, our staffing levels were adjusted to support the influx of patients seeking radiology procedures.

Additionally, we are continuing to face inflation in employee wage rates as we compete for talent in a tight labor market, further impacted by the October 2024 increase in California's minimum wage for healthcare workers.

In Thousands Years Ended December 31,

2025 2024 $ Increase/(Decrease) % Change

Salaries $ 775,640 $ 711,054 $ 64,586 9.1%

Professional Fees 307,910 273,226 34,684 12.7%

Salaries and Professional Fees $ 1,083,550 $ 984,280 99,270 10.1%

In response to higher procedure volumes, we increased staffing levels across clinical, administrative, and technical functions to support the influx of patients.

This included permanent headcount growth as well as a significant number of temporary hires to keep our centers operating smoothly during the first quarter of 2025.

Compensation-related expenses were further impacted by increased 401K match contributions and more vacation and paid time off taken during the period.

We also continued to experience wage inflation across the board, driven by a competitive labor market and the October 2024 increase in California’s minimum wage for healthcare workers.

Additionally, higher workers’ compensation insurance premiums contributed to the overall rise in staffing costs.

Stock-based compensation

Stock-based compensation increased $17.8 million, or 66.3%, to approximately $44.7 million for the year ended December 31, 2025 compared to $26.9 million for the year ended December 31, 2024.

The increase is primarily due to higher fair value of stock awards granted in the first quarter of 2024.

The increase is primarily due to a greater number of shares granted and higher grant-date fair values compared to prior-year period.

Building and equipment rental

In Thousands Year Ended December 31,

Building & Equipment Rental 2024 2023 $ Increase/(Decrease) % Change

Total $121,514 $117,405 $4,109 3.5%

Same Center $107,013 $107,226 ($213) (0.2)%

Excluded $14,501 $10,179 — —

Building and equipment rental expense on a same center basis was relatively unchanged from the prior period.

In Thousands Years Ended December 31,

2025 2024 $ Increase/(Decrease) % Change

Building rent and common area maintenance $ 125,459 $ 118,467 $ 6,992 5.9%

Equipment Rental 2,340 3,047 (707) (23.2)%

Building & Equipment Rental $127,798 $121,514 6,284 5.2%

Building and equipment rental expense increased primarily as a result of additional centers from openings and acquisitions.

Equipment lease expense represents an immaterial portion of total rental expense.

Medical supplies

In Thousands Year Ended December 31,

Medical Supplies Expense 2024 2023 $ Increase/(Decrease) % Change

Total $103,189 $86,213 $16,976 19.7%

Same Center $96,330 $83,068 $13,262 16.0%

Excluded $6,859 $3,145 — —

The increase in medical supplies expense was driven by our higher patient volume and product shift towards more advanced imaging modalities.

The increase in PETHC procedures related to prostate cancer and suspected Alzheimer studies also raised medical supplies expense due to the requirement for high-cost isotope tracers.

In Thousands Years Ended December 31,

2025 2024 $ Increase/(Decrease) % Change

Medical Supplies Expense $126,126 $103,189 $22,937 22.2%

Consistent with the shift in our procedural mix toward more advanced imaging, medical supplies expense increased at a higher rate than revenue growth.

The growth in PET/CT procedures, particularly for prostate cancer and suspected Alzheimer’s studies, drove higher utilization of high-cost isotope tracers, contributing to the increase.

In addition, price increases for these tracers further elevated medical supplies expense compared to the prior year.

Other operating expenses

In Thousands Year Ended December 31,

Other Operating Expenses 2024 2023 $ Increase/(Decrease) % Change

Total $275,587 $271,672 $3,915 1.4%

Same Center $255,254 $260,815 $(5,561) (2.1)%

Excluded $20,333 $10,857 — —

Other operating expenses was relatively unchanged compared to the same period in the prior year and lower as a percentage of overall revenues.

In Thousands Years Ended December 31,

2025 2024 $ Increase/(Decrease) % Change

Other Operating Expenses $355,225 $303,952 $51,273 16.9%

Other operating expenses, which include outside services, software licensing fees, repair and maintenance, and utilities, have increased $51.3 million, or 16.9%, to approximately $314.6 million for the year ended December 31, 2025 compared to $275.6 million for the year ended December 31, 2024.

The increase was primarily attributable to higher professional fees associated with acquisition activity, increased contractor services, and higher equipment and maintenance costs.

In addition, certain increases relate to intersegment software licensing fees from the Digital Health segment, which are eliminated in consolidation and therefore impact segment operating results but not consolidated operating income.

Additional segment operating and non-operating expenses:

In Thousands Year Ended December 31,

In Thousands Years Ended December 31,

2025 2024 $ Increase/(Decrease) % Change

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Loss on disposal of equipment and other $9,821 $2,257 $7,564 335.1%

Gain on contribution of imaging centers into joint venture $0 (16,808) $16,808 nm

Non-cash change in fair value of interest rate swaps $8,006 $8,185 ($179) (2.2)%

Other income ($32,066) ($30,336) ($1,730) 5.7%

Debt restructuring and extinguishment expenses $— $11,292 ($11,292) (100.0)%

Severance $1,797 $1,095 $702 64.1%

nm=not meaningful

The increase in depreciation expense was due to higher depreciable asset base, mainly driven by our expanded locations.

For the year ended December 31, 2023, we recognized a non-recurring gain on the contribution of assets into our Santa Monica Imaging Group LLC joint venture.

Other income for the year ended December 31, 2024 included money market interest income of $31.4 million, partially offset by an impairment of investment in non-marketable securities of $1.2 million and debt restructuring and extinguishment expenses of $11.3 million.

Interest income for the year ended December 31, 2024 increased approximately $20.6 million, or 190%, to $31.4 million from $10.9 million for the year ended December 31, 2023.

The increase is primarily due to higher average cash balance in our money market account for the year ended December 31, 2024.

The increase in loss on disposal of equipment was primarily driven by a higher volume of fixed asset disposals during the period.

These disposals reflect a strategic initiative to replace legacy imaging units with newer AI-enabled and other advanced technologies intended to enhance operational efficiency, clinical capabilities, and long-term productivity.

Other income primarily consists of interest income earned on our cash and cash equivalents.

Lease abandonment charges

In Thousands Years Ended December 31,

2025 2024 $ Increase/(Decrease) % Change

Lease abandonment charges $8,563 2,478 $6,085 246 %

We closely monitor patient levels at our imaging centers and occasionally divest or shut down centers to maximize utilization rates.

During the end of 2024, we experienced lower utilization at seven imaging centers.

As a result, we abandoned the leases related to these locations at the end of 2024 and diverted the patients to our other sites in the area.

We recorded a charge of approximately $2.5 million in December 2024 related to lease facilities abandonment.

The lease abandonment charges include the impairment of associated right-of-use assets of $1.8 million and write off of related leasehold improvements of approximately $0.7 million.

During the end of 2023, we experienced lower utilization at two imaging centers.

We may abandon low utilization leases and divert the patients to nearby centers.

During year ended 2025, we experienced lower utilization at seven imaging centers.

As a result, we abandoned the leases related to these locations at the end of 2025 and diverted the patients to our other sites in the area.

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The lease abandonment charges include the impairment of associated right-of-use assets of $6.7 million and write off of related leasehold improvements of approximately $1.9 million.

In Thousands Year Ended December 31,

Lease abandonment charges 2024 2023 $ Increase/(Decrease) % Change

Total $2,478 5,146 $(2,668) —

Same Center $1,518 4,089 $(2,571) —

Excluded 960 1,057 — —

Digital Health Segment

Our Digital Health segment develops and deploys clinical applications to enhance interpretation of medical images and improve patient outcomes with a current emphasis on breast, prostate, and lung cancer diagnostics.

The breakdown of revenue and expenses of the segment for the years ended December 31, 2025 and 2024 are as follows:

In Thousands Years Ended December 31,

2025 2024 $ change

Revenue $ 92,691 $ 65,706 $ 26,985

Salaries and Wages 45,207 26,569 18,638

Stock Compensation 9,927 2,971 6,956

Other operating 32,683 24,578 8,105

Non-Capitalized R&D - DeepHealth Cloud OS & Generative AI 20,155 14,995 5,160

Depreciation & Amort.

15,831 10,696 5,135

Other operating (gain) loss (163) 19 (182)

Severance 1,348 807 541

Total operating expenses 124,988 80,635 44,353

Loss from operations (32,297) (14,929) (17,368)

Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024

For the year ended December 31, 2025 , Digital Health segment revenues increased $27.0 million or 41.1% , to $92.7 million , compared to $65.7 million for the year ended December 31, 2024 .

The growth was primarily driven by a 64.9% increase in AI-related revenue and a 29.0% increase in Enterprise Imaging revenue.

External revenue represented 55.3% of total segment revenue for 2025.

During the year, the segment’s customer base expanded from 486 to 2,075, and procedure volumes increased from 19.1 million to 24.1 million, primarily reflecting the addition of iCAD.

Annual Recurring Revenue or ARR, at the end of 2025 was $75 million.

The Company defines Annual Recurring Revenue ("ARR") as a key subscription economy metric representing the predictable, normalized annualized value of contracted recurring revenue generated from customers from active customer contracts.

ARR includes subscription fees,

recurring support fees, and contracted usage charges and excludes one-time, non-recurring fees such as, implementation, hardware sales, professional services, consulting and one-off training.

ARR is a non-GAAP measure and does not represent GAAP revenue recognized over time.

For the year ended December 31, 2025, results reflect steady organic growth prior to the acquisition and a sharp acceleration in the third quarter following the inclusion of iCAD, highlighting that recent performance was driven primarily by external expansion rather than internal volume increases.

Segment operating expenses increased year over year due to the addition of new costs resulting from acquisitions (iCAD, SeeMode, and CIMAR);

investments in the personnel, increased stock-based compensation commensurate with the growing organization, and higher non-capitalized R&D costs, reflecting continued investment in scaling our platforms for broader deployment.

We expect the segment to continue operating at a net loss in the near term as integration of iCAD, Inc., See-Mode Technologies, and CIMAR UK progresses.

Interest expense

In Thousands Year Ended December 31,

In Thousands Years Ended December 31,

Interest Expense 2025 2024 $ Increase/(Decrease) % Change

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Adjusted Interest Expense*** $71,903 $78,335 $(6,433) (8.2)%

*Includes payments from 2019 swaps

*Includes payments from 2019 swaps, inclusive of amortization of other comprehensive income

**Includes noncash amortization of deferred loan costs and discount on issuance of debt

***Includes interest related to our term loans, revolving credit line, notes, and other

The increase in interest expense was the result in the general increase in term loan debt due to the refinancing of our Barclays credit facility in April 2024, partially offset by lower interest rates compared to the same period in the prior year.

The decrease in interest expense was primarily due to the repricing transaction of our Barclays Revolving Credit Facility (as defined in the notes to our consolidated financial statements) in the fourth quarter of 2024, which resulted in lower interest rates compared to the same period in the prior year.

This benefit was partially offset by the $100.0 million of incremental term loan borrowings under our existing Barclays Revolving Credit Facility in the second quarter of 2025.

See Note 8, Credit Facilities and Notes Payable, included in the notes to our consolidated financial statements.

During the year ended December 31, 2025, interest rates were above the arranged rates in our 2019 Swaps for most of the year and we received $7.9 million in cash payments from our 2019 swap counterparties, which were reported as a component of interest expense.

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Since that time, in accordance with accounting guidelines, all changes in fair value are being recognized in other income and expense.

The fair value of the 2019 swaps as of December 31, 2024 was a net asset of $7.1 million compared to a net asset of $15.1 million December 31, 2023, resulting in a loss $8.0 million during the year ended December 31, 2024.

This change in fair value was driven by market expectations of continued declines in interest rates over the remaining term of the 2019 Swaps.

The fair value of the 2019 swaps as of December 31, 2025 was a net asset of $0.0 million compared to a net asset of $7.1 million as of December 31, 2024, resulting in a loss $7.1 million during the year ended December 31, 2025.

The decrease in fair value was primarily attributable to the expiration of the 2019 swaps during 2025, which reduced the remaining contractual term to zero.

Equity in earnings from unconsolidated joint ventures

For the year ended December 31, 2025 we recognized equity in earnings from unconsolidated joint ventures of $14.9 million versus $14.5 million for the year ended December 31, 2024, an increase of $0.4 million or 2.8%.

The increase was mainly due to the additional contribution made to SMIG in September 2023.

SMIG operated at a net income for the December 31, 2024, which positively impacted our equity in earnings from unconsolidated joint ventures during the period.

Additionally, the increase was supported by improved earnings from our interest in the Arizona Diagnostic Radiology Group joint venture, reflecting continuing operational improvements and revenue growth.

Net income attributable to noncontrolling interests

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As noncontrolling interests only represent a portion of our imaging center business, and excludes our Digital Health segment which generated losses of $30.3 million in 2025, we do not expect changes in net income attributable to noncontrolling interests to correlate with changes in consolidated operating income or pretax income.

for the year ended December 31, 2024, we recognized net income attributable to noncontrolling interests of $36.0 million versus $27.3 million for the year ended December 31, 2023, an increase of $8.8 million.

The increase in net income attributable to noncontrolling interests was primarily due to the formation of new majority owned subsidiaries, Los Angeles Imaging Group, LLC, in September 2023 and Tri Valley Imaging Group, LLC in March 2024.

Net income attributable to noncontrolling interests was also impacted by an increase in patient volumes for advanced modalities in 2024 and the closure of two underperforming centers in a majority owned subsidiary, Beach Imaging Group, LLC in 2023.

Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022

We grow our imaging center business through a combination of organic growth as well as acquisitions and joint ventures.

In the discussion below, same center metrics are based on imaging centers that were in operation throughout the period of January 1, 2022 through December 31, 2023.

Excluded amounts relate to imaging centers that were acquired or divested between January 1, 2022 through December 31, 2023.

Total Revenue

In Thousands Year Ended December 31,

Revenue 2023 2022 $ Increase/(Decrease) % Change

Total Revenue $1,567,054 $1,392,003 $175,051 12.6%

Same Center Revenue $1,427,969 $1,338,472 $89,497 6.7%

Excluded $139,085 $53,531 — —

Overall revenue change was driven by procedure volume growth of 5.7% compared to the same period in the prior year.

On a same center basis, the increase in revenue was largely attributable to product mix as advanced radiology procedures of MRI, PET, and CT expanded at combined 7.2% to provide the major portion of the revenue growth.

Operating Expenses

Total operating expenses for the year ended December 31, 2023 increased approximately $128.1 million, or 9.6%, from $1.3 billion for the year ended December 31, 2022 to $1.5 billion for the year ended December 31, 2023.

The following table sets forth our cost of operations and total operating expenses for the year ended December 31, 2023 and 2022 (in thousands):

Years Ended December 31,

Salaries and professional reading fees, excluding stock-based compensation $ 853,327 $ 771,952

Stock-based compensation 24,574 20,988

Building and equipment rental 117,405 122,894

Medical supplies 86,213 68,712

Other operating expenses *

271,672 240,739

Cost of operations 1,353,191 1,225,285

Depreciation and amortization 120,141 109,025

Gain on contribution of imaging centers into joint venture (16,808) —

Lease abandonment charges 5,146 —

Loss on sale and disposal of equipment 2,191 2,506

Severance costs 1,973 926

Total operating expenses $ 1,465,834 $ 1,337,742

* Includes billing fees, office supplies, repairs and maintenance, insurance, business tax and license, outside services, telecommunications, utilities, marketing, travel and other expenses.

Salaries and professional reading fees, excluding stock-based compensation and severance

In Thousands Year Ended December 31,

Salaries and Professional Fees 2023 2022 $ Increase/(Decrease) % Change

Total $853,327 $771,952 $81,375 10.5%

Same Center $797,959 $751,355 $46,604 6.2%

Excluded $55,368 $20,597 — —

Similar to the prior year, growth in procedure volumes precipitated increases in salary expenses to meet additional professional staffing needs and we increased salaries to retain our skilled work force in the current tight labor market.

Stock-based compensation

Stock-based compensation increased $3.6 million, or 17.1%, to approximately $24.6 million for the year ended December 31, 2023 compared to $21.0 million for the year ended December 31, 2022.

Building and equipment rental

In Thousands Year Ended December 31,

Building & Equipment Rental 2023 2022 $ Increase/(Decrease) % Change

Total $117,405 $122,894 ($5,489) (4.5)%

Same Center $104,002 $113,021 ($9,019) (8.0)%

Excluded $13,403 $9,873 — —

The decrease in building and equipment rental was the result of our contribution of Phoenix, AZ imaging centers in connection with the formation of the Arizona Diagnostic Radiology Group joint venture in November 2022 and from the buyout of radiology equipment lease contracts during the year.

Medical supplies

In Thousands Year Ended December 31,

Medical Supplies Expense 2023 2022 $ Increase/(Decrease) % Change

Total $86,213 $68,712 $17,501 25.5%

Same Center $79,550 $64,872 $14,678 22.6%

Excluded $6,663 $3,840 — —

The increased medical supplies expense was related to the 7.2% growth in advanced radiology volumes noted above, combined with price increases for contrast agents and higher utilization of isotopes employed in PET and CT procedures.

Other operating expenses

In Thousands Year Ended December 31,

Other Operating Expenses 2023 2022 $ Increase/(Decrease) % Change

Total $271,672 $240,739 $30,933 12.8%

Same Center $249,232 $235,289 $13,943 5.9%

Excluded $22,440 $5,450 — —

The rise in other operating expenses is attributable to additional professional fees associated with our acquisition activity, contractor services, equipment and maintenance, and software upgrades all in support of our expansion and increase in procedure volumes.

Additional segment operating and non-operating expenses:

In Thousands Year Ended December 31,

2023 2022 $ Increase/(Decrease) % Change

Depreciation and Amortization $120,141 $109,025 $11,116 10.2%

Loss on disposal of equipment and other $2,191 $2,506 ($315) (12.6)%

Gain on contribution of imaging centers into joint venture ($16,808) — ($16,808) *

Non-cash change in fair value of interest rate swaps $8,185 ($39,621) $47,806 (120.7)%

Other (income) expenses ($10,891) $644 ($11,535) (1791.1)%

Severance $1,973 $926 $1,047 113.1%

* The percent change in contribution of imaging centers into joint venture was not meaningful.

The increase in depreciation expense was the result of our higher depreciable asset base.

For the year ended December 31, 2023, we recognized a gain on the contribution of assets into our Santa Monica Imaging Group LLC joint venture.

The non-cash expense associated with the change in fair value of our interest rate swaps for the year ended December 31, 2023 related to the expiration of our notional $100 million in 2019 swaps and the shorter term on our remaining $400 million notional 2019 swaps.

The gain associated with the non-cash change in fair value of interest rate swaps during the year ended December 31, 2022 was driven by the significant increase in interest rates experienced during the time period.

Other income for the year ended December 31, 2023 included money market interest income of $10.9 million.

Other expenses in 2022 included approximately $0.7 million of debt restructuring charges related to the refinancing of our credit facilities with Truist in 2022 and an eRad loss on investments of $2.9 million.

Lease abandonment charges

We closely monitor patient levels at our imaging centers and occasionally divest or shut down centers to maximize utilization rates.

During the end of 2023, we experienced lower utilization at two imaging centers.

As a result, we abandoned the leases related to these locations at the end of 2023 and diverted the patients to our other sites in the area.

We recorded a charge of approximately $5.1 million in December 2023 related to lease facilities abandonment.

The lease abandonment charges include the impairment of associated right-of-use assets of $2.7 million and write off of related leasehold improvements of approximately $2.5 million.

In Thousands Year Ended December 31,

Lease abandonment charges 2023 2022 $ Increase/(Decrease) % Change

Total $5,147 — $5,147 —

Same Center $5,147 — $5,147 —

Excluded — — — —

Interest expense

In Thousands Year Ended December 31,

Interest Expense 2023 2022 $ Increase/(Decrease) % Change

Total Interest Expense $64,483 $50,841 $13,642 26.8%

Interest related to derivatives* $(9,752) $7,806

Interest related to amortization** $2,987 $2,693

Adjusted Interest Expense*** $71,248 $40,342 $30,906 76.6%

*Includes payments from 2019 swaps

**Includes noncash amortization of deferred loan costs and discount on issuance of debt

***Includes interest related to our term loans, revolving credit line, notes, and other

The rise in adjusted interest expense is attributable to higher overall loan balances in combination with increased variable interest rates paid on those balances in comparison to the same period in the prior year.

During 2022 we refinanced our Truist term loan which added an additional $108.0 million in obligations to our balance sheet in the fourth quarter.

Based on recent Federal Reserve interest rate decisions, we expect the effective interest rates on our senior credit facilities, and the related interest expense, to stabilize in the near term.

See “Liquidity and Capital Resources” below for more details on our credit facilities.

To mitigate our future floating rate interest expense exposure, we entered into the 2019 swaps with locked in interest rates for one-month Term SOFR of 1.89% for $100 million of notional value and 1.98% for $400 million of notional value.

We are liable for premium payments to the 2019 swap counterparties if interest rates are below the arranged rates, and receive payments from the 2019 swap counterparties if interest rates exceed the arranged rates.

If interest rates were to theoretically reduce to 0%, our maximum premium payment would be the difference between the two swapped rates and 0% then multiplied by the notional value of the swaps, or $1.89 million per year for the $100 million swap and $8.0 million per year for the $400 million swap.

Payments under the 2019 swaps are settled in cash on a monthly basis.

During the year ended December 31, 2023, interest rates were above the arranged rates for most of the year and we received payment of $14.5 million in cash payments from our 2019 swap counterparties, which was reported a component of interest expense.

See the Derivative Instruments section of Note 2, Summary of Significant Accounting Policies, in the notes accompanying the consolidated financial statements included in this report and Item 7A — "Quantitative and Qualitative Disclosure About Market Risk" below for more details on our derivative transactions.

Non-cash change in fair value of interest rate hedge

In 2020, we determined that the cash flows from the 2019 swaps did not match the cash flows of our Barclays term loan and were therefore ineffective as cash flow hedges.

Since that time, in accordance with accounting guidelines, all changes in fair value are being recognized in other income and expense.

The fair value of the 2019 swaps as of December 31, 2023 was a net asset of $15.1 million compared to a net asset of $23.3 million December 31, 2022, resulting in a loss of $8.2 million during the year ended December 31, 2023, which decreased the Company’s tax provision by $2.1 million.

The significant change in fair value was caused by the expiration of the $100 million swap in October 2023 and the shorter remaining term on the $400 million swap, which offset the increase in market interest rates and the steepening of the yield curve.

The one-month Term SOFR rate as of December 31, 2023 was approximately 5.47%, higher than the 4.33% one-month Term SOFR rate at December 31, 2022 and significantly above the 1.98% arranged rate for the $400 million portion of the 2019 swaps.

Equity in earnings from unconsolidated joint ventures

For the year ended December 31, 2023 we recognized equity in earnings from unconsolidated joint ventures of $6.4 million versus $10.4 million for the year ended December 31, 2022, a decrease of $4.0 million or 38.1%.

The decrease in equity in earnings from unconsolidated joint ventures was due to the formation of Arizona Diagnostic Radiology Group in November 2022, which operated at a net loss in 2023.

Net income attributable to noncontrolling interests

At December 31, 2023, our consolidated subsidiaries operated 321 imaging centers of which 85 were not wholly-owned and thus a portion of their operating results were attributable to noncontrolling interests.

At December 31, 2022, our consolidated subsidiaries included 318 centers of which 81 were not wholly-owned.

As noncontrolling interests only represent a portion of our imaging center business, and excludes our Digital Health which generated losses of $21.2 million in 2023, we do not expect changes in net income attributable to noncontrolling interests to correlate with changes in consolidated operating income or pretax income.

For the year ended December 31, 2023, we recognized net income attributable to noncontrolling interests of $27.3 million versus $23.0 million for the year ended December 31, 2022, an increase of $4.3 million.

The increase in net income attributable to noncontrolling interests was primarily due to the formation of a new majority owned subsidiary, Los Angeles Imaging Group, LLC, in September 2023 as described in Note 4 to the consolidated financial statements.

We contributed the operations of three centers to Los Angeles Imaging Group, LLC, and Cedars-Sinai Medical Center contributed cash.

Net income attributable to noncontrolling interests also improved as a result of our acquisition of various interests in 2022, which were able to operate for full year in 2023.

In October 2022, our consolidated joint venture New Jersey Imaging Network, LLC, acquired the assets of Montclair Radiological associates, P.A.

In November 2022 we acquired a 75% controlling interest in the HLH Imaging Group Limited fka Heart & Lung Imaging Limited.

Additionally in April 2022 we formed a new majority owned subsidiary, Frederick County Radiology, LLC.

See Note 4, Business Combinations and Related Activity, in the notes accompanying our consolidated financial statements included in this report, for a more detailed discussion of these acquisitions.

Digital Health Segment

Our Digital segment develops and deploys clinical applications to enhance interpretation of medical images and improve patient outcomes with a current emphasis on breast, prostate, and lung cancer diagnostics.

The breakdown of revenue and expenses of the segment for the year ended December 31, 2024, 2023 and 2022 are as follows:

In Thousands Year Ended December 31,

2024 2023 2022 2024 vs 2023

$ change 2023 vs 2022

Revenue $ 65,706 $ 49,576 $ 38,058 $ 16,130 $ 11,518

Salaries and Wages 26,569 25,272 21,812 1,297 3,460

Stock Compensation 2,971 2,211 2,782 760 (571)

Other operating 24,579 14,565 14,467 10,014 98

Non-Capitalized R&D - DeepHealth Cloud OS & Generative AI 14,995 — — 14,995 —

Depreciation & Amort.

10,696 8,250 6,852 2,446 1,398

Other operating loss (gain) 19 (4) 23 23 (27)

Severance 807 1,805 20 (998) 1,785

Total operating expenses 80,636 52,099 45,956 28,537 6,143

Loss from operations (14,930) (2,523) (7,898) (12,407) 5,375

Other expense (income) 5,419 4,537 1,920 882 2,617

Income before taxes (20,349) (7,060) (9,818) (13,289) 2,758

Income taxes (424) (1,906) (3,342) 1,482 1,436

Segment net loss (19,925) (5,154) (6,476) (14,771) 1,322

Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023

Revenues for the Digital Health segment increased as a result of core growth in our eRad PICS business, the rollout in 2023 of our Deephealth OS, and continued rollout of our Enhanced Breast Cancer Detection solutions across additional facilities.

The increase in operating expenses was primarily related to salary expense as we increased headcount in connection with the commercialization of our initial AI products and higher non-capitalized research and development expenses with respect to our new DeepHealth cloud OS and generative AI.

Aside from the effect of increased non-capitalized research and development expenses, our net loss for the segment was consistent with the prior year.

We expect that our Digital Health segment will continue to generate net losses over the next several years.

Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022

The increase in revenues for the Digital Health segment was driven by the launch of new imaging products, including our Enhanced Breast Cancer Detection product which was initially released in 2022 and is being rolled out in certain of our imaging centers.

The increase in operating expenses for the Digital Health segment was primarily related to salary expense as we increased headcount in connection with the commercialization of our initial AI products.

Our net loss for the segment was consistent with the prior year.

We expect that our Digital Health segment will continue to generate net losses over the next several years.

For the year ended December 31, 2025, we recognized net income attributable to noncontrolling interests of $35.7 million versus $36.0 million for the year ended December 31, 2024, a decrease of $0.3 million.

Non-GAAP Financial Measures

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2025 2024 2023

Net Income Attributable To Radnet, Inc.

Net (Loss) Income Attributable To Radnet, Inc.

Common Stockholders $ (18,652) $ 2,793 $ 3,044

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Loss on extinguishment of debt and related expenses — 11,292 —

Legal settlements — — 2,197

Change in estimate related to refund liability — — 8,089

Non-cash change to contingent consideration 110 1,974 (4,075)

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Accordingly, we believe that our current sources of funds will provide us with adequate liquidity during the 12-month period following December 31, 2025, as well as in the long-term.

The following table summarizes key balance sheet data as of December 31, 2024 and December 31, 2023 and income statement data for the year ended December 31, 2024, 2023 and 2022 (in thousands):

The following table summarizes key balance sheet data as of December 31, 2025 and December 31, 2024 and income statement data for the years ended December 31, 2025, 2024 and 2023 (in thousands):

Balance Sheet Data as of December 31, 2025 2024

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Total revenue $ 2,040,210 $ 1,829,664 $ 1,616,630

Net income attributable to RadNet common stockholders 2,793 3,044 10,650

Net (loss) income attributable to RadNet, Inc.

common stockholders

(18,652) 2,793 3,044

We operate in a capital intensive, high fixed-cost industry that requires significant amounts of capital to fund operations.

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Cash provided by financing activities 72,207 397,950 195,635

Cash provided by operating activities for the year ended December 31, 2024 included $289.5 million in net income reconciling adjustments offset by a $56.5 million change in assets and liabilities.

The $12.2 million increase in cash provided by operating activities for the year ended December 31, 2024 compared to December 31, 2023 was primarily driven by an increase in income from operations.

Cash used in investing activities for the year ended December 31, 2024 increased from December 31, 2023 by $31.6 million.

Purchases of imaging centers during the period was $43.7 million, a $31.6 million increase from the prior period.

Capital expenditures for property and equipment during the period was $188.1 million, a $11.5 million increase from the prior period.

Cash provided by financing activities for the year ended December 31, 2024 resulted from a secondary public offering of our common stock and a refinancing of our Barclays credit facility.

In March 2024, we completed a public offering of 5,232,500 shares of our common stock, which included 682,500 shares sold pursuant to an underwriters overallotment option, at a price to the public of $44.00 per share, resulting in net proceeds after underwriting discounts, commissions, and expenses of $218.4 million.

In April 2024, we refinanced our Barclays credit facility replacing the prior facility with an $875 million term loan.

After paying off the balance on the prior facility, payment of accrued interest through the closing of the refinance transaction, and payment of transaction fees and expenses, we added approximately $167.9 million in cash to the balance sheet.

Cash provided by operating activities for the year ended December 31, 2025 included $308.6 million of net income, adjusted for non-cash items such as depreciation and amortization, non-cash lease expense, stock-based compensation and deferred taxes, offset by a $9.8 million change in assets and liabilities.

The $65.8 million increase in cash provided by operating activities for the year ended December 31, 2025 compared to December 31, 2024 was primarily driven by favorable changes in working capital.

Cash used in investing activities for the year ended December 31, 2025 increased from the year ended December 31, 2024 by $110.8 million.

Purchases of imaging centers and other acquisitions during the period was $133.4 million, a $89.8 million increase from the prior period.

Cash payments for capital expenditures on property and equipment during the period was $213.3 million, a $25.2 million increase from the prior period.

Cash provided by financing activities for the year ended December 31, 2025 decreased by $325.7 million compared to the year ended December 31, 2024.

Financing activity in 2024 included a public equity offering that generated $218.4 million in net proceeds and a refinancing of the Barclays Revolving Credit Facility that resulted in an additional $167.9 million of cash.

In 2025, financing activity primarily consisted of a $100.0 million incremental term loan under the Barclays Credit Agreement, partially offset by repayment of term loans, notes, and lease payables of $27.8 million.

Based on current operating performance, cash on hand and available borrowing capacity, management believes the Company has sufficient liquidity to meet its short-term working capital needs and contractual obligations.

Over the long term, the Company expects to fund operations, capital expenditures and acquisitions through a combination of cash generated from operations, available credit facilities and access to capital markets, as appropriate.

Senior Credit Facilities:

We maintain secured credit facilities with Barclays Bank PLC and with Truist Bank.

We maintain secured credit facilities with Barclays Bank PLC and Truist Bank.

On April 18, 2024, we refinanced our Barclays Credit Facility, replacing the prior facility with an $875.0 million term loan and a $282.0 million revolving credit facility.

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Critical Accounting Policies

The Securities and Exchange Commission defines critical accounting estimates as those that are both most important to the portrayal of a company’s financial condition and results of operations and require management’s most difficult, subjective or complex judgment, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods.

The SEC defines critical accounting estimates as those that are both most important to the portrayal of a company’s financial condition and results of operations and require management’s most difficult, subjective, or complex judgment, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods.

In Note 2 to our consolidated financial statements in this annual report on Form 10-K, we discuss our significant accounting policies, including those that do not require management to make difficult, subjective, or complex judgments or estimates.

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generally accepted accounting principles (GAAP), which requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes.

These estimates and assumptions affect various matters, including our reported amounts of assets and liabilities in our consolidated balance sheets at the dates of the financial statements;

our disclosure of contingent assets and liabilities at the dates of the financial statements;

and our reported amounts of revenues and expenses in our consolidated statements of operations during the reporting periods.

These estimates and assumptions affect various matters, including our reported amounts of assets and liabilities in our consolidated balance sheets at the dates of the financial statements, our disclosure of contingent assets and liabilities at the dates of the financial statements, and our reported amounts of revenues and expenses in our consolidated statements of operations during the reporting periods.

These estimates involve judgments with respect to numerous factors that are difficult to predict and are beyond management’s control.

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Management continually reviews the contractual estimation process to consider and incorporate updates to laws and regulations and the frequent changes in managed care contractual terms resulting from contract renegotiations and renewals.

As it relates to the Group (as defined in Note 1 Nature of Business included in the notes to our consolidated financial statements), this service fee revenue includes payments for both the professional medical interpretation revenue recognized by them as well as the payment for all other aspects related to our providing the imaging services, for which we earn management fees.

As it relates to other centers, this service fee revenue is earned through providing the use of our diagnostic imaging equipment and the provision of technical services as well as providing administration services such as clerical and administrative personnel, bookkeeping and accounting services, billing and collection, provision of medical and office supplies, secretarial, reception and transcription services, maintenance of medical records, and advertising, marketing and promotional activities.

As it relates to the Group (as defined in Item 1 of this Form 10-K), this service fee revenue includes payments for both the professional medical interpretation revenue recognized by them as well as the payment for all other aspects related to our providing the imaging services, for which we earn management fees.

As it relates to other centers, this service fee revenue is earned through providing the use of our diagnostic imaging equipment and the provision of technical services as well as providing administration services such as clerical and administrative personnel, bookkeeping and accounting services, billing and collection, provision of medical and office supplies, secretarial, reception and transcription services, maintenance of medical records, digital health support services, and advertising, marketing, and promotional activities.

Our revenues are based upon the estimated amounts we expect to be entitled to receive from patients and third-party payors.

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Services are generally provided pursuant to one-year contracts with healthcare providers.

We continuously monitor collections from our payors and maintain an allowance for credit losses based upon specific payor collection issues that we have identified and our historical experience.

We continuously monitor

collections from our payors and maintain an allowance for credit losses based upon specific payor collection issues that we have identified and our historical experience.

BUSINESS COMBINATIONS – When the qualifications for business combination accounting treatment are met, it requires us to recognize separately from goodwill the assets acquired and the liabilities assumed at their acquisition date fair values.

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Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to our consolidated statements of operations.

GOODWILL AND INDEFINITE LIVED INTANGIBLES – Goodwill totaled $710.7 million and $679.5 million as of December 31, 2024 and December 31, 2023, respectively.

Indefinite lived intangible assets were $13.0 million as of December 31, 2024 and $9.0 million as of December 31, 2023 and are associated with the value of certain trade name intangibles and IPR&D.

Goodwill, trade name intangibles and IPR&D are recorded as a result of business combinations.

When we determine the carrying value of goodwill exceeds its fair value, an impairment charge would be recognized which should not exceed the total amount of goodwill allocated to that reporting unit.

We determined fair values for each of the reporting units using the market approach, when available and appropriate, or the income approach, or a combination of both.

We assess the valuation methodology based upon the relevance and availability of the data at the time we perform the valuation.

If multiple valuation methodologies are used, the results are weighted appropriately.

We tested goodwill, trade name and IPR&D for impairment on October 1, 2024.

In September 2023, we determined that an IPR&D indefinite-lived intangible asset related to Aidence's Ai Veye Lung Nodule and Veye Clinic would not receive FDA authorizations for sale in the US without a new submission and additional expenditures for rework in the original projected timeline.

The additional expenditures, delay and reduction of US sales affected the estimated fair value of the related IPR&D intangible asset and resulted in impairment charges of $3.9 million within Cost of Operations in our Consolidated Statements of Operations .

Our annual impairment test as of October 1, 2024 noted no other impairment, and we have not identified any indicators of impairment through December 31, 2024.

Recent Accounting Standards

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What changed 10-K

Item 7. Management’s Discussion and Analysis