U.S. Physical Therapy (NYSE:USPH) highlighted improved profitability and record patient volumes in its fourth-quarter and full-year 2025 earnings call, while outlining initiatives and new strategic hospital affiliations expected to contribute to growth and margin expansion in 2026 and beyond.
Full-year 2025 performance: EBITDA and revenue up double digits
Chairman and CEO Chris Reading said 2025 results were delivered despite “continued Medicare rate reductions,” with progress “across every measure.” On an adjusted basis, the company reported that adjusted EBITDA increased by $13.2 million, a 16.2% improvement year over year, while net revenue increased 16.3%. Reading said the increase in net revenue was driven by 16% growth in the physical therapy business and 18% growth in the injury prevention business.
Fourth-quarter highlights: record visit intensity and gross margin expansion
Management emphasized record levels of patient visits per clinic per day, describing demand as “unabated.” Hendrickson said average visits per clinic per day were 32.7 in the fourth quarter, the highest fourth-quarter level in company history, and marked the seventh consecutive quarter with a record on a per-day basis. For full-year 2025, average visits per clinic per day were 32.2, also a record annual level.
In physical therapy, Hendrickson reported:
- Total clinic visits: 1,560,603 in the fourth quarter, plus 32,733 home care visits.
- Physical therapy revenue: $173.8 million in the fourth quarter, up $20.0 million (13%) year over year.
- Net rate per visit: $106.49 in the fourth quarter versus $104.73 a year earlier; full-year net rate rose 1% to $105.76 from $104.71 despite a 2.9% Medicare rate reduction in 2025.
- Cost control: salaries and related costs per visit fell 1.1% year over year in the quarter to $62.15; total operating cost per visit decreased 0.6% to $85.56.
- Adjusted gross margin: 20.5% in the quarter, up nearly 200 basis points from 18.6% in the fourth quarter of 2024.
Adjusted EBITDA increased to $24.8 million in the fourth quarter of 2025 from $21.8 million in the year-ago quarter, according to Hendrickson. Operating results were $10.2 million, up from $7.8 million, and operating results per share increased to $0.67 from $0.51.
Hendrickson also addressed GAAP EPS dynamics, explaining that changes in the revaluation of redeemable non-controlling interests are included in GAAP EPS. “When our partnerships perform well, our redeemable non-controlling interest increases,” he said, which can reduce GAAP EPS even when operating performance improves.
Injury prevention: organic growth in Q4, mixed margin dynamics
The company’s injury prevention segment also posted growth. Hendrickson said Industrial Injury Prevention (IIP) income increased 11.5% in the fourth quarter and 20.2% for the full year. He noted that the fourth-quarter growth was “pure organic growth,” as the company did not complete acquisitions between the fourth quarters of 2024 and 2025.
In the fourth quarter, IIP net revenue increased $2.3 million, or 8.7%, year over year, while IIP income rose $510,000. IIP margin increased to 17.1% from 16.7%.
During Q&A, management discussed a sequential margin decline that investors had noticed. Reading attributed the dynamic to a combination of (1) staffing and training ahead of revenue for a large new contract that began ramping in the fourth quarter and (2) typical seasonal softness, as some manufacturing facilities shut down for part of the year-end period. Reading also said a recent New York injury prevention acquisition brought a “really strong margin profile” and expanded the company’s testing capabilities.
Hospital affiliations and 2026 outlook: guidance calls for continued growth
Reading highlighted two “significant hospital arrangements,” describing them as long-term strategic affiliations expected to begin phasing in around mid-year 2026. He said the relationships will cover 60 Metro clinics and 10 second-market facilities, with the expectation that all 70 clinics—plus scheduled new openings—will be under the affiliations by year-end.
Management provided multiple reference points for the financial impact of the hospital agreements:
- Reading said the “original clinics” are expected to provide an enterprise lift of at least $14 million in EBITDA in 2027, with U.S. Physical Therapy’s portion after minority interest of over $7 million.
- Hendrickson said that when fully implemented (expected by year-end 2026), the two hospital agreements are expected to contribute at least $14 million in combined physical therapy revenue and income, and at least $7.3 million to USPH’s adjusted EBITDA reflecting its ownership interest.
In response to investor questions, Reading said the contribution estimates assume current volumes and do not include additional facilities planned within the relationships, which he said would be additive. He also characterized the reimbursement as akin to a hospital outpatient rate and said the arrangements are exclusive with respect to outpatient partnering. When asked about the rate relative to the company’s blended average, Reading said rates will vary by market, but described them as “meaningfully better,” while reiterating that the company preferred to guide investors to EBITDA contribution rather than provide granular rate detail.
For 2026, Hendrickson guided adjusted EBITDA to a range of $102 million to $106 million. The outlook includes about $2.5 million in incremental revenue related to a Medicare rate increase that took effect Jan. 1, 2026. Management said it included only a modest contribution from the hospital affiliations in 2026 guidance given the mid-year start and phased implementation. In Q&A, Hendrickson said the company’s framework for same-store performance is roughly a 2.5% to 3% increase combining visits and rates, supported by improved rate momentum in 2026.
Reading also outlined operational initiatives for 2026, including further rollout of ambient listening documentation support, “semi-virtualization” of front desk and intake operations, additional cash-based program expansion, a return to pursuing remote therapeutic monitoring following CMS changes beginning in 2026, continued pursuit of additional hospital alliances, and ongoing de novo development and acquisitions in both physical therapy and injury prevention.
On the balance sheet, Hendrickson said the company ended the year with $131 million on its term loan and a swap agreement fixing the interest rate at 4.77% through mid-2027. The company had a $175 million revolving credit facility with $30.5 million drawn at year-end and finished the quarter with $35.6 million in cash.
Management closed the call by reiterating enthusiasm for 2026 execution and for the expected acceleration in 2027 as hospital affiliations mature, while emphasizing continued focus on cost discipline, patient access, and operational efficiency.
About U.S. Physical Therapy (NYSE:USPH)
U.S. Physical Therapy, Inc (NYSE: USPH) is a leading owner and operator of outpatient physical therapy clinics across the United States. The company delivers rehabilitative care to patients recovering from orthopedic injuries, neurological disorders and chronic conditions. Its core services include one-on-one physical therapy sessions, aquatic therapy, occupational therapy, massage therapy and sports medicine programs designed to restore mobility and enhance quality of life.
In addition to traditional rehabilitation services, U.S.
