On August 9, RadNet (NASDAQ:RDNT) posted second-quarter revenue of $622.7 million, a 25.0% jump from $498.2 million a year earlier, and raised its full-year outlook for the second time in three months. The imaging network also grew profit at a slower clip than sales, and a six-month net loss widened even as the headline numbers hit records. The gap between the top-line story and the bottom-line story is where this quarter gets interesting.
A Growth Engine Running Hot
RadNet’s imaging centers are doing more of the expensive scans that pay better. Advanced imaging, which covers MRI, CT and PET/CT, climbed to 29.9% of total procedural volume in the second quarter of 2026, up 238 basis points from 27.5% a year earlier, and aggregate advanced imaging volume rose 21.2% year over year. That mix shift helped push the Imaging Center segment’s adjusted EBITDA margin to 16.1%, a 17 basis point improvement from the second quarter of 2025. The Digital Health arm is growing even faster. Its revenue rose 56.5% to $32.4 million in the quarter, and annual recurring revenue nearly doubled, climbing from $53.5 million at June 30, 2025 to $105.5 million at June 30, with external customers now making up roughly 63% of that segment’s revenue.
New signed business totaled about $21 million in the quarter and $37 million for the first half of the year. RadNet is also leaning on hospital partnerships to expand, with 157 of its 442 locations now held in health system joint ventures, including a new five-center venture with Trinity Health’s Saint Alphonsus Health System in Boise announced during the quarter. Management responded to the momentum by raising full-year Imaging Center revenue guidance to $2.37 billion to $2.42 billion and adjusted EBITDA guidance to $345 million to $358 million, both increases from the ranges set just after the first quarter.
Profit Growth Lagging The Headlines
The record-setting language in RadNet’s release covers up a rougher profit picture. Total company net income fell to $7.5 million in the second quarter of 2026 from $14.5 million a year earlier, and adjusted earnings per share slipped to $0.29 from $0.34, even as revenue grew by a quarter. Digital Health’s own profitability moved the wrong direction too, with segment adjusted EBITDA dropping 27.2% to $2.5 million as the company poured money into sales, marketing and implementation staff to chase that ARR growth. Zoom out to the first six months of the year, and the picture gets worse: RadNet posted a net loss of $25.9 million, wider than the $23.5 million loss in the same period of 2025.
Part of that reflects one-time items scattered through the quarter, including $6.6 million in acquisition costs, a $3.4 million loss tied to debt refinancing, and $6.8 million of intangible amortization from recent Digital Health deals. RadNet also nudged its cash interest expense guidance higher, to $48 million to $53 million from $45 million to $50 million, and its diluted share count grew from 75.5 million to 78.7 million year over year, a dilution headwind for per-share results even as the underlying business expands.
Hedge Funds And Skeptics Diverge
Hedge fund ownership of RadNet fell from 30 funds to 22 funds between the two most recent quarters tracked, a pullback that runs counter to the record revenue and raised guidance in the release. Short interest, meanwhile, sits at 14.56% of the float, a level that points to a sizable bear camp still betting against the stock. That combination suggests that the market is not fully convinced the growth story translates cleanly to the bottom line.
Where This Leaves Investors
RadNet’s release makes a clean case for a company still early in converting scan volume growth and a fast-growing software business into scale. But the same release shows adjusted earnings per share falling, a widening six-month loss, and rising interest costs, all while dilution creeps higher. For the growth story to win out, Digital Health’s investment spending needs to turn into durable margin rather than a permanent cost of chasing ARR.
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