U.S. Physical Therapy Reports Fourth Quarter and Full Year 2025 Results

HOUSTON--( BUSINESS WIRE)--U.S. Physical Therapy, Inc. (“USPH” or the “Company”) (NYSE, NYSE Texas: USPH), a national operator of outpatient physical therapy clinics and provider of industrial injury prevention services, today reported results for the fourth quarter and full year ended December 31, 2025.

FINANCIAL HIGHLIGHTS

Year Ended December 31, 2025 versus Year Ended December 31, 2024

Fourth Quarter Ended December 31, 2025, versus Fourth Quarter Ended December 31, 2024

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MANAGEMENT’S COMMENTS

Chris Reading, Chief Executive Officer, said, “Our team delivered a strong finish to a solid year where we made progress around a number of key initiatives which helped to deliver revenue growth of more than 16%, gross profit growth of over 20%, and margin and net rate improvements, among other positive developments. Additionally, we have recently announced several acquisitions as well as new, important hospital relationships in key markets which will create long-term value and increase our ability to serve patients in those areas. We have a very clear plan for the year ahead and we are excited to bring those plans to fruition with the capable help of our partners and our support teams around the country.”

2025 Fourth Quarter Versus 2024 Fourth Quarter

Additional details are available in the “Supplemental Financial and Performance Metrics” section of this release.

Physical Therapy Operations

Three Months Ended

Variance

December 31, 2025

December 31, 2024

(In thousands, except percentages)

Revenue related to:

Mature Clinics (1)

133,497

131,589

1,908

1.4%

Clinic additions (2)

35,694

17,080

18,614

(9)

Clinics sold or closed (3)

484

1,391

(907)

(9)

Net Patient Revenue

169,675

150,060

19,615

13.1%

Other (4)

4,103

3,747

356

9.5%

Total

173,778

153,807

19,971

13.0%

Operating costs (5) (7)

138,599

125,723

12,876

10.2%

Gross profit

35,179

28,084

7,095

25.3%

Financial and operating metrics (not in thousands):

Net rate per patient visit (1)

106.49

104.73

1.76

1.7%

Patient visits (1)

1,593,336

1,432,801

160,535

11.2%

Average daily visits per clinic (1)

32.7

31.6

1.1

3.5%

Gross Profit Margin (7)

20.2%

18.3%

Adjusted gross profit margin (4)(5)(6)(7)

20.5%

18.6%

Adjusted salaries and related costs per visit (6)(8)

62.15

62.85

(0.70)

(1.1)%

Adjusted operating costs per visit (6)(8)

85.56

86.06

(0.50)

(0.6)%

(1) See Glossary of Terms - Revenue Metrics for definitions.

(2) Includes 47 owned clinics added during the year ended December 31, 2025 and 96 owned clinics added during the year ended December 31, 2024. See “Clinic Count Roll Forward” for additional information.

(3) Includes 23 owned clinics closed during the year ended December 31, 2025 and 45 owned clinics closed during the year ended December 31, 2024. See “Clinic Count Roll Forward” for additional information.

(4) Includes revenues from management contracts.

(5) Includes costs from management contracts.

(6) Excludes $0.4 million for the 2025 Fourth Quarter and $0.5 million for the 2024 Fourth Quarter of certain incentive costs related to the Metro acquisition and gains or losses related to clinic closures, as applicable. See “Reconciliation of Non-GAAP Measures to the Most Directly Comparable GAAP Measure”.

(7) Amortization of certain intangible assets was reallocated between the physical therapy operations and IIP segments. Prior year amounts were reallocated to conform with current presentation.

(8) Per visit costs exclude management contract costs.

(9) Not meaningful.

Net revenue from physical therapy operations increased $20.0 million, or 13.0%, to $173.8 million for the 2025 Fourth Quarter from $153.8 million for the 2024 Fourth Quarter. Net rate per patient visit for the 2025 Fourth Quarter was $106.49 compared to $104.73 for the 2024 Fourth Quarter.

Operating costs from physical therapy operations increased $12.9 million, or 10.2%, to $138.6 million for the 2025 Fourth Quarter from $125.7 million for the 2024 Fourth Quarter. Excluding certain incentive costs related to Metro and clinic closures costs for both periods, adjusted salaries and related costs per visit (1) was $62.15 for the 2025 Fourth Quarter compared to $62.85 for the 2024 Fourth Quarter while adjusted total operating costs per visit (1) was $85.56 in the 2025 Fourth Quarter compared to $86.06 for the 2024 Fourth Quarter.

Gross profit from physical therapy operations increased $7.1 million, or 25.3%, to $35.2 million for the 2025 Fourth Quarter as compared to $28.1 million for the 2024 Fourth Quarter.

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Industrial Injury Prevention Services

Three Months Ended

Variance

December 31, 2025

December 31, 2024

(In thousands, except percentages)

Net revenue

28,948

26,640

2,308

8.7%

Operating costs (1)

23,995

22,197

1,798

8.1%

Gross profit

4,953

4,443

510

11.5%

Gross profit margin

17.1%

16.7%

(1) Amortization of certain intangible assets was reallocated between the physical therapy operations and IIP segments. Prior year amounts were reallocated to conform with current presentation.

IIP revenue increased $2.3 million, or 8.7%, to $28.9 million for the 2025 Fourth Quarter as compared to $26.6 million for the 2024 Fourth Quarter. Gross profit from IIP operations for the 2025 Fourth Quarter increased $0.5 million, or 11.5%, to $5.0 million from $4.4 million for the 2024 Fourth Quarter. Gross profit margin from IIP operations was 17.1% for the 2025 Fourth Quarter compared to 16.7% for the 2024 Fourth Quarter.

Corporate Office Costs and Other Expenses

Corporate office costs increased to $18.1 million for the 2025 Fourth Quarter from $15.6 million for the 2024 Fourth Quarter, primarily to support the larger number of clinics in 2025, as well as costs associated with acquisition integration and the implementation of a new financial and human resources system. Implementation costs associated with the new financial and human resources system are expected to continue through the end of 2026. As a percentage of net revenue, corporate office costs was 8.9% for the 2025 Fourth Quarter compared to 8.6% for the 2024 Fourth Quarter. Excluding the acquisition integration costs and costs associated with the implementation of the new financial and human resources system of $1.0 million and $0.5 million in each comparative quarter, corporate office costs was 8.5% and 8.3% of net revenue for the 2025 Fourth Quarter and the 2024 Fourth Quarter, respectively.

The Company revalued contingent consideration related to certain acquisitions and recognized a net loss (an increase in the related liabilities) of $5.2 million for the 2025 Fourth Quarter compared to a net gain (a decrease in the related liabilities) of $5.1 million for the 2024 Fourth Quarter.

A non-cash impairment charge of $2.4 million was recognized during the 2024 Fourth Quarter related to the impairment of assets held for sale. No impairment was recorded during the 2025 Fourth Quarter.

Operating income was $16.8 million for the 2025 Fourth Quarter compared to $19.7 million for the 2024 Fourth Quarter. Excluding the impact of certain costs discussed above, adjusted operating income (1) increased $5.4 million or 30.3% to $23.4 million for the 2025 Fourth Quarter from $17.9 million in the 2024 Fourth Quarter. See “Reconciliation of Non-GAAP measures to the Most Directly Comparable GAAP Measure”.

Interest expense increased by $0.3 million to $2.3 million for the 2025 Fourth Quarter compared to $2.0 million for the 2024 Fourth Quarter due to a higher average outstanding balance on our revolving credit facility for the 2025 Fourth Quarter. The interest rate associated with borrowings on the Company’s credit facilities was 4.8% in each of the 2025 Fourth Quarter and the 2024 Fourth Quarter, with an all-in effective interest rate (including all associated costs) of 5.6% and 5.5% over the same periods, respectively.

Interest income was $0.1 million during the 2025 Fourth Quarter compared to $0.3 million for the 2024 Fourth Quarter.

The Company revalued a put-right liability related to the future purchase of an IIP business and recognized a net non-cash gain (a decrease in the related liability) of $0.1 million in both the 2025 Fourth Quarter and the 2024 Fourth Quarter.

The provision for income taxes was $5.8 million for each of the 2025 Fourth Quarter and 2024 Fourth Quarter. Income tax expense for the 2025 Fourth Quarter included an adjustment of $1.2 million to revalue the Company’s deferred tax assets and liabilities using the most current statutory income tax rate.

USPH Net Income and Non-GAAP Measures

Net income attributable to non-controlling interest (temporary and permanent) was $5.0 million for the 2025 Fourth Quarter compared to $3.3 million for the 2024 Fourth Quarter.

USPH Net Income was $4.2 million for the 2025 Fourth Quarter compared to $9.2 million for the 2024 Fourth Quarter, with the decrease attributable to the change in fair value of contingent earnout consideration quarter over quarter. Under GAAP, increases and decreases in the value of redeemable noncontrolling interests, net of taxes, are not included in net income, but they are included in the calculation of earnings per share. The Company’s improved performance in the 2025 Fourth Quarter increased the value of these ownership interests, net of taxes, by $10.8 million, which reduced earnings per share. Loss per share was $0.44 for the 2025 Fourth Quarter compared to earnings per share of $0.52 for the 2024 Fourth Quarter.

Non-GAAP Adjusted EBITDA (1) was $24.8 million for the 2025 Fourth Quarter, an increase of $3.0 million or 13.5%, from $21.8 million for the 2024 Fourth Quarter. Non-GAAP Operating Results (1) was $10.2 million, or $0.67 per share, for the 2025 Fourth Quarter compared to $7.8 million, or $0.51 per share, for the 2024 Fourth Quarter.

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These are non-GAAP Measures. Please refer to the section titled “Reconciliation of Non-GAAP Measures to the Most Directly Comparable GAAP Measure” for the definition and reconciliation of Adjusted EBITDA, Operating Results and other non-GAAP measures to the most directly comparable GAAP measure.

2025 Year Versus 2024 Year

Net revenue for the 2025 Year increased $109.6 million, or 16.3%, to $781.0 million from $671.3 million for the 2024 Year while operating costs increased $83.9 million, or 15.3%, to $631.3 million from $547.4 million over the same periods, respectively. Gross profit for the 2025 Year was $149.7 million, or 19.2% of net revenue, compared to $123.9 million for the 2024 Year, or 18.5% of net revenue.

Net revenue from physical therapy operations increased $92.2 million, or 16.0%, in the 2025 Year versus the comparable prior year period. Additionally, net rate per patient visit increased to $105.76 for the 2025 Year from $104.71 for the 2024 Year. Gross profit from physical therapy operations increased $22.1 million or 20.9% to $128.1 million, or 19.2% as a percent of net revenues, for the 2025 Year as compared to $105.9 million, or 18.4% as a percent of net revenues, for the 2024 Year. Excluding certain incentive costs related to the Metro acquisition, which occurred on October 31, 2024, and clinic closures, the adjusted gross profit margin (1) increased $18.5 million or 16.8%. to $129.0 million, or 19.4% as a percent of net revenues for the 2025 Year compared to $110.5 million, or 19.2% as a percent of net revenues, for the 2024 Year.

Revenues from IIP increased $17.5 million, or 18.0%, to $114.4 million for the 2025 Year from $96.9 million for the 2024 Year. Gross profit from IIP operations increased $3.6 million, or 20.2%, to $21.6 million for the 2025 Year from $18.0 million in the 2024 Year. The gross profit margin from IIP operations was 18.9% for the 2025 Year compared to 18.6% for the 2024 Year.

Corporate office costs were $69.3 million for the 2025 Year compared to $58.3 million for the 2024 Year. As a percentage of net revenue, corporate office costs were 8.9% and 8.7% over the same periods, respectively. Excluding acquisition integration costs and the costs associated with the implementation of the new financial and human resources system of $2.4 million and $0.8 million in the comparative years, corporate office costs was 8.6% of net revenue for the 2025 Year and the 2024 Year.

The Company revalued contingent consideration related to certain acquisitions and recognized a net gain (a decrease in the related liabilities) of $6.2 million for the 2025 Year compared to a net loss of $0.2 million for the 2024 Year (an increase in the related liabilities).

Operating income was $86.7 million for the 2025 Year compared to $63.0 million for the 2024 Year. Excluding the certain costs discussed above, adjusted operating income (1) increased to $84.1 million for the 2025 Year from $71.0 million for the 2024 Year, an increase of 18.4%. See the “Reconciliation of Non-GAAP Measures to the Most Directly Comparable GAAP Measure”.

Other expenses were $8.9 million for the 2025 Year compared to $2.8 million for the 2024 Year, with the increase primarily due to higher interest expense as a result of increased borrowings and lower interest income as the excess cash available during the 2024 Year has been deployed to fund acquisitions since that time. Additionally, the Company revalued a put-right liability related to the future purchase of an IIP business and recognized a net non-cash expense (an increase in the related liability) of $1.3 million for the 2025 Year compared to net non-cash expense of $0.1 million for the 2024 Year.

The provision for income tax was $19.8 million, or an effective tax rate of 33.4%, for the 2025 Year and $14.6 million, or an effective tax rate of 31.7%, for the 2024 Year. Income tax expense for the 2025 Year included an adjustment of $1.2 million to revalue the Company’s deferred tax assets and liabilities using the most current income tax rate.

USPH Net Income was $39.6 million for the 2025 Year as compared to $31.4 million for the 2024 Year while earnings per share was $1.42 for the 2025 Year compared to $1.84 for the 2024 Year.

Non-GAAP Adjusted EBITDA (1) increased $13.2 million to $95.0 million for the 2025 Year from $81.8 million for the 2024 Year while non-GAAP Operating Results (1) increased $3.1 million to $40.0 million, or $2.63 per share, for the 2025 Year from $36.9 million, or $2.45 per share, for the 2024 Year.

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For additional information on the 2025 Year results, please refer to the Company’s Annual Report on Form 10-K which is expected to be filed with the Securities and Exchange Commission on February 27, 2026.

BALANCE SHEET AND CASH FLOW

Total cash and cash equivalents were $35.6 million as of December 31, 2025, compared to $41.4 million as of December 31, 2024. The Company had $161.8 million in outstanding borrowings and $144.5 million in available credit under the Company’s revolving facility as of December 31, 2025. This compares to $151.6 million of outstanding borrowings and $164.0 million in available credit under the Company’s revolving facility as of December 31, 2024.

The Company repurchased 81,322 of its own shares for total consideration of $5.6 million on the open market during the 2025 Fourth Quarter, demonstrating its confidence in the long-term prospects of the Company.

RECENT ACQUISITIONS

On January 2, 2026, the Company acquired an eight-clinic practice currently generating approximately $8.0 million in annual revenue and approximately 66,000 in annual visits. USPH acquired a 50% interest and 50% was retained by the previous owners.

On January 31, 2026, the Company acquired an industrial injury prevention business currently generating approximately $7.0 million in annual revenue. USPH acquired a 70% interest and 30% was retained by the previous owner.

The Company’s strategy is to continue acquiring multi-clinic outpatient physical therapy practices and home-care physical and speech therapy practices, to develop outpatient physical therapy clinics as satellites in existing partnerships, and to continue acquiring companies that provide industrial injury prevention services.

STRATEGIC HOSPITAL ALLIANCES

On February 2, 2026, the Company announced a 10-year strategic alliance between its subsidiary partner, MSO Metro, LLC (“Metro”), and a prominent New York hospital system. Under the agreement, 60 of Metro’s existing outpatient physical therapy clinics in New York will become part of the hospital system’s clinical services network. The alliance is expected to begin operations with an initial group of clinics in mid-2026, with all 60 clinics anticipated to be operational by year-end 2026.

On February 25, 2026, the Company also announced a 10-year strategic alliance between another of its subsidiary partners and a local hospital system. Under the agreement, the subsidiary partner’s existing ten clinics will become part of the hospital’s clinical services network. The alliance is expected to begin operations by mid-2026, with all ten clinics anticipated to be operational by year-end 2026.

These arrangements will be accretive to the Company’s revenue, EBITDA, and margins. Upon full integration of 60 of Metro’s clinics, the incremental annualized EBITDA contribution to Metro is expected to be at least $12 million, with the corresponding impact to USPH estimated to be at least $6 million, reflecting its 50% ownership interest in Metro. Upon full integration of the additional subsidiary partner’s ten clinics, the incremental annualized EBITDA contribution to the subsidiary partner is expected to be at least $2 million, with the corresponding impact to USPH estimated to be at least $1.3 million, reflecting its 65% ownership interest in the subsidiary partner. Given the phased ramp-up of these affiliations beginning mid-year 2026, a modest contribution from these alliances has been incorporated into the Company’s 2026 guidance discussed below.

2026 EARNINGS GUIDANCE

Management expects the Company’s Adjusted EBITDA for 2026 to be in the range of $102.0 million to $106.0 million. Guidance includes an estimated $2.5 million in incremental revenue associated with the estimated 1.75% Medicare rate increase beginning January 1, 2026, which applies to all of the Company’s traditional Medicare visits and a portion of the Company’s Medicare Advantage visits. Guidance also includes the modest contribution in 2026 from the strategic hospital alliances as discussed above, given the phased ramp-up of these affiliations beginning mid-year 2026.

The annual guidance figures will not be updated unless there is a material development that causes management to believe that Adjusted EBITDA will be significantly outside the given range.

QUARTERLY DIVIDEND

The Company’s Board of Directors raised the Company’s quarterly dividend rate from $0.45 per share to $0.46 per share, effective immediately, and declared a quarterly dividend for the first quarter of 2026 at the higher rate. The dividend will be payable on April 10, 2026, to shareholders of record on March 13, 2026.

CFO TRANSITION

The Company also is announcing that its Chief Financial Officer, Carey Hendrickson, will be resigning from his position with the Company on April 24, 2026 to pursue another chief financial officer position with a publicly-traded company. Concurrent with Mr. Hendrickson’s departure, Jason Curtis, the Company’s Senior Vice President of Finance and Accounting, will assume the responsibilities of Chief Financial Officer on an interim basis while the Company conducts a comprehensive search for a permanent successor.

Chris Reading, Chairman and Chief Executive Officer of the Company commented, “We are grateful for Carey’s many contributions to USPH over the past 5 years. We wish him well in his future endeavors.”

CONFERENCE CALL INFORMATION

U.S. Physical Therapy’s management will host a conference call at 10:30 a.m. ET / 9:30 a.m. CT, on February 26, 2026, to discuss the Company’s financial results for the three months and year ended December 31, 2025. Interested parties may participate in the call by dialing (800) 445-7795 (Primary) or (785) 424-1699 (Alternate) and conference ID of USPHQ425. Please call approximately 10 minutes before the call is scheduled to begin. To listen to the live call, go to the Company’s website at www.usph.com at least 15 minutes early to register, download and install any necessary audio software. If you are unable to listen live, a playback of the conference call can be accessed until May 27, 2026, on the Company’s website.

FORWARD-LOOKING STATEMENTS

This press release contains statements that are considered to be forward-looking within the meaning under Section 21E of the Securities Exchange Act of 1934, as amended. These statements contain forward-looking information relating to the financial condition, results of operations, plans, objectives, future performance and business of our Company. These statements (often using words such as “believes”, “expects”, “intends”, “plans”, “appear”, “should” and similar words) involve risks and uncertainties that could cause actual results to differ materially from those we expect. Included among such statements may be those relating to new clinics, availability of personnel and the reimbursement environment. The forward-looking statements are based on our current views and assumptions and actual results could differ materially from those anticipated in such forward-looking statements as a result of certain risks, uncertainties, and factors, which include, but are not limited to:

Many factors are beyond our control. Given these uncertainties, you should not place undue reliance on our forward-looking statements. For additional information regarding these and other risks and uncertainties, that could cause actual results to differ materially from those contained in our forward-looking statements, please refer to “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the Securities and Exchange Commission (“SEC”) on March 3, 3025 and any risk factors contained in subsequent quarterly and annual reports we file with the SEC. Our forward-looking statements represent our estimates and assumptions only as of the date of this report. Except as required by law, we are under no obligation to update any forward-looking statement as a result of new information, future events, or otherwise, except as required by law.

GLOSSARY OF TERMS – REVENUE METRICS

Mature clinics are clinics (physical clinic locations and home-care business units) opened or acquired prior to January 1, 2024, and are still operating as of the balance sheet date.

Net rate per patient visit is net patient revenue related to our physical therapy operations divided by total number of patient visits (defined below) during the periods presented.

Patient visits is the number of unique patient visits during the periods presented for both physical clinic locations and home-care.

Average daily visits per clinic per day is patient visits (excluding home-care visits) divided by the number of days in which normal business operations were conducted during the periods presented and further divided by the average number of clinics in operation during the periods presented.

ABOUT U.S. PHYSICAL THERAPY, INC.

Founded in 1990, U.S. Physical Therapy, Inc. owns and/or manages 780 outpatient physical therapy clinics in 44 states. USPH clinics provide preventative and post-operative care for a variety of orthopedic-related disorders and sports-related injuries, treatment for neurologically-related injuries and rehabilitation of injured workers. USPH also has an industrial injury prevention business which provides onsite services for clients’ employees including injury prevention and rehabilitation, performance optimization, post-offer employment testing, functional capacity evaluations, and ergonomic assessments.

More information about U.S. Physical Therapy, Inc. is available at www.usph.com. The information included on that website is not incorporated into this press release.

U. S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

Three Months Ended

For the Year Ended

December 31,

2025

December 31,

2024

December 31,

2025

December 31,

2024

Net patient revenue

169,675

150,060

650,429

560,553

Other revenue

33,051

30,387

130,561

110,792

Net revenue

202,726

180,447

780,990

671,345

Operating cost:

Salaries and related costs

120,234

109,494

461,890

399,394

Rent, supplies, contract labor and other

36,345

30,863

140,431

118,910

Depreciation and amortization

4,283

5,470

21,059

17,853

Provision for credit losses

1,732

1,847

7,647

6,912

Clinic closure costs - lease and other

246

270

4,355

Total operating cost

162,594

147,920

631,297

547,424

Gross profit

40,132

32,527

149,693

123,921

Corporate office costs

18,125

15,571

69,260

58,290

(Gain) loss on change in fair value of contingent earn-out consideration

5,240

(5,113)

(6,244)

219

Impairment of assets held for sale

2,418

Operating income

16,767

19,651

86,677

62,994

Other (expense) income:

Interest expense, debt and other

(2,350)

(2,049)

(9,459)

(8,015)

Interest income from investments

306

105

3,941

Change in revaluation of put-right liability

(1,322)

(82)

Equity in earnings of unconsolidated affiliate

322

264

1,477

1,014

Loss on sale of partnership

(123)

Other

114

458

357

Total other expense

(1,810)

(1,329)

(8,864)

(2,785)

Income before taxes

14,957

18,322

77,813

60,209

Provision for income taxes

5,782

5,828

19,808

14,609

Net income

9,175

12,494

58,005

45,600

Less: Net income attributable to non-controlling interest:

Redeemable non-controlling interest - temporary equity

(4,133)

(2,505)

(13,849)

(10,044)

Non-controlling interest - permanent equity

(889)

(745)

(4,573)

(4,132)

(5,022)

(3,250)

(18,422)

(14,176)

Net income attributable to USPH shareholders

4,153

9,244

39,583

31,424

Basic and diluted earnings (loss) per share attributable to USPH shareholders (1)

(0.44)

0.52

1.42

1.84

Shares used in computation – basic and diluted

15,167

15,089

15,175

15,089

Dividends declared per common share

0.45

0.44

1.80

1.76

(1) See “Adjusted EBITDA, Operating Results and Earnings per Share” for the calculation of basic and diluted earnings per share.

U. S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(IN THOUSANDS)

Three Months Ended

For the Year Ended

December 31,

2025

December 31,

2024

December 31,

2025

December 31,

2024

Net income

9,175

12,494

58,005

45,600

Other comprehensive income:

Unrealized (loss) gain on cash flow hedge

(349)

1,960

(2,838)

Tax effect at statutory rate (federal and state)

(500)

753

(6)

Comprehensive income

8,919

13,954

55,920

45,617

Comprehensive income attributable to non-controlling interest

(5,022)

(3,250)

(18,422)

(14,176)

Comprehensive income attributable to USPH shareholders

3,897

10,704

37,498

31,441

U. S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

(IN THOUSANDS, EXCEPT SHARES AND PER SHARE AMOUNTS)

December 31,

2025

December 31,

2024

ASSETS

Current assets:

Cash and cash equivalents

35,570

41,362

Patient accounts receivable, less provision for credit losses of $3,775 and $3,506, respectively

64,249

59,040

Accounts receivable - other

24,087

26,626

Other current assets

16,084

10,555

Total current assets

139,990

137,583

Fixed assets:

Furniture and equipment

67,891

68,128

Leasehold improvements

58,985

51,105

Fixed assets, gross

126,876

119,233

Less accumulated depreciation and amortization

(91,225)

(87,093)

Fixed assets, net

35,651

32,140

Operating lease right-of-use assets

144,197

133,936

Investment in unconsolidated affiliate

12,275

12,190

Goodwill

692,392

667,152

Other identifiable intangible assets, net

172,861

179,311

Other assets

6,644

5,155

Total assets

1,204,010

1,167,467

LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST, USPH SHAREHOLDERS’ EQUITY AND NON-CONTROLLING INTEREST

Current liabilities:

Accounts payable - trade

6,059

5,936

Accrued expenses

80,982

59,513

Current portion of operating lease liabilities

42,134

39,835

Current portion of term loan and notes payable

9,865

10,999

Total current liabilities

139,040

116,283

Notes payable, net of current portion

417

903

Revolving facility

30,500

11,000

Term loan, net of current portion and deferred financing costs

121,677

130,627

Deferred taxes

28,391

29,465

Operating lease liabilities, net of current portion

110,572

101,868

Other long-term liabilities

3,214

18,275

Total liabilities

433,811

408,421

Redeemable non-controlling interest - temporary equity

293,311

269,025

Commitments and Contingencies

U.S. Physical Therapy, Inc. ("USPH") shareholders’ equity:

Preferred stock, $.01 par value, 500,000 shares authorized, no shares issued and outstanding

Common stock, $.01 par value, 20,000,000 shares authorized,

17,418,621 and 17,309,120 shares issued, respectively

174

172

Additional paid-in capital

285,522

290,321

Accumulated other comprehensive gain

714

2,799

Retained earnings

227,216

227,265

Treasury stock at cost, (2,296,059 and 2,214,737 shares at December 31, 2025, and 2024, respectively)

(37,194)

(31,628)

Total USPH shareholders’ equity

476,432

488,929

Non-controlling interest - permanent equity

456

1,092

Total USPH shareholders' equity and non-controlling interest - permanent equity

476,888

490,021

Total liabilities, redeemable non-controlling interest,

USPH shareholders' equity and non-controlling interest - permanent equity

1,204,010

1,167,467

U. S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN THOUSANDS)

Year Ended

December 31, 2025

December 31, 2024

OPERATING ACTIVITIES

Net income including non-controlling interest

58,005

45,600

Adjustments to reconcile net income including non-controlling interest to net cash provided by operating activities:

Depreciation and amortization

22,391

18,681

Provision for credit losses

7,647

6,912

Equity-based awards compensation expense

8,270

7,823

Amortization of debt issue costs

422

Change in deferred income taxes

11,406

5,365

Change in revaluation of put-right liability

1,322

Change in fair value of contingent earn-out consideration

(6,244)

219

Equity of earnings in unconsolidated affiliate

(1,477)

(1,014)

Loss on sale of clinics and fixed assets

383

836

Loss on sale of a partnership

123

Impairment of assets held for sale

2,418

Changes in operating assets and liabilities:

Patient accounts receivable, net

(11,955)

(5,346)

Accounts receivable - other

2,895

(6,548)

Other current and long term assets

(10,418)

(818)

Accounts payable and accrued expenses

(7,798)

1,713

Other long-term liabilities

(1,405)

Net cash provided by operating activities

75,058

74,940

INVESTING ACTIVITIES

Purchase of fixed assets

(14,071)

(9,186)

Purchase of majority interest in businesses, net of cash acquired

(15,674)

(133,087)

Purchase of redeemable non-controlling interest, temporary equity

(9,917)

(8,052)

Purchase of non-controlling interest, permanent equity

(273)

(1,004)

Proceeds on sale of non-controlling interest, permanent equity

Repayment of notes receivable related to sales of redeemable non-controlling interest

531

551

Proceeds on sale of partnership interest - redeemable non-controlling interest, temporary equity

186

Distributions from unconsolidated affiliate

1,411

1,080

Proceeds on sale of partnership interest, clinics and fixed assets

700

Other

364

143

Net cash used in investing activities

(36,713)

(149,450)

FINANCING ACTIVITIES

Proceeds from revolving facility

189,500

19,000

Distributions to non-controlling interest, permanent and temporary equity

(19,269)

(14,711)

Cash dividends paid to shareholders

(27,362)

(26,540)

Payments on revolving facility

(170,000)

(8,000)

Payments on term loan

(9,375)

(3,750)

Cash used for the repurchase of common stock

(5,566)

Principal payments on notes payable

(2,065)

(2,952)

Net cash used in financing activities

(44,137)

(36,953)

Net decrease in cash and cash equivalents

(5,792)

(111,463)

Cash and cash equivalents - beginning of period

41,362

152,825

Cash and cash equivalents - end of period

35,570

41,362

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

Cash paid during the period for:

Income taxes

14,348

4,823

Interest paid

9,431

7,209

Non-cash investing and financing transactions during the period:

Purchase of businesses - seller financing portion

300

2,060

Liabilities assumed associated with a purchase of a business

670

Fair market value of initial contingent consideration related to purchase of businesses

5,292

17,672

Notes payable related to purchase of redeemable non-controlling interest, temporary equity

173

Payable related to the purchase of redeemable non-controlling interest, temporary equity

3,934

Offset to notes receivable associated with purchase of redeemable non-controlling interest

358

726

Notes receivable related to sale of redeemable non-controlling interest

1,890

Payable related to the purchase of non-controlling interest, permanent equity

8,144

Notes receivable related to the sale of non-controlling interest, permanent equity

282

Issuance of restricted stock related to purchase of business

1,500

U.S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP MEASURES

TO THE MOST DIRECTLY COMPARABLE GAAP MEASURE

The following tables provide details of the basic and diluted earnings per share computation and reconcile net income attributable to USPH shareholders calculated in accordance with GAAP to Adjusted EBITDA and Operating Results. The tables also provide a reconciliation of additional non-GAAP measures to the most comparable GAAP measure. Management believes providing Adjusted EBITDA and Operating Results to investors is useful for comparing the Company's period-to-period results as well as for comparing with other similar businesses since most do not have redeemable instruments and therefore have different equity structures. Management uses Adjusted EBITDA and Operating Results, which eliminate certain items described above that can be subject to volatility and unusual costs, as the principal measures to evaluate and monitor financial performance period over period.

Adjusted EBITDA, a non-GAAP measure, is defined as net income attributable to USPH shareholders before interest income, interest expense, taxes, depreciation, amortization, change in fair value of contingent earn-out consideration, changes in revaluation of put-right liability, equity-based awards compensation expense, clinic closure costs, impairment on assets held for sale, business acquisition related costs, costs related to a one-time financial and human resources systems upgrade, loss on sale of a partnership and other income and related portions for non-controlling interests.

Operating Results, a non-GAAP measure, equals net income attributable to USPH shareholders less changes in revaluation of a put-right liability, clinic closure costs, loss on sale of a partnership, changes in fair value of contingent earn-out consideration, business acquisition related costs, an income tax adjustment to revalue the Company’s deferred tax assets and liabilities to the most current statutory tax rate, costs related to a one-time financial and human resources systems upgrade and any allocations to non-controlling interests, all net of taxes. Operating Results per share also excludes the impact of the revaluation of redeemable non-controlling interest and the associated tax impact.

Adjusted EBITDA and Operating Results are not measures of financial performance under GAAP. Adjusted EBITDA, Operating Results and other non-GAAP measures should not be considered in isolation or as an alternative to, or substitute for, net income attributable to USPH shareholders presented in the consolidated financial statements.

U. S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES

ADJUSTED EBITDA, OPERATING RESULTS AND EARNINGS PER SHARE

(IN THOUSANDS, EXCEPT PER SHARE DATA)

Three Months Ended

For the Year Ended

December 31,

2025

December 31,

2024

December 31,

2025

December 31,

2024

(In thousands, except per share data)

Adjusted EBITDA (a non-GAAP measure)

Net income attributable to USPH shareholders

4,153

9,244

39,583

31,424

Adjustments:

Provision for income taxes

5,782

5,828

19,808

14,609

Depreciation and amortization

4,635

5,685

22,391

18,681

Interest expense, debt and other, net

2,350

2,049

9,459

8,015

Interest income from investments

(20)

(306)

(105)

(3,941)

Impairment of assets held for sale

2,418

Equity-based awards compensation expense

2,119

1,986

8,270

7,823

Change in revaluation of put-right liability

(84)

(54)

1,322

(Gain) loss on change in fair value of contingent earn-out consideration

5,240

(5,113)

(6,244)

219

Clinic closure costs (1)

246

270

4,355

Business acquisition related costs (2)

369

505

1,239

819

ERP implementation costs (3)

605

1,490

Loss on sale of partnership

123

Other expense (income)

109

(96)

(235)

(357)

Allocation to non-controlling interests

(504)

(590)

(2,361)

(2,379)

24,754

21,802

95,010

81,768

Operating Results (a non-GAAP measure)

Net income attributable to USPH shareholders

4,153

9,244

39,583

31,424

Adjustments:

(Gain) loss on change in fair value of contingent earn-out consideration

5,240

(5,113)

(6,244)

219

Impairment of assets held for sale

2,418

Change in revaluation of put-right liability

(84)

(54)

1,322

Clinic closure costs (1)

246

270

4,355

Business acquisition related costs (2)

369

505

1,239

819

ERP implementation costs (3)

605

1,490

Loss on sale of partnership

123

Income tax adjustment (4)

1,499

Allocation to non-controlling interest

(3)

(8)

277

(521)

Tax effect at statutory rate (federal and state)

(1,551)

513

404

(1,884)

10,228

7,751

39,963

36,912

Operating Results per share (a non-GAAP measure)

0.67

0.51

2.63

2.45

Earnings per share

Computation of earnings per share - USPH shareholders:

Net income attributable to USPH shareholders

4,153

9,244

39,583

31,424

Charges to retained earnings:

Revaluation of redeemable non-controlling interest

(14,700)

(1,806)

(24,521)

(4,964)

Tax effect at statutory rate (federal and state)

3,903

462

6,510

1,268

(6,644)

7,900

21,572

27,728

Earnings (loss) per share (basic and diluted)

(0.44)

0.52

1.42

1.84

Shares used in computation - basic and diluted

15,167

15,089

15,175

15,064

(1) Costs associated with the closure of 23 owned clinics during the year ended December 31, 2025 and 45 owned clinics during the year ended December 31, 2024. See “Clinic Count Roll Forward” for additional information.

(2) Primarily consists of retention bonuses, legal and consulting expenses related to the acquisitions of equity interests in certain partnerships.

(3) Consists of costs related to a one-time financial and human resources systems upgrade.

(4) Mostly consist of adjustment to revalue the Company's deferred tax assets and liabilities to the most current statutory tax rate.

U. S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES

RECONCILIATION OF OTHER NON-GAAP MEASURES

TO THE MOST COMPARABLE GAAP MEASURES

(IN THOUSANDS, EXCEPT PER VISIT DATA AND PERCENTAGES)

The tables below reconcile other non-GAAP measures to the most directly comparable GAAP measures for the 2025 Fourth Quarter and the 2025 Year.

Three Months Ended December 31, 2025

Reported

(GAAP)

Adjustments

Adjusted

(Non-GAAP)

Clinic

Closure

Costs

Metro

Incentive

Costs (1)

Business

Acquisition

Related Costs (2)

ERP

Implementation

Costs (3)

Change in

Fair Value of

Contingent

Earn-out

Consideration

(in thousands, except per visit data and percentages)

Segment information - Physical Therapy Operations

Salaries and related costs (4)

99,410

(384

)

99,026

Operating costs (4)(5)

136,702

(384

)

136,318

Gross profit

35,179

384

35,563

Gross profit margin

20.2%

20.5%

Number of visits

1,593,336

Salaries and related costs per visit (4)

62.39

(0.24

)

62.15

Operating costs per visit (4)(5)

85.80

(0.24

)

85.56

Operating income

16,767

384

369

605

5,240

23,365

Three Months Ended December 31, 2024

Reported

(GAAP)

Adjustments

Adjusted

(Non-GAAP)

Clinic

Closure

Costs

Metro

Incentive

Costs (1)

Business

Acquisition

Related Costs (2)

Impairment

of Assets

Held for Sale

Change in

Fair Value of

Contingent

Earn-out

Consideration

(in thousands, except per visit data and percentages)

Segment information - Physical Therapy Operations

Salaries and related costs (4)

90,266

(218

)

90,048

Operating costs (4)(5)

123,777

(246

)

(218

)

123,313

Gross profit

28,084

246

218

28,548

Gross profit margin

18.3%

18.6%

Number of visits

1,432,801

Salaries and related costs per visit (4)

63.00

(0.15

)

62.85

Operating costs per visit (4)(5)

86.38

(0.17

)

(0.15

)

86.06

Operating income

19,651

246

218

505

2,418

(5,113

)

17,925

(1) Certain earnout bonuses and incentive costs related to the Metro acquisition.

(2) Includes expenses related to the acquisitions of equity interests in certain partnerships.

(3) Includes costs related to a one-time financial and human resources systems upgrade.

(4) Excludes costs related to management contracts.

(5) Amortization of certain intangible assets was reallocated between the physical therapy operations and IIP segments. Prior year amounts were reallocated to conform with current presentation.

* Not meaningful

U. S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES

RECONCILIATION OF OTHER NON-GAAP MEASURES

TO THE MOST COMPARABLE GAAP MEASURES - Continued

(IN THOUSANDS, EXCEPT PER VISIT DATA AND PERCENTAGES)

For the Year Ended December 31, 2025

Reported

(GAAP)

Adjustments

Adjusted

(Non-GAAP)

Clinic

Closure

Costs

Metro

Incentive

Costs (1)

Business

Acquisition

Costs (2)

ERP

Implementation

Costs (3)

Change in

Fair Value of

Contingent

Earn-out

Consideration

(in thousands, except per visit data and percentages)

Segment information - Physical Therapy Operations

Salaries and related costs (4)

381,556

(670

)

380,886

Operating costs (4)(5)

530,763

(270

)

(670

)

529,823

Gross profit

128,056

270

670

128,996

Gross profit margin

19.2%

19.4%

Number of visits

6,150,104

Salaries and related costs per visit (4)

62.04

(0.11

)

61.93

Operating costs per visit (4)(5)

86.30

(0.04

)

(0.11

)

86.15

Operating income

86,677

270

670

1,239

1,490

(6,244

)

84,102

For the Year Ended December 31, 2024

Reported

(GAAP)

Adjustments

Adjusted

(Non-GAAP)

Clinic

Closure

Costs

Metro

Incentive

Costs (1)

Business

Acquisition

Costs (2)

Impairment

of Assets

Held for Sale

Change in

Fair Value of

Contingent

Earn-out Consideration

(in thousands, except per visit data and percentages)

Segment information - Physical Therapy Operations

Salaries and related costs (4)

330,095

(218

)

329,877

Operating costs (4)(5)

460,694

(4,355

)

(218

)

456,121

Gross profit

105,914

4,355

218

110,487

Gross profit margin

18.4%

19.2%

Number of visits

5,353,189

Salaries and related costs per visit (4)

61.66

(0.04

)

61.62

Operating costs per visit (4)(5)

86.06

(0.81

)

(0.04

)

85.21

Operating income

62,994

4,355

218

819

2,418

219

71,023

(1) Certain earnout bonuses and incentive costs related to the Metro acquisition.

(2) Includes expenses related to the acquisitions of equity interests in certain partnerships.

(3) Includes costs related to a one-time financial and human resources systems upgrade.

(4) Excludes costs related to management contracts.

(5) Amortization of certain intangible assets was reallocated between the physical therapy operations and IIP segments. Prior year amounts were reallocated to conform with current presentation.

* Not meaningful

U. S. PHYSICAL THERAPY, INC. AND SUBSIDIARIES

SUPPLEMENTAL FINANCIAL AND PERFORMANCE METRICS

Revenue Metrics

Net Rate Per Patient Visit (1)

Patient Visits (1)

Average Visits Per

Clinic Per Day (2)

2025

2024

2025

2024

2025

2024

First quarter

105.66

103.37

1,443,805

1,268,002

31.2

29.5

Second quarter

105.33

105.05

1,558,756

1,335,335

32.7

30.6

Third quarter

105.54

105.65

1,554,207

1,317,051

32.2

30.1

Fourth quarter

106.49

104.73

1,593,336

1,432,801

32.7

31.6

Year

105.76

104.71

6,150,104

5,353,189

32.2

30.4

(1) See definition of the metrics above in the Glossary of Terms – Revenue Metrics.

(2) Excludes home-care visits.

Clinic Count Roll Forward (1)

2025

2024

Owned

Managed

Total

Owned

Managed

Total

Number of clinics, beginning of period

722

761

671

714

Q1 additions

Q1 closed or sold

(7)

(2)

(9)

(6)

(2)

(8)

Number of clinics, end of period

729

766

679

720

Q2 additions

Q2 closed or sold

(3)

(1)

(4)

(5)

Number of clinics, end of period

732

768

681

722

Q3 additions

Q3 closed or sold

(3)

(4)

(7)

(32)

(2)

(34)

Number of clinics, end of period

745

779

661

700

Q4 additions

Q4 closed or sold

(10)

(2)

Number of clinics, end of period

746

780

722

761

Full year 2025 and 2024 additions

Full year 2025 and 2024 closed or sold

(23)

(7)

(30)

(45)

(4)

(49)

(1) Excludes the home care business.