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Concentra Group Holdings Parent, Inc. (CON) Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered double‑digit top-line and EBITDA growth, with revenue up 17.0% to $572.8M and Adjusted EBITDA up 17.1% to $118.9M; Adjusted EBITDA margin ticked up to 20.8% despite public-company/separation costs and one-time integration expenses .
  • Results beat S&P consensus on revenue and EPS; revenue $572.8M vs $565.5M*, EPS (company adjusted) $0.39 vs $0.381*; Adjusted EBITDA also ran above S&P EBITDA consensus (definitions differ) .
  • Management raised FY25 guidance (revenue to $2.145‑$2.160B; Adj. EBITDA to $425‑$430M), authorized a $100M share repurchase, and maintained a $0.0625 quarterly dividend, supporting deleveraging targets of ≤3.5x by YE25 and <3.0x by YE26 .
  • Core operating momentum remains solid: visits/day rose 9.2% YoY and revenue/visit rose 4.2%, with workers’ comp VPD +9.8% and employer services VPD +8.9%; excluding Nova, visits/day +3.0% with workers’ comp +4.4% and employer services +1.9% .
  • Key catalysts: raised guidance, buyback authorization, visible rate tailwinds into 2026 (notably California) and synergy capture (>85% of Nova cost synergies captured by end of Q3) .

What Went Well and What Went Wrong

  • What Went Well

    • Sustained growth and slight margin expansion: revenue +17.0% and Adj. EBITDA +17.1% YoY; Adj. EBITDA margin up to 20.8% despite one-time integration and public-company costs .
    • Volume and rate both strong: visits/day +9.2% YoY; revenue/visit +4.2% (workers’ comp +4.7%; employer services +2.7%); management attributed workers’ comp growth to follow‑up and PT visit mix and better capture via technology .
    • Strategic progress and capital return: raised FY25 guide; deleveraging to 3.6x; authorized $100M repurchase; maintained $0.0625 dividend .
    • Quote: “Our strong third quarter results delivered year-over-year increases in revenue, net income, and Adjusted EBITDA driven by visit and rate growth, as well as executing on our inorganic strategy.” — Keith Newton, CEO .
    • Quote: “We now have all [Nova] centers converted to Concentra systems… we estimate we have captured just over 85% of our planned… synergies.” — Matt DiCanio, CFO .

  • What Went Wrong

    • GAAP profitability compressed: net income margin 8.7% vs 9.3% YoY (interest expense headwinds from IPO recapitalization and higher G&A from public company/separation costs) .
    • Free cash flow down YoY in the quarter ($40.2M vs $50.8M) on higher cash interest and Nova transition capex (LTM FCF $176.3M remains strong) .
    • One‑time integration costs (Nova) continued to burden cost of services and G&A in Q3 (not fully adjusted out of Adj. EBITDA), though largely complete by September .

Financial Results

Quarterly performance and margins

MetricQ3 2024Q2 2025Q3 2025
Revenue ($M)489.6 550.8 572.8
Net Income ($M)45.8 46.2 49.8
Diluted EPS ($)0.37 0.35 0.38
Adjusted EPS ($)0.37 0.37 0.39
Adjusted EBITDA ($M)101.6 115.0 118.9
Adjusted EBITDA Margin (%)20.7% 20.9% 20.8%
Net Income Margin (%)9.3% 8.4% 8.7%

Q3 2025 vs S&P Global consensus

MetricActual Q3 2025S&P Consensus Q3 2025
Revenue ($M)572.8 565.5*
EPS ($)0.39 (company adjusted) 0.381 (Primary EPS)*
EBITDA/Adj. EBITDA ($M)118.9 (Adjusted EBITDA) 116.0 (EBITDA)*

Values marked with * retrieved from S&P Global.

Segment revenue mix (Q3)

Segment Revenue ($M)Q3 2024Q3 2025
Workers’ Compensation298.7 343.5
Employer Services154.8 173.2
Consumer Health7.3 7.4
Other Occupational Health Center2.2 2.0
Total Occupational Health Centers463.1 526.0
Onsite Health Clinics15.6 34.9
Other11.0 11.9
Total Revenue489.6 572.8

KPIs and productivity

KPIQ3 2024Q2 2025Q3 2025
Visits per Day (Total)50,916 55,005 55,589
Revenue per Visit (Total, $)141.42 145.92 147.31
Workers’ Comp VPD23,070 24,843 25,335
Employer Services VPD27,011 29,334 29,419
Workers’ Comp RPV ($)202.29 208.93 211.82
Employer Services RPV ($)89.55 92.85 92.01

Guidance Changes

MetricPeriodPrevious Guidance (Q2 2025 8-K)Current Guidance (Q3 2025 8-K)Change
RevenueFY 2025$2.13B – $2.16B $2.145B – $2.160B Raised low end
Adjusted EBITDAFY 2025$420M – $430M $425M – $430M Raised low end
Capital ExpendituresFY 2025$80M – $90M $80M – $90M (trending lower end) Maintained (qualitative lower end)
Net LeverageFY 2025~3.5x ≤3.5x Maintained/tightened wording
Dividend per ShareQuarterly$0.0625 (declared Aug 6, 2025) $0.0625 (declared Nov 5, 2025) Maintained
Share Repurchase AuthorizationThrough 12/31/2027—Up to $100M New

FY25 “implied Q4” vs S&P: With YTD revenue $1,624.3M and YTD Adj. EBITDA $336.6M, implied Q4 revenue is ~$520.7M–$535.7M and implied Q4 Adj. EBITDA is ~$88.4M–$93.4M; S&P Q4 2025 consensus sits at ~$532.2M revenue and ~$91.8M EBITDA*, within guidance ranges .

Values marked with * retrieved from S&P Global.

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2 2025)Current Period (Q3 2025)Trend
AI/Technology investmentsAdded board members with data/AI expertise; emphasized tech-enabled sales/marketing and systems modernization Investing in “digital bilateral interconnectivity,” payment automation, scheduling, and AI initiatives to drive capture/retention and efficiency Increasing focus/capability
Macro and laborStable labor costs (~3%); ability to flex staffing; Q2 saw no macro slowdown in visit trends Decoupling noted between BLS and CON visits; still not seeing slowdown; labor environment stable with slightly lower turnover Demand stable; labor stable
Rate/fee schedulesEarly 2026 rate tailwinds flagged (California) “Good rate year” expected in 2026 with California doc‑fix uplift and MEI; employer services rates to track inflation (~3%) Positive visibility
M&A & de novosNova closed Q1; Pivot closed Q2; de novo pipeline building; focus on delevering Nova integration largely complete (85%+ synergies captured); Pivot integration smooth; pipeline of small 1‑5 center bolt‑ons; 2026 de novos in advanced stages Integration → tuck-ins
Onsite clinicsPivot announced Q1 and closed Q2; expected to double onsite segment Onsite revenue +123.8% YoY; advanced primary care offering winning new business; head‑to‑head wins vs larger APC players Accelerating platform
Operational KPIsQ2: visits/day +9.5%; RPV +4.4%; ex‑Nova visit growth turned positive in employer services Q3: visits/day +9.2%; RPV +4.2%; ex‑Nova: total VPD +3.0%, WC +4.4%, ES +1.9% Consistent core growth

Management Commentary

  • “Adjusted EBITDA was $118.9 million… margin increased slightly from 20.7% in Q3 2024 to 20.8% in Q3 2025… even with one-time Nova integration costs and incremental public company/separation costs.” — Keith Newton, CEO .
  • “Through the end of Q3, we estimate we have captured just over 85% of our planned… synergies [for Nova]… remainder to occur through Q1 of 2026.” — Matt DiCanio, CFO .
  • “We continue to execute on our key strategic initiatives, accelerating technology investments to modernize and enhance our systems and capabilities and making substantial progress towards our full separation from Select Medical.” — Matt DiCanio, CFO .
  • “Technological initiatives include digital bilateral interconnectivity with customers, systems modernization, payment automation, patient scheduling capabilities, and AI initiatives.” — Keith Newton, CEO .

Q&A Highlights

  • Market share and workers’ comp dynamics: Management believes they are taking share; growth aided by follow-up injury and PT visit mix, better capture with tech, and a soft prior-year July comp .
  • Macro decoupling from BLS: Over last two years, BLS trends have been less predictive of CON visits; management emphasizes direct data and still sees stability .
  • 2026 rate visibility: Strong outlook for workers’ comp rates (notably California) and normal inflation‑aligned employer services pricing; many state schedules finalize late 2025/early 2026 .
  • Cost control and labor: Model’s flexible staffing and lower exposure to RN labor supports margin stability through cycles; turnover slightly down; wage inflation ~3% .
  • M&A cadence: Large “bricks and mortar” targets limited; focus on smaller 1‑5 center bolt‑ons (sub‑3x post‑synergy multiples) and de novos; onsite APC opportunity expanding .

Estimates Context

  • Q3 2025 beat: revenue $572.8M vs $565.5M*; EPS (company adjusted) $0.39 vs S&P Primary EPS $0.381*; Adj. EBITDA $118.9M vs S&P EBITDA consensus $116.0M* (note definitional differences between EBITDA and company’s Adjusted EBITDA) .
  • Implied Q4 to meet FY guide aligns with S&P: revenue ~$521–$536M (consensus ~$532M*); Adj. EBITDA ~$88–$93M (consensus ~$92M*), suggesting limited guide-bridge pressure .
  • Estimate revisions: Raised FY guide (revenue/EBITDA low ends) and strong Q3 performance likely drive modest upward revisions to Q4/FY models, especially for Adj. EBITDA and free cash flow trajectory, while GAAP EPS may remain pressured by higher interest expense .

Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • Durable growth algorithm intact: dual tailwinds from volume and rate produced +17% revenue and +17% Adj. EBITDA growth with steady ~21% margins despite integration and separation costs .
  • Guidance credibility improved: Raised FY25 revenue and EBITDA ranges; implied Q4 requirements sit near S&P consensus, reducing execution risk into year-end .
  • Capital allocation turning shareholder-friendly: $100M buyback authorized alongside the maintained dividend; deleveraging on track (3.6x now; ≤3.5x YE25; <3.0x YE26) .
  • 2026 setup constructive: Positive rate visibility (California doc fix + MEI), synergy ramp completion, and tech investments should support margin resilience and free cash flow .
  • Onsite clinics are a growing second engine: Pivot integration and APC offering expand TAM and win rates; expect faster organic growth in onsite segment .
  • Risk watch: higher interest burden suppresses GAAP EPS; any macro labor weakening could pressure visits, though the model’s flex staffing historically protected margins .

Appendix: Additional Data

Revenue mix detail (Q3 disaggregation) shown above; Balance sheet at 9/30/25: cash $49.9M, total debt $1,612.4M; net leverage 3.6x; revolver repaid in Q3 with further $35M in October . Cash from operations in Q3: $60.6M; capex $21.2M (incl. ~$3.3M Nova one-time); FCF (ex M&A) ~$40.2M .

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