Q3 2025 US Physical Therapy Inc Earnings Call
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active promoter, uh, score for
Our um, across across our entire company for our our patients and our outpatient facilities, just incredible. So look none of this is perfect at any given point. Um but we are making a difference in a lot of patients lives. Um, those patients recognize the value in the service. They're getting from us. We pay their bills.
Collect their money and then we get them back later when pickle ball happens. There's something else that causes their function to be impacted.
This quarter.
Again, maybe it's against the soft quarter a year ago, but gross profit grew 30%.
I mean said those numbers in a long time.
Even if you just have some of the noise from a year ago, we still need teams. Gross profit increased, and we have PT.
And that's in the middle of an inflationary period and a period where you know staff is more expensive.
We impacted our our salary and related costs per visit.
on a year-over-year basis, and actually went down some
We're working on a number of initiatives, including AI, um, driven documentation, including what I refer to as is a semi virtualization of our front desk operations math, rolling out, we have a target for that by year, end of, of 200 facilities about halfway there. Uh, but we're beginning to see some impact from both of those things. Um, and, and we've got more to come. We're just on the front end of the numbers things, which take some time.
As we look at the year 1 of the big headwinds. We've been faced with quite honestly. Now, for 5 years,
Is this Medicare headwind? Um,
CMS produced their final rule on Friday. I said, as I often do, there were some incorrect tables in our park that we had to contact CMS about. It took them a couple of days, but they looked at it and, in fact, they were incorrect. They updated those tables.
It's gotten a little bit better than last time we talked. Um, I think last time and we're not done with our analysis, last time we said it was going to be about a 1 and a half percent increase. Probably a little better than that right now this year's more complicated than most because of the the significance and the change in the geographic index factors that kind of shuffled all around the country,
1 of the things that swung for us, it's a net positive, manual therapy, which is when we put our hands on our patients. When we mobilize joints, when we restore motion again
Through that, that very upfront and close personal contact. Very precise ways, do that on almost every patient that comes in the door.
Manual therapy was slated to go down.
Uh, we challenged their, um, assumptions, and in this final rule manual therapy will go up slightly. So it it reverse from a negative to a slight positive. So, that's that's positive for us as as we sort the impact of this final rule. The other thing that I think will be meaningfully positive
is that, um,
In 2024.
Um, we went and and began to roll out remote therapeutic monitoring, which was which was a new code for us.
And the rules around that code.
I'm not going to go through all of it but it required, a lot of visits and a lot of monitoring which we did with the partner limber uh a great guys and who've done a great job and but it was clunky took a little while. We had to integrate limbers tool into our EMR system that took some considerable time wasn't within our control. Frankly,
And by the end of the year, we hadn't gotten the traction with our Partnerships that we had hoped. Now, what
EMS has appreciated, which is what we've appreciated.
The more gates with the home program, the more adherent to their total program, which helps in their exiting function, and so CMS again with encouragement from groups like apq and others.
They've reduced significantly the number of visits that it takes in order to get to a billable code.
Um, we now have a fully integrated working model, uh, through an app, uh, which integrates well with our EMR, uh, and so beginning 2026. This will be a, a reinitiate of of, that of that opportunity for us, which we're just right now, scheming and surface up. So, for first time in a while, we're going to see some blue sky in 2026, in terms of attending, particularly in terms of of Medicare reimbursement, we see additional opportunity around remote therapeutic monitoring, and then we've got these internal initiatives to help with our efficiency and our patient flow in a cost overall. So that's very encouraging.
Um, I want to shift the gear a minute and talk a little about our injury prevention.
Both of those teams are are doing really well. This year, I read a report that won the report said, injury prevention for the quarter was disappointing.
Look this quarter. We've last an acquisition that we had in the last quarter still uh as part of those numbers which gave us mid 20s Revenue growth. I remember right?
1415 percent, that's purely organic.
Still strong Revenue growth, that's where we've been.
Uh, we've got other injury prevention opportunities in the pipeline. We continue to love this business, you know, deals happen when we get them done. We will talk about them and we don't put information up ahead of time, uh, but you're going to continue to see us grow this business because we have high confidence in our teams and both injury, prevention Partnerships. We have other things in the market that we like that we think are going to be impactful.
Help us to grow our industry verticals and help us to grow our service opportunities and we started this in 2017 and we had a great team but we had very small company, very narrow service. Line that sort of the service lines have broadened significantly. Over the years teams, got even stronger.
Uh, and our, our industry verticals have gotten wider and wider as we've added more programs and services. So you're going to see that continue to be a strong Focus for us.
So, let me just say this in closing.
Now, I touched on a number of things.
This is a team that doesn't give up. We've had a lot of headwinds over the years.
It's been challenging.
We always find a way. You look at the Medicare cuts that we've absorbed.
You know, in these last few years, the aggregates have grown over 11%. You look at the impact—just in this year, it's a $25 million profit impact—and yet we've found a way throughout all those years to continue to grow. Now that the Medicare headwind is going to be gone, we have some good things in the mix. We still have a great capital structure, and we have a very strong resolve to take this company forward and do the things that we've said we're going to do. So with that, I'm going to turn it over to Carrie to cover the details, and I look forward to your questions. Thank you.
Great. Thank you, Chris. I appreciate it, and good morning everyone. Let me highlight a few performance metrics that drove our strong results in the third quarter, some of which Chris already covered. But just to emphasize, our average visits per clinic per day was 32.2, and that's the highest third quarter volume per clinic per day in our company's history.
Our total patient visits increased 18% year-over-year, supported by the 84 net own clinic additions Chris mentioned since the third quarter of 2024, and also a solid 2.2% increase in visits in our return clinics.
Our PT salaries and related costs per visit. Actually decreased this quarter, they decreased 40 cents per visit compared to the prior year. That's the first time we've seen a decline in our salaries related cost since the fourth quarter of 2023. And then I our IP Revenue grew almost 15%. And our iip growth profit was up nearly 11%, which is all organic growth.
.2% to 23.9 million.
Turning to patient visit volumes, we recorded 1,524,070 clinic visits in the third quarter, along with 30,137 home care visits.
Our average visits per clinic per day, as I mentioned, was 32.2. It was 32.2 in July, 31.9 in August, and then 32.7 in September, which follows our normal seasonal pattern, with volumes typically picking up in September after the summer months.
Our home care, visits continue to build nicely. They move from just under 23,000 in the first quarter to a little above 28,000, in the third quarter. And now a little of about 3,000 in the third quarter. So those continue to build
Our net rate per patient visit for the third quarter was $105.54. This reflects a modest decline from the second quarter of this year and is down slightly from the third quarter of last year.
September was our highest monthly net rate of the year. Um, so it was it grew in September as the highest month of the quarter and certainly the highest month of the year and that exceeded 106 dollars per visit. So the trajectory there is good as a reminder. We absorbed a 2.9% Medicare rate reduction that took effect at the start of the year and then we saw some rate mix shifts a little bit in the third quarter, most of our year-over-year, visit growth came in the commercial, and Medicare categories the by, by payer category commercial visits.
Year-over-year at which we're about 106 dollars. A visit those slightly above our average rate.
We're up about 20% in the third quarter compared with last year, Medicare visits which averaged approximately 94 dollars to visit. So that's below. Our average rate, increase 18%, and then workers compensation visits at roughly 145 dollars to visit increase at a lesser rate of 5% partly because recycling needs some significant increases in our workers comp business in the prior year and we're continuing to focus on expanding our higher rate workers comp business and expect to add several new workers comp Network relationships before the end of this year.
Our Physical Therapy. Revenues were 168.1 million in the third quarter of 2025, which was an increase of 25.4 million, or 17.8% from a year ago.
Most of that growth came from Acquisitions. We completed since last year with Metro and PT in New York, which we acquired last November, contributing, 19 and a half million dollars to our third quarter Revenue.
Our PT operating cost total is $136.9 million. That was an increase of $18.2 million, or 15.3%, compared to the same quarter last year. Importantly, as I mentioned, we manage costs effectively. As I noted earlier, salaries and related costs per visit decreased year-over-year from $62.47 in the third quarter of 2024 to $60.07 in the third quarter of 2025.
Total operating costs per visit increase. Just 1% moving from $6 per visit last year to 86 to 88 cents this year, which we view, as a strong result, given the inflationary environment.
Our Physical Therapy operating margin was 18.6%. As a reference point, we made a small reallocation of amortization between our PT and iip segments in the third quarter. And then we adjusted the prior year amounts to align with the current year presentation. Um, look, and we'll continue that approach going forward, making a prospective change on that. It, the change results in a slight increase of about 20 to 30 basis points, in our PT margin across all periods. And then as a, a decrease of about 172 to 100 basis points in the iip margin,
Speaking of IIP, as Chris mentioned, our IP delivered another strong performance. In the third quarter, IIP net revenues increased by $3.7 million, or 14.6%, while IIP income rose by $546,000, or 10.7%.
And again emphasizing this growth is all organic. We've not made any iip Acquisitions since this since the third quarter of last year and our iip margin for the third quarter was 19.6%.
turning to corporate costs, they remained in line with expectations, our corporate expenses were 8.5% of net revenue compared with 8.6% in the third quarter of 2024,
As I mentioned, last quarter, we're in the early stages of implementing, a new, enterprise-wide financial and human resources system. During the third quarter, we incurred about 700,000 dollars in implementation, costs related to that project and consistent with our practice for similar non-recurring items. We add those costs back to our adjusted. Eva calculation.
Income of a million dollars is, you know, we had excess cash in our balance sheet and the third quarter of last year but that's now all been deployed into Acquisitions. So we didn't get the interest income associated with that. And then we also had higher interest expense of dollars, that's associated with the higher debt balance this year because it made our positions and put, um, a small amount on a revolver, which we didn't have anything on our revolver last year in the third quarter.
On a per share basis, operating results were $0.66, compared with $0.69 in the same quarter last year.
Our balance sheet remains an excellent shape, we currently have 132 million on our Term Loan but the swap agreement in place that fixes the interest rate at 4.7% through mid 2027. In addition we have the 175 million revolving credit facility with 26.5 million drawn on it at September 30th 2025.
We ended the quarter with 31.1 million in working capital cash.
We've not yet. Repurchased, any shares in the share report purchase program? We established in August. We view that as a prudent tool to have at our disposal but Acquisitions will continue to be our primary Capital allocation priority consistent with our long-term growth strategy.
Finally, as noted in our release, we reaffirmed our adjusted Diva. Dog guidance to be in the range of 93 to 97 million for full year, 2025 reflecting our third quarter results, and then our current expectations for the remainder of the year. And with that, I'll turn the call back over to Chris.
Thanks Carrie. Okay, operator. I know we have some questions, so let's go ahead and open up the line since after we take this questions.
at this time, if you would like to ask a question, please press star 1 on your telephone keypad,
You may remove yourself from the Queue at any time by pressing star 2.
Once again, that is star 1 to ask a question.
Our first question comes from Brian tanil with Jeff.
Please go ahead morning, morning morning, guys morning. Um maybe Chris, I'll I'll ask first. I mean, what are you seeing in the demand environment for physical therapy? And then kind of like the other side of that? You know, how are you seeing it? Or what are you seeing in terms of clinician Recruitment and Retention? And I mean, I know you guys called out the decline in salary for visits. So just curious what are the Dynamics that you're seeing there? Thanks.
Yeah, the main demand has for us pretty much all year continues to be strong. I was saying the quarter, um, we had a little bit of a shift between July and August.
July was better much better than we expected and actually was very similar to June, which doesn't normally happen. And then August was a little bit softer concerned us a little bit and then we pop right back up in September. And so I think what happened was? We just we we were busier in July than normal. We probably shifted some summer vacations into August which impacted us a little bit. These are slight memberships. The man's pretty much been been good everywhere. On the supply side of the, on the labor side, you made a number of Investments over the last year plus
in terms of our recruiting, um,
New tracking, applicant tracking platform, um, new people and resources devoted.
Toward developing, um, more robust School relationships and services and programs content. Actually for students that are still you know, in school. Uh and that we think is is paying dividends our our our time to fill.
Down, uh, our turnover spin, really good, uh, really cross all parts of the company. Um,
but you know, we're definitely not paying people less
The Market's not soft by any stretch, young therapists, still have a lot of debt when they come out of school and and plenty of opportunity in terms of employment where they can go. And so it's competitive in that regard, but I think we made some some incremental positive strides over the last 12 to 15 months, in terms of our infrastructure, our ability and our capability and we're seeing that you know, pay off
Your share BuyBacks and also I know you and I have had conversations about how iip is a focused area for m&a. So maybe if we can just touch on that and and in terms of why that is
Yeah, sure. On the, on the repurchase side as I mentioned, my remarks I mean we we think that's a good tool to have our disposal um and and we weigh that versus Acquisitions but certainly Acquisitions at this point, we've got a number of them you know that are in process that we hope to that. We hope to get across the Finish Line um and and the relatively near-term. But um it's it's just a much better use of our Capital at this point our Acquisitions because that's they're the Acquisitions. We're looking at to your point are iip Acquisitions for the most part. We're going to continue to do, pt Acquisitions. But we're we're really, we are focused on iip because of the return Dynamics. I mean the the the growth prospects in that side of the business uh are just are better and um so that's where we're really focusing. A lot of our IP, our acquisition attention is on that side of the business with better Revenue growth better. Um um
Profit growth there. So, um, and we need that.
That segment to get larger. So that's what we're really looking at. Yeah.
Awesome. Thank you.
Our next question comes from. Benjamin Rossi with JP Morgan. Please go ahead.
Hey thanks. Good morning. Um, appreciate you taking my question here. So just hoping you could discuss some of the competitive dynamics that you may be seeing across your markets and physical therapy. Just giving some of your commentary about this strong demand backdrop. Guess just when we think about existing marketing competition for the primary and markets and Medicare Commercial Workers Comp, can you just kind of walk through competitive Dynamics this year? And maybe if you're seeing any pressure for a newer offerings or coverage amounts that have kind of changed some of your inbound, demand,
Yeah, but it's it's hard to quantify and and and particularly it's hard to say, well, this year is different than prior years. I can tell you, and again, I'm going to speak in some generalities. I'm not going to
Call anybody out. But, um, Cross on Market, we typically compete with small practices, Mom and Pops. We compete with the hospital-based practices where patients often...
Primarily, not the top of the list in terms of product lines. Then we compete with other large providers and other consolidators in the market.
And really since
I would say since the latter part of 2022.
Some of the larger PE-backed companies have been balance sheet constrained. And so, you know, we're seeing multiples, um, the acquisition side come down a little bit. That wasn't specifically your question, but we have seen an impact there in terms of.
You know boots on the ground and who gets which patient, really hard to measure. You know we all have relationships we're all out there.
Looking at to, to try to get keep the relationships that we have and expand into new relationships. It's competitive market, but we're in as good a position as anybody just because our balance sheets are good. So we have the ability to deploy resources, we have the ability to make a long-term investment to make decisions that aren't based upon Acuity or crisis or other, you know,
Of a balance sheet, pressured things. And so, I think over time it's our benefit, which is 1 of the reasons, our visits for clearing per day, continue to move up, you know,
in spite of,
The General market challenges overall.
Got it. Okay, appreciate the comments there. I guess just thinking about the broader backdrop across, you may be mature cohort in the bank growth there.
You kind of just parse out, you know, core growth figures and maybe how that core growth looked across those main segments, like Medicare commercial and workers camp or at least maybe, like, directionally. What was up or what down year-over-year.
You know, that kind of affected the the rate a little bit for the mature clinics there in the quarter. So our visit growth was 2.2% and then our rate growth and mature clinics because of that, a little bit of that mix shift. I just talked about the fact that, you know, commercial and Medicare are commercials right at our rate, Medicare is a low rate and that's where we saw the growth. But then workers comp dipped a little bit, which is a high rate, high rate. Um, Fair category that rate decreased 2.2% for um was 2.0% for the third quarter in mature clinics. So 2.2%, visit growth 2% Revenue growth, so it was up just slightly from a revenue standpoint year-over-year. That's my category though.
If you yeah.
Great, thanks for the caller.
Our next question comes from Joanna, good with Bank of America, please go ahead.
Hi, good morning, thanks for picking a good question. Um,
thought I could build a very quick follow up on the final America race being posted. But based on the proposal you've gonna estimate, it will be, it's called, um, you know, 1.5 to 2.5 million to adjust City the da. So, based on your, um, I guess updated, um, that's the month of that since I could sound like, it's not finalizing but, um, you know, where where, where did the land right now, in terms of I just said, either that 1
So I don't think we're there yet. We're not there, the tables didn't come out until Tuesday, so
Yeah and it's a pretty complicated calculation. We have to go through. We have to go through by market by it but I would say
The increase we expect to be. I think really more of a floor of 1 and a half percent now whereas we thought that maybe kind of right where we ended up, I think that's kind of a Florida and a half percent and there could be, it could be greater than that. And we'll certainly get more color on that on our next call. But the fact that it's a positive going into 2026 is is is really, really good.
All right, thank you again. It's going to be a little bit better than that number, so that's
2% to adjust it but that growth next year, Jessica that I know you're not giving guidance and like I said, you know anything, a lot of different things, but anything else we should be thinking about in terms of care and headwinds into next year.
Other than what we've talked about, we're working on some cross things. Obviously those are beginning to to come through. Um, you know, AI driven documentation, virtualization of the front desk.
We talked about remote therapeutic monitoring being an update to our high-priority work list for 2026, where there's some reimbursement that we're not tapping into right now. This is due to the complexities historically around how the government has approached this.
Set up and funded this program, it's gotten much more logical uh and and much more doable and so we'll focus on that. And then got some things that we haven't talked about yet. That we're not quite ready to talk about that are that'll be very positive next year. That we expect you an update when we, uh, meet your guidance and, and talk about our year end numbers. We think we'll be far enough along and
to, to lay it all out.
Yeah, and on the, on the head I think of anything significant on the headwind. You know, we've had, you know, obviously, the big major headwind was at the last 5 years has been, uh, you know, the Medicare rate and we're thankful, we don't have that headwind going in 2026. So, um, that's why, you know, at this point, we'll get the guidance later, but we feel good about kind of how things are shaping up for 2026.
Okay, let me find my, uh, different top with different question. Um, I noticed that these, there's some additional diverso, uh, of the payouts from my position. So, I think you you had this in a couple of quarters in a row. So any anything in particular like, you know, what's causing that reversal?
I'm sorry. That's on what.
Atlanta.
On the payouts from acquisitions.
So you said I think like 11 million this quarter
Yeah. Um, you know, that's really just it's a, it's every quarter, we reproduct kind of where we think they're going to end up, um, for the for whatever the earnout period is and we have to make adjustments based on the monoc, Carlo, simulation. Um, you know, I
If they don't quite get there, then we have to back it off a little bit.
Chris, would you anything else you'd say about that?
No, I mean, it's just a quarter to quarter adjustment, you know, that predicts.
attempts to predict where we'll end up at the end of
Another period. It's it's, you know, to be honest it's it's an exercise that I don't think it's particularly meaningful, but we have to do it. And so, you know, because up and down every quarter.
Not actually what we're spending at, any given time.
And as a reminder, it is star 1. If you'd like to ask a question,
We'll go next to Larry solo with CJs Securities. Please go ahead.
Hello great. Uh, hey Chris good morning, good morning everybody. Um congrats on your 84th call. I think if I did the math this is my 73rd 1 listening in. So
Keep in a fun ride. Uh, uh, I guess just last question. I appreciate all the the color on the, on the volumes. Um, well, just in terms of the mature clinics and I know they were a little bit flat too last quarter, and, and pretty flat this quarter, um, on both the price and the volume I guess. So, um, net, just and you've discussed the, the pricing pretty well. You parse that out pretty well. And it's just any thoughts on the on the flat volumes. Um, and
How you can maybe is that just a timing thing. A staffing issue? What are you? You know.
I mean caller there.
Yeah, I mean my sense is that...
Anytime.
Anytime you focused on trying to wring out costs?
You probably wring out.
A little bit of volume.
And so you kind of have to pick your poison, and we're trying to obviously get it right in each and every situation. There are literally thousands upon thousands of those situations. When you look at daily schedules and how many therapists we have?
All of it. Um,
and, you know, I I don't look at 2.2 as flat. Although it's, you know, I would rather than 3, let's say, right, you know, more more more on our average.
um,
on the flip side, we made a little bit of an impact on the cost side. So I think there's probably some
some impact there from trying to be as efficient as you can and not have slack resources, slack resources, allows you to take a walk up and, you know, have people just show up and and be able to deal with them and then when you don't have slack resources you know it makes it a little bit harder to do that. And so I think that's part of it probably.
I know, I appreciate that. Um,
in terms of the the Erp, the new Erp system, which is a, I guess a modest headwind in terms of cost today. Um, does does that become a benefit? I mean, obviously. I know your time that in with, you know, a lot of your other, you know, the your AI virtual notes taking up stuff like that too. So maybe hard to isolate that, um, by itself. But does that end up being a, you know, an efficiency benefit at some point?
Certainly learning. Yeah.
Go ahead. Okay. No please it'll be a big efficiency. Uh you know.
Positive for us, in the Finance and Accounting area and um, you know, with the with the human resource side, too. So it'll be a really good tool for, uh, all of our employees to use for. They'll they'll be kind of a 1-stop place. They can go and get all their HR information and their financial information too. If they if they have financials if they need to do so everything will be there at the same time. And I think what it does is just provide us
More and provides us quicker and probably, um, more information to manage our business. But that from that respective, it's going to create some efficiencies and processes for sure.
Great, if I could just switch gears from 1 last quickly on the injury prevention. Um,
Sounds like, you know, really knocked me out of the park on the top line, um, with teens growth. I don't know, you know, is that is that number, you know, hard to say sustainable over a multi-year period, but it does feel like you do expect that business to certainly grow faster than the, the PT business. Um, I guess any color there and then the follow-up would be. It seems a little bit of a gross margin. Um, came in a little bit, I guess year over year. Um, and any anything, um, we should be concerned about on the iPad.
Yeah, so gross margin but when you look at it year-over-year, um it you know it did for IIT come down a little bit, it was 20.3% on on the properly adjusted basis and um, in 2024, it was 19.6% in the third quarter this year. So a little bit of dip there, but that margin continues to be, you know, really really strong and near near that 20% mark.
Um part of it is, you know, we have added some Auto clients which and over the last year, which which had a little bit lower margin, but that's good business. That's why you see that Top Line growing at the 15% but not quite as much on the bottom line growth, the 11%
um, because yeah, kind of depends on the mix of the business there and what their margins are for those but um nothing really notable to to
To point out related to the margin difference, quarter or quarter.
Yeah. And Larry in terms of growth, you know, I don't know if I don't pretend to have a perfect Crystal Ball. But yeah, no I get 17. We've been growing at a pretty good clip. You know, in the early first couple of years, year-over-year growth was more like 30 or 40, um, more for a while as we get bigger, you know, gets a little bit harder and it's, I think mid teens is pretty good number right now, but, you know, as we add these other companies and we pick up more services, it gives us a bigger opportunity.
To cross sell. So in that regard, I do think there's a sustainability element particularly as we've added programs over the years that in our team has gotten better at cross-selling. And um so I think we can grow certainly at an outsized rate compared to PT when you look at organic growth,
Thank you for all the caller, appreciate it.
Our next question comes from Constantine. Divides with citizens? Please go ahead.
Thanks uh Chris just on the the Home Care visits. Can you just
Talked about, um, directionally how you think that's heading. Are these still largely?
Confined to the Metro asset um or or have you expanded the model out to any of the other logos at this point?
yeah, Eric you want to take I'm going to let Eric speak to that but yes it's it's primarily Metro
Yeah. And it's really Regional. So it's outside of New York. I mean, we've expanded into the New Jersey Market, Michael had the biggest footprint, obviously in home care operating out of New York. Um, it's easy to expand as we go with CD over and in a state over and so I still think that's going to be the area where we have the biggest expansion opportunity but we are looking elsewhere um, within the portfolio around where we can replicate that. And and
Make an impact. So still believe it. It, uh, can generate growth for us as we continue growth for. But right now, most of it will be in the Northeast.
And can you maybe speak to the relative margin? Differential between a home based visit and just kind of, you know, historical level of margins on the core Core PT business.
I'll speak to a specifically to New York, New Jersey, I mean, obviously. So it's it's, they're we're treating Medicare. Uh, the Medicare reimbursement up in the Northeast is is very very favorable as compared to other parts of the country. And you know doing home care you. You do generate pretty decent margins because you're only real overhead associated with Home. Care is labor rates, and you pay a little bit more for, uh, Home Care staff. Um, but margins are are helping the business and I can Circle back and get you a number for you. I don't have that in front of me, but it won't be the case everywhere. I mean there's markets where it just based on cost of Labor and, um, uh, uh, decrease Medicare rates, uh, it won't make as much sense for us. But right now, the Northeast very, very healthy rate. We're able to find labor and and generate accountings this scale which is another big part of the program. I mean when you bring home care people on while they're typically paid um on a per visit basis, your ability to attract staff
Is is really based on having the ability to give them a full schedule. And so for us, it's easier to grow off of an existing program and expand as we move into different zip,
Um, a little bit lower markets, we're just starting up a program for the first time. So I hope that caller helps a little bit.
Pushing.
Probably in the 35 to 40 range this year. So I'm wondering, you know, what's the limiting factor on that and is this kind of, ah, you know, New Normal in terms of what you're targeting, you're in, you're out, or is this just, you know, there's 2025 just a year of just more pronounced uh, denovo growth.
No, I, you know, so, um, limiting factor first limiting factor, really not our ability to get to know those out of the ground. We could do more than than we're doing. It's having the right person ready to take over that facility in the leadership position, then being able to backfill that person in the in the existing clinic. And so that's, that's part of it. Um, an important, there has to be willing to take a a near-term, dip, and distributions. And other things that again, to, to fund that facility and get it up and out of the ground, having said that we've got some things that we're working on behind the scenes, again, this falls into the category of, you know, I haven't fully listed the current me at that will help us
And, um, certain markets accelerate our denovo opportunity, and that's something. We'll spend some time on. I think in February, when, when we release our year, end earnings and talk about what we what we expect to do going forward. That's the, that's the general time frame. When we're going to be ready to, to kind of talk about some of these other things. But, you know, I think in that
30 to 50 range is, you know, it's likely where we'll be
Alright, thank you. Chris.
Thanks.
And once more, ladies and gentlemen, it is star 1. If you'd like to ask a question,
We'll go next to Mike pusky with barington research. Please go ahead.
Make your line is open. Sorry. Sorry, sorry, sorry, sorry. Sorry, I'm I'm here. I'm here. Sorry, mute, okay, um, Carrie I know that you uh you talked uh to the uh the year-over-year decline in gross margin iip, but I'm I'm I'm actually more uh, confused uh and you may have addressed this and I missed it but confused by the sequential decline in that gross margin. Did, did you talk about that or could could you talk about that? Yeah, so I'm
On the call that we had some amortization. That was that
Had been being allocated to the PT segment that really should have been allocated to the iip segment. So um, we made that adjustment in, um, in, you know, and we're making to make that on a, on a prospective basis. And so it increased our PT margin a little bit by about 20 to 30 basis points. And it decreases our, um, IP margin by 170 to 200 basis points. So okay, when you look so so there, so that last quarter is that as you reported is not apples to this third quarter. But as we go along, we'll just prospectively um, uh, present that in the same manner, going forward with that. I, I with that I I am conversation. Actually squarely, placed in iip, so yeah. But but if you look at any of that, the court, like the second quarter last of this year would have been 170,600 basis points less than what we showed um in our report.
Gotcha. Okay, perfect. And then, in terms of workers' comp, what percentage of overall revenue was workers' comp in this quarter?
Yeah. Hold on 1 second I believe it was. It's right at 9.6% I believe is what it was.
9.7%. It was 9.7%. And we did, you know, overall we did see workers comp growth just in in visits. We, it was about a 5% increase in workers comp business for our total book of business, uh, just mature clinics when when I was speaking to a certain clinics that was, it was down a little bit in the tur clinics but it is up overall 5%. It just didn't see as big a growth as commercial Medicare, which were at 20% and about 18% respectively. So um, we did see increasing with this kind of visits.
and I'm
happy to throw a little bit more color on the work time side here. You know, the careers Point. Um the growth wasn't as robust as as what we've been seeing or over, you know, uh
Under 10% 2325 compared to Q3 24, um, on a on a year to date basis, revenues are up 19% in work comp visits are up about 9% and, and rate has been up about 9.4%. We signed 11 new contracts in in 2025 with work comp 2 of which came online in q1, 4 of them. Q2 2 of them late Q3 and 3 of them are coming online. Late Q4. So we still have growth opportunity that we're going to see on the work comp side. There's also a concerted effort around volume pull through, uh, and a focus on our PPO contracts, which pay a higher rate than some of the work comp specialty networks. So we still foresee, um, good growth on the warcom visit side as we move forward here in the 2026.
Okay, great. And and just a couple of more quick ones, uh, you know, the 1 1.5%. You know what you guys are calling, probably a floor on on, on the Medicare update for 26. I mean it could the ceiling be as high as 2% or are we really talking? It's it's 1.5 or its 1.6 or 1.7 like pretty close.
My gosh tells me it's going to be pretty close to 15 1 617 probably. I don't know that it gets to 2. What could take it to
Is if we can ramp up remote therapeutic monitoring and get that, you know, in a meaningful percentage of our Medicare patient, that would pick us up, you know, a few dollars per visit over the course of the case.
Um, and so that would be a nice lift. That would be a Difference Maker. Um but we think on the base reason, this is so complicated right now. So many of the geographic index factors which normally don't move very much moves a lot. And so we have to model
Not only kind of the historic look at what the changes would have done, but a prospect of look, we have to estimate what we think the migration will be for Medicare Advantage to Medicare and frankly it's it's not entirely precise.
Um, it requires, you know, it requires some estimation.
And so that's why we're we're being a little less precise on this because it's not quite easy to pin the tail on it as it has been in the past.
That's fantastic. And then I just the last thing and I met again, this I may have missed this as well. Uh, July August September. Did you give the visits per month there?
Yes, but I'll repeat it. Um, let me.
get that in front of me here. I know a July was 32.2.
Um, yeah, yeah, 30 people see July 3197 in September.
And, and then, just the last sort of second part of of that, uh, uh, question as as as you're, you know, there's a lot of talk and, and news media and around the elections about, uh, sort of affordability. People getting squeezed by persisting inflation. All the rest of it. Are you, are you guys seeing any evidence of that impacting? Uh, you know, sort of people later in therapy or are you are you hearing anything or you're picking up anything on that? Thanks.
I mean, what we have to look at is our duration of care, right? I mean that's the 1 objective measures that we have to look at and so duration of care hasn't dropped um it's not going backwards. It it's it's been been very steady.
Eric, I don't know if if you provide any other call on.
Uh, no Chris said that's spot on. I mean, even when we went through some of those, you know, a difficult periods, 2 years ago, would rapidly Rising inflation in a concern that, you know, people are going to kind of hang out of the ballot.
And saw absolutely no variation in our, um, durations, and they continue to be strong and consistent, um, throughout 2025 as well.
Okay, very good. Thanks guys. And our volumes in October have been really, really good. So, you know, that's that we haven't seen it yet there.
Alright, thanks.
Thanks Mark.
Thank you. I'm showing no further questions at this time. I will now turn the program back over to our presenters for any additional or closing remarks.
Okay, well, thank you everybody. We appreciate your time, this morning, we always appreciate your questions, Karen and I are available later today through the week. Um, and and until next week, of course, uh, for any follow-up. So, hope you have a great day. Thanks again. Bye bye.