American Shared Hospital Services ((AMS)) has held its Q2 earnings call. Read on for the main highlights of the call.
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American Shared Hospital Services’ recent earnings call revealed a mixed sentiment, characterized by strong sequential growth in revenue and EBITDA, primarily fueled by strategic expansion in direct patient services and international markets. Despite these positive developments, the company faced challenges such as declines in equipment leasing revenue and treatment volumes, resulting in a net loss. Nevertheless, the company expressed confidence in its long-term growth strategy.
Sequential Revenue Growth
The company reported a 16% sequential increase in revenue for the second quarter of 2025, driven by the expansion of the Direct Patient Services segment and international business development initiatives. This growth highlights the company’s strategic focus on diversifying its revenue streams and expanding its market presence.
Double-Digit Revenue Increase in Direct Patient Services
Revenue from Direct Patient Services reached $3.5 million for Q2 2025, marking a 12% increase compared to Q2 2024. This growth was largely attributed to the acquisition in Rhode Island and the initiation of new operations in Puebla, Mexico, underscoring the company’s successful expansion efforts.
Strong Adjusted EBITDA Growth
The company’s adjusted EBITDA for Q2 2025 was $1.7 million, up from $949,000 in Q1 2025. This reflects strong cost controls and reliance on treatment volumes for growth, indicating effective financial management amidst operational challenges.
Successful Expansion in International Markets
The international segment emerged as a significant growth area, with centers in Peru, Ecuador, Puebla, and a new center planned in Guadalajara, Mexico. This expansion is a testament to the company’s strategic focus on international markets as a key driver of future growth.
Strategic Partnerships and Staffing Achievements
The company secured a professional services agreement with Brown University Health and recruited three radiation oncologists for its Rhode Island centers. These strategic partnerships and staffing achievements are expected to enhance the company’s service offerings and operational capabilities.
Decrease in Equipment Leasing Revenue
Revenue from the Equipment Leasing segment decreased to $3.6 million from $3.9 million in Q2 2024, with declines in Gamma Knife and proton beam therapy revenues. This decline highlights the challenges faced in this segment, impacting overall revenue performance.
Year-over-Year Decline in Gamma Knife Procedures
The number of Gamma Knife procedures decreased by 22% compared to Q2 2024, primarily due to the expiration of two contracts. This decline underscores the challenges in maintaining procedure volumes and highlights the need for strategic adjustments.
Operating Income and Net Loss
Q2 2025 saw an operating income loss of $544,000 compared to a loss of $1,000 in Q2 2024. The net loss attributable to the company for Q2 2025 was $280,000, a significant shift from a net income of $3.6 million in Q2 2024, reflecting the financial challenges faced during the quarter.
Gross Margin Decline
The gross margin for Q2 2025 decreased by 34% compared to Q2 2024, reflecting increased operational expenses and lower treatment volumes. This decline indicates the financial pressures the company is navigating amidst its growth initiatives.
Forward-Looking Guidance
Looking ahead, the company remains optimistic about its long-term growth trajectory and profitability, supported by a strong balance sheet with cash and cash equivalents at $11.3 million. The company is focused on ongoing projects, including a new radiation therapy center in Guadalajara, Mexico, set to start operations by the end of the year, and two new centers in Rhode Island. These initiatives, along with strategic partnerships and recruitment efforts, are expected to drive future growth.
In conclusion, American Shared Hospital Services’ earnings call reflected a complex landscape of growth and challenges. While the company achieved significant revenue and EBITDA growth through strategic expansions, it also faced notable declines in certain segments. Despite these hurdles, the company remains confident in its strategic direction and long-term growth potential, making it a company to watch for investors interested in the healthcare sector.