US Physical Therapy (USPH) Q2 2024 earnings summary

Executive summary

• Achieved record-high average visits per clinic per day in Q2 2024, with April reaching 31.2 and strong demand across most partnerships.

• Operates through two segments: physical therapy operations and industrial injury prevention services (IIP), with 681 clinics in 42 states as of June 30, 2024.

• Completed several acquisitions in 2023 and 2024, including a 100% IIP business for $24 million and a 50% equity interest in a nine-clinic practice.

• Net income attributable to shareholders was $7.5 million for Q2 2024, with EPS of $0.47, down from $0.64 in Q2 2023 due to increased share count.

• Declared a quarterly dividend of $0.44 per share payable September 13, 2024.

Financial highlights

• Q2 2024 net revenue increased 10.4% year-over-year to $167.2 million; physical therapy revenues reached $143.5 million, up 8.5% year-over-year.

• Adjusted EBITDA for Q2 2024 was $22.1 million, up from $21.7 million in Q2 2023; margin was 16.4%.

• Operating income for Q2 2024 was $19.6 million (vs. $20.1 million prior year); EPS slightly lower at $0.47 vs. $0.64 prior year.

• IIP segment Q2 revenue increased 23.2% to $23.7 million; gross profit up 27.5% to $5.1 million.

• Gross margin for Q2 2024 was 20.3% (down from 21.3% prior year); physical therapy margin: 20.1%.

Outlook and guidance

• 2024 Adjusted EBITDA guidance reaffirmed at $80–$85 million, reflecting higher labor and contract costs.

• Management expects continued growth through acquisitions and new clinic development.

• Patient volumes expected to remain strong, with continued progress on net rate and ongoing focus on cost management.

• Anticipates further Medicare reimbursement reductions in 2025, with a proposed 2.8% decrease.