USPH

Image source: The Motley Fool. Thursday, Aug. 6, 2026 at 10:30 a.m. ET Chairman and Chief Executive Officer - Christopher Reading President and Chief Operating Officer, East - Eric Williams Interim Chief Financial Officer and Senior Vice President of Finance and Accounting - Jason Curtis Executive Vice President and General Counsel - Rick Binstein Chief Operating Officer, West - Graham Reeve Vice President of Accounting and Controller - Kate Venturina Operator: Good day, and thank you for standing by. Welcome to the U.S. Physical Therapy Second Quarter 2026 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I'd now like to turn the call over to Chris Reading, Chairman and CEO. Please go ahead, sir. Christopher Reading: Thank you. Good morning, and welcome, everyone, to our U.S. Physical Therapy Second Quarter 2026 Earnings Call. With me on the line include Eric Williams, our President and Chief Operating Officer, East; Jason Curtis, our Interim CFO, also serving as our Senior Vice President of Finance and Accounting; Rick Binstein, our Executive Vice President and General Counsel; Graham Reeve, our Chief Operating Officer, West; and Kate Ventin, our Vice President of Accounting and our Controller. Before we make some prepared remarks on the quarter as well as the year, we need to cover a brief disclosure statement. Kate, if you would, please. Kate Venturina: Thank you, Chris. This presentation includes forward-looking statements, which involve certain risks and uncertainties. The forward-looking statements are based on the company's current views and assumptions. The company's actual results may vary materially from those anticipated. Please see the company's filings with the Securities and Exchange Commission for more information. This presentation also contains certain non-GAAP measures as defined in Regulation G, and the related reconciliations can be found in the company's earnings release and the company's presentation on its website. Back to you, Chris. Christopher Reading: Thanks, Kate. So this morning, I'm going to spend a little time talking about where we are going with a heavy concentration around these hospital affiliation arrangements and try to dovetail that into our results for the quarter as well as look forward because it's all intertwined. For starters, volumes across the company are and have been very strong. This includes our Metro partnership, now part of our long-term NYU Langone affiliation. For some perspective, visits per clinic per day were at an all-time high this quarter at 33.5 per day. For the past 24 consecutive months and 37 out of the last 42 months, we have set visit per clinic per day record volumes, including those at our hospital-affiliated clinics. They're all very strong. This is important because part of our cost equation in Q2 is related to upfront hiring with the expectation of referral and volume translation within these partnerships. In short, the transition of our NYU-affiliated clinics has gone very well. By the end of this month, we will have transitioned all 60 of our metro clinics and will benefit from approximately 50 clinicians hired in advance, which will drive the opportunity for growth going forward. That was at the expense of some short-term cost absorption. However, once those facilities are transitioned, that creates nothing but upside opportunity with no cost downside based on how these agreements work with our hospital partners. And just another point of perspective, I talked to Michael earlier this morning. Our year-over-year growth at Metro from a volume perspective significantly exceeds 100,000 visits, and that was before we had the support of our NYU Langone affiliated partners. So we're looking forward to a great year ahead. We had an opportunity to hire clinicians coming out of school who were available, and we know we're going to be in a position to grow this business, so we jumped on that. Another indicator of building strength was demonstrated in our best ever net rate this quarter, finishing the quarter at $107.59, up $2.26 from the year ago quarter and trending solidly within the quarter itself. Once these hospital clinics are fully onboarded, that will provide additional lift as we finish the year and head into 2027. Embedded in that rate lift are increases across commercial, Medicare and workers' comp in addition to the lift provided by the limited number of clinics transitioned inside of the quarter into our hospital affiliations. That clinic number will grow significantly in quarter 3 with approximately half of the busiest metro clinics transitioning in the current period as well as the Gulf Coast partnership, which is expected to go forward by the end of this month. One of the areas dragging against us a bit so far this year has to do with our self-insured health care costs. Due to a small number of very significant claims across our employee base, we're running well ahead of our usual cost and our claims experience this year, and it's against a much better-than-average experience in 2025 when claim volume was lighter than normal. That swing from last year to this year above the average is an approximately $3.2 million difference between the years so far, and that we have factored into our decision to guide as we have for the remainder of the year. PT revenue growth supported by visit strength and record net rate grew by 8.4% with industrial injury prevention revenue growing by over 9% year-over-year. Same-store revenue growth for PT was north of 3% for the quarter with a nice progression since early last year back to a historically strong average. Margins for our IIP business were steady, slightly above 20%, while PT margins were pressured on a combination of our internal benefits-related health care costs and some front-loading of those hospital implementation costs that I just mentioned. With continued WelcomeWare rollout and expected takeouts there, and strong performance from our hospital-affiliated clinics, we expect that we can influence or offset some of these headwinds between now and year-end. On the development front, we have just very recently announced 12 clinic partnership acquisition in a great new state, some young hungry partners who know how to deliver great care. And that follows several earlier announced acquisitions in the PT as well as IIP areas. We continue to pursue good accretive opportunities where care is superior and the forward trajectory looks good in both the PT and the injury prevention spaces. On the hospital development front, our pipeline of opportunities continues to grow, and we expect further relationships like the one with NYU, which will positively impact 2027 our 2027 outlook in a meaningful way. Finally, we are working on our own digital and hybrid opportunities for 2027 and have recently hired a very accomplished well-known to our senior leader to work with our team to identify the right partners around which to make that happen. Our primary focus at this time is to build the foundation that we need in order to accelerate our opportunity later this year and into 2027 and forward. With the help of an increased Medicare rate projected for 2027 in combination with continued commercial rate lift and the extraordinary lift associated with our hospital affiliations, we expect very good things in the coming year and beyond. So that concludes my prepared comments. I'll ask Jason to cover the financials in a little bit more granular detail before we open things up for questions. Jason, go ahead. Jason Curtis: Thanks, Chris, and good morning, everyone. Total revenue for Q2 2026 was $214 million, an 8.5% increase over last year. Physical therapy revenue for Q2 2026 was $182 million, an 8.4% increase over last year, including a nice 3.5% increase in mature clinics. Q2 2026 physical therapy revenue includes $5.6 million from the initial phases of our hospital affiliation rollout. Q2 2026 visits were 1,662,000, a 6.6% increase, inclusive of hospital affiliation visits. Average daily visits per clinic was 33.5 in Q2 2026 compared to 32.7 in Q2 2025. Q2 2026 physical therapy revenue per visit, inclusive of hospital affiliation revenue and visits was $107.59, a $2.26 increase versus last year. Medicare revenue per visit increased 3.7% in Q2 2026. Year-to-date 2026 Medicare revenue per visit compared to full year 2025, which provides for a longer measurement period to smooth quarterly variability is approximately in line with our expectations. As a reminder, the 2026 guidance includes a 1.75% increase in Medicare, which equates to a 1.1% increase after taking into account the mix of Medicare Advantage plans. The expected revenue lift for Medicare increases in full year 2026 is $2.5 million, equating to a $0.35 in revenue per visit lift. Commercial payers and workers' compensation revenue per visit also delivered healthy increases in Q2 2026 of 1.2% and 2.0%, respectively. Q2 2026 adjusted salaries and related costs as a percent of revenue was 57.5% compared to 56.4% in Q2 2025. This increase is largely attributable to higher-than-average medical costs in the current quarter compared to lower-than-average medical costs in Q2 2025. Reporting salaries and related costs as a percent of revenue replaces the company's previous methodology of reporting salaries and related costs per visit. For clinics operating in hospital affiliations, salaries and related costs of licensed staff are fully reimbursed by the hospital systems with the reimbursement recognized as revenue for USPH. This structure allows USPH to invest in additional staffing without the risk of negatively impacting bottom line profitability. As a result, utilizing a percentage of revenue is a more meaningful metric. Adjusted physical therapy gross profit margin in Q2 2026 was 19.9% compared to 21.4% in Q2 2025. As noted, employee medical costs in Q2 2026 compared to Q2 2025 were a headwind. During Q2 2026, the company integrated 31 existing clinics into hospital affiliations. The remaining 39 existing clinics are expected to integrate during the third quarter. IIP revenue for Q2 2026 was $32 million, a 9.1% increase over last year, including a 3.6% increase in comparable partnerships. IIP margin was 20.4% in Q2 2026 compared to 20.3% in Q2 2025. Adjusted corporate expense as a percent of revenue was 8.4% in Q2 2026 compared to 8.7% in Q2 2025. The company is continuing its effort to upgrade its finance and HR systems with an expected go-live at the beginning of 2027. This upgrade will improve efficiency throughout the organization and position USPH for future growth. Interest expense was $3.2 million in Q2 2026 compared to $2.4 million in Q2 2025. In Q2 2026, the all-in effective interest rate, including all associated costs, was 5.3%. Income tax rate in Q2 2026 was 29.6%. Year-to-date 2026 income tax rate is 30.5%, approximately in line with full year 2026 expectations. Adjusted EBITDA for Q2 2026 was $27.0 million compared to $26.9 million in Q2 2025. Adjusted operating results were $11.3 million for Q2 2026 compared to $12.4 million for Q2 2025. Adjusted operating results per share were $0.75 in Q2 2026 compared to $0.81 in Q2 2025. Net income attributable to USPA shareholders was $9.9 million in Q2 2026 compared to $12.4 million in Q2 2025. Included in net income was a loss on change in fair value of contingent earn-out considerations of $992,000 in Q2 2026 compared to a gain of $790,000 in Q2 2025. Improving results in recent acquisitions with contingent earn-outs increases the associated liability, resulting in a charge to the P&L. As such, a loss on change in fair value of earn-out consideration reflects improving underlying performance of impacted acquisitions. Earnings per share were $0.25 in Q2 2026 compared to $0.58 in Q2 2025. Under GAAP, changes in the value of redeemable noncontrolling interests are excluded from net income but are included in the earnings per share calculation. Improving performance in partnerships with redeemable noncontrolling interest has a dilutive impact on earnings per share. Turning to the balance sheet. Cash and cash equivalents were $25 million at the end of Q2 2026 compared to $36 million at the end of year 2025. Credit facility borrowings were $221 million at the end of Q2 2026 compared to $162 million at the end of year 2025. Reflecting the impact of the previously announced upsized $450 million credit facility, revolver availability at the end of Q2 2026 was $229 million compared to $145 million prior year. In addition to increasing revolver availability, the new credit facility also contains $125 million accordion, providing sufficient liquidity to fund sizable future acquisitions. During the quarter, the company repurchased 306,000 shares on the open market for a total consideration of $19.2 million at an average share price of $62.80. Including share repurchases made in 2025, the company has materially concluded repurchases under its current $25 million authorization. Year-to-date Q2 2026 operating cash flow was $38 million compared to $30 million for year-to-date Q2 2025. As Chris mentioned, subsequent to the end of the second quarter, the company completed the acquisition of a 12-clinic physical therapy practice for a purchase price of $16.4 million. This practice currently generates $12 million in annual revenue and 112,000 annual visits. Including the 2 previously announced Q1 2026 acquisitions, the cumulative purchase price of our 3 announced 2026 acquisitions is $38 million with a combined annualized revenue of $27 million. Taking into account the year-to-date 2026 results and the expected increasing benefit of hospital affiliations in the back half of the year, we are reaffirming our full year 2026 adjusted EBITDA guidance of $102 million to $106 million. With that, I will turn the call back to Chris. Christopher Reading: Thanks, Jason. Great job. Appreciate it. Operator, we're going to go ahead and open it up for questions. Operator: [Operator Instructions] And we will take our first question from Benjamin Rossi with JPMorgan. Benjamin Rossi: So just on the back half ramp implied for the remainder of the year, it sounds like that's going to be more weighted towards 4Q once those remaining facilities have been integrated in 3Q. You also mentioned the additional 50 hires being front-loaded. Can you just walk us through the specific initiatives that you're expecting to deliver margin lift during the back half of the year? And then how should we be thinking about the timing of associated costs and benefits during 3Q and 4Q? Christopher Reading: Yes. So we have a number of things. I mean the WelcomeWare initiative we've talked about earlier that involves the semi-virtualization of our front desk and aggregation of certain functions to potentially remote site that we know results in our ability to take out headcount at the front desk. So that will continue to ramp. We're more than halfway through our expected ramp in there. And then the big impact then is just the impact from getting these hospital facilities fully loaded. As Jason mentioned, we have close to 40, 39, I believe, that will flow in this quarter. Some of those are already in the works. Many of them are with a few to remain here this next month. That's going to give us a good solid lift. And then the other things, like I said, we're working on for next year. But those are the big impact things between now and year-end. Benjamin Rossi: Great. I appreciate the color there. I guess a couple of clarifications on that $5.6 million in revenue you reported from the hospital affiliation during 2Q. Can you just walk through the mechanics of the hospital affiliation revenue recognition, how flows through your P&L? And then is there any ballpark for how many visits those clinics are currently seeing? Like we're assuming those volumes are coming in at a slight premium to your consolidated revenue per visit. Is it fair to think of this group currently representing maybe 50,000 patient visits? Or is that overstating volumes? Christopher Reading: Jason, do you want to take a swing at the revenue recognition part and the pieces parts associated with that? And then Eric, maybe we can touch base on the number of -- the visit number of this remaining group. Eric Williams: Sure. Jason Curtis: So the $5.6 million comes from 2 components of the agreement with the hospitals. One is a per visit fee. So for every visit that we see -- every patient that we see, we receive a fee and income from the hospitals. And then additionally, as Chris mentioned, we receive a reimbursement for the licensed clinical staff who are treating those patients. So the sum of those 2 income streams is the $5.6 million. And that would, just for clarity, replace the net patient revenue that we would have previously seen when they were operating pre-hospital affiliations. So the $5.6 million is the hospital increase. there would be a reduction to net patient revenue, but it would be less than the increase we're seeing from the $5.6 million increase. Benjamin Rossi: Yes. I appreciate the additional details there. Eric Williams: In terms of the volume going through those metro clinics, just the outpatient clinics, we're averaging about 45 visits per day per clinic in our New York market and expect that to continue to increase with our NYU relationship. Christopher Reading: Just to provide a little perspective, prior to the NYU Lango opportunity, we were able to grow on a year-over-year basis about -- these are round numbers, but about 120,000 visits year-over-year. That was '25 to current period '26. That's without the support of that hospital. So those clinicians that we hired, we fully expect to get them very busy and to produce very significant growth between now and the same time next year, including additional clinics, potential tuck-ins and other things that we have in the works. Operator: And we'll move next to Larry Solow with CJS Securities. Lawrence Solow: So just a follow-up on that one. So the 50 clinicians that you hired in advance essentially this quarter, and if I do the math, that -- I mean if they're making $100,000 a year, that would be like $2 million in the quarter or something like that. So maybe it's more than that. But does that -- will that be reimbursed under the alliance or essentially, it should be, right? Christopher Reading: Yes, it doesn't -- it's not going to rise our Q2 expense. But as soon as those clinics are rolled in the arrangement, that cost gets picked up and effectively supplemented by NYU. So that's -- it was important for us to make that decision. Michael made a good decision, I think schools produce graduates at certain times of the year. And based on our confidence in our ability to grow, we kind of have to reap those opportunities when they're available. And so that hurt us a bit in Q2. Lawrence Solow: Right. And is my number, is that right, a couple of million dollars, plus or minus? Is that like a fair ballpark? Christopher Reading: Well, I think the $100,000 per person is probably in the ballpark when you look at benefits and sign-on bonuses and other things, maybe a little bit more than that, but I think it's probably close enough. Lawrence Solow: Okay. And the year-to-date, you mentioned -- a little over $3 million higher insurance. Was that mostly felt this quarter? Or was it already running higher in Q1? Christopher Reading: It was running -- was -- the bigger impact was Q2. Jason has the quarterly breakdown. We ran light all of '25, and we knew we were running light. We budgeted to a median number where we've averaged for '26, and we've pretty significantly exceeded that number on these handful of semi-catastrophic cases that we have. Jason Curtis: About 80% of the $3 million that Chris referenced was the second quarter when you think about the spread between the higher-than-average experience in the second quarter of 2026 versus lower-than-average experience in the second quarter 2025. Lawrence Solow: Got you. So it's like a couple of million between that and the pre-hiring or the hiring in advance, that's probably could all in $2.5 million, $3 million in the quarter or something on your operating profit. Okay. No, that's -- I appreciate that clarification. And the volumes were nice, really strong, and it's good to see Medicare pricing finally coming through here. Just on the commercial side, a little bit light, a little over 1% increase. Anything have been running around 2%. Anything -- I don't want to split hairs on 1 quarter, but anything to call out there? Christopher Reading: No, it could move around a little bit. It's going to depend on when deals went into effect and quarterly timing. And just like we talked about kind of the catch-up on the Medicare side, which gets us to a more normal average. We really look at it over the course of the year. So we're kind of where we expect it to be. And we have more to come, but it's a little bit lumpy here and there depending on the size of the contracts and the timing. Jason Curtis: We were up 3.4% in the first quarter on commercial. Lawrence Solow: Okay. So year-to-date, you're still running over 2%. Okay. Great. And then just lastly, you mentioned you recently refinanced, increased the size of your credit facility. And then I think you also -- you mentioned the accordion you added. It sounds like you're pretty confident in terms of continuing to do acquisitions and potentially even increase that activity. Is that fair? Christopher Reading: Yes, it's all fair. I mean we're going to use the same filter that we've always used. So we're not going to spend differently just because we have money available. We're not going to be imprudent, but it gives us the room to do some -- to do the things that are available if we feel like it's the right thing to do. Operator: And we'll move next to Jack Slevin with Jefferies. Jack Slevin: I guess I want to touch maybe not on the interim seems you've covered enough on sort of the moving pieces near term around the hospital partnerships. But on some of the comments you made, Chris, as far as 2027 goes in the pipeline, can you maybe give a little more color on sort of what that looks like and sort of when you think maybe some of the next announcements of partnerships could start to come off? And then secondly, if you think very long term and you look across your whole portfolio, it's obviously a very exciting opportunity. How do you think about across the whole base of clinics you have, how many of these could potentially be eligible based on the market or potential hospital partners, et cetera, of sort of how far you could potentially push into hospital partnerships on a longer-term basis? Christopher Reading: Yes. So I'll take the second part of that first. On a longer-term basis, I think slowly and steadily, we can push into a pretty good subset of our portfolio. And so when you look at right now, the top 30 or 40 partnerships in our company, they already aggregate 75% or 80% of our earnings. And these are partnerships typically in MSA markets where there's good population support, multiple hospital systems and where we have good brand recognition and reputation. And so we can't address all the markets all at once, these deals take -- I wish they could move as fast as we can move because we can move very fast. I have a great team. Our General Counsel is fantastic, and he can move quickly with these and operations teams can move quickly. We're dealing with hospital systems that when they think they're moving quickly, we think we're watching paint dry a little bit sometimes. And so they're going to happen. You're going to get some additional announcements. I can't predict the absolute cadence of these. I would be over my skis and outside my point of control to be able to do that. But we feel confident that 2027 is going to look meaningfully different with the next few of these. Jack Slevin: Okay. Really helpful. And then just a follow-up maybe on -- this deal coming through in 3Q with the 12 clinics. I know entering the year, you're pretty bullish on sort of potential opportunities on the inorganic side of things via M&A. Can you speak to maybe if there are more to come on this front, other things that you guys have in the pipeline right now? Would love to hear about sort of the current state of M&A. Christopher Reading: Yes. We continue to have good discussions. We're in diligence on some things right now. We -- it's difficult for me to be particularly descriptive and not kind of put us in the corner on these because we're going through our process, and we're in discussions with a number of people, both on the injury prevention side and on the PT side. And we know that there are some things that are coming to market that this year, probably late in the year that are going to be a little bit bigger. And so we'll see. I think we'll produce a good development year. And we're excited, particularly once we get these hospital partnerships under the tent, it gives us the ability to truly transform what we do because we're able to go out and find -- in the case of New York, there's some really high-volume practices that, practically speaking, on their own, don't make a lot of money, wouldn't be acquisition targets right now that when you pull together the alliance we have with NYU Langone and the rate differential and the additional referral support we can get those done all day long. And they can have a meaningful impact as meaningful of an impact as a larger acquisition might have historically where we're paying a lot of money. These were not going to have to pay a lot of money for because they don't have big profit line to begin with. And so I think it opens up a front of ours that potentially accelerates cash flow just based on the opportunity at hand and the way the numbers work. So we're excited about that, too. Jack Slevin: Got it. Really helpful color, Chris. One just touch up on the model for Jason here. I don't know if I missed this, but can you just speak to the -- from a same-store perspective in PT, the breakdown of visits and rate in that like just over 3% number you gave? Jason Curtis: Yes. I mean I think as we were talking, the math that you were talking about is a pretty reasonable one. So the total increase, the mature clinic increase is 3.5% and then the net rate increase is 2.1%. So you're looking at around 1.5% coming out of visits, I think, is a reasonable assumption to make. Operator: And we will move next to Joanna Gajuk with Bank of America. Joaquin Agota-Martinez: This is Joaquin Agota-Martinez on for Joanna. Just wanted to ask quickly on the payer mix and how you guys saw self-pay increase throughout the quarter or decrease. Christopher Reading: Jason, do you have that one? Jason Curtis: Yes. I mean we saw a small decrease in that particular line item. I think it's very important to note that from a total percentage of the payer mix, self-pay is significantly less than 5%, runs in like the 3.5%, 3.5% to 4% range. So commercial, Medicare and workers' comp are really where the needle movers occur. Christopher Reading: Yes. Understanding the underpinnings to that question, we've gotten some questions related to hospital call-outs on increase for uninsured and things like that. We really don't see big swings to our payer mix, and we've never really ever seen a big swing in our or underinsured populations. So we've been very steady and volume has been very good, as we've mentioned, and that part of our business is pretty steady as well. It's not a big part. Joaquin Agota-Martinez: Okay. And could you talk about your workers' comp mix and what your average workers' comp revenue per visit increase was? And are there more contracts you plan on bringing in or bring in over the last quarter? Jason Curtis: Yes. So our workers' comp in terms of the penetration is holding steady at about 10%. And as I mentioned, we saw a nice increase of 2% in the second quarter in terms of revenue per visit. Christopher Reading: Eric, I don't know -- I don't have in front of me or off the top of my head even any new contracts that would have influenced that one way or the other. I don't know if you do. Eric Williams: Yes. I'll tell you what's been driving rate and volume, and this has been a big initiative for us over the last couple of years, and we've seen an increase in visits. We've seen an increase in rate. And if you flash back 3-plus years ago, we really had fixed agreements that were driving the bulk of our work comp business. and those were network agreements. And we brought someone on to lead this initiative for us. I think we've had somewhere around 22 or 23 agreements over the course of the last 3 years. We have another 4 to 5 agreements that are going to come online here over the balance of 2026. And there is a difference between what those different contracts pay. The networks pay a little bit lower, the PPL agreements that we have pay a little bit higher, and that's what we're seeing more of is the PPL business on our door and it's having an impact on rate. And to Jason's point, in Q2, we finished with a rate of $155.32 on work comp. It was 2% higher than prior year. So I think we'll continue to see traction here on the rate and volume side as we continue to move forward. Operator: [Operator Instructions] And we'll take our next question from Mike Petusky with Barrington Research. Michael Petusky: I guess, Chris, I don't think I heard you, but if I did forgive, any comments on the proposed pricing for next year? Christopher Reading: Yes, we didn't touch on that, and I appreciate -- I called it out at the end. We have -- but I wasn't specific. So we have the benefit of knowing that CMS intends to give modest price increase for next year, somewhere between, we think, around 1.5%. And so that increase would, of course, affect our traditional Medicare, wouldn't necessarily affect our Medicare Advantage. It affects a percentage of those contracts, but not all. While it's not a big increase, it is an increase. The other thing that they've done, which they haven't done in a long time is through our APTQI alliance, there was an indicator or an influencer of some of the rate movement around the particular indicator that I hadn't heard about before. It's called an IPC multiplier has to do with the subset of specialists who use the codes that are in your code set and the relative, call it, aggregate reimbursement to those physicians. So said a different way, if in our code set, we know we have the majority of its physical and occupational therapists who make on an income basis, a pretty low amount when you look across the whole physician fee schedule. But we also have orthopedic surgeons. We have interventional pain management specialists. We have physical medicine and rehabilitation doctors who make a great deal of money. we were the -- when we discovered this a year or so ago, a year ago, we were the only group in the physician fee schedule who's that IPI factor that I mentioned who didn't take into account the full width and breadth of everyone who uses that code. So again, said differently, we were being treated differently than all. We brought that to CMS' attention a year ago. They seem surprised by it. They did their own work. They've given us an early indication that in 2028, we'll see the beginning of some -- what we hope to be not clear yet, and it's not set yet completely, but a resolution of that difference in the form of some more positive momentum going forward into the 2028 year. So stay tuned on that. We've got more work to do, but that's a positive indicator as we look forward. Michael Petusky: Okay. That's terrific. That's helpful. Chris, I'm just curious on the industrial injury prevention business. The organic growth in the quarter seemed a little softer than what you guys have been putting up some big numbers. I'm just curious, were there -- was there a business loss there? Or can you just comment on that? Christopher Reading: Yes, a couple of different things. So I think if I remember right, going back last year, Q2, we had an 18% organic growth rate, so pretty high comp, number one, on last year. We had one contract with an automobile manufacturer contract. We got notice on this more than a year ago. It was a Japanese manufacturer, where we had a long-standing good relationship. They changed the hierarchy of who in that company made the decisions about health care. We had very good local relationship at the plants where we provided service. Those people wanted to continue to keep us yet somebody outside the market made the decision to move to a different provider. So that happened in this year. I think we're feeling most of that in Q2. That's been replaced by Nissan Motors contract and the largest grocery store chain in Texas, that contract, which is also expanding. But there was -- we don't lose many contracts. We have -- that's really the one impact that we've had since we've been in this business is with that particular employer. It created a little bit of a dent, but we filled it in and we're going forward. And I will say we just hired what sounds like a great new salesperson for one of our partnerships who is embarking on trying to be more aggressive in the market. And so we're excited about that, and we'll see where that goes. But we are a little lighter than normal, but we think it's temporary. Eric Williams: Yes, Chris, I'll add a little additional color commentary on there for one of our injury prevention businesses. And their pipeline continues to be very, very strong. However, they had a number of open positions that have been taking longer to fill, so they haven't been able to execute against driving revenue with some of that pipeline, and they've recently filled a number of those positions. So to Chris' point, we believe this is temporary and we'll pick back up momentum. Michael Petusky: Great. If I could sneak one more in, and then I'll turn it over to somebody else. Just on the expectations around adjusted EBITDA contribution from the hospital agreements. I think when these were first announced, you sort of said $7.3 million for '27 in terms of adjusted EBITDA contribution. And I honestly don't even recall what you said for this year. I think it was very modest. Can you just sort of update -- I guess, first, if you could help me with '26 potential contribution? And then is 7.3% still your view? Or has that been adjusted? Christopher Reading: Let me speak to '27, and then I'll have Jason walk you through the mechanics of '26 because, frankly, off the top of my head, I'm not confident I'm going to remember it exactly. But we will update the market as we always do at the end of the year with what we expect those opportunities to do in 2027. But we're very confident that the early results are going to position us for a greater number in 2027. And let me explain the reason behind that. When we guided, our Board was comfortable giving guidance because this was so new. Our guidance was based on a trailing 12 months visit rate at the time we enacted that contract. So it didn't include a run rate at the time. It also didn't include any takeouts in the business. Takeouts would be as the business transitions and as we work down accounts receivable, we won't have the need for billing and collections inside these partnerships over a long period of time. Now Metro will continue to keep billing collections for their home care business, but we won't need billing collections for the outpatient business. So that cost goes away. We didn't include that. We were very conservative with how we guided. We'll give a more specific number when we guide for '27, but it's going to be bigger than what we originally said. Jason Curtis: Yes. And I would say for 2026, as we talked about in the second quarter, we did see some revenue that began to flow in from the hospital affiliations, although we did have that offset from some of the pull forwards of hiring to get ourselves ready for the additional volume that we expect on a go-forward basis. If you take that $7.3 million and assume that it's going to be something higher than that and divided by 4, you're getting something like $1.5 million to $2 million impact in Q4. Q3 is going to be somewhere in between those 2 numbers as we're continuing to ramp in the remaining clinics. Operator: At this time, this concludes our question-and-answer session. I will now turn the meeting back to Chris Reading for any additional or closing remarks. Christopher Reading: Thank you. Listen, we appreciate your time this morning. We're available over the next days and week or weeks for any follow-up that you need. And we thank you for your interest and your support. Have a great day. Bye now. Operator: This concludes today's meeting. We appreciate your time and participation. You may now disconnect. Thank you. Before you buy stock in U.S. Physical Therapy, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and U.S. Physical Therapy wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $403,337!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,334,946!* That performance is why people listen. With a track record of beating the S&P 500 by 4x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of August 13, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. USPH (USPH) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Interested in U.S. Physical Therapy, Inc.? Here are five stocks we like better. Revenue and patient volumes increased: Second-quarter revenue rose 8.5% to $214 million, driven by higher visits, improved reimbursement rates and growth in both physical therapy and industrial injury prevention. The company reaffirmed its 2026 adjusted EBITDA guidance of $102 million to $106 million. Hospital affiliations are becoming a key growth driver: U.S. Physical Therapy integrated 31 clinics into its NYU Langone affiliation during the quarter, generating $5.6 million in initial revenue, with 39 more clinics expected to transition in the third quarter. Management expects the partnerships to have a greater impact in 2027. Profitability faced cost pressures: Physical therapy gross margin fell to 19.9% because of elevated employee healthcare claims and upfront hiring costs tied to hospital affiliations. Net income declined to $9.9 million from $12.4 million, despite adjusted EBITDA remaining broadly stable at $27 million. U.S. Physical Therapy (NYSE:USPH) reported second-quarter 2026 revenue growth supported by higher patient volumes, improved reimbursement rates and the early rollout of hospital-affiliation agreements, while elevated employee healthcare claims and upfront staffing costs pressured physical therapy margins. Total revenue rose 8.5% year over year to $214 million. Physical therapy revenue increased 8.4% to $182 million, while industrial injury prevention, or IIP, revenue grew 9.1% to $32 million. The company reaffirmed its full-year adjusted EBITDA guidance of $102 million to $106 million. → No Hangover: Revisiting Microsoft One Week After Earnings “Volumes across the company are and have been very strong,” Chris Reading said during the earnings call. Average daily visits per clinic reached a record 33.5, compared with 32.7 in the prior-year quarter. The company said it has set records for visits per clinic per day in 24 consecutive months and in 37 of the past 42 months. The company highlighted the transition of its Metro clinics into its long-term affiliation with NYU Langone. During the second quarter, U.S. Physical Therapy integrated 31 existing clinics into hospital affiliations, with the remaining 39 clinics expected to transition during the third quarter. → MarketBeat Week in Review – 08/03 - 08/07 Jason Curtis, interim CFO and senior vice president of finance and accounting, said physical therapy revenue included $5.6 million from the initial phases of the hospital-affiliation rollout. That revenue reflects two sources: a per-visit fee paid by hospital systems and reimbursement for licensed clinical staff treating patients. Under the agreements, licensed clinical staff costs are fully reimbursed by hospital systems and the reimbursement is recorded as revenue. Curtis said the model enables the company to add staffing without negatively affecting profitability once clinics are operating under the affiliation structure. → Why the Landlord of the AI Boom Could Outlast the Chipmakers Reading said U.S. Physical Therapy hired approximately 50 clinicians in advance of anticipated referral growth from the NYU Langone relationship. Those hires created near-term expense pressure, but their costs will be supported once the associated clinics move into the hospital arrangement. Eric Williams, president and chief operating officer for the East region, said Metro’s outpatient clinics in New York are averaging about 45 visits per day per clinic. Reading added that Metro had already increased year-over-year volume by roughly 120,000 visits before receiving support from the NYU Langone affiliation. Looking ahead, Reading said the company expects the hospital relationships to have a greater effect in 2027. He said U.S. Physical Therapy’s larger partnerships in metropolitan markets could offer opportunities for additional affiliations, though the timing of announcements depends on hospital systems’ processes. Second-quarter physical therapy visits totaled 1.662 million, up 6.6% from a year earlier. Revenue per visit increased $2.26 year over year to $107.59, which Reading described as the company’s best-ever net rate. Medicare revenue per visit increased 3.7%. Commercial payer revenue per visit increased 1.2%. Workers’ compensation revenue per visit increased 2.0%. Mature-clinic physical therapy revenue increased 3.5%. Williams said workers’ compensation represented about 10% of the company’s payer mix and generated revenue per visit of $155.32 in the second quarter. He said the company has added roughly 22 or 23 workers’ compensation agreements over the past three years and expects another four to five agreements to begin during the remainder of 2026. Physical therapy gross margin declined to 19.9% from 21.4% a year earlier. Adjusted salaries and related costs were 57.5% of revenue, compared with 56.4% in the prior-year period. Management attributed much of the pressure to higher self-insured employee medical costs. Reading said a small number of significant employee claims created an approximately $3.2 million year-to-date swing compared with 2025, when claims experience was lighter than normal. Curtis said about 80% of that difference occurred in the second quarter. The company also cited upfront hiring associated with the hospital implementation. Reading said U.S. Physical Therapy expects continued rollout of its WelcomeWare initiative, which centralizes some front-desk functions and can reduce front-desk headcount, to help offset some pressure through year-end. Adjusted EBITDA was $27 million, compared with $26.9 million in the second quarter of 2025. Adjusted operating results fell to $11.3 million from $12.4 million, while adjusted operating results per share declined to $0.75 from $0.81. Net income attributable to U.S. Physical Therapy shareholders was $9.9 million, compared with $12.4 million a year earlier. Earnings per share were $0.25, compared with $0.58 in the prior-year quarter. The company recorded a $992,000 loss from changes in the fair value of contingent earn-out considerations; Curtis said such losses can reflect improving performance at acquired businesses because stronger results increase the earn-out liability. Operating cash flow for the first half was $38 million, up from $30 million in the first half of 2025. Cash and cash equivalents were $25 million at quarter-end, while credit-facility borrowings were $221 million. The company said its upsized $450 million credit facility provided $229 million of revolver availability and includes a $125 million accordion feature. During the quarter, U.S. Physical Therapy repurchased 306,000 shares for $19.2 million, or an average price of $62.80 per share. The company said it has materially completed repurchases under its current $25 million authorization. Following the quarter, the company acquired a 12-clinic physical therapy practice for $16.4 million. The acquired practice generates approximately $12 million in annual revenue and 112,000 annual visits, according to management. Including two acquisitions announced in the first quarter, the company’s three announced 2026 acquisitions carried a combined purchase price of $38 million and annualized revenue of $27 million. Management also said it is pursuing additional acquisition opportunities in both physical therapy and injury prevention, while working on digital and hybrid care initiatives for 2027. U.S. Physical Therapy, Inc (NYSE: USPH) is a leading owner and operator of outpatient physical therapy clinics across the United States. The company delivers rehabilitative care to patients recovering from orthopedic injuries, neurological disorders and chronic conditions. Its core services include one-on-one physical therapy sessions, aquatic therapy, occupational therapy, massage therapy and sports medicine programs designed to restore mobility and enhance quality of life. In addition to traditional rehabilitation services, U.S. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "U.S. Physical Therapy Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Achieved record visit volumes of 33.5 per clinic per day, marking the 24th consecutive month of record-setting performance driven by strong referral trends. Realized a record net rate of $107.59, a $2.26 year-over-year increase supported by gains across commercial, Medicare, and workers' compensation payers. Strategic transition of 60 Metro clinics into the NYU Langone affiliation is nearing completion, with 31 clinics integrated in Q2 and the remainder expected by the end of Q3. Absorbed short-term margin pressure due to front-loaded hiring of approximately 50 clinicians to capture anticipated volume growth within new hospital partnerships. Experienced a $3.2 million year-over-year headwind in self-insured healthcare costs due to a small number of significant employee claims compared to a lighter-than-average 2025. Industrial Injury Prevention (IIP) revenue grew 9.1%, maintaining steady margins above 20% despite temporary headwinds from a specific contract loss and staffing delays. Expanded the development pipeline with the acquisition of a 12-clinic practice, bringing total 2026 acquisition spend to $38 million across three transactions. Reaffirmed full-year 2026 adjusted EBITDA guidance of $102 million to $106 million, assuming increasing benefits from hospital affiliations in the second half. Expects meaningful margin lift in Q4 2026 as hospital facilities become fully operational and the WelcomeWare front-desk virtualization initiative continues its rollout. Anticipates significant growth in 2027 driven by the full-year impact of hospital affiliations, projected Medicare rate increases, and continued commercial rate lift. Projecting a 1.75% Medicare rate increase for 2026, which translates to a 1.1% net increase after accounting for the Medicare Advantage plan mix. Actively pursuing a growing pipeline of hospital development opportunities and accretive M&A in both the physical therapy and injury prevention sectors. Transitioned to reporting salaries and related costs as a percentage of revenue to better reflect the reimbursement structure of hospital affiliation agreements. Upsized credit facility to $450 million with a $125 million accordion, providing significant liquidity for future sizable acquisitions. Recorded a $992,000 loss on the change in fair value of contingent earn-outs, which management interprets as a sign of improving performance in recently acquired businesses. Identified a potential long-term tailwind for 2028 via a CMS 'IPC multiplier' adjustment that could resolve historical reimbursement disparities for therapy codes. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management expects margin improvement to be weighted toward Q4 as the remaining 39 clinics integrate into hospital affiliations during Q3. The WelcomeWare initiative, currently more than halfway through its ramp, will contribute to margin lift by reducing front-desk headcount through virtualization. Revenue from hospital affiliations consists of a per-visit fee plus full reimbursement for licensed clinical staff salaries, effectively eliminating bottom-line risk for those costs. The New York market clinics are currently averaging 45 visits per day, significantly higher than the company-wide average, with further growth expected under the NYU relationship. Management believes a 'pretty good subset' of their portfolio is eligible for hospital partnerships, particularly the top 30-40 partnerships that generate 75-80% of earnings. These affiliations allow USPH to acquire high-volume practices that might not be profitable independently but become highly accretive under the hospital's rate structure. The slight softening in IIP organic growth was attributed to a high year-over-year comparison (18% in Q2 2025) and the loss of one specific automotive contract. Growth is expected to rebound as new contracts with Nissan and a large grocery chain scale, and as recently filled staff positions begin executing on a strong sales pipeline.

U.S. Physical Therapy (USPH) came out with quarterly earnings of $0.75 per share, missing the Zacks Consensus Estimate of $0.85 per share. This compares to earnings of $0.81 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -11.77%. A quarter ago, it was expected that this physician staffing services company would post earnings of $0.55 per share when it actually produced earnings of $0.46, delivering a surprise of -16.36%. Over the last four quarters, the company has not been able to surpass consensus EPS estimates. U.S. Physical Therapy, which belongs to the Zacks Medical - Outpatient and Home Healthcare industry, posted revenues of $214.06 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 0.31%. This compares to year-ago revenues of $197.34 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. U.S. Physical Therapy shares have lost about 2.9% since the beginning of the year versus the S&P 500's gain of 13%. While U.S. Physical Therapy has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for U.S. Physical Therapy was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.79 on $213.36 million in revenues for the coming quarter and $2.99 on $843.49 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Medical - Outpatient and Home Healthcare is currently in the top 41% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, Astrana Health, Inc. (ASTH), is yet to report results for the quarter ended June 2026. The results are expected to be released on August 6. This company is expected to post quarterly earnings of $0.33 per share in its upcoming report, which represents a year-over-year change of +73.7%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Astrana Health, Inc.'s revenues are expected to be $980.9 million, up 49.8% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report U.S. Physical Therapy, Inc. (USPH) : Free Stock Analysis Report Astrana Health, Inc. (ASTH) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Find your next quality investment with Simply Wall St's easy and powerful screener, trusted by over 7 million individual investors worldwide. U.S. Physical Therapy (USPH) reported mixed second quarter 2026 results, with higher revenue alongside lower net income and earnings per share, and separately affirmed a quarterly dividend of $0.46 per share. See our latest analysis for U.S. Physical Therapy. The latest earnings and dividend announcement comes after a strong 90 day share price return of 31.71%. However, the year to date share price return is slightly down 1.48% and the 3 year total shareholder return is down 23.95%. This suggests recent momentum has picked up after a weaker longer term experience for U.S. Physical Therapy investors. If this earnings move has you reassessing your watchlist, it can help to scan beyond healthcare and see which other themes are gaining interest through the 22 top founder-led companies For U.S. Physical Therapy, a 32% move in 90 days after a weaker multi year record raises a simple question: Is the recent strength pointing to a business reset, or just sentiment catching up after a tough stretch? The most followed narrative for U.S. Physical Therapy pegs fair value at $93.67 per share, which sits above the latest close of $77.71 and frames the recent share price recovery in a different light. Read the complete narrative. Want to see what is baked into that $93.67 figure? The narrative leans heavily on rising earnings, richer margins and a future valuation multiple that needs everything to line up. Result: Fair Value of $93.67 (UNDERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, U.S. Physical Therapy still faces pressure from healthcare reimbursement policies and tight clinician staffing, which could cap margins and slow the clinic growth narrative. Find out about the key risks to this U.S. Physical Therapy narrative. With U.S. Physical Therapy showing both pressures and positives in the latest narrative, it makes sense to review the full picture yourself and be ready to act. To see how the potential upsides and the areas of concern balance out, take a closer look at the 3 key rewards and 2 important warning signs If you stop with U.S. Physical Therapy, you could miss other opportunities that fit your goals. Take a few minutes to scan fresh ideas with the Simply Wall St screener and keep your shortlist working harder for you. Target dependable income and shortlist companies with robust payouts through the 8 dividend fortresses Hunt for quality at a reasonable price by checking out companies that screen well on value using the 51 high quality undervalued stocks Prioritise resilience and reduce potential downside by focusing on financially sturdy businesses via the solid balance sheet and fundamentals stocks screener (50 results) This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include USPH. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

This article first appeared on GuruFocus. Release Date: August 06, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. US Physical Therapy Inc (NYSE:USPH) achieved a record second quarter with visits per clinic per day jumping to 32.7, up from 30.6 in the prior year's record quarter. The company's net promoter score reached an exceptional 93.5, with 95% of patients being active promoters and only 1% detractors, indicating very high patient satisfaction. Revenue growth was strong, with physical therapy revenues up 17.3% and injury prevention revenues up 22.6%, while gross profit in injury prevention increased by 25.8%. Cost management was effective, with salaries and related costs per visit up only 0.7% (the smallest increase since Q4 2023) and total operating costs per visit actually decreasing year-over-year. The company raised its full-year 2025 adjusted EBITDA guidance to $93-$97 million, up from the previous range of $88-$93 million, reflecting strong first-half performance and positive outlook. US Physical Therapy Inc (NYSE:USPH) continues to face significant headwinds from cumulative Medicare rate cuts, which have impacted the profit line by approximately $25 million this year alone. Same-store growth in mature facilities was lighter than expected at just over 1%, partly due to tight staffing in some markets, which dampened performance. A policy change by a large payer in Michigan, the company's third-largest state, negatively impacted the net rate per visit in the second quarter. The company is incurring implementation costs for a new enterprise-wide financial and HR system, with costs expected to continue through 2026, adding to non-recurring expenses. The net rate per visit in the second quarter ($105.33) was slightly lower than the first quarter ($105.66), reflecting the impact of the Medicare reduction and the Michigan payer change. Warning! GuruFocus has detected 6 Warning Signs with USPH. Is USPH fairly valued? Test your thesis with our free DCF calculator. Q: Can you provide an update on the company's performance in the second quarter, particularly regarding patient volumes and financial results?A: Chris (CEO) reported a record second quarter with visits per clinic per day jumping to 32.7, up from 30.6 in the prior year's record quarter. The company achieved a net promoter score of 93.5, with 95% of patients being active promoters. Revenue in physical therapy increased 17.3%, and the injury prevention business grew 22.6%. Despite Medicare headwinds totaling approximately $25 million in stacked cuts, the company grew earnings over 20%. Carrie (CFO) added that adjusted EBITDA margin expanded to 17.5% from 16.4%, and the company raised its full-year 2025 adjusted EBITDA guidance to $93-$97 million. Q: What is driving the strong performance in the Injury Prevention (IIP) segment, and is it ahead of your initial expectations?A: Chris (CEO) confirmed the IIP segment is ahead of budget, with strong organic growth contributing to its success. The company is actively pursuing acquisitions in this space, having widened its industry verticals and service offerings. They are competing and winning large contracts, including a major new auto industry contract requiring 50 FTEs. The team is spending more time on development in this area and expects to continue deploying capital there, as the embedded organic growth elements are strong. Q: Can you discuss the recent Medicare rate proposals for 2026 and their potential impact on the company?A: Chris (CEO) noted that the 2026 proposed rules are the most complicated he has seen, with significant changes to work values and geographic indices. However, the overall assessment is positive, marking the first time in a while that Medicare rates are not a headwind. Carrie (CFO) estimated the company could see a 1% to 1.75% rate increase, translating to $2-$3 million in top-line revenue and $1.5-$2.5 million in EBITDA. The company is pushing for a more permanent fix to the physician fee schedule, using results from a Maryland pilot program showing physical therapy as primary care for musculoskeletal issues can generate massive savings. Q: How are you managing labor costs and what strategies are in place for recruiting and retention?A: Eric (likely COO) detailed several initiatives: a 25% increase in student clinical rotations, a new applicant tracking system, and a strong focus on mentorship programs. These efforts have resulted in the lowest turnover rates in 7 years for the first half of 2025. The company is also deploying AI-backed voice recognition technology for clinical documentation, which is well-received by clinicians and expected to aid retention. Carrie (CFO) noted salaries and related costs increased only 0.7% year-over-year, the smallest increase since Q4 2023, and total operating costs per visit actually decreased. Q: What is the company's capital allocation strategy, particularly regarding the new share repurchase program?A: Chris (CEO) explained that the board authorized a $12 million share repurchase program through December 31, 2026, as a tool to demonstrate confidence in the company's growth, given the stock has been undervalued. However, acquisitions remain the primary capital allocation priority, with injury prevention being the first preference, followed by physical therapy. The company will be disciplined about buybacks, dependent on other capital demands and stock price. Carrie (CFO) added that the balance sheet remains strong with $135 million on the term loan fixed at 4.7% and $34.1 million in cash. Q: Can you provide more detail on the commercial pricing breakdown and the impact of the Michigan payer policy change?A: Carrie (CFO) provided the breakdown: overall net rate was $105.33 per visit, commercial rates were around $105.50 (up 1-1.5% year-over-year), Medicare was slightly north of $92, and workers' comp was still a little under $150 per visit. The Michigan payer policy change, effective April 1st, had about a $0.30 per visit impact on the overall rate. Without that change, the rate would have been at the first quarter level. Chris (CEO) noted this appears to be an isolated situation, not a contagion risk, as Michigan has had ebb and flow with this payer on various fronts. Q: How should we think about capacity constraints and the potential for margin expansion with incremental volumes?A: Chris (CEO) explained that capacity is not limited by physical footprint, as clinics can extend hours and fill slower times. The constraint is staffing, but the company has made investments in recruiting, retention, and residency programs to build a stable bench. He confirmed that incremental visits are extremely margin accretive, as fixed costs are already covered, which is why total cost per visit decreased this quarter. With continued commercial rate wins and efforts around workers' comp, the company has more than enough to offset wage pressure and expects margins to expand over time. Q: What is the status of the Metro PT acquisition in New York, and how is it performing?A: Chris (CEO) stated that Metro has a strong team and is performing well, with plenty of opportunities for growth, including aqua-novos (small de novo clinics). Carrie (CFO) highlighted that Metro's net rate has improved significantly since acquisition, from around $101 in the first month to $104.50 in Q1 and $107.50 in Q2. This improvement doesn't show up in the mature clinics line but in the clinic additions line, contributing to overall rate growth. The acquisition also brought a home care business, which is now being reported separately with 28,493 visits in Q2. Q: Can you discuss the company's approach to virtual physical therapy and potential partnerships with digital providers?A: Chris (CEO) acknowledged having discussions with virtual providers about offering brick-and-mortar services to supplement digital offerings. However, he expressed skepticism about the current virtual model, noting that many providers deliver generic care through apps or call centers without licensed clinicians, which he believes cannot effectively handle complex post-operative cases. The company is instead using technology like Limber to augment its own services, allowing clinicians to see patients' home programs and objective measures. He indicated the company will approach digital solutions differently, focusing on augmenting care rather than replacing it. Q: What insights have come from the deep operational reviews with your top 40 partnerships?AFor the complete transcript of the earnings call, please refer to the full earnings call transcript.

HOUSTON, August 05, 2026--(BUSINESS WIRE)--U.S. Physical Therapy, Inc. ("USPH" or the "Company") (NYSE, NYSE Texas: USPH), a national operator of outpatient physical therapy clinics and provider of industrial injury prevention services ("IIP"), today reported results for the three and six months ended June 30, 2026. Total net revenue of $214.1 million for the second quarter ended June 30, 2026 ("Q2 2026"), an 8.5% increase over the second quarter ended June 30, 2025 ("Q2 2025"). Net income attributable to USPH shareholders of $9.9 million for Q2 2026 compared to $12.4 million for Q2 2025 with earnings per share of $0.25 compared to earnings per share of $0.58 for the same periods, respectively. Under GAAP, changes in the value of redeemable noncontrolling interests, representing our partners’ ownership stakes in subsidiaries not fully owned by USPH, are excluded from net income but are included in the calculation of earnings per share. Improving performance increases the value of these ownership interests, which has a dilutive effect on earnings per share. Operating results (1), a non-GAAP measure, of $11.3 million for Q2 2026 compared to $12.4 million for Q2 2025, with operating results per share of $0.75 compared to $0.81 for the same periods, respectively. Adjusted EBITDA (1), a non-GAAP measure, of $27.0 million for Q2 2026 compared to $26.9 million for Q2 2025. Chris Reading, Chairman and Chief Executive Officer commented, "Our second quarter 2026 results include an important milestone for USPH as we completed the integration of 31 existing clinics into our hospital affiliations. The remaining 39 hospital affiliated clinics are expected to integrate in the third quarter, resulting in increasing physical therapy revenues and margins. Combined with the partial virtualization of front desk processes and expansion of cash-based programs in our largest partnerships, we expect to accelerate our year over year adjusted EBITDA improvement in the back half of 2026, and for these initiatives to propel us into 2027." Mr. Reading continued, "I want to thank our partners, clinical and support staff for their ongoing work, with special callout to those working directly on our hospital initiative. Their work is building momentum for 2027 with an expanding pipeline of opportunities around the country." Q2 2026 versus Q2 2025 Physical therapy net revenue was $182.4 million for Q2 2026, an 8.4% increase versus Q2 2025, including a 3.5% increase in mature revenue (1). Patient visits (1) were 1,661,694 for Q2 2026, a 6.6% increase versus Q2 2025, with average daily visits per clinic (1) of 33.5 for Q2 2026 compared to 32.7 for Q2 2025. Physical therapy net revenue per patient visit (1) was $107.59 for Q2 2026, a $2.26 increase compared to Q2 2025. Physical therapy margin was 19.5% for Q2 2026 compared to 21.2% for Q2 2025. Adjusted physical therapy margin (2) was 19.9% compared to 21.4% for Q2 2025. Q2 2026 results included an unfavorable impact of company-provided health benefit costs compared to a favorable impact in Q2 2025, impacting margins by approximately 100 basis points. IIP revenue was $31.7 million for Q2 2026, a 9.1% increase compared to Q2 2025. Excluding the IIP acquisition on January 31, 2026, IIP revenue increased 3.6% over the comparable periods. IIP margin was 20.4% for Q2 2026 compared to 20.3% for Q2 2025. Corporate expense as a percentage of total revenue was 8.9% in each of Q2 2026 and Q2 2025. Adjusted corporate expense (2) as a percentage of total revenue was 8.4% in Q2 2026 and 8.7% in Q2 2025. The Company added four and closed four locations during Q2 2026, bringing the clinic count (1) to 781 as of June 30, 2026. Six Months ended June 30, 2026 versus Six Months ended June 30, 2025 Total net revenue was $412.3 million for year-to-date June 30, 2026 ("YTD 2026"), an 8.2% increase over the year-to-date ended June 30, 2025 ("YTD 2025"). Physical therapy net revenue was $350.0 million for YTD 2026, a 7.8% increase versus YTD 2025, including a 3.1% increase in mature revenue (1). Patient visits (1) were 3,204,838 for the YTD 2026, a 6.7% increase versus YTD 2025, with average daily visits per clinic (1) of 32.7 for YTD 2026 compared to 31.9 for the YTD 2025. Physical therapy net revenue per patient visit (1) was $107.06 for YTD 2026, a $1.57 increase compared to YTD 2025. Physical therapy margin was 17.7% for YTD 2026 compared to 19.0% for YTD 2025. Adjusted physical therapy margin (2) was 18.1% compared to 19.2% for YTD 2025. IIP revenue was $62.3 million for YTD 2026, a 10.4% increase compared to YTD 2025. Excluding the IIP acquisition made on January 31, 2026, IIP revenue increased 5.8% over the comparable periods. IIP margin was 20.4% for YTD 2026 compared to 19.5% for YTD 2025. Corporate expense as a percentage of total revenue was 9.0% for YTD 2026 and 8.8% for YTD 2025. Adjusted corporate expense (2) as a percentage of total revenue was 8.6% for YTD 2026 and 8.7% for YTD 2025. Net income attributable to USPH shareholders of $14.9 million for YTD 2026 compared to $22.3 million for YTD 2025 with earnings per share of $0.13 compared to earnings per share of $1.38 for the same periods, respectively. Operating results (2), a non-GAAP measure, of $18.2 million for YTD 2026 compared to $19.7 million for YTD 2025, with operating results per share of $1.21 compared to $1.30 for the same periods, respectively. Adjusted EBITDA (2), a non-GAAP measure, of $47.2 million for YTD 2026 compared to $46.4 million for YTD 2025. BALANCE SHEET AND CASH FLOW Cash and cash equivalents were $24.9 million as of June 30, 2026 compared to $35.6 million as of December 31, 2025. Borrowings under the Company’s credit facility were $221.0 million as of June 30, 2026, compared to $161.8 million as of December 31, 2025. As previously announced, on April 14, 2026, the Company closed on a $450.0 million, five-year credit facility that includes a $175.0 million term loan and a $275.0 million revolver with a maturity date of April 14, 2031. This is an increase and extension of the Company’s prior $325.0 million credit facility which was due to expire on June 17, 2027. The Company’s Board of Directors declared a quarterly dividend of $0.46 which will be payable on September 11, 2026 to shareholders of record on August 21, 2026. Under the Company’s $25.0 million share repurchase authorization, during Q2 2026, the Company repurchased 306,256 of its own shares on the open market for a total consideration of $19.2 million, at an average share price of $62.80. Including repurchases made in 2025, the Company has repurchased 387,578 shares on the open market for a total consideration of $24.8 million, at an average share price of $63.99. 2026 ACQUISITIONS The Company has announced three acquisitions during 2026 with a cumulative purchase price of $37.6 million and approximately $27.0 million in cumulative annualized revenue. On July 1, 2026, the Company acquired a 67% equity interest in a 12-clinic physical therapy practice for a purchase price of $16.4 million. The business currently generates $12.0 million in annual revenue and 112,000 annual visits. On January 31, 2026, the Company acquired a 70% equity interest in an industrial injury prevention business for a purchase price of $15.0 million. The business currently generates $7.0 million in annual revenue. On January 2, 2026, the Company acquired a 50% equity interest in an 8-clinic physical therapy practice for a purchase price of $6.2 million. The business currently generates $8.0 million in annual revenue and 66,000 annual visits. HOSPITAL AFFILIATIONS The Company’s two previously announced hospital affiliations impact 70 existing USPH clinics. On February 2, 2026, the Company announced a 10-year strategic alliance between its subsidiary, Metro, and NYU Langone. The integration of the 60 clinics began in Q2 2026 and is expected to conclude in the three months ended September 30, 2026 ("Q3 2026"). On February 25, 2026, the Company announced a 10-year strategic alliance between its subsidiary in the gulf-coast region and a local hospital system. The integration of the 10 clinics is expected to occur in Q3 2026. 2026 EARNINGS GUIDANCE Management reaffirmed the Company’s full year 2026 adjusted EBITDA guidance of $102.0 million to $106.0 million. CONFERENCE CALL INFORMATION U.S. Physical Therapy’s management will host a conference call at 10:30 a.m. ET / 9:30 a.m. CT, on August 6, 2026, to discuss the Company’s financial results for the three and six months ended June 30, 2026. Interested parties may participate in the call by dialing (800) 347-6865 (Primary) or (203) 518-9757 (Alternate) and conference ID of USPHQ226. Please call approximately 10 minutes before the call is scheduled to begin. To listen to the live call, go to the Company’s website at www.usph.com at least 15 minutes early to register, download and install any necessary audio software. If you are unable to listen live, a playback of the conference call can be accessed until November 4, 2026, on the Company’s website. FORWARD-LOOKING STATEMENTS This press release contains statements that are considered to be forward-looking within the meaning under Section 21E of the Securities Exchange Act of 1934, as amended. These statements contain forward-looking information relating to the financial condition, results of operations, plans, objectives, future performance and business of our Company. These statements (often using words such as "believes", "expects", "intends", "plans", "appear", "should" and similar words) involve risks and uncertainties that could cause actual results to differ materially from those we expect. Included among such statements may be those relating to new clinics, availability of personnel and the reimbursement environment. The forward-looking statements are based on our current views and assumptions and actual results could differ materially from those anticipated in such forward-looking statements as a result of certain risks, uncertainties, and factors, which include, but are not limited to: changes in Medicare rules and guidelines and reimbursement or failure of our clinics to maintain their Medicare certification and/or enrollment status; revenue we receive from Medicare and Medicaid being subject to potential retroactive reduction; changes in reimbursement rates or payment methods from third party payors including government agencies, and changes in the deductibles and co-pays owed by patients; private third-party payors for our services may adopt payment policies that could limit our future revenue and profitability; compliance with federal and state laws and regulations relating to the privacy of individually identifiable patient information, and associated fines and penalties for failure to comply; compliance with state laws and regulations relating to the corporate practice of medicine and fee splitting, and associated fines and penalties for failure to comply ; competitive, economic or reimbursement conditions in our markets which may require us to reorganize or close certain clinics and thereby incur losses and/or closure costs including the possible write-down or write-off of goodwill and other intangible assets; the impact of a termination of one or more of the Company’s hospital affiliated arrangements, which could have an adverse impact on revenue and the results of operations; the impact of future public health crises and epidemics/pandemics; certain of our acquisition agreements contain put-rights related to a future purchase of significant equity interests in our subsidiaries or in a separate company; the impact of future vaccinations and/or testing mandates at the federal, state and/or local level, which could have an adverse impact on staffing, revenue, costs and the results of operations; our debt and financial obligations could adversely affect our financial condition, our ability to obtain future financing, and our ability to operate our business; changes as the result of government enacted national healthcare reform; the ability to control variable interest entities for which we do not have a direct ownership; business and regulatory conditions including federal and state regulations; governmental and other third party payor inspections, reviews, investigations and audits, which may result in sanctions or reputational harm and increased costs; revenue and earnings expectations; contingent consideration provisions in certain of our acquisition agreements, the value of which may impact future financial results; legal actions, which could subject us to increased operating costs and uninsured liabilities; general economic conditions, including but not limited to inflationary and recessionary periods; actual or perceived events involving banking volatility, defaults or other adverse developments that affect the U.S or the international financial systems, may result in market wide liquidity problems which could have a material and adverse impact on our available cash and results of operations; our business depends on hiring, training, and retaining qualified employees; availability and cost of qualified physical therapists; competitive environment in the industrial injury prevention services business, which could result in the termination or non-renewal of contractual service arrangements and other adverse financial consequences for that service line; our ability to identify and complete acquisitions, and the successful integration of the operations of the acquired businesses; impact on the business and cash reserves resulting from retirement or resignation of key partners and resulting purchase of their non-controlling interest (minority interests); maintaining our information technology systems with adequate safeguards to protect against cyber-attacks; a security breach of our or our third party vendors’ information technology systems may subject us to potential legal action and reputational harm and may result in a violation of the Health Insurance Portability and Accountability Act of 1996 of the Health Information Technology for Economic and Clinical Health Act; maintaining clients for which we perform management, industrial injury prevention related services, and other services, as a breach or termination of those contractual arrangements by such clients could cause operating results to be less than expected; maintaining adequate internal controls; use of generative artificial intelligence; maintaining necessary insurance coverage; availability, terms, and use of capital; and weather and other seasonal factors. Many factors are beyond our control. Given these uncertainties, you should not place undue reliance on our forward-looking statements. For additional information regarding these and other risks and uncertainties, that could cause actual results to differ materially from those contained in our forward-looking statements, please refer to "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the Securities and Exchange Commission ("SEC") on February 27, 2026 and any risk factors contained in subsequent quarterly and annual reports we file with the SEC. Our forward-looking statements represent our estimates and assumptions only as of the date of this report. Except as required by law, we are under no obligation to update any forward-looking statement as a result of new information, future events, or otherwise, except as required by law. GLOSSARY OF TERMS Mature revenue includes revenues from owned and hospital affiliated clinics as well as homecare which were operational prior to January 1, 2025, and are still operating as of the balance sheet date. This metric excludes other management contracts. Physical therapy revenue per patient visit is net revenue from owned and hospital affiliated clinics as well as homecare divided by total number of patient visits (defined below) during the periods presented. This metric excludes other management contracts. Patient visits is the number of unique patient visits at the Company’s owned and hospital affiliated clinics as well as homecare for the periods presented. This metric excludes other management contracts. Average daily visits per clinic is patient visits at the Company’s owned and hospital affiliated clinics, divided by the number of days in which normal business operations were conducted during the periods presented and further divided by the average number of owned and hospital affiliated clinics in operation during the periods presented. This metric excludes homecare and other management contracts. Clinic count includes owned and hospital affiliated clinics as well as other management contracts. This metric excludes homecare. ABOUT U.S. PHYSICAL THERAPY, INC. Founded in 1990, U.S. Physical Therapy, Inc. owns and/or manages 796 outpatient physical therapy locations in 45 states. USPH locations provide preventative and post-operative care for a variety of orthopedic-related disorders and sports-related injuries, treatment for neurologically-related injuries and rehabilitation of injured workers. USPH also has an industrial injury prevention business which provides onsite services for clients’ employees including injury prevention and rehabilitation, performance optimization, post-offer employment testing, functional capacity evaluations, and ergonomic assessments. More information about U.S. Physical Therapy, Inc. is available at www.usph.com. The information included on that website is not incorporated into this press release. U.S. PHYSICAL THERAPY, INC. AND SUBSIDIARIESRECONCILIATION OF NON-GAAP MEASURESTO THE MOST DIRECTLY COMPARABLE GAAP MEASURE The following tables provide details of the basic and diluted earnings per share computation and reconcile net income attributable to USPH shareholders calculated in accordance with GAAP to Adjusted EBITDA and Operating Results. The tables also provide a reconciliation of additional non-GAAP measures to the most comparable GAAP measure. Management believes providing Adjusted EBITDA and Operating Results to investors is useful for comparing the Company's period-to-period results as well as for comparing with other similar businesses since most do not have redeemable instruments and therefore have different equity structures. Management uses Adjusted EBITDA and Operating Results, which eliminate certain items described above that can be subject to volatility and unusual costs, as the principal measures to evaluate and monitor financial performance period over period. Adjusted EBITDA, a non-GAAP measure, is defined as net income attributable to USPH shareholders before interest income, interest expense, taxes, depreciation, amortization, change in fair value of contingent earn-out consideration, changes in revaluation of put-right liability, equity-based awards compensation expense, clinic closure costs, business acquisition related costs, costs related to a one-time financial and human resources systems upgrade, loss on sale of a partnership, other income and related portions for non-controlling interests, and other non-recurring items as applicable. Operating Results, a non-GAAP measure, equals net income attributable to USPH shareholders less changes in revaluation of a put-right liability, clinic closure costs, loss on sale of a partnership, changes in fair value of contingent earn-out consideration, business acquisition related costs, costs related to a one-time financial and human resources systems upgrade, any allocations to non-controlling interests, all net of taxes, and other non-recurring items as applicable. Operating Results per share also excludes the impact of the revaluation of redeemable non-controlling interest and the associated tax impact. Adjusted EBITDA and Operating Results are not measures of financial performance under GAAP. Adjusted EBITDA, Operating Results and other non-GAAP measures should not be considered in isolation or as an alternative to, or substitute for, net income attributable to USPH shareholders presented in the consolidated financial statements. View source version on businesswire.com: https://www.businesswire.com/news/home/20260805033144/en/ Contacts U.S. Physical Therapy, Inc.Jason Curtis, Interim Chief Financial Officeremail: [email protected] Chris Reading, Chief Executive Officer(713) 297-7000 Three Part AdvisorsJoe Noyons(817) 778-8424

Option Care (OPCH) came out with quarterly earnings of $0.45 per share, beating the Zacks Consensus Estimate of $0.42 per share. This compares to earnings of $0.41 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +7.14%. A quarter ago, it was expected that this infusion and home care services company would post earnings of $0.37 per share when it actually produced earnings of $0.4, delivering a surprise of +8.11%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. Option Care, which belongs to the Zacks Medical - Outpatient and Home Healthcare industry, posted revenues of $1.44 billion for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 1.68%. This compares to year-ago revenues of $1.42 billion. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Option Care shares have lost about 29.4% since the beginning of the year versus the S&P 500's gain of 8.5%. While Option Care has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Option Care was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.48 on $1.45 billion in revenues for the coming quarter and $1.83 on $5.71 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Medical - Outpatient and Home Healthcare is currently in the top 35% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, U.S. Physical Therapy (USPH), is yet to report results for the quarter ended June 2026. The results are expected to be released on August 5. This physician staffing services company is expected to post quarterly earnings of $0.85 per share in its upcoming report, which represents a year-over-year change of +4.9%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. U.S. Physical Therapy's revenues are expected to be $213.4 million, up 8.1% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Option Care Health, Inc. (OPCH) : Free Stock Analysis Report U.S. Physical Therapy, Inc. (USPH) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research