U S PHYSICAL THERAPY INC /NV Q1 FY2025 earnings call

• Weather impacted the first quarter, but visits per clinic per day improved, with March being particularly strong.
• Despite Medicare rate cuts, the team increased rates by over $2 per visit.
• Payer contracting team, including work comp focused group, made progress.
• Injury Prevention segment grew double-digit, with recent acquisitions and contract wins.
• Added 14 centers this quarter, with deals in diligence, and announced a home care acquisition.
• Metro partnership showed strong visit performance and home care capabilities.

Physical therapy revenues in the first quarter of 2025 were $156.4 million, an increase of $22 million or 16.4% from the first quarter of 2024, driven by higher net rate and acquisitions like Metro, which added nearly $17 million in revenue. The Injury Prevention (IIP) segment saw revenue up 28.8% year-over-year, with gross profit up 29.1%. Workers' comp revenue mix increased to 10.9% in Q1 2025, the highest since 2020.

Management is hopeful to update guidance after a couple more months, as they are ahead of internal projections and want to get more comfortable with the trajectory before providing updated guidance.

• Weather can impact volumes, especially in key markets.
• Economic downturns could affect staffing and volumes.
• Legislative challenges with Medicare rate cuts and uncertainties in healthcare policy.

Q: Joanna Gajuk asked about mature clinic revenue being down year-over-year and the impact of weather and calendar.

A: Christopher Reading and Carey Hendrickson explained weather, particularly extreme winter weather in certain markets, affected mature clinic revenue.

Q: Benjamin Rossi asked about drivers of IIP outperformance and growth vectors.

A: Christopher Reading and Eric Williams discussed organic growth in IIP, rate escalators, and greenfield opportunities.

Q: Brian Tanquilut asked about improvement in the business and clinician productivity.

A: Christopher Reading talked about strong demand, recruiting investments, and school relationships.

Q: Lawrence Solow asked about margin decline and leap year impact.

A: Carey Hendrickson and Christopher Reading discussed cost absorption, acquisitions, and focus on margin improvement.

Q: Jared Haase asked about learnings from Metro and home care expansion.

A: Christopher Reading and Eric Williams highlighted Metro's strong team, home care capabilities, and potential for expansion across partnerships.

Q: Constantine Davides asked about home care profitability and IIP in manufacturing.

A: Christopher Reading and Eric Williams discussed home care profitability and IIP potential in manufacturing.

Q: Michael Petusky asked about Metro rate renegotiation and home care interest.

A: Carey Hendrickson and Eric Williams talked about rate progress in Metro and interest in home care and other revenue-generating programs.