Concentra Group Holdings Parent, Inc.

Our operations and sales and marketing teams have done a nice job driving visits and gaining market share against a macroeconomic backdrop that I would generally describe as uncertain considering interest rates, tariffs, and the shutdown. Some recently published jobs data would seemingly indicate that we're in an economic environment that is slowing down, but we aren't necessarily seeing that play out in our business to date. With respect to macroeconomic data reporting over a long period of time, we have seen correlation between our workers' compensation volume and employment levels reported by the BLS, and there is strong correlation between our employer services volumes and quits and hiring rates within the BLS JOLTS data. However, we've also found that our workers' comp visit data has largely lacked correlation with BLS employment data in the most recent times. I just point that out so that the folks don't rely solely on the publicly reported jobs data as the only proxy for our visit volume. On the rate front, we had strong growth again with a 4.2% increase in revenue per visit this quarter versus the same quarter prior year. This growth was driven by a 4.7% increase in workers' compensation and a 2.7% increase in employer services revenue per visit. Adjusted EBITDA was 118.9 million in the quarter versus 101.6 million in the same quarter prior year, or a 17.1% increase. Adjusted EBITDA margin increased slightly from 20.7% in Q3 2024 to 20.8% in Q3 2025. As with prior quarters, we are comparing against prior year margin that was not fully burdened by public company and other separation costs. Additionally, similar to last quarter, we had a number of one-time NOVA integration costs that burdened adjusted EBITDA. This expansion in margin, even with these dynamics, is another strong indicator of the performance of our business. Adjusted net income attributable to the company's $49.9 million net and adjusted earnings per share was $0.39 for the third quarter 2025. These compare favorable to prior year adjusted net income attributable to the company and adjusted earnings per share of $44.3 million and $0.37 respectively. As a reminder, adjusted EBITDA and adjusted net income reflect the add-back of transaction expenses related to our acquisition activity as well as one-time costs related to our separation from select medical. Now we'll turn it over to Matt to provide additional details on our financial results.

Thanks, Keith, and good morning, everyone. I'll start by going through some more details on our results in our three operating segments. In our occupational health operating segment, total revenue of $526 million in Q3 2025 was 13.6% higher than the same quarter prior year. Workers' compensation revenue of $343.5 million in Q3 2025 was 15% higher than prior year. Work comp visits per day increased 9.8% from prior year, and work comp revenue per visit increased 4.7% versus prior year. Within employer services, revenue of $173.2 million increased 11.9% from prior year. Employer services visits per day increased 8.9% from prior year, and employer services revenue per visit increased 2.7% versus prior year. As with the past two quarters, here are the same stats excluding the impact of NOVA to help isolate our core business from our Q1 acquisition. Total revenue within the occupational health center operating segment was $494.7 million in Q3 2025, a 6.8% increase over the prior year. Total visits per day increased 3% over the same quarter prior year, and revenue per visit increased 3.9%, from $141 in Q3 2024 to $147 in Q3 2025. Workers' compensation revenue of $324 million in Q3 2025 was 8.5% higher than prior year. Workers' compensation visits per day were 4.4% higher than prior year, and work comp revenue per visit was 3.9% higher than prior year. Within employer services, Revenue of $161.7 million in Q3 2025 increased 4.4% from prior year. Employer services visits per day were 1.9% higher than prior year, and employer services revenue per visit was 2.5% higher than prior year. Moving on from our occupational health centers, our onsite health clinic segment reported revenue of $34.9 million in Q3 2025. a 123.8% increase from the same quarter prior year. This was largely driven by the acquisition of Pivot Onsite Innovations in Q2 of this year. Excluding the impact from Pivot, the onsite segment revenue grew 17.5% year-over-year. The growth in the legacy onsite business is indicative of the nice momentum we are seeing with the platform as a solution to employers across the country who are seeing double-digit year-over-year increases in employee health benefit costs. We believe we are naturally positioned to further penetrate this growing market given our national presence in infrastructure and deep relationships across approximately 200,000 existing employer customers. We expect this to continue to be an important part of our organic and inorganic growth strategy over the coming years. And finally, other businesses generated revenue of $11.9 million in the quarter, an 8.1% increase against the same quarter prior year. Now switching to expenses. Cost of services was $405.5 million, or 70.8% of revenue in Q3 2025, down from 71.7% of revenue for the same quarter prior year. The decrease as a percentage of revenue can generally be attributed to an overall improvement in staffing efficiencies at our centers. As with the last quarter, we had a number of one-time costs related to the NOVA transition that are not adjusted out of adjusted EBITDA. We estimate that the net incremental costs totaled more than $500,000 during the quarter and are now substantially complete as of September. Our total general and administrative expenses were $52.9 million, or 9.2% of revenue in Q3 2025, compared to 7.6% of revenue in the same quarter prior year. And just to reiterate, this comparison is not apples to apples, as we have expenses in Q3 of this year that we did not have in the prior year before we separated from Select and were fully burdened with public company costs. We also have some one-time acquisition-related expenses here related to Pivot and NOVA that are adjustments to EBITDA. Excluding items that are added back for the purpose of calculating adjusted EBITDA, including equity compensation expense, one-time select separation costs, and M&A transaction costs, G&A expense was $48.5 million for the quarter, or 8.5% of revenue. compared to 7.5% of revenue in the same quarter prior year. The increase was largely driven by expected increases in personnel costs since becoming a public company and with our ongoing separation from Select Medical. On the topic of separation, we have onboarded approximately two-thirds of the colleagues needed to fully transition services over from Select. and we have made meaningful progress towards reducing our transition services agreement spend as those folks ramp up and knowledge transfer occurs. We have until November of 2026 to complete the transition, but at this point, we expect to be substantially complete with separation activities by the summer of 2026. As previously communicated, on a run rate basis, we will have net incremental expense as a standalone public company, but a significant portion of these costs are already embedded into our 2025 actual results and our guidance. The overall adjusted EBITDA margin in Q3 2025 was 20.8% compared to 20.7% during the same quarter prior year. Keith mentioned this, but I think it's important to underscore that we're achieving incremental year-over-year gain in margin despite additional public company and separation costs. In Q3 2025, we generated $60.6 million in operating cash flow. This compares to $65.9 million in the third quarter of 2024, with the year-over-year decrease largely driven by a $25 million increase in cash interest payments, offset by a $12 million decrease in cash taxes paid. Investing activities used $20.5 million of cash in the third quarter and was driven by our spend on center de novos, relocations, renovations, and normal maintenance. The year-over-year increase from $17 million of spend in Q3 2024 was due in part to approximately $3 million of one-time CapEx related to the NOVA integration. The substantial majority of NOVA capital has been spent as of the end of the third quarter. Free cash flow or cash flow from operations less cash flow from investing activity, excluding business combinations, totaled $40.2 million, a decrease from prior year third quarter free cash flow of $50.8 million. Additional cash interest expense following the recapitalization of the business in July 2024 and NOVA integration capex were the primary drivers of the decrease. On an LTM basis, excluding acquisitions, we've generated 176.3 million of free cash flow, which is net of approximately $11 million in one-time NOVA integration capex. Financing activities during the quarter resulted in net cash outflows of 64.1 million. This was primarily due to repayments of $25 million outstanding on the revolver credit facility in both August and September and an $8 million dividend payment. Subsequent to quarter end, we made another $35 million revolver payment, resulting in zero outstanding balance on the credit facility. We ended the quarter with total debt balance of $1.61 billion and a cash balance of $50 million. Our net leverage ratio per our credit agreement at the end of September was 3.6 times. We continue to focus on deleveraging towards our targets of 3.5 times or below by the end of this year and below 3.0 times by the end of 2026. Q4 is typically our strongest cash flow period, so meaningful progress will be made towards these targets during the quarter. Now, with respect to our growth efforts, regarding NOVA, we now have all centers converted to concentric systems, processes, and signage, and our teams have shifted focus towards growing visits and bringing operating efficiencies in line with the rest of our platform. As it relates to cost synergies, through the end of Q3, we estimate we have captured just over 85% of our planned operational and back office synergies, though not all of that was fully reflected across the entire quarter, with the remainder to occur through Q1 of 2026. We still have some running room before we hit expected run rate performance from both a top line and cost perspective, but we are pleased with the progress to date. Similarly, integration of our pivot acquisition continues to go smoothly with most expected synergies having been captured to date. On the de novo front, we opened one location in Atlanta, Georgia in the quarter, and we have two more locations in California and Florida planned for the fourth quarter. Shifting to 2026 activity, we currently have six sites across Florida, Georgia, Missouri, Idaho, and Arizona in advanced stages of development and have a number of other locations that we are actively evaluating. On the M&A front, with the NOVA and PIVOT integrations largely behind us, we are shifting our focus back towards our core acquisition strategy of practices with around one to five occupational health centers. We've had a lot of success with these smaller deals over the last decade with an average acquisition multiple less than three times EBITDA on a post synergy basis. We've been building out our deal pipeline and we have several active targets that we're pursuing that could close over the next three to six months. From a capital allocation standpoint, we believe we can continue to execute on our growth strategy in parallel with our deleveraging efforts. and achieve the leverage targets that we've consistently communicated to the market at or below 3.5 times by the end of 2025 and at or below three times by the end of 2026. In most instances, these smaller M&A deals and de novo sites are actually leverage accretive for us. And now wrapping up with just some several subsequent events. First, we're pleased to announce a continuation of our dividend this quarter with the Concentra's Board of Directors declaring a cash dividend of $0.0625 per share on November 5, 2025. The dividend will be payable on or about December 9, 2025 to stockholders of record as of the close of business on December 2, 2025. Also, the Board of Directors has authorized a share repurchase program of up to $100 million of the company's outstanding common stock. The share repurchase authorization will expire on December 31, 2027, unless extended or terminated earlier by the Board of Directors. While our aforementioned leverage targets and growth objectives remain the priority, we believe the company's robust free cash flow generation provides additional flexibility to execute opportunistic buybacks when market conditions and valuation levels suggest that it's appropriate. And finally, with respect to guidance, we are raising the low end of our 2025 revenue guidance range from $2.13 billion to $2.145 billion and the low end of our 2025 adjusted EBITDA guidance range from $420 million to $425 million. The top ends of both ranges remain unchanged. We are also reaffirming our CAPEX range of 80 to 90 million, while noting that we are trending towards the lower end of that range. I also want to remind folks that the CAPEX range this year is elevated relative to normal due to the incurrence of approximately 10 to 15 million in one-time NOVA integration-related spend. We are also reiterating our previously stated leverage targets of less than or equal to 3.5 times by the end of 2025. and less than three times by the end of 2026. I'll pass it back to Keith to wrap things up.

Thanks, Matt. As you can see with our results, we've put together three nice quarters to start the year and have solid momentum heading into the fourth quarter. The team is working hard and is motivated to finish out the year strong. Looking forward, in addition to the M&A and DeNovo growth backlog, that Matt touched upon, we are evaluating and expect to invest over the coming year in new technological capabilities that should drive improvements in new customer capture, existing customer retention, and general operating efficiencies with our internal systems. Historically, this has been an advantage for us from a value proposition standpoint. We believe that it's of a paramount importance. to continue to invest in technologies that improve patient-employer ecosystem partner experiences, as well as our colleague efficiencies, and help further differentiate ourselves from our competition. Technological initiatives include digital bilateral interconnectivity with customers, systems modernization, payment automation, patient scheduling capabilities, and AI initiatives, among others. that we anticipate will all have a meaningful impact upon implementation. With respect to 2026, similar to this year, we expect to provide guidance early next year once we have further visibility into visit trends and updates on state fee schedules. On our last call, we touched on the expected rate tailwinds in California and a few other states. While this gave us some early visibility into 2026 rates, For one of our larger states, many states don't finalize fee schedules until late this year or early next year. We think it's important to have a little more information before issuing formal guidance. Lastly, I'd like to include by saying that I'm pleased with the progress we've made as a company since our IPO in July 2024. We outperform the organic growth algorithm we originally communicated during the roadshow, despite a choppy jobs market. We acquired and fully integrated a large player in the occupational health center space at NOVA. We substantially bolstered our onsite platform through the acquisition and integration of Pivot Onsite. We've made substantial progress towards full separation from Select and wind down the transition services agreement, maintaining EBITDA margin even with the incremental G&A cost. We've continued to develop and execute on strong core M&A and de novo strategy. We've continued to deliver on the timeline that we've been communicating throughout the year. We implemented a number of new technological initiatives, and we've continued to deliver best in class care for our patients and outstanding outcomes for our customers. We have obviously had a tremendous number of moving pieces over the past 12 months, but the team has remained focused and performed exceptionally throughout. Very proud of the efforts across the board. This concludes our prepared remarks, and we thank everybody for the time today. We'd like to turn it back over to the operator to open up the call for questions. Thank you.