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Good morning, and thank you for joining us today for Concentra Group Holdings Parent Inc. earnings conference call to discuss the first quarter 2026 results. Speaking today are the company's Chief Executive Officer, Keith Newton, and the company's President and Chief Financial Officer, Matthew DiCanio. Management will give you an overview and then open the call for questions. Before we get started, we would like to remind you that this conference call may contain forward-looking statements regarding future events or the future financial performance of the company, including without limitation, statements regarding operating results, growth opportunities, and other statements that refer to Concentra's plans, expectations, strategies, intentions, and beliefs. You are hereby cautioned that these forward-looking statements may be affected by the important factors, among others, set forth in Concentra's earnings release and in reports that are filed or furnished with the SEC.

Consequently, actual operations and results may differ materially from those discussed in the forward-looking statements. These forward-looking statements are based on information available to management of Concentra today, and the company assumes no obligation to update these statements as circumstances change. At this time, I would like to hand the conference call over to Mr. Keith Newton.

Thanks, operator. Good morning, everyone. Welcome to Concentra's first quarter 2026 earnings call. We have continued our momentum from 2025 and are pleased with a strong start to the year. Total company revenue was $569.6 million in Q1 2026 compared to $500.8 million in Q1 of the prior year, representing 13.7% growth year-over-year. Excluding contributions from the Nova and Pivot acquisitions in both current and prior year, where applicable, revenue was $520.3 million in Q1 2026, resulting in a 6.3% increase over the prior year. Total patient visits increased 6.7% to an average of more than 54,000 visits per day in the first quarter.

Our workers' compensation visits per day increased 9.6%, and employer services visit volume increased 4.8% relative to prior year. Excluding the impact from the acquisition of Nova, total visits per day increased 2.9% in the first quarter. Workers' compensation visits increased 6.2%, and employer services increased 0.7%. We believe the stronger performance in our workers' compensation business has been a result of a combination of events. Most importantly, we have seen the continued improvement of our patient satisfaction with the experience they have in our centers, along with the implementation of new technologies to help strengthen the account management and retention of our existing employer customers, along with enhanced prospecting efforts for new employer customers.

The service level metrics we track at our centers, including average patient time in the centers, Google ratings, and patient Net Promoter Scores, are all at or close to historical best. Additionally, Q1 2025 was the easiest comp of all the quarters in 2026 due to a relatively dry, mild winter last year compared to more ice and snow winter events this year that lead to more slips and falls and resulting injuries. On the rate front, revenue per visit grew 3.1% during the first quarter relative to prior year. The growth was driven by a 2.0% increase in workers' compensation and a 2.7% increase in employer services revenue per visit. The California workers' compensation rate increase took effect on March 1st. We anticipate upside to the workers' compensation rate growth over the remainder of the year.

Adjusted EBITDA was $120.7 million in the quarter versus $102.7 million in the same quarter of the prior year, or a 17.6% increase. Adjusted EBITDA margin increased 69 basis points from 20.5% in Q1 2025 to 21.2% in Q1 2026. With our strong Q1 performance, our trailing 12-month Adjusted EBITDA is now $450 million, up $85 million or 23% from our trailing 12-month Adjusted EBITDA at the time of our IPO in July of 2024. Adjusted net income attributable to the company was $51.5 million, and Adjusted earnings per share was $0.40 for the first quarter 2026, representing strong growth over prior year of $42.2 million and $0.33, respectively. Quick update on 2025 acquisitions.

Regarding our March 2025 acquisition of Nova, we have completed our integration efforts and captured all the synergies that we expect to capture. We are comfortably ahead of where we anticipated we should be approximately one year into this deal, and we are tracking well towards the original objective of reaching a transaction multiple below 7.5x Adjusted EBITDA. With our June 2025 acquisition of Pivot, we have a similar story. Integration is complete, performance is strong, and we are ahead of our original estimate of transaction multiple of below 9x Adjusted EBITDA.

Regarding other growth efforts during the quarter, we added three centers in California via acquisition and one de novo center outside of Atlanta. On the de novo front, we continue to expect to open a total of eight to 10 centers this year, with planned locations in Arizona, Idaho, Missouri, Illinois, Virginia, South Carolina, and Florida. With respect to additional small bolt-on M&A, we have several opportunities actively underway and look forward to sharing more detail in the future. Finally, I'd like to take a moment to recognize and thank Dr. John Anderson, our Chief Medical Officer since 2014, who, as previously disclosed, has announced his well-deserved retirement at the end of the year. Known affectionately across Concentra as Dr. A, he has been a foundational part of our organization for nearly five decades, including his time with predecessor companies.

Over his career, Dr. Anderson has helped shape their mission and vision and values, built a comprehensive clinical orientation and training program that supports long-term success in Occupational Health, embedded a strong patient-first mindset into our daily operations, and developed our best-in-class clinical model. His decades of service, leadership, and clinical expertise have been invaluable, and we are deeply grateful for the lasting impact he has made on our organization. We're fortunate to have a strong pipeline of both internal and external candidates, and we'll be conducting a thorough evaluation process with the expectation of filling the role in the coming months. To support a smooth transition, we expect to enter into a consulting agreement with Dr. Anderson for a period of time. Now, I will turn it over to Matt to provide additional details on our financial results for the quarter and updated outlook for 2026.

Thanks, Keith. Good morning, everyone. In our Occupational Health operating segment, total revenue of $519.9 million in Q1 2026 was 9.9% higher than the same quarter of the prior year. Total visits per day increased 6.7% over the same quarter of the prior year. Revenue per visit increased 3.1% from $147 in Q1 2025 to $151 in Q1 2026. Workers' compensation revenue of $337.7 million in Q1 2026 was 11.8% higher than prior year.

Workers' compensation visits per day increased 9.6% from prior year during the quarter, and workers' compensation revenue per visit increased 2% from $209 in Q1 2025 to $213 in Q1 2026. Employer services revenue of $172.4 million increased 7.6% in Q1 2026 from prior year. Employer services visits per day increased 4.8% from same quarter prior year. Finally, employer services revenue per visit increased 2.7% from $94 in Q1 2025 to $97 in Q1 2026. As with past quarters, here are the same stats for Q1, excluding the impact of Nova to help isolate core business from our Q1 2025 acquisition.

This is the last quarter we plan to break out Nova, as its contribution will be fully embedded in both Q2 2025 and Q2 2026 P&L. Total revenue within the Occupational Health center operating segment was $487.8 million in Q1 2026, a 5.7% increase over the prior year. Total visits per day increased 2.9% over the same quarter prior year, and revenue per visit increased 2.7% from $147 in Q1 2025 to $151 in Q1 2026. Work comp revenue of $317.8 million in Q1 2026 was 7.5% higher than prior year. Work comp visits per day, excluding Nova, were 6.2% higher than prior year during the quarter.

Work comp revenue per visit was 1.3% higher than prior year during the quarter. Employer services revenue of $160.7 million in Q1 2026 increased 3.2% from prior year. Employer services visits per day, excluding Nova, were 0.7% higher than prior year during the quarter. Employer services revenue per visit was 2.4% higher than prior year during the quarter. I'd like to take a moment to reemphasize an important distinction in our business mix. Our workers' compensation segment generates significantly higher revenue per visit and contribution margin than our employer services offering. Employer services remains an important part of our service offering, and it often is the initial point of entry with employer customers, but those services are typically completed at much lower contribution margins.

As you can see, workers' compensation is the primary engine of our business, accounting for approximately 2/3 of our total center revenue. As a result, in a low hire, low fire macroeconomic environment like the one we're experiencing today, employer services can show muted trends while the company continues to perform well overall. While this may be obvious to some, we felt it was important to underscore this dynamic given the significant growth disparity between employer services and workers' compensation visits this quarter. Moving on from our Occupational Health centers, our onsite health clinics operating segment had another strong quarter with reported revenue of $37.2 million. In Q1 2026, a 125% increase from the same quarter of prior year. This was largely driven by the acquisition of Pivot Onsite Innovations in Q2 2025.

Excluding the impact from that acquisition, our On-Site Health Clinics operating segment revenue grew 20.9% year-over-year during the quarter. On-Site Health Clinics total revenue is nearing a run rate of $150 million, up from $64 million in 2024. We are encouraged by the continued strong organic growth in this business. We have a robust pipeline of opportunities across both occupational medicine and advanced primary care, supported by a highly capable team following last year's Pivot acquisition that is well-positioned to execute on our growth strategy. We remain excited about this segment given the meaningful cross-selling opportunities within our existing customer base and expanding margin profile, the direct employer-paid revenue model, and the growing and sizable market opportunity. We estimate the serviceable addressable market to be between $15 billion and $20 billion, with only a small portion currently penetrated.

This significant white space, combined with our best-in-class service offering, gives us strong conviction in the long-term potential of the business. Finally, other businesses, which include telemedicine, our pharmacy operations, and other Occupational Health-related services businesses, generated $12.5 million in the quarter, a 10.4% increase against the same quarter of prior year. We are impressed by the team's execution in these businesses and the opportunities that exist to continue to grow at attractive growth rates. Moving on to expenses. Cost of services was $399.1 million, or 70.1% of revenue in Q1 2026, an improvement from 71.3% of revenue for the same quarter prior year. We continue to realize incremental improvements in staffing efficiencies within the centers, resulting in nice gains in center-level margin.

Our total general and administrative expenses were $55.3 million, or 9.7% of revenue in Q1 2026, compared to 9.3% of revenue in the same quarter prior year. Excluding items that are added back for the purpose of calculating Adjusted EBITDA, including equity comp expense, one-time Select separation costs, and M&A transaction costs, G&A expense was $50.2 million for the quarter, or 8.8% of revenue, compared to 8.2% of revenue in the same quarter prior year. The increase is predominantly driven by planned additions to our team and IT infrastructure resulting from our separation from Select. As a result, Adjusted EBITDA margin increased from 20.5% in Q1 2025 to 21.2% in Q1 2026.

To quickly comment on the separation, we continue to track very well and have now hired more than 95% of the total expected new FTEs. Over the next month or so, we will complete several significant back-office technology separation milestones, resulting in functional separation from Select by the end of this summer, well ahead of the November 2026 deadline. To touch on cash flows. In Q1, we generated $21 million in operating cash flow. This compares to $11.7 million in the first quarter of 2025, with a year-over-year increase largely resulting from higher earnings in Q1 2026. Investing activities used $14.8 million of cash in the first quarter and was driven by the acquisition of three net centers in California, as well as investments in de novo centers, relocations, renovations, and maintenance, as well as IT investments.

Free Cash Flow, or cash flow from operations less cash flow from investing activity, excluding business combinations, totaled $9.9 million, an increase from prior year first quarter Free Cash Flow of negative $4 million. This was driven by a combination of higher cash flow from operations and lower capital spend in Q1 2026. Financing activities during the quarter resulted in net cash outflows of $24.4 million as we repurchased approximately 661,000 shares totaling $15 million and paid $8 million in dividends. At the end of the first quarter, we had approximately $65 million remaining under the repurchase program authorized by the board of directors. We ended the quarter with a total debt balance of $1.58 billion and a cash balance of $61.7 million.

Our net leverage ratio per our credit agreement at the end of March was 3.4x, down slightly from year-end. Q1 is typically our lowest Free Cash Flow quarter, so we expect to see an acceleration in the decline in our leverage ratio over the remainder of this year. Finally, we are pleased to announce the continuation of our dividend this quarter with Concentra's board of directors declaring a cash dividend of $0.0625 per share on May 5, 2026. The dividend will be payable on or about June 9, 2026, to stockholders of record as of the close of business on May 19, 2026. Moving on to 2026 guidance.

Given the strong start to the year, we are revising our 2026 guidance, including increasing the low and high end of our revenue target range by $25 million-$2.275 billion-$2.375 billion. The low and high end of our Adjusted EBITDA range by $10 million-$460 million-$480 million. The low end of our Free Cash Flow target range by $15 million and the high end by $10 million-$215 million-$235 million. Our CapEx range of $70 million-$80 million remains unchanged. With respect to net leverage, given the increase to both Adjusted EBITDA and Free Cash Flow guidance, we expect to end the year comfortably below 3x.

Overall, a great start to the year, and our team is excited about initiatives we have in place to continue our trajectory. That concludes our prepared remarks, and we thank everyone for their time today. We'd like to turn it back to the operator to open the call for questions.

Certainly, at this time we will be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line question queue. You may press star two if you would to remove your question from the queue. For participants using a speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment before we call for questions.

Your first question for today is from Ann Hynes with Mizuho.

Great. Good morning, and thank you. Depending on who you look at, you beat consensus-adjusted EBITDA estimates by 10%-11%. What was your internal beat versus what consensus was? What surprised you the most, on the upside beat? Thanks.

Yeah. Good morning, Ann Hynes. Hey, it's Matthew. I think, you know, when you look at our results, what really drove the results in Q1 was the work comp visits and also our cost of services and cost control. Our teams did a great job from a staffing perspective across the centers, and the visit volume was higher than expected. You know, we're not necessarily gonna comment on our internal budget, but those were the two main drivers of our performance in Q1.

I know in your prepared remarks, you talked about weather. Was weather actually a positive impact in the quarter? If it was, can you quantify how much it was?

Ann, this is Keith. Weather can be both negative and positive to us. We think that in this quarter it was a net positive. In our business, ice and snow, dependent upon the extent you get it, how long it's around, can create lots of slips and falls. You know, the individuals that are coming to our centers, typically, a lot of them are having to work during those time frames, either maintenance workers, street workers, whatever. We see quite a bit during the wintertime, the slips and falls. When you look back at 2025, it was a relatively mild, dry winter. Our Northeast region, when you look at them geographically, was by far the region that was most up over the prior year, so indicative of weather.

We certainly had center days where we had closures. We've always been extremely aggressive about limiting that as much as possible because, you know, we're here to keep America working. We are very aggressive about getting our centers open. There's people out there needing care as a result of those injuries. We think overall, based on kind of the extent of the weather this year compared to last year, our ability to minimize the number of days our centers are actually closed, that overall it was a net gain.

All right, great. Thank you.

Your next question for today is from Justin Bowers with Deutsche Bank.

Hi, good morning, everyone. Keith, just on that note of keeping America working, can you give us your perspective on economic activity based on what you're seeing with your customers and some of the prospecting that you mentioned Concentra is doing? Part two of that would just be, how are those trends correlating with the BLS and JOLTS data? I know those relationships have decoupled from historical patterns before, and just curious if you're seeing any differing trends.

Yeah. You know, I think coming out of last year and the early part of this year, it's kind of been, as Matt mentioned earlier, you know, the continued, no hire, no fire type situation. From a hiring perspective, we've kind of seen that early in the year. Now, it seems like things are starting to accelerate a little bit. We're optimistic about that. I believe we've had the first two months in a row, including this month, with net job gains. That definitely is a positive for the future. The second half of the question.

Yeah. I would just add a couple comments on the economic data. We saw some positive news today. Total employment continues to grow, especially blue-collar, which is the patients that walk in our centers every day. There's less layoffs compared to prior year. You know, we're seeing stability, obviously, with our employer services visit volume. You know, it's still below historical averages. You know, good news for us is total employment continues to grow, and clearly we're gaining market share within the categories that we compete.

Yeah, the quit rates is usually indicative of a growth in our employer services. That still remain relatively stable or below norm, so we haven't really seen much there. It seems to be more just straight new job growth that we're starting to see in the last, say, 60 days or so. I don't know if we would really change our opinion as far as what we've said in the past as far as the disconnect a little bit with what's been out there, but we're optimistic it starts to narrow. You know, and again, work comp is typically indicative of what's going on with total employment, and we're seeing blue collar continue to trend up.

Understood. Thank you. Appreciate it.

Your next question is from Ben Hendrix with RBC Capital Markets.

Hey, thank you. I may have a bad connection, but I want to try to get this in here. Just any comments on your Free Cash Flow guidance. Seems like the low end came up higher than EBITDA, but you still continue to have really strong Free Cash Flow conversion. Any thoughts on time dynamics through the capital or other considerations there? Thanks.

Yeah, sure. Good morning, Ben. We raised our Free Cash Flow guidance, obviously raised our EBITDA guide. From a profit standpoint, we're moving higher. The CapEx was a little lower in Q1, we still expect it to be between $70 million-$80 million for the full year. Really, we're just pushing up that guide there, equivalent to what we saw from an EBITDA standpoint.

Thank you.

Yep.

Your next question is from Stephen Baxter with Wells Fargo.

Hi, this is Mitchell on for Steve. Just on the rate side in workers' comp, I know you mentioned California rate taking effect in March, just trying to understand what led to the revenue per visit being below your typical rate increase in Q1. Are you still on track for the 3% for the year? Thank you.

Yeah, sure. I'll take that. Overall, revenue per visit was up 3.1%. You'll see in our investor deck, work comp was up 2%, and employer services was up 2.7%. There's some differences there because of visit mix. That's why the overall revenue per visit is higher than the individual components with work comp visits growing faster than employer services in Q1. Keith mentioned California rate increase went into place on March 1st. We didn't have a couple months of that outsized rate increase, but that is now in effect, and we'll see it for the rest of the year.

There was some visit mix within the workers' comp rate growth, so it would have been higher than 2%, if the visit mix was consistent with prior periods. Maybe 2.3%, 2.4%. Overall, we are on track. We had some more updates in April, and we expect 3%, potentially higher for the full year.

Yeah, the 3% that we've quoted in the past is really what we've seen on average through the years. There's going to be some a little higher, like last year, some a little lower. Again, this year we feel pretty good about where it's going to end up, just some timing of when. We're also, as Matthew DiCanio mentioned, seeing a little bit of mix going on with it also.

Great. Thank you.

Your next question for today is from Joanna Gajuk with Bank of America.

Hey, this is Joaquin. I got on for Joanna. I just wanted to ask. Any update on the New York rates and when do you expect to have a final decision if you don't have one already? Once you know the rates, how quickly do you plan to expand in New York?

I'll take that one. No new update. Not sure when we're going to hear something, but anticipate it will happen this year and that January 1st, something will go into play. Right now, as we mentioned in the past, it's focused on the E&M codes, the evaluation and management codes that doctors use as far as coding level of service, and that PT was not adjusted at all. It definitely took a step forward. It's in an area where we could consider doing something now, albeit still not as attractive as what we want and what we see in other states. We'll continue to work on that. We can move pretty quickly. We've done a lot of analysis in the state.

We know where we want to be, we know what we want to do. We also have a pretty good pipeline already built, so we can be selective of when we start and when we pull the trigger there in New York. In the meantime, we're going to continue to execute on the de novos that we talked about earlier that are already in the pipeline this year. We've got a robust pipeline built next year for additional de novos and small organic M&A out there. There's certain things we'll look at as we get further out in the year that could be a little bigger than those things.

We've tabled those for now, as we've mentioned in the past, as we get through the final decoupling from Select with here in the near future. We continue to delever a little bit more.

Thanks. Just touching up again on the economic activity. You've always highlighted onshoring as a tailwind for your business. What industries do you mainly have your eyes on? What portion of your de novos are targeted within this theme? Thanks.

Well, as far as onshoring, manufacturing naturally is gonna be the fit with what we do. We'll continue to watch what's gonna happen there. As far as onshoring manufacturing, that's gonna take some time because typically that requires some sort of capital deployment, so that's not gonna necessarily happen overnight. We, you know, we hope to see that in the future as we continue to hear about the trillions of dollars that potentially are gonna get invested in the U.S. over the coming months and years. The second part of the question, I didn't catch that.

Joaquin, can you repeat the other part of your question?

Yeah. It was just what portion of de novos would be targeted at this theme in the future? Thanks.

Yeah. Our de novo strategy is spread pretty much across the country. We track economic activity, industrial pockets of growth, things like that. It's pretty spread all across the country. We've got a new state, Idaho, that we're entering. We're growing in Texas, Florida, you know, a lot of areas where you see continued infrastructure build-out and growth trends. The other thing I'd add to what Keith was saying about onshoring is construction industry will be important for us as well, especially with all the AI build-out. We're seeing pockets of that across the country that we believe is gonna help our business as well.

Thank you.

Your next question is from Benjamin Rossi with JPMorgan.

Hey, y'all. Good morning, and thanks for taking my questions here. Just following up on the rate side in workers' comp, you mentioned some of that mix shift in workers' comp. The California went into effect on March 1st. I know historically you've said most workers' comp fee schedule adjustments occur in 1Q. You got one month of California in the first quarter, but did this one include the bulk of your 2026 fee schedule benefit, or should we expect any other meaningful step-ups over the course of the year, like in October or later? Thanks.

I believe we have said in the past, approximately 75%-80% of what we see typically, is happening during the first quarter at some point in time. That's pretty much what we saw this year. We've got Tennessee that's gonna be happening in the second quarter, that'll be meaningful for us. Then there'll be some annual updates that other states do throughout the summer and early fall, like in Arizona. At this point in time, we really don't know what they will be doing, but wouldn't anticipate anything too material other than potentially inflation adjusted activity around their fee schedule. That's kind of what we really see happening for the rest of the year.

Understood. I guess as just a follow-up on, the onsite side, you talked about the current opportunity set within there in your opening comments. When you're assessing opportunities for your onsite health clinics, where do you see the current largest white space opportunities across things like new geographies, new employer relationships, deeper wallet share, or service line expansion? How do you think about sequencing here in the coming quarters? Thanks.

I would say, D, all of the above. We're really gaining some traction is in the area of advanced primary care, which we've talked about in the past. You know, we deployed Epic as the electronic medical record within the onsites, a year and a half or so ago. We're really starting to gain some traction there, which is a white space we typically did not play in just because we didn't have the capabilities and the technologies, to support that type of delivery of care. We're extremely competitive, definitely have the support and awareness of the broker world that support a lot of the employer decisions around this. We definitely have a seat at the table.

Because of our infrastructure and footprint across the U.S., it makes us extremely competitive with those that have historically focused on that. In addition to that, you know, with our size, now with the acquisition of Pivot, that combination has gone extremely well. We've had a lot of our employer base that we supported with those traditional, more occ med type onsites, wanting to shift or wanting to expand in the further sites. We've got kind of what we call the internal organic growth within existing employers and have been very successful as far as starting to add additional sites there across the U.S.

We're really pulling all the levers, prospecting new, going after RFPs, expanding existing, and again, really focused on the advanced primary care type of onsite, which is probably the biggest white space that we historically did not play in.

Ben, I'll just add a couple comments just to reiterate in case people missed it in the opening remarks. Our onsite portfolio, excluding the Pivot acquisition, grew 20% in Q1. Total onsite portfolio is now approaching $150 million in revenue, up from $64 million in 2024. The teams are doing an unbelievable job. The leadership from our organization, but also the acquisition of Pivot, which Keith mentioned is ahead of schedule. We're really excited about the trends there and the upside for the future.

Great. I appreciate all the additional comments. Thanks.

We have reached the end of the question-and-answer session, and I will now turn the call over to Keith Newton for closing remarks.

Thank you, operator. We appreciate everybody joining us today. We'll talk again next quarter.

This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.