U.S. Physical Therapy Accelerates Revenue Growth as Profit Falls
The company reaffirmed its 2026 adjusted EBITDA forecast of $102 million to $106 million.
U.S. Physical Therapy (USPH), the physical-therapy clinic operator, accelerated revenue growth in the second quarter even as higher costs weighed on earnings.
Net revenue rose 8.5% from a year earlier to $214.1 million, compared with 7.9% growth in the first quarter. Revenue increased about 8.0% sequentially. Net income attributable to shareholders fell 20.1% to $9.9 million, while earnings declined to $0.25 a share from $0.58 a share.
Adjusted EBITDA was little changed at $27.0 million, after rising about 3.6% year over year in the first quarter. Non-GAAP operating results fell 8.9% to $11.3 million, a steeper decline than the prior quarter's 4.1% drop, though both measures improved sequentially.
Physical-therapy revenue rose 8.4% to $182.4 million as mature-clinic growth accelerated and patient visits increased 6.6%. Average daily visits per clinic climbed to 33.5 from 32.7, while revenue per visit rose 2.1% to $107.59.
The physical-therapy margin improved sequentially to 19.5% from 15.8% but remained 170 basis points below the year-earlier period. Operating costs grew 10.8%, outpacing segment revenue growth, and unfavorable company-provided health-benefit costs accounted for about 100 basis points of the year-over-year margin pressure.
Industrial injury prevention revenue increased 9.1% to $31.7 million, slower than its first-quarter pace, with growth excluding a January acquisition at 3.6%. The segment's margin held at 20.4% from the prior quarter, while its year-over-year improvement narrowed to 10 basis points.
Hospital affiliations contributed $5.6 million of newly reported revenue. U.S. Physical Therapy integrated 31 of the 70 affiliated clinics during the quarter and expects to integrate the remaining 39 in the third quarter, which management forecasts will lift physical-therapy revenue and margins.
The company reaffirmed its full-year adjusted EBITDA outlook, which was unchanged from its first-quarter forecast. U.S. Physical Therapy also announced three acquisitions carrying a combined purchase price of $37.6 million and about $27.0 million in annualized revenue. Borrowings rose to $221.0 million as the company funded expansion and repurchased 306,256 shares for $19.2 million during the quarter.