U.S. Physical Therapy’s Earnings Call Highlights Robust Growth

U.s. Physical Therapy ((USPH)) has held its Q3 earnings call. Read on for the main highlights of the call.

The recent earnings call for U.S. Physical Therapy painted a picture of robust performance and optimistic future prospects. The company reported significant growth in patient visits and gross profit, driven by strategic initiatives. Despite challenges like Medicare rate reductions, the overall sentiment was positive, buoyed by new CMS rules and internal efficiency projects.

Significant Increase in Visits Per Clinic

The company achieved a record-breaking average of 32.2 visits per clinic per day during the third quarter, marking the highest volume in the company’s history. This milestone underscores the effectiveness of their operational strategies and patient engagement efforts.

Strong Growth in Patient Visits

U.S. Physical Therapy experienced an 18% year-over-year increase in total patient visits. This growth was bolstered by the addition of 84 net owned clinics and a 2.2% rise in visits at mature clinics, highlighting the company’s expanding footprint and patient base.

Gross Profit Growth

The company reported a 30% year-over-year growth in gross profit, with mid-teens increase when adjusted for previous year’s anomalies. This demonstrates the company’s ability to enhance profitability amidst challenging economic conditions.

Improved Medicare Reimbursement Outlook

Adjustments by CMS have led to a potentially positive change in Medicare reimbursement, which could improve by more than the previously estimated 1.5%. This adjustment is expected to provide a financial boost to the company.

Injury Prevention Revenue Growth

The Injury Prevention segment saw a 14.6% increase in revenue, all of which was organic. This growth reflects the company’s successful focus on expanding its injury prevention services.

Adjusted EBITDA Growth

Adjusted EBITDA rose by $2.8 million or 13.2% to $23.9 million for the quarter, indicating strong operational performance and efficient cost management.

Remote Therapeutic Monitoring Opportunities

New CMS rules are set to benefit remote therapeutic monitoring, potentially improving patient outcomes and increasing revenue. This development aligns with the company’s strategic focus on leveraging technology for better healthcare delivery.

Medicare Rate Reduction

At the start of the year, the company faced a 2.9% Medicare rate reduction, which impacted revenue. Despite this, the company has managed to maintain strong growth in other areas.

Constrained Workers’ Compensation Growth

Workers’ compensation visits grew by only 5% year-over-year, which was lower compared to other segments. This indicates a potential area for further improvement and strategic focus.

Impact of Geographic Index Factors

Changes in geographic index factors have added complexity to modeling future Medicare reimbursement impacts, presenting a challenge in financial forecasting.

Forward-Looking Guidance

Looking ahead, U.S. Physical Therapy is optimistic about its growth trajectory. The company anticipates continued increases in patient visits and gross profit, supported by strategic initiatives like AI-driven documentation and semi-virtualized front desk operations. Additionally, Medicare reimbursement rates are expected to improve by at least 1.5% in 2026, with potential for further upside.

In summary, U.S. Physical Therapy’s earnings call reflected a strong performance and a positive outlook. The company is poised for continued growth, driven by strategic expansions and technological advancements, despite facing some challenges in reimbursement and workers’ compensation growth.