Q3 FY2026
Filed Nov 6, 2026USPH Q3 2026: net revenue $223 million, up 13%; GAAP loss per share $(1.04); adjusted EBITDA $28 million; FY2026 adjusted EBITDA guidance reaffirmed
Net revenue grew 13% and adjusted EBITDA rose to $27,781 thousand from $23,855 thousand, and management reaffirmed FY2026 adjusted EBITDA guidance of $102 million to $106 million. GAAP results weakened: net income attributable to USPH shareholders fell to $11,045 thousand from $13,138 thousand, GAAP operating income was $25,101 thousand against $25,330 thousand, and GAAP EPS was $(1.04) against $0.48. The filing attributes the EPS decline to the revaluation of redeemable non-controlling interests, and the margin pressure to company-provided health benefit costs.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net revenue, Q3 2026GAAP | $222.6M | – | 13% |
| Net patient revenue, Q3 2026GAAP | $161.1M | – | (1.8)% |
| Hospital affiliation revenue, Q3 2026GAAP | $25.04M | – | – |
| Other revenue, Q3 2026GAAP | $36.43M | – | – |
| Gross profit, Q3 2026GAAP | $43.03M | – | – |
| Total operating cost, Q3 2026GAAP | $179.5M | – | – |
| Salaries and related costs, Q3 2026GAAP | $130.4M | – | – |
| Rent, supplies, contract labor and other, Q3 2026GAAP | $41.47M | – | – |
| Corporate office costs, Q3 2026GAAP | $17.83M | – | – |
| Corporate office costs as % of net revenue, Q3 2026GAAP | 8.0% | – | – |
| Corporate costs as % of net revenue (adjusted), Q3 2026non-GAAP | 7.7% | – | – |
| Loss on change in fair value of contingent earn-out consideration, Q3 2026GAAP | $0.1 million loss | – | – |
| Operating income, Q3 2026GAAP | $25.10M | – | – |
| Interest expense, debt and other, Q3 2026GAAP | $3.58M | – | – |
| Income before taxes, Q3 2026GAAP | $21.56M | – | – |
| Provision for income taxes, Q3 2026GAAP | $3.97M | – | – |
| Net income (including non-controlling interest), Q3 2026GAAP | $17.59M | – | – |
| Net income attributable to USPH shareholders, Q3 2026GAAP | $11.04M | – | – |
| Basic and diluted (loss) earnings per share, Q3 2026GAAP | $(1.04) | – | – |
| Adjusted net income, Q3 2026non-GAAP | $11.95M | – | – |
| Adjusted earnings per share, Q3 2026non-GAAP | $0.80 | – | – |
| Adjusted EBITDA, Q3 2026non-GAAP | $27.78M | – | – |
| Physical therapy operations net revenue, Q3 2026GAAP | $189.5M | – | 12.7% |
| Physical therapy operations gross profit, Q3 2026GAAP | $35.80M | – | 14.8% |
| Physical therapy gross profit margin, Q3 2026GAAP | 18.9% | – | – |
| Adjusted physical therapy gross profit margin, Q3 2026non-GAAP | 19.1% | – | – |
| IIP net revenue, Q3 2026GAAP | $33.02M | – | 13.8% |
| IIP gross profit, Q3 2026GAAP | $7.23M | – | 27.4% |
| IIP gross profit margin, Q3 2026GAAP | 21.9% | – | – |
| Patient visits, Q3 2026other | 1,682,642 | – | 8.3% |
| Average daily visits per clinic, Q3 2026other | 33.4 | – | 3.7% |
| Physical therapy revenue per patient visit, Q3 2026other | $110.61 | – | 4.8% |
| Mature revenue percent change, Q3 2026other | 6.4% | – | – |
| Clinics, end of period, Q3 2026other | 799 | – | – |
| Net revenue, nine months 2026 (YTD 2026)GAAP | $634.9M | – | 10% |
| Net patient revenue, YTD 2026GAAP | $498.6M | – | 3.7% |
| Hospital affiliation revenue, YTD 2026GAAP | $30.60M | – | – |
| Other revenue, YTD 2026GAAP | $105.7M | – | – |
| Gross profit, YTD 2026GAAP | $117.7M | – | – |
| Corporate office costs, YTD 2026GAAP | $55.11M | – | – |
| Operating income, YTD 2026GAAP | $59.53M | – | – |
| Interest expense, debt and other, YTD 2026GAAP | $9.59M | – | – |
| Provision for income taxes, YTD 2026GAAP | $10.54M | – | – |
| Net income (including non-controlling interest), YTD 2026GAAP | $40.64M | – | – |
| Net income attributable to USPH shareholders, YTD 2026GAAP | $25.98M | – | – |
| Basic and diluted (loss) earnings per share, YTD 2026GAAP | $(0.90) | – | – |
| Adjusted net income, YTD 2026non-GAAP | $30.18M | – | – |
| Adjusted earnings per share, YTD 2026non-GAAP | $2.01 | – | – |
| Adjusted EBITDA, YTD 2026non-GAAP | $74.98M | – | – |
| Physical therapy gross profit margin, YTD 2026GAAP | 18.1% | – | – |
| Adjusted physical therapy gross profit margin, YTD 2026non-GAAP | 18.4% | – | – |
| IIP net revenue, YTD 2026GAAP | $95.33M | – | 11.6% |
| IIP gross profit margin, YTD 2026GAAP | 20.9% | – | – |
| Patient visits, YTD 2026other | 4,887,480 | – | 7.3% |
| Average daily visits per clinic, YTD 2026other | 32.9 | – | 2.8% |
| Physical therapy revenue per patient visit, YTD 2026other | $108.28 | – | 2.6% |
| Mature revenue percent change, YTD 2026other | 4.2% | – | – |
| Corporate office costs as % of net revenue, YTD 2026GAAP | 8.7% | – | – |
| Net cash provided by operating activities, YTD 2026GAAP | $63.90M | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Physical Therapy Operations, Q3 2026Filing prints net patient revenue of $161,086 thousand (down 1.8%), hospital affiliation revenue of $25,039 thousand, and other revenue of $3,414 thousand (down 16.4%). Gross profit $35,799 thousand, up 14.8%. Company states Q3 2026 results reflect higher company-provided health benefit costs against a favorable Q3 2025, representing approximately 150 basis points of margin headwind. | $189,539 thousand net revenue | – | 12.7% |
| IIP (industrial injury prevention), Q3 2026Company states the IIP acquisition on January 31, 2026 is included; excluding it, IIP revenue increased 8%. IIP gross profit margin 21.9% against 19.6%. | $33,019 thousand net revenue | – | 13.8% |
| Net patient revenue (Physical Therapy Operations), Q3 2026Filing reports patient visits up 8.3% and revenue per visit up 4.8% (company metrics), while net patient revenue is down 1.8% on the segment table. | $161.1M | – | (1.8)% |
| Hospital affiliation revenue, Q3 2026Filing states the 72 clinics under hospital affiliation agreements generated $25 million in revenue in Q3. Company says it expects this to increase significantly as referral volumes rise and new affiliations are added. Prior-year comparison is not applicable. | $25.04M | – | – |
| Physical Therapy Operations, YTD 2026Nine-month segment table: net patient revenue $498,638 thousand (up 3.7%), hospital affiliation revenue $30,603 thousand, other revenue $10,327 thousand (down 14.3%). Gross profit $97,767 thousand, up 5.3%. | $539,568 thousand net revenue | – | 9.5% |
| IIP (industrial injury prevention), YTD 2026Company states excluding the January 31, 2026 IIP acquisition, IIP revenue increased 7% for YTD 2026. IIP gross profit margin 20.9% against 19.5%. | $95,334 thousand net revenue | – | 11.6% |
| Net patient revenue (Physical Therapy Operations), YTD 2026Company states physical therapy net revenue increased 10% for YTD 2026, including a 4% increase in mature revenue; net patient revenue line is up 3.7% in the segment table. | $498.6M | – | 3.7% |
| Hospital affiliation revenue, YTD 2026Nine-month figure for the hospital affiliation line. Prior-year comparison is not applicable. | $30.60M | – | – |
FY2026 outlook
- NoteAdjusted EBITDA (non-GAAP) of $102 million to $106 million; management reaffirmed this guidance in the release
Capital returns
- Quarterly dividend of $0.46 declared, payable December 11, 2026, to shareholders of record on November 16, 2026. Q3 2025 dividend declared per share was $0.45.
- Dividends declared per common share: $1.38 for nine months 2026 against $1.35 for nine months 2025.
- Cash dividends paid to shareholders: $(20,735) thousand for nine months 2026 against $(20,520) thousand for nine months 2025.
- Repurchases of common stock: $(19,233) thousand for nine months 2026; the nine months 2025 column prints a dash.
- Purchase of redeemable non-controlling interest, temporary equity: $(13,549) thousand against $(8,579) thousand for nine months 2025.
- Distributions to non-controlling interest, permanent and temporary equity: $(16,767) thousand against $(14,610) thousand for nine months 2025.
- Treasury stock: 2,605,083 shares at September 30, 2026 against 2,296,059 shares at December 31, 2025.
What drove it
- Company explanation: the year-over-year EBITDA improvement reflects the initial benefit of the completed rollout of the first two hospital affiliations.
- Company explanation: the 72 clinics under hospital affiliation agreements generated $25 million in revenue in Q3 2026.
- Company explanation: Q3 2026 results reflect higher company-provided health benefit costs compared to a favorable experience in Q3 2025, representing approximately 150 basis points of margin headwind.
- Company explanation: cost pressures from the self-insured employee medical program continued in Q3, and expense control efforts partially mitigated these overages during the quarter.
- Company explanation: under GAAP, changes in the value of redeemable non-controlling interests are excluded from net income but included in EPS; improving performance increases the value of these interests, which has a dilutive effect on EPS.
- Mature revenue increased 6% in Q3 2026 (6.4% in the metrics table), and 4.2% for nine months 2026.
- Company states all 72 clinics under the two previously announced hospital affiliation agreements were integrated through the end of Q3 2026.
Concerns
- GAAP net income attributable to USPH shareholders was $11,045 thousand in Q3 2026 against $13,138 thousand, and GAAP EPS was $(1.04) against $0.48. The filing states the revaluation of redeemable non-controlling interest is charged to retained earnings at $(36,188) thousand in Q3 2026 against $(7,918) thousand in Q3 2025.
- GAAP operating income was $25,101 thousand in Q3 2026 against $25,330 thousand, and $59,528 thousand for nine months 2026 against $69,910 thousand.
- Other revenue in the Physical Therapy Operations segment was $3,414 thousand in Q3 2026 against $4,086 thousand, down 16.4%.
- Net patient revenue was $161,086 thousand against $164,024 thousand, down 1.8%, while hospital affiliation revenue of $25,039 thousand was recorded in Q3 2026 with no prior-year equivalent.
- Interest expense, debt and other was $3,583 thousand in Q3 2026 against $2,408 thousand. Credit facility borrowings were $247 million at September 30, 2026 against $162 million at December 31, 2025.
- Corporate costs were 8.0% of net revenue in Q3 2026 against 8.8% (GAAP), and 7.7% against 8.5% on an adjusted basis.
- Presentation inconsistencies in the filing: the narrative says physical therapy margin was 19% in both Q3 2026 and Q3 2025, while the table prints 18.9% and 18.6%. The narrative says adjusted physical therapy margin rose 150 basis points, while the table prints 19.1% against 18.5%. The YTD 2025 supplemental metrics table prints 6,150,104 patient visits and $105.76 per visit, while the segment table prints 4,556,768 and $105.50 for the same nine-month period.
What to watch
- Q4 2026 results against FY2026 adjusted EBITDA guidance of $102 million to $106 million, reaffirmed in this release.
- Growth in hospital affiliation revenue, which the company expects to increase significantly as referral volumes rise and new affiliations are added.
- Health benefit and self-insured employee medical costs, and whether expense control efforts continue to offset them as the company states they will benefit future periods.
- Revaluation of redeemable non-controlling interests and its effect on GAAP EPS.
- Credit facility borrowings ($247 million at September 30, 2026) and the swap fixing term debt at 4.6% from June 30, 2027.
- Mature revenue growth (6.4% in Q3 2026) and the company's clinic count of 799 at September 30, 2026.
Balance sheet and cash flow
- Cash and cash equivalents: $38 million (balance sheet $38,225 thousand) at September 30, 2026, compared to $36 million (balance sheet $35,570 thousand) at December 31, 2025.
- Borrowings under the credit facility: $247 million at September 30, 2026, compared to $162 million at December 31, 2025, as printed in the filing text.
- Balance sheet lines at September 30, 2026 against December 31, 2025: revolving facility $72,700 thousand against $30,500 thousand; term loan, net of current portion and deferred financing costs $167,703 thousand against $121,677 thousand.
- Total assets: $1,295,741 thousand at September 30, 2026 against $1,204,010 thousand at December 31, 2025.
- Total USPH shareholders' equity: $429,303 thousand at September 30, 2026 against $476,432 thousand at December 31, 2025.
- Redeemable non-controlling interest, temporary equity: $357,306 thousand at September 30, 2026 against $293,311 thousand at December 31, 2025.
- Net cash provided by operating activities, nine months: $63,902 thousand against $50,126 thousand. Purchase of fixed assets: $(15,810) thousand against $(10,145) thousand. Purchase of majority interest in businesses: $(36,468) thousand against $(15,214) thousand.
- Interest rate swap: as previously announced, on September 22, 2026 the company entered into a swap with a $171 million initial notional value that fixes term debt at 4.6% from June 30, 2027 to April 14, 2031.
- Q3 2026 acquisition: on July 1, 2026, the company acquired a 67% equity interest in a 12-clinic physical therapy practice for a purchase price of $16 million; the business generates $12 million in annual revenue and 0.1 million annual visits.
Analysis
U.S. Physical Therapy reported Q3 2026 net revenue of $222,558 thousand, up 13% from $197,132 thousand, and nine-month net revenue of $634,902 thousand, up 10%. The growth came from two sources the filing separates: hospital affiliation revenue of $25,039 thousand in the quarter, which had no prior-year equivalent, and IIP revenue of $33,019 thousand, up 13.8%. Net patient revenue fell 1.8% to $161,086 thousand. Patient visits rose 8.3% to 1,682,642 and revenue per visit rose 4.8% to $110.61, so the decline in net patient revenue sits alongside volume and rate gains in the company's own metrics. The filing does not reconcile these lines beyond the figures printed.
Margins and earnings present a split picture. On an adjusted basis, Physical Therapy gross margin was 19.1% against 18.5%, and adjusted EBITDA rose to $27,781 thousand from $23,855 thousand. On a GAAP basis, Physical Therapy gross margin was 18.9% against 18.6%, GAAP operating income was $25,101 thousand against $25,330 thousand, and net income attributable to USPH shareholders fell to $11,045 thousand from $13,138 thousand. GAAP EPS was $(1.04) against $0.48. The company states that the EPS decline reflects the revaluation of redeemable non-controlling interests, which it describes as dilutive to EPS when performance improves, and that the Q3 2026 results reflect higher company-provided health benefit costs, representing approximately 150 basis points of margin headwind. The filing's narrative and tables do not fully agree on margin changes, so the table figures are the ones used here.
Cost lines show the pattern behind the margins. Salaries and related costs rose to $130,408 thousand from $116,619 thousand, while the salaries ratio was 58.2% in both periods on a GAAP basis and 58.0% against 58.2% adjusted. Corporate office costs were $17,827 thousand against $17,414 thousand, and interest expense rose to $3,583 thousand from $2,408 thousand. Quarterly income before taxes was $21,560 thousand against $22,875 thousand. Nine-month adjusted net income of $30,181 thousand and adjusted EPS of $2.01 compare with $29,733 thousand and $1.96, while nine-month GAAP net income attributable to shareholders was $25,981 thousand against $35,430 thousand.
Capital allocation shows continued investment alongside higher leverage. Nine-month operating cash flow was $63,902 thousand against $50,126 thousand. Spending included $(36,468) thousand on business acquisitions, $(15,810) thousand on fixed assets, $(13,549) thousand on purchases of redeemable non-controlling interests, and $(19,233) thousand on share repurchases. Credit facility borrowings rose to $247 million from $162 million at December 31, 2025. The company declared a $0.46 quarterly dividend, up from $0.45. Total assets reached $1,295,741 thousand, and total USPH shareholders' equity fell to $429,303 thousand from $476,432 thousand.
The company reaffirmed FY2026 adjusted EBITDA guidance of $102 million to $106 million. The release does not provide a prior outlook for comparison, and no revenue, margin or GAAP earnings guidance is printed. Nine-month adjusted EBITDA of $74,976 thousand is the only interim figure that bears directly on that range in the filing. The figures that deserve attention are the trajectory of hospital affiliation revenue, the health benefit cost headwind, the non-controlling interest revaluation charge behind the GAAP EPS loss, and the rising credit facility balance.
Management, verbatim
The 72 clinics operating under hospital affiliation agreements generated $25 million in revenue in Q3, and we expect this number to increase significantly as referral volumes rise, additional clinics are incorporated into existing agreements, and our pipeline of hospital prospects results in new affiliations.
Chris Reading, Chairman and Chief Executive Officer
Cost pressures from our self-insured employee medical program continued in Q3. As a result, we implemented expense control efforts that partially mitigated these overages during the quarter and will benefit future periods.
Chris Reading, Chairman and Chief Executive Officer
Not in the filing
stated, not guessed- No prior outlook was provided, so vs_prior_guidance is empty and no revenue, margin, operating expense or tax guidance is printed.
- Consolidated gross margin as a percentage is not printed; only segment margins are given.
- Prior-quarter (June 30, 2026) figures are not in the filing, so all qoq_change and prior_quarter fields are null.
- Consolidated yoy percentage changes for net patient revenue, other revenue, gross profit, operating income and net income are not printed and are left null.
- Mature revenue percent change row prints 6.4% and 0.2% without a stated column label; the prior-year field is left null.
- Clinic count prior-year figure (777) is taken from the physical therapy locations roll forward, which is a different basis from the location count of 799 defined in the glossary.
- The YTD 2025 supplemental metrics table (6,150,104 visits, $105.76 per visit, 32.2 average daily visits) conflicts with the segment table (4,556,768 visits, $105.50, 32.0); the segment table figures are used.
- Narrative margin figures (19% in each quarter, up 150 basis points; 18% against 19% for nine months) differ from table figures (18.9%/18.6%, 19.1%/18.5%, 18.1%/18.8%); table figures are used.
- Free cash flow, net debt and total debt are not printed as totals and are not computed.
- Balance sheet comparisons are to December 31, 2025, not to the prior-year period; these are placed in balance_sheet_cash_flow and not in prior-year fields.
- Consensus estimates, analyst expectations, price targets and share-price reaction are not in the filing.
- Segment yoy changes for IIP and Physical Therapy Operations are printed in the segment tables; quarter-over-quarter segment figures are not printed.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure is checked against the filing text, and a metric the filing does not print, or whose value, prior period and change do not add up, is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.