U.S. Physical Therapy, Inc.

What they do

USPH operates two reportable segments. The physical therapy operations segment runs physical therapy, speech therapy and occupational therapy clinics plus home-care physical and speech therapy practices, treating orthopedic disorders, sports injuries and injured workers. The industrial injury prevention services (IIP) segment provides onsite injury prevention and rehabilitation, performance optimization, post-offer employment testing, functional capacity evaluations and ergonomic assessments, contracted with and paid for directly by employers including a number of Fortune 500 companies.

Revenue drivers

• Physical therapy operations — The larger segment: $182.4 million of net revenue in Q2 2026, an 8.4% increase year over year, with 1,661,694 patient visits and net revenue per visit of $107.59.
• Industrial injury prevention services (IIP) — Q2 2026 revenue of $31.7 million, up 9.1% year over year; excluding the January 31, 2026 IIP acquisition, revenue rose 3.6%.
• Acquired clinic and IIP practices — Growth is supplemented by acquisitions; the 10-K lists deals from February 2023 through July 2025, and the 2025 deal year included fourteen tuck-in physical therapy clinic purchases.
• Hospital affiliations — 31 existing clinics were integrated into hospital affiliations in Q2 2026, with the remaining 39 hospital-affiliated clinics expected to integrate in Q3.

Recent performance

Q2 2026 total net revenue was $214.1 million, up 8.5% over Q2 2025. Net income attributable to USPH shareholders was $9.9 million, or $0.25 per share, versus $12.4 million and $0.58 per share in Q2 2025. Operating results, a non-GAAP measure, were $11.3 million versus $12.4 million, with operating results per share of $0.75 versus $0.81. Adjusted EBITDA was $27.0 million versus $26.9 million. Physical therapy margin was 19.5% versus 21.2%, and IIP margin was 20.4% versus 20.3%.

Strategy

Management continues acquiring multi-clinic outpatient physical therapy practices and home-care physical and speech therapy practices, developing satellite clinics within existing partnerships, and acquiring industrial injury prevention businesses. The company is integrating hospital-affiliated clinics, virtualizing front desk processes and expanding cash-based programs in its largest partnerships. It is also implementing a new ERP system to support human resources and accounting functions. The company repurchased 81,322 shares for $5.6 million in the three months ended December 31, 2025.

Risks

• Reimbursement and payor policy — Medicare and Medicaid revenue is subject to potential retroactive reduction, and private third-party payors may adopt payment policies that limit future revenue and profitability.
• Labor availability — The business depends on hiring, training and retaining qualified employees, and on the availability and cost of qualified physical therapists.
• Acquisition integration and minority interests — Growth depends on identifying and integrating acquisitions, and certain acquisition agreements contain put-rights related to future purchases of significant equity interests; retirement or resignation of key partners triggers purchase of their non-controlling interests.
• Clinic closures and impairment — Competitive, economic or reimbursement conditions may require reorganizing or closing clinics and incurring closure costs including possible write-down or write-off of goodwill and other intangible assets.

Outlook

Management reaffirmed full-year guidance alongside the Q2 2026 release. With the remaining 39 hospital-affiliated clinics expected to integrate in Q3, the virtualized front desk processes and expanded cash-based programs, management expects to accelerate year-over-year adjusted EBITDA improvement in the back half of 2026 and to carry that momentum into 2027.