Concentra Group Holdings Parent, Inc. 2026 Q2 Earnings Call

Good morning, thank you for joining us today. Before we comment on our second quarter results, I would like to share my perspective on the announcement that was made yesterday afternoon in our press release. After more than a decade as Concentra's Chief Executive Officer and a relationship with a company that has spanned over 30 years, I have decided, effective November 1st of this year, to transition from the CEO role into a new role at Concentra as its Executive Chairman of the Board. At that time, Matt DiCanio, our President and Chief Financial Officer, will become Concentra's President and Chief Executive Officer. Robert Ortenzio, our current chairman, will continue to serve on our board as a director. Many thanks to Bob for his leadership and guidance over the last 11 years, especially over the last couple of years as a public company.

Leading this organization and its more than 13,000 colleagues has been the privilege of my career. I could not be prouder of what we have accomplished together at Concentra. Today, we stand as the clear leader in occupational health, powered by a best-in-class team that remains focused every day on our mission of improving the health of America's workforce. The company has experienced tremendous growth, particularly over the last decade, driven by the dedication and execution of our teams. Together, we have reached significant milestones throughout our journey, including the successful completion of our IPO in 2024. This transition is the result of a multi-year succession plan that we have worked on with our board of directors. There is no better time to turn the role over to Matt. The business is performing exceptionally well. Our strategy is delivering, Matt has been central to both.

Over more than a decade working side by side, he has shaped nearly every dimension of Concentra, leading our de novo and acquisition growth engine and integration efforts, developing and executing strategies that support our operating model, running the IPO process, and leading our public company efforts since the IPO. He knows this business, he knows our customers, and he knows our people as well as anyone. Importantly, Matt will assume this role supported by one of the most experienced leadership teams in our industry. The members of our executive and senior leadership team across the country have an average tenure with Concentra of approximately 20 years, reflecting a deep understanding of our business, a strong commitment to our culture, and a proven ability to execute through changing market environments.

As Executive Chairman, I plan to remain actively engaged with the board, Matt, and his executive leadership team, and I have complete confidence that Concentra will continue to prosper in its next chapter in his hands. With that, I will turn it over to Matt to talk about the quarter, where you will see we continue to have great momentum with the business.

Matt? Thank you, Keith. Before turning to the quarter, I would like to say what an honor it is to be selected by the board of directors as Concentra's next President and Chief Executive Officer.

Keith, on behalf of all of our colleagues, thank you for your leadership. Over the 11 years we've worked together, you've taught me what it means to lead this company, making sure the right people are in place, enabling teams to do what they do best, and supporting the culture we have built. I'm grateful that I'll continue to benefit from your partnership and counsel as Executive Chairman. To our shareholders, my message is simple: this transition reflects continuity.

The strategy we've articulated since our IPO, delivering on our strong customer value proposition, expanding access through de novo development and disciplined acquisitions, and driving operating leverage across the platform is working, and it will not change on November 1st. Just as importantly, I have the privilege of working alongside an exceptional tenured executive and senior leadership team. Their experience, institutional knowledge, and commitment to our mission provides tremendous stability and positions us well for our next phase of growth. With that, let's turn to our second quarter results. Total company revenue was $606 million in Q2 2026 compared to $550.8 million in Q2 of the prior year, representing 10% growth year-over-year.

Excluding contributions from the Pivot acquisition in both the current and prior year where applicable, revenue was $589.1 million this quarter, resulting in an 8% increase over the prior year, representing one of our strongest core revenue growth quarters in some time. Total occupational health center patient visits increased 2.6% to an average of more than 56,000 visits per day in the second quarter. Our work comp visits per day increased 3.7%, and our employer services visit volume increased 1.8% relative to prior year. As we expected, work comp visit growth rates were lower relative to the first quarter, but visits remained strong and above long-term growth averages. We believe that this reflects both a resilient blue-collar labor market, where we generally operate, as well as market share gains. Importantly, the growth in visit volume has been nicely distributed across industries and geographies.

While it's still a little early to definitively point towards reshoring as a key driver of the recent uptick in visit growth, we are seeing indications of improved activity in the manufacturing and construction sectors. In particular, some encouraging activities in markets proximate to data center development. With respect to market share, as mentioned last quarter, we are continuing to deploy new tactics and technologies to help us target and efficiently communicate with prospective customers, which we think is having a positive impact. Those efforts, combined with customer satisfaction and retention metrics remaining at or near all-time highs, are likely contributing to our market share gains. In sum, there are solid secular tailwinds supporting a growing market in the near and long term, and we are actively investing in utilizing all available levers to increase our share.

We'd also like to highlight the acceleration employer services growth this quarter, which we view as an indicator of relatively resilient hiring trends across the economy. On the occupational health center rate front, revenue per visit grew 4.6% during the second quarter relative to prior year. This growth was driven by a 4.9% increase in work comp and a 3.2% increase in employer services revenue per visit. We had expected rate bumps in the state of California and Tennessee on March 1st and April 1st, respectively, helping drive the increase in the work comp rate. Additionally, we had some mixed dynamics at play with higher reimbursement initial injury visits comprising a larger percentage of total work comp visits this quarter. We expect rate growth over the remainder of the year to fall closer to 3%.

Adjusted EBITDA was $140.9 million this quarter versus $115 million in the same quarter of the prior year, an increase of 22.5%. Adjusted EBITDA margin increased nearly 240 basis points from 20.9% in Q2 2025 to 23.3% this quarter, reflecting strong rate and volume growth coupled with good execution and operational efficiencies across the business. Additionally, Q2 2025 included just under $4 million of estimated Nova acquisition-related costs tied to one-time integration activities or expenses that have since been eliminated through synergies, creating an incremental tailwind for year-over-year earnings growth. Both our Pivot and Nova acquisitions continue to perform very well and are ahead of underwriting.

Adjusted net income attributable to the company was $66.7 million, and adjusted earnings per share was $0.52 for the second quarter of 2026, representing approximately 40% growth over prior year adjusted net income of $47.7 million and adjusted earnings per share of $0.37. To provide a little more detail in our occupational health operating segment, total revenue of $553.5 million this quarter was 7.2% higher than the same quarter of prior year. Work comp-specific revenue of $361.2 million this quarter was 8.7% higher than prior year, and employer services-specific revenue of $183.2 million increased 5.1% in Q2 2026 versus prior year. Our Onsite Health Clinics operating segment had yet another strong quarter with reported revenue of $38.8 million, a 72.1% increase from the same quarter of the prior year.