FONAR (FONR) Q1 2026 earnings summary

Executive summary

• Net income for Q1 FY2026 was $2.7M on revenues of $26.0M, down 33% and up 4% year-over-year, respectively, with operating income declining to $3.2M from $4.6M.

• Revenue growth was driven by increases in management and other fees, product sales, and service and repair fees, but costs and SGA expenses rose at a higher rate, impacting profitability.

• A non-binding proposal was received to take the company private, with ongoing negotiations and no assurance of completion.

• The company’s primary revenue and profit source is its diagnostic imaging management subsidiary, which managed 44 MRI scanners.

• Cash and cash equivalents plus short-term investments totaled $54.3M at quarter-end, down from $56.3M at June 30, 2025.

Financial highlights

• Revenues increased 4.3% year-over-year to $26.0M, while costs and expenses rose 12.2% to $22.8M.

• Operating income decreased to $3.2M from $4.6M year-over-year; net income attributable to shareholders was $2.3M, down from $3.1M.

• Basic and diluted EPS for common stockholders were $0.34, compared to $0.47 and $0.46, respectively, in the prior year.

• FONAR segment revenues rose 14% year-over-year to $2.5M; HMCA segment revenues increased 3% to $23.5M.

• Net cash flow from operating activities was $1.7M, flat year-over-year.

Outlook and guidance

• Management expects to complete installation of a new high field scanner and open a new location in Long Island, NY in FY2026, with capital expenditures of approximately $2.4M planned.

• Plans include adding a second MRI at an existing center and opening a new MRI center in Nassau County during the fiscal year.

• Ongoing search for new locations to expand the MRI network in New York and Florida.

• The company believes existing cash balances and internal cash generation are sufficient to fund operations and capital needs for at least the next twelve months.