US Physical Therapy Q2FY26 Results: Revenue rises 8.5% to $214 million
- Revenue rose 8.5% YoY to $214 million, driven by 6.6% visit growth and record net rates.
- Adjusted EBITDA held flat at $27.0 million as margin pressure offset by volume gains.
- Gross profit margin contracted to 19.9% from 21.4% due to higher healthcare claims.
- Company integrated 31 clinics into hospital affiliations, with 39 more expected in Q3.
- Full-year 2026 adjusted EBITDA guidance reaffirmed at $102 million to $106 million.
*this image is generated using AI for illustrative purposes only.
US Physical Therapy (NYSE: USPH) reported second-quarter 2026 revenue of $214 million, an 8.5% increase year over year, driven by volume growth and record net rates per visit.
Adjusted EBITDA remained flat at $27.0 million compared to $26.9 million in the prior-year quarter, as operational gains were offset by higher self-insured healthcare costs and upfront hiring for hospital affiliations.
Financial Performance
Total revenue growth was supported by an 8.4% rise in physical therapy revenue to $182 million. Industrial injury prevention (IIP) revenue grew 9.1% to $32 million.
The company achieved a record net rate per visit of $107.59, up $2.26 from the previous year. This rate increase included lifts across commercial payers (1.2%), Medicare (3.7%), and workers' compensation (2.0%).
| Metric | Q2 2026 | Q2 2025 | Change |
|---|---|---|---|
| Total Revenue | $214 million | — | +8.5% YoY |
| PT Revenue | $182 million | — | +8.4% YoY |
| IIP Revenue | $32 million | — | +9.1% YoY |
| Adjusted EBITDA | $27.0 million | $26.9 million | Flat |
| Net Income | $9.9 million | $12.4 million | Decline |
What the Numbers Show
While top-line growth accelerated, profitability faced headwinds from specific cost structures. The adjusted physical therapy gross profit margin contracted to 19.9% from 21.4% in Q2 2025. Management attributed this decline primarily to a swing in self-insured healthcare claims, which increased costs by approximately $3.2 million year-over-year due to significant claims in the current period against a lighter experience in 2025. Additionally, adjusted salaries and related costs rose to 57.5% of revenue from 56.4%, reflecting both higher medical costs and front-loaded hiring for hospital partnerships.
Operational Highlights
Visits grew 6.6% to 1,662,000, with average daily visits per clinic reaching an all-time high of 33.5. The company integrated 31 clinics into hospital affiliations during the quarter, generating $5.6 million in initial revenue from these arrangements. An additional 39 clinics are expected to integrate in Q3 2026.
Balance Sheet and Guidance
Cash and cash equivalents stood at $25 million at the end of Q2 2026, down from $36 million at year-end 2025. Credit facility borrowings increased to $221 million from $162 million, following an upsized $450 million credit facility that includes a $125 million accordion feature. Revolver availability rose to $229 million.
The company reaffirmed its full-year 2026 adjusted EBITDA guidance of $102 million to $106 million. Subsequent to the quarter, US Physical Therapy acquired a 12-clinic practice for $16.4 million, bringing total 2026 acquisition spending to $38 million across three deals.
How will the integration of the remaining 39 clinics in Q3 2026 impact near-term profitability given the current headwinds from upfront hiring costs?
What specific strategies is management implementing to mitigate the volatility of self-insured healthcare claims that eroded gross margins by 150 basis points?
With cash reserves declining and credit facility borrowings rising significantly, what is the company's plan for deleveraging or refinancing in the current interest rate environment?
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