Concentra Group Holdings Parent, Inc. (CON) - 10-K Summary
Business Context and Reporting Period
Company: Concentra Group Holdings Parent, Inc.
Filing Type: Form 10-K (Annual Report)
Period Ended: December 31, 2025
Business Overview: Concentra is the largest provider of occupational health services in the United States by number of locations. As of December 31, 2025, the company operated 628 stand-alone occupational health centers in 41 states and 411 onsite health clinics at employer worksites in 44 states. Services include workers' compensation injury care, employer services (physicals, drug screening), and consumer health services. The company operates as a single reportable segment.
Key Financial Metrics (Year Ended Dec 31, 2025)
| Metric | 2025 | 2024 |
|---|---|---|
| Revenue | $2,163.4 million | $1,900.2 million |
| Net Income (GAAP) | $172.8 million | $171.9 million |
| Net Income Attributable to Company | $166.4 million | $166.5 million |
| Adjusted EBITDA | $431.9 million | $376.9 million |
| Adjusted EBITDA Margin | 20.0% | 19.8% |
| Operating Cash Flow | $279.4 million | $274.7 million |
| Total Debt (Principal) | $1,596.4 million | $1,503.4 million |
| Cash and Equivalents | $79.9 million | $183.3 million |
| Revolving Credit Availability | $428.0 million | $400.0 million (Capacity) |
Material Changes vs. Prior Period
- Revenue Growth: Revenue increased 13.9% to $2,163.4 million, driven by organic growth in patient visits (up 7.3%) and revenue per visit (up 4.3%), as well as the acquisition of Nova Medical Centers (67 centers) and Pivot Onsite Innovations (240+ onsite clinics).
- Profitability: Net income remained relatively flat year-over-year ($172.8M vs $171.9M) despite revenue growth, primarily due to a significant increase in interest expense ($109.3M vs $47.7M) resulting from new debt financing and the elimination of related-party debt interest from the former parent, Select Medical Corporation.
- Acquisitions:
- Nova Acquisition (March 2025): Purchased for $265.0 million; financed via new term loan, revolver, and cash.
- Pivot Onsite Innovations (June 2025): Purchased for $54.4 million; financed via revolver and cash.
- Debt Structure: The company amended its Credit Agreement to increase the Revolving Credit Facility to $450.0 million and added a $102.1 million incremental term loan. The company voluntarily repaid $85 million on the revolver, leaving no outstanding revolver borrowings as of year-end.
- Shareholder Returns: The company repurchased 1.1 million shares for $22.4 million and paid $32.1 million in cash dividends.
Guidance, Outlook, and Risks
Management Commentary: Management highlighted strong organic growth in visit volume and reimbursement rates. The company continues to focus on strategic acquisitions and de novo center openings. The separation from Select Medical Corporation is complete, and the company is operating as a standalone public entity.
Key Risks and Contingencies:
- Regulatory & Legal: The company faces ongoing investigations regarding physical therapy billing practices by the DOJ and the California Department of Insurance. A qui tam lawsuit under the California Insurance Fraud Prevention Act was unsealed in November 2025.
- Cybersecurity: The company is subject to litigation related to a 2023 data breach at a third-party vendor (Perry Johnson & Associates) affecting nearly four million patients.
- Reimbursement Rates: Revenue is sensitive to state workers' compensation fee schedules and cost containment initiatives by payors.
- Debt Covenants: The company must maintain a leverage ratio not exceeding 6.5x. As of December 31, 2025, the ratio was 3.4x.
Investor Verification Checklist
- Debt Servicing: Verify the impact of rising interest rates on the $942.9 million variable-rate term loan, noting the company has hedged $600 million of this exposure.
- Legal Exposure: Monitor the status of the DOJ and California Department of Insurance investigations into physical therapy billing and the outcome of the unsealed qui tam lawsuit.
- Acquisition Integration: Assess the financial performance and integration progress of the Nova and Pivot Onsite Innovations acquisitions, which contributed significantly to 2025 revenue.
- Reimbursement Trends: Track state-level fee schedule changes for workers' compensation, as these directly impact the 61% of revenue derived from this source.
- Cash Flow: Review the reduction in cash on hand from $183.3 million to $79.9 million and the reliance on the revolving credit facility for liquidity.