Outpatient physical therapy provider U.S. Physical Therapy (NYSE: USPH) reported revenue ahead of Wall Streets expectations in Q3 CY2025, with sales up 17.3% year on year to $197.1 million. Its non-GAAP profit of $0.66 per share was in line with analysts’ consensus estimates.

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Chris Reading, Chief Executive Officer, said, “This was a very solid quarter for us across the board with record visits per clinic per day, continued clinic expansion with 84 net owned additions since the third quarter of 2024, and sustained double-digit growth in our injury prevention business. Importantly, we are also making progress on some key initiatives that will benefit our 2026 growth and performance, along with an expected and overdue Medicare pricing lift.”

Company Overview

With a nationwide footprint spanning 671 clinics across 42 states, U.S. Physical Therapy (NYSE: USPH) operates a network of outpatient physical therapy clinics and provides industrial injury prevention services to employers across the United States.

Revenue Growth

Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Luckily, U.S. Physical Therapy’s sales grew at a solid 12.2% compounded annual growth rate over the last five years. Its growth beat the average healthcare company and shows its offerings resonate with customers.

Long-term growth is the most important, but within healthcare, a half-decade historical view may miss new innovations or demand cycles. U.S. Physical Therapy’s annualized revenue growth of 13.3% over the last two years is above its five-year trend, suggesting its demand was strong and recently accelerated.

We can better understand the company’s revenue dynamics by analyzing its number of patient visits, which reached 1.55 million in the latest quarter. Over the last two years, U.S. Physical Therapy’s patient visits averaged 10.8% year-on-year growth. Because this number is lower than its revenue growth, we can see the company benefited from price increases.

This quarter, U.S. Physical Therapy reported year-on-year revenue growth of 17.3%, and its $197.1 million of revenue exceeded Wall Street’s estimates by 1.2%.

Looking ahead, sell-side analysts expect revenue to grow 6.5% over the next 12 months, a deceleration versus the last two years. Still, this projection is above the sector average and indicates the market sees some success for its newer products and services.

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Operating Margin

U.S. Physical Therapy has done a decent job managing its cost base over the last five years. The company has produced an average operating margin of 11%, higher than the broader healthcare sector.

Looking at the trend in its profitability, U.S. Physical Therapy’s operating margin decreased by 3.9 percentage points over the last five years, but it rose by 1 percentage points on a two-year basis. Still, shareholders will want to see U.S. Physical Therapy become more profitable in the future.

In Q3, U.S. Physical Therapy generated an operating margin profit margin of 12.8%, up 4.1 percentage points year on year. This increase was a welcome development and shows it was more efficient.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

U.S. Physical Therapy’s EPS grew at an unimpressive 2.5% compounded annual growth rate over the last five years, lower than its 12.2% annualized revenue growth. This tells us the company became less profitable on a per-share basis as it expanded.

Diving into the nuances of U.S. Physical Therapy’s earnings can give us a better understanding of its performance. As we mentioned earlier, U.S. Physical Therapy’s operating margin expanded this quarter but declined by 3.9 percentage points over the last five years. Its share count also grew by 18.3%, meaning the company not only became less efficient with its operating expenses but also diluted its shareholders.

In Q3, U.S. Physical Therapy reported adjusted EPS of $0.66, down from $0.69 in the same quarter last year. This print was close to analysts’ estimates. Over the next 12 months, Wall Street expects U.S. Physical Therapy’s full-year EPS of $2.46 to grow 16.2%.

Key Takeaways from U.S. Physical Therapy’s Q3 Results

It was good to see U.S. Physical Therapy narrowly top analysts’ revenue expectations this quarter. Overall, this print had some key positives. The stock remained flat at $88.05 immediately following the results.

So should you invest in U.S. Physical Therapy right now? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.