U.S. Physical Therapy Q2 Earnings Call Highlights

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. 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. 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. 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. "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. 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. 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 ...