Concentra Group Holdings Parent, Inc. (CON) Earnings

Management highlights

### Leadership Transition - CEO Keith Newton will transition to Executive Chairman of the Board effective November 1, 2026, per a multi-year succession plan approved by the board. Current President and CFO Matt DiCanio will become President and CEO. - The transition confirms strategic continuity: the company's existing growth and operating strategy will remain unchanged, supported by a tenured executive leadership team with an average tenure of ~20 years at Concentra. ### Operational Performance - Total average daily patient visits at occupational health centers increased 2.6% year-over-year to over 56,000. Work comp daily visits grew 3.7%, and employer services daily visits grew 1.8%: visit growth is broadly distributed across industries and geographies, with early signs of improved activity in manufacturing, construction, and markets near data center development driven by reshoring trends. - Revenue per visit grew 4.6% year-over-year overall: 4.9% for work comp (driven by approved state rate increases in California and Tennessee, and a higher mix of higher-reimbursement initial injury visits) and 3.2% for employer services. Management expects full-year rate growth to moderate to ~3% for the remainder of 2026. - Customer retention and satisfaction remain at or near all-time highs, with new sales and marketing tactics driving ongoing market share gains, supported by secular tailwinds for the occupational health market. - The separation from Select Medical is substantially complete: all required new hires are in place, core technology and ERP system conversions are finished, and remaining transition spending will be fully eliminated by November 2026 when the transition service agreement expires. - Capital deployment: 1 de novo center was opened in Q2 2026 near Phoenix, with 2 additional centers (including the first location in Idaho, expanding the company's footprint to 42 states) opened after quarter end. The company continues to develop a robust bolt-on M&A pipeline, with announcements expected later this year. - Balance sheet: Generated $135.2 million in operating cash flow and $121 million in free cash flow in Q2 2026, up from $63.2 million in Q2 2025. Net leverage fell to just under 3x, well ahead of schedule, triggering a 25 basis point step down in the term loan B interest rate spread. The company maintains $54 million remaining in its $100 million share repurchase program, and declared a $0.0625 per share cash dividend.

Guidance

- Management raised full-year 2026 guidance driven by stronger-than-expected year-to-date performance from visit growth, rate growth, disciplined expense management, and favorable market tailwinds. - Full-year 2026 revenue guidance is updated to a range of $2.325 billion to $2.375 billion, with the low end of the range increased by $50 million from prior guidance. - Full-year 2026 adjusted EBITDA guidance is updated to a range of $485 billion to $495 million, with the low end increased by $25 million and the high end increased by $15 million from prior guidance. - Full-year 2026 capital expenditure guidance is maintained at $70 million to $80 million, unchanged from prior guidance. - Management's long-term baseline expectation remains low single-digit work comp visit growth and 3% annual rate growth, and the guidance increase reflects a conservative approach given remaining macro uncertainty through the rest of the year. - The long-term target net leverage ratio remains 2.5x, and management expects leverage to continue to decline toward this target after reaching 3x in Q2 2026 well ahead of schedule.

Segment performance

1. Occupational Health Segment: Total revenue of $553.5 million, up 7.2% year-over-year. This segment accounts for 91.3% of total company revenue. Within the segment, Work Comp revenue was $361.2 million, up 8.7% year-over-year, and Employer Services revenue was $183.2 million, up 5.1% year-over-year. 2. Onsite Health Clinics Segment: Reported revenue of $38.8 million, up 72.1% year-over-year. Excluding the impact of the Pivot acquisition, organic revenue grew 27.9% year-over-year. This segment accounts for 6.4% of total company revenue. 3. Other Businesses Segment (includes telemed, pharmacy operations, and other occupational health-related services): Generated revenue of $13.7 million, up 13.3% year-over-year. This segment accounts for 2.3% of total company revenue. Overall company total revenue was $606 million in Q2 2026, up 10% year-over-year from $550.8 million. Adjusted EBITDA was $140.9 million, up 22.5% year-over-year, with adjusted EBITDA margin expanding 240 basis points to 23.3%. Adjusted net income attributable to the company was $66.7 million, and adjusted EPS was $0.52, representing 40% year-over-year growth.

Risks & headwinds

No material new risks or operational failures were discussed on the call. Management noted that forward-looking statements are inherently uncertain, and actual results could differ materially from expectations due to general macroeconomic and industry factors that could impact visit volume, pricing, and expense levels. No specific operational failures, unplanned cost increases, or regulatory penalties were disclosed.

Analyst Q&A

• Q: After a strong Q2 beat, why didn't management raise guidance more, and what is the baseline long-term work comp visit growth expectation, and how much could reshoring/data center development add to that long-term growth? /

  A: Management confirmed that first half 2026 results exceeded internal expectations, and the size of the guidance raise already reflects more than the beat to expectations. Management maintains guidance conservatism given several months remain in the year and ongoing macro uncertainty. The baseline long-term expected work comp visit growth rate remains low single-digit; the past 3 quarters of 3-4% growth are above the long-term trend, and early signs of reshoring-driven activity in manufacturing/construction are positive but not yet large enough to change the long-term baseline. Management is well-positioned geographically to capture any incremental growth if these trends continue.

• Q: Q2 margins were very strong, so how should investors think about margin trajectory going forward, especially after separation-related costs are fully eliminated? /

  A: Q2 and Q3 are seasonally the highest margin quarters for the company, so full-year 2026 guided margins of ~21% reflect normal seasonality. After years of stable ~20% margins (while absorbing public company and separation costs), management expects margins to trend higher over time as visit and rate growth flows through to the bottom line combined with ongoing operational efficiencies. Q2's strong margin result reflects the impact of these long-term improvements and is not a one-time outperformance.

• Q: How much consolidation runway does Concentra have in the occupational health market, both in large enterprise and small customer segments? /

  A: There is substantial white space for future growth, both from new geographic de novo expansion and deeper penetration of existing customers. Adding new locations makes it easier to win more business from large Fortune 500 customers, and the company already serves over 200,000 small customers that drive a majority of total visits. Ongoing investments in technology to improve customer and patient experience and streamline operations are driving higher retention and market share gains that will continue to support growth.

• Q: With leverage now below 3x well ahead of plan, how should investors think about the M&A pipeline and capital deployment priorities going forward? /

  A: The M&A pipeline is robust, with multiple attractive mid-sized deals expected to close in the coming months, with no large NOVA-sized transactions currently expected. The company's strong free cash flow generation will allow it to complete these planned transactions while continuing to reduce leverage toward the 2.5x long-term target. There are no changes to capital deployment priorities: the company will continue to prioritize de novo expansion and M&A, while also maintaining its dividend and share repurchase program. Even with planned M&A, leverage is expected to continue trending downward over time.