By M. Marin
NYSE: AMS
READ THE FULL AMS RESEARCH REPORT
As O&O footprint expands, expect it can help smooth out lumpiness of quarterly results over time
American Shared Hospital Services (NYSE: AMS), which provides and operates advanced radiation therapy treatment systems to treat cancer patients, reported 4Q25/2025 results last week. Results were mixed, in our view. In our view, results highlighted the benefits of AMS’s transition from a company that primarily leases expensive cancer treatment medical equipment to one that also owns and operates (O&O) the equipment itself, but also mirrored the pressure on revenue when leasing contracts expire, and/or equipment is temporarily out of service for upgrades.
AMS ended 2025 with eight domestic medical equipment leasing agreements and six direct patient care service centers. The O&O centers operate in the U.S. and Latin America. The company intends to pursue growth opportunities for both its equipment leasing segment and direct patient care services unit. The direct patient segment has recorded strong growth, up 23.7% for the full year. Direct patient services segment revenue benefited from the company’s 2024 acquisition of treatment centers in Rhode Island and the July 2024 opening of its radiation therapy facility in Puebla, Mexico. We believe the strong contribution of the Direct patient services sector reflects the benefits of the company’s recent growth initiatives and, over time, can help smooth out lumpiness of quarterly results.
AMS views 2025 as a transitional year of investing to set the stage for growth in 2026 & beyond
The upgrade of the O&O Gamma Knife center in Lima, Peru to the Esprit platform interrupted operations in that facility for a period. Nevertheless, the upgrade brings newer generation technology to the center and is expected to expand the company’s treatment capabilities there to support future growth.
With the other O&O facilities operating throughout the full year, LINAC treatment sessions nearly doubled in 2025 (up 92% year-over-year) to 28,147, compared with 14,662 in 2024. With LINAC treatment volumes strong, 2025 LINAC revenue was $11.5 million, which represents a 35.4% year-over-year advance. LINAC revenue comprised 40.9% of total revenue and contributed to revenue remaining relatively stable at $28.1 million, compared with $28.3 million in 2024, despite the expiration of leases and upgrade of an O&O center.
The company also secured a seven-year lease extension with Orlando Health for its PBRT system. AMS’ legacy business is the provision of costly advanced radiation cancer treatment equipment under a leasing model. Reflecting its roughly 40 years of operation, the company has developed a partnership model with medical centers and also has relationships with multiple original equipment manufacturers (OEMs) in this sector to support this business model. The partnership between AMS and Orlando Health has been in place for more than two decades. AMS believes this underscores the value of its Leasing model services and long-term relationships with medical centers. We view this lease extension as a positive that is expected to contribute to aggregate revenue and supports the company’s view that its focus on customer care and service can facilitate AMS’s ability to renew and enter into new lease agreements.
Planned construction of two new treatment centers in Rhode Island is a key growth initiative…
One of the company’s key growth initiatives is the planned construction of a PBRT center in Johnston, Rhode Island. We view this project and another planned Rhode Island center positively, particularly given the general lack of patient access to PBRT care. AMS recently obtained Certificate of Need (CON) approvals for a fourth treatment center in Bristol, Rhode Island, and a proton beam radiation treatment (PBRT) center in Johnston, Rhode Island. AMS acquired property in Bristol, Rhode Island, in 1Q25 where it expects to construct the linear accelerator facility.
With the RI centers located near Rhode Island hospital campuses, the company also expects to benefit from synergies as it works on developing new sites in Rhode Island. AMS’s new business lines and revenue streams are aimed at diversifying revenue and markets of operation, fueling growth, and expanding its product portfolio.
… that is expected to strengthen AMS’s footprint within a key market
The expansion strategy is also aimed at strengthening AMS’s footprint within selective key markets. Given its strong relationships within the state of Rhode Island, the company believes it will benefit from synergies among its various facilities there. For example, the company expects to leverage its network to facilitate staffing of medical professionals at its O&O sites once construction is completed.
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