U.S. Physical Therapy, Inc. — Third Quarter 2026 Earnings Summary

Financial Performance

• Total net revenue was $223 million for Q3 2026, a 13% increase compared to Q3 2025.
• Net income attributable to USPH shareholders was $11 million for Q3 2026, compared to $13 million in Q3 2025.
• GAAP loss per share was $1.04 in Q3 2026, compared to earnings per share of $0.48 in Q3 2025; this includes a $0.1 million loss on change in fair value of contingent earn-out consideration versus a $6 million gain in the prior year.
• Adjusted net income was $12 million for Q3 2026, up from $10 million in Q3 2025.
• Adjusted earnings per share was $0.80 in Q3 2026, compared to $0.66 in Q3 2025.
• Adjusted EBITDA was $28 million for Q3 2026, an increase from $24 million in Q3 2025.
• For the nine months ended September 30, 2026, total net revenue was $635 million, a 10% increase over the same period in 2025.
• Net income attributable to USPH shareholders was $26 million for the nine months ended September 30, 2026, compared to $35 million in the prior year period.
• Adjusted net income was $30.2 million for the nine months ended September 30, 2026, compared to $29.7 million in the prior year period.
• Adjusted earnings per share was $2.01 for the nine months ended September 30, 2026, compared to $1.96 in the prior year period.
• Adjusted EBITDA was $75 million for the nine months ended September 30, 2026, compared to $70 million in the prior year period.
• Cash and cash equivalents were $38 million as of September 30, 2026, compared to $36 million as of December 31, 2025.
• Borrowings under the credit facility were $247 million as of September 30, 2026, compared to $162 million as of December 31, 2025.

Guidance and Future Outlook

• Management reaffirmed full-year 2026 adjusted EBITDA guidance of $102 million to $106 million.
• The Company expects revenue from the 72 clinics under hospital affiliation agreements to increase significantly as referral volumes rise, additional clinics are incorporated, and new affiliations are added from the pipeline.
• Expense control efforts implemented in Q3 2026 to mitigate self-insured employee medical program overages are expected to benefit future periods.

Business Segments and Product Lines

• Physical therapy net revenue was $190 million for Q3 2026, a 13% increase compared to Q3 2025, including a 6% increase in mature revenue.
• Patient visits were 1.7 million for Q3 2026, an 8% increase compared to Q3 2025, with average daily visits per clinic of 33 compared to 32 in the prior year.
• Physical therapy net revenue per patient visit was $111 for Q3 2026, a $5 increase compared to Q3 2025.
• Physical therapy margin was 19% in Q3 2026, consistent with Q3 2025; adjusted physical therapy margin was 19%, up 150 basis points from Q3 2025.
• IIP revenue was $33 million for Q3 2026, a 14% increase compared to Q3 2025; excluding the January 31, 2026 acquisition, IIP revenue increased 8%.
• IIP margin was 22% for Q3 2026, compared to 20% in Q3 2025.
• Corporate expense as a percentage of total revenue was 8% in Q3 2026, down from 9% in Q3 2025.
• The Company added 21 locations and closed three locations during Q3 2026, bringing the total location count to 799 as of September 30, 2026.
• All 72 clinics under previously announced hospital affiliation agreements were successfully integrated by the end of Q3 2026.
• On July 1, 2026, the Company acquired a 67% equity interest in a 12-clinic physical therapy practice for $16 million; the business generates $12 million in annual revenue and 0.1 million annual visits.
• For the nine months ended September 30, 2026, physical therapy net revenue was $540 million, a 10% increase over the prior year, including a 4% increase in mature revenue.
• Patient visits were 4.9 million for the nine months ended September 30, 2026, a 7% increase compared to the prior year.
• Physical therapy net revenue per patient visit was $108 for the nine months ended September 30, 2026, a $3 increase compared to the prior year.
• Physical therapy margin was 18% for the nine months ended September 30, 2026, compared to 19% in the prior year; adjusted physical therapy margin was 18% compared to 19% in the prior year.
• IIP revenue was $95 million for the nine months ended September 30, 2026, a 12% increase compared to the prior year; excluding the January 31, 2026 acquisition, IIP revenue increased 7%.
• IIP margin was 21% for the nine months ended September 30, 2026, compared to 20% in the prior year.

Market and Competitive Landscape

• The Company operates 799 outpatient physical therapy locations in 45 states.
• The 72 clinics operating under hospital affiliation agreements generated $25 million in revenue in Q3 2026.
• The Company maintains a pipeline of hospital prospects for new affiliations.

Risks and Challenges

• Cost pressures from the self-insured employee medical program continued in Q3 2026, impacting margins by approximately 150 basis points in the quarter and 100 basis points year-to-date.
• Risks include changes in Medicare rules, reimbursement rates, and payment methods; potential retroactive revenue reductions; and compliance with federal and state laws regarding patient privacy and corporate practice of medicine.
• Risks include termination of hospital affiliated arrangements, public health crises, and the impact of future vaccinations or testing mandates on staffing and costs.
• Risks include the ability to control variable interest entities, contingent consideration provisions in acquisition agreements, and the impact of retirement or resignation of key partners.
• Risks include cyber-attacks, security breaches, and the ability to identify and complete acquisitions with successful integration.

Management Commentary and Tone

• Chairman and CEO Chris Reading expressed pleasure with the strong financial performance in Q3 2026, noting that EBITDA improvement reflects the initial benefit of the completed rollout of the first two hospital affiliations.
• Management thanked partners, clinicians, and support staff for their efforts in closing out 2026 and accelerating into 2027.
• The tone regarding hospital affiliations is positive, with expectations of significant revenue growth as referral volumes rise and the pipeline advances.

Other Key Points

• The Board of Directors declared a quarterly dividend of $0.46 per share, payable on December 11, 2026, to shareholders of record on November 16, 2026.
• On September 22, 2026, the Company entered into a new interest rate swap agreement with a $171 million initial notional value, fixing term debt at 4.6% from June 30, 2027, to April 14, 2031.
• The Company reported a $0.1 million loss on change in fair value of contingent earn-out consideration in Q3 2026, compared to a $6 million gain in Q3 2025.
• Changes in the value of redeemable noncontrolling interests, representing partners' ownership stakes in subsidiaries not fully owned by USPH, are excluded from net income but included in earnings per share calculations, creating a dilutive effect on EPS as performance improves.
• The Company changed its salaries and related costs metric from cost-per-visit to percentage-of-revenue beginning in the second quarter of 2026.
• Adjusted net income and adjusted earnings per share were previously labeled operating results and operating results per share, respectively.