Lumexa Imaging (NASDAQ:LMRI) reported higher third-quarter revenue and a return to profitability as growth in advanced imaging procedures helped lift results across its outpatient network and health system joint ventures.
The company narrowed its full-year adjusted EBITDA guidance and raised its adjusted earnings-per-share outlook, primarily because of a lower assumed tax rate. It also said it expects free cash flow to equal at least 30% of adjusted EBITDA for 2026, above its previous expectations.
Adjusted EBITDA increased to $62.6 million from $59.1 million a year earlier and rose 11% from the second quarter. The adjusted EBITDA margin was 23.0%, up from 22.8% a year earlier.
Advanced Imaging and Joint Ventures Drive Growth
Systemwide advanced modality volumes grew 8.1% year over year and represented a record 38.2% of total volume, an increase of 145 basis points. Chief Executive Officer Caitlin Zulla said PET volume rose 19.5% from a year earlier.
Chief Financial Officer Tony Martin said advanced procedures generally reimburse at three to four times the rate of routine procedures. Total systemwide volume increased 4%, while outpatient systemwide revenue rose 7.7% and revenue per scan increased 3%.
Martin said the growth in revenue per scan reflected the shift toward advanced procedures and modest increases in contracted payer rates, partly offset by payer mix changes in a few markets.
Equity in earnings of unconsolidated affiliates, representing Lumexa’s ownership share of income from joint venture sites, increased $4.9 million to $22.8 million. Martin attributed the strength in part to advanced modality growth and higher revenue per scan at joint venture locations.
Consolidated revenue and adjusted EBITDA cover different parts of the business: Revenue reflects wholly owned outpatient sites and the professional services segment, while adjusted EBITDA also includes Lumexa’s pro rata share of joint venture performance.
2026 Outlook and Cash Flow
Lumexa narrowed its adjusted EBITDA guidance to $236 million to $240 million from $235 million to $241 million, maintaining the $238 million midpoint. It reiterated consolidated revenue guidance of $1.045 billion to $1.097 billion.
The company raised its adjusted EPS forecast to $0.86 to $0.90 from $0.71 to $0.77. Martin said the increase was primarily driven by a lower assumed effective tax rate, rather than a change in operating assumptions.
Third-quarter free cash flow was $20.6 million, compared with negative $1.8 million a year earlier. Operating cash flow rose by $23 million to $34.8 million, helped by higher earnings and lower debt-related interest payments.
Martin said joint venture distribution timing, taxes and working capital swings had been more favorable than the company anticipated earlier in the year. Lumexa spent $14.2 million on capital expenditures during the quarter and plans to invest modestly more in the second half than previously anticipated.
The company ended September with $90 million in cash and cash equivalents. Net leverage fell to 3.5 times from 5.6 times a year earlier.
Expansion and Reimbursement Outlook
Lumexa expanded its joint venture with Advocate Health into Illinois, a new state for the company. Zulla said Lumexa now has 10 health system joint ventures and is discussing potential partnerships with other health systems.
The company said it opened three new centers in early November in Texas, South Carolina and North Carolina, bringing its total for the year to five. It maintained its goal of eight to 10 new center openings in 2026. Martin also said Lumexa had closed a couple of centers during the quarter as part of its approach to managing its network.
Zulla said a finalized 2027 federal site-neutral reimbursement provision could encourage health systems to expand lower-cost freestanding imaging capacity. Lumexa estimates the change adds a $44 billion hospital outpatient imaging opportunity to its existing $33 billion market, though Zulla said the effect would unfold over years rather than quarters.
On the 2027 Medicare Physician Fee Schedule, Zulla said Lumexa’s preliminary analysis points to an approximately 1% decline in Medicare reimbursement after adjusting for joint venture and profit-sharing structures and the effect of bonus payments. Medicare fee-for-service and Medicare Advantage together represent about 20% of revenue, the company said.
With nearly all 2027 commercial negotiations complete, Lumexa expects the final rule to have a limited effect on its overall reimbursement outlook. Martin said the company plans to provide formal 2027 guidance in March.
About Lumexa Imaging (NASDAQ:LMRI)
Lumexa Imaging operates outpatient diagnostic imaging centers that provide radiology services to patients, referring physicians and healthcare providers. Its services include imaging used to help diagnose and monitor a range of medical conditions. The company offers diagnostic procedures such as MRI, CT, PET/CT, mammography, ultrasound and X-ray through its imaging centers and affiliated radiology practices. Lumexa serves communities across the United States, providing an outpatient option for medical imaging outside of a hospital setting.
