USPH · U.S. Physical Therapy, Inc.

Performance Summary

U.S. Physical Therapy, Inc. reported net revenue of $781.0 million for fiscal year 2025, with gross profit of $149.7 million and operating income of $86.7 million. Net income attributable to USPH shareholders was $39.6 million, representing basic and diluted earnings per share of $1.00. The company's gross margin was 19.2% and operating margin was 11.1%. Total assets stood at $1.20 billion as of December 31, 2025, with total liabilities of $433.8 million and total USPH shareholders' equity of $476.4 million. The company declared dividends of $2.00 per common share.

Revenue Analysis

The company operates through two reportable business segments: physical therapy operations and industrial injury prevention services (IIP). The physical therapy operations segment consists of clinics and home-care practices providing pre- and post-operative care for orthopedic-related disorders, sports-related injuries, and rehabilitation of injured workers. The IIP segment provides onsite services for clients' employees including injury prevention, rehabilitation, performance optimization, and ergonomic assessments. For the year ended December 31, 2025, net patient revenues from Medicare were approximately $213.5 million. In 2025, approximately 64.2% of revenues were derived from managed care plans, commercial health insurers, workers' compensation payors, and other private pay sources, while approximately 35.8% were derived from Medicare and Medicaid.

Margins & Profitability

The company achieved a gross margin of 19.2% on net revenue of $781.0 million, with gross profit of $149.7 million. Operating expenses included salaries and related costs of $461.9 million, rent, supplies, contract labor and other costs of $140.4 million, depreciation and amortization of $21.1 million, provision for credit losses of $7.6 million, and clinic closure costs of $270,000. Corporate office costs were $69.3 million. Operating income was $86.7 million, resulting in an operating margin of 11.1%. Net income attributable to USPH shareholders was $39.6 million after accounting for $18.4 million in net income attributable to non-controlling interest.

Cash Flow & Balance Sheet

Operating activities generated $75.1 million in cash flow, primarily from net income of $58.0 million adjusted for non-cash items including depreciation and amortization of $22.4 million and provision for credit losses of $7.6 million. Investing activities used $36.7 million in cash, including purchases of fixed assets ($14.1 million) and majority interests in businesses ($15.7 million). Financing activities used $44.1 million in cash, including cash dividends paid to shareholders ($27.4 million), distributions to non-controlling interest ($19.3 million), and payments on revolving facility ($170.0 million). The net decrease in cash was $5.8 million, with ending cash and cash equivalents of $31.6 million. Total assets were $1.20 billion, including goodwill of $692.4 million and other identifiable intangible assets of $172.9 million.

Outlook

The company expects Medicare reimbursement rates under the Medicare Physician Fee Schedule to increase by approximately 1.75% for services provided in 2026 compared to 2025 rates. The company faces risks related to decreases in Medicare reimbursement rates, as Medicare revenues were approximately $213.5 million for 2025. Compliance with complex Medicare and Medicaid regulations remains a challenge, with potential for retroactive adjustments, recoupments, or repayments. The company depends substantially on third-party payors, with 64.2% of revenues from private sources and 35.8% from government programs. Initiatives by industry and government to contain healthcare costs may affect profitability through discounted service contracts.