FONAR Corporation Reports Decline in Revenue and Net Income for Third Quarter

FONAR Corporation reported its financial results for the third quarter and nine months ended March 31, 2026, revealing a decline in both revenue and net income compared to the same period in the previous fiscal year. For the three months ended March 31, 2026, the company generated total revenues of $26.5 million, down from $27.2 million in the prior year, while net income decreased to $2.3 million from $3.1 million. For the nine-month period, revenues increased slightly to $78.1 million from $77.1 million, but net income fell to $7.5 million from $9.3 million. The decrease in net income was attributed to rising costs and increased competition, particularly affecting patient fee revenue.

The company experienced a notable increase in management and other fees, which rose by $1.5 million to $47.9 million for the nine months ended March 31, 2026. However, patient fee revenue declined by approximately $1.3 million, reflecting challenges in the competitive landscape, particularly in Florida. The total costs and expenses for the nine months increased by 4.5% to $69.4 million, outpacing revenue growth and contributing to the decline in operating income from $10.7 million to $8.6 million.

FONAR's operational metrics showed an increase in the number of scans performed at its facilities, rising to 165,612 from 160,844 in the previous year, attributed to enhanced marketing efforts and operational efficiencies. The company currently manages or owns 45 MRI scanners, with 27 located in New York and 18 in Florida. Despite the challenges, FONAR continues to focus on expanding its market presence and improving service capabilities.

Strategically, FONAR is in the process of a proposed merger with FONAR, LLC, which is controlled by the company's CEO, Timothy Damadian. The merger agreement, signed on December 23, 2025, stipulates that shareholders will receive cash for their shares, with the transaction subject to various conditions, including stockholder approval. A special meeting is scheduled for May 28, 2026, to vote on the merger. The company has incurred significant costs related to the merger, which could impact its financial position if the transaction does not close.

Looking ahead, FONAR's management remains cautious about the competitive landscape and reimbursement rates, particularly in light of recent legislative changes affecting the healthcare industry. The company plans to continue investing in its facilities and technology to enhance service delivery and maintain profitability. However, the ongoing challenges in the market, including inflation and reduced reimbursement rates, may pose risks to future performance.