Concentra Group Holdings Parent (NYSE:CON) reported higher second-quarter revenue, earnings and cash flow, while also announcing that Chief Executive Officer Keith Newton will transition to Executive Chairman on Nov. 1 and President and Chief Financial Officer Matt DiCanio will become President and CEO.
Newton, who has served as CEO for more than a decade and has had a relationship with Concentra spanning more than 30 years, said the change followed a multiyear succession plan developed with the board. Robert Ortenzio will remain a director after stepping down from the chairman role.
DiCanio told shareholders the leadership change represents continuity, saying the company’s strategy of serving customers, expanding through new centers and acquisitions, and pursuing operating leverage “will not change on November 1st.”
Second-Quarter Revenue and Earnings Rise
Concentra reported total revenue of $606 million for the second quarter of 2026, up 10% from $550.8 million in the prior-year quarter. Excluding contributions from the Pivot acquisition where applicable, revenue was $589.1 million, representing 8% year-over-year growth.
Adjusted EBITDA rose 22.5% to $140.9 million from $115 million a year earlier. Adjusted EBITDA margin increased to 23.3% from 20.9%, which management attributed to volume and rate growth, staffing efficiencies and operating execution. The prior-year quarter also included nearly $4 million of estimated Nova acquisition-related integration costs that have since been eliminated through synergies.
Adjusted net income attributable to the company was $66.7 million, compared with $47.7 million in the prior-year period. Adjusted earnings per share increased to $0.52 from $0.37.
- Occupational health segment revenue increased 7.2% to $553.5 million.
- Workers’ compensation revenue rose 8.7% to $361.2 million.
- Employer services revenue increased 5.1% to $183.2 million.
- Onsite Health Clinics revenue climbed 72.1% to $38.8 million; excluding Pivot, the segment grew 27.9%.
- Other businesses, including telemedicine, pharmacy operations and related services, generated $13.7 million of revenue, up 13.3%.
Visits, Pricing and Market Trends
Average daily patient visits at occupational health centers increased 2.6% to more than 56,000. Workers’ compensation visits per day rose 3.7%, while employer services visits increased 1.8%.
Management said workers’ compensation visit growth moderated from the first quarter but remained above long-term averages. DiCanio cited a resilient blue-collar labor market, market-share gains and early signs of activity in manufacturing and construction, including in markets near data-center developments.
The company said its customer satisfaction and retention measures remained at or near all-time highs. Newton said technology investments have helped Concentra identify prospective customers, retain existing accounts and make its facilities easier for customers to use.
Revenue per occupational health center visit increased 4.6% year over year, including a 4.9% rise in workers’ compensation revenue per visit and a 3.2% increase in employer services revenue per visit. The workers’ compensation rate performance reflected rate increases in California and Tennessee, as well as a higher proportion of initial injury visits, which carry higher reimbursement rates. Management expects overall rate growth for the remainder of 2026 to be closer to 3%.
During the question-and-answer session, DiCanio said Tennessee’s rate increase, effective April 1, was roughly 30% on a blended basis depending on visit type. He also said management continues to view low-single-digit visit growth as the company’s long-term expectation, though it is monitoring construction, manufacturing and data-center activity.
Margins, Cash Flow and Capital Deployment
Cost of services was 68.3% of revenue, improving from 70.7% in the prior-year period. Newton said labor is the company’s largest cost and that technology has helped employees handle more patient visits per full-time equivalent by reducing nonclinical work.
General and administrative expense was 9.4% of revenue, compared with 9.6% a year earlier. Excluding certain adjusted EBITDA add-backs, G&A expense was 8.4% of revenue, versus 8.5% in the prior-year quarter.
Operating cash flow totaled $135.2 million, compared with $88.4 million a year earlier, while free cash flow reached $121 million, up from $63.2 million. The increase reflected higher earnings, timing of current-liability payments and lower capital spending compared with the prior-year quarter.
Concentra used $14.2 million for investing activities, including investments in new centers, relocations, renovations, maintenance and information technology. The company opened one de novo center near Phoenix during the quarter and subsequently opened centers in Boise, Idaho, and Kansas City. The Boise location marked Concentra’s first occupational health center in Idaho and its presence in a 42nd state.
Management continues to target eight to 10 de novo openings in 2026 and said its development pipeline could support double-digit openings in 2027 and beyond. It also said it expects additional bolt-on acquisition announcements during the remainder of the year, though Newton said the company does not anticipate another transaction comparable in size to Nova.
The company repurchased about 424,000 shares for $11 million and paid $8 million in dividends during the quarter. It had approximately $54 million remaining under its original $100 million repurchase authorization. Total debt was $1.57 billion and cash was $158 million at quarter-end.
Concentra’s net leverage ratio declined to just under 3 times from 3.4 times at the end of the first quarter. Management said it reached the milestone ahead of schedule and continues to target leverage near 2.5 times, absent opportunistic acquisitions or share repurchases. The lower leverage level is also expected to reduce the interest-rate spread on its term loan by 25 basis points.
Guidance Raised as Separation Nears Completion
Management raised its full-year 2026 outlook, citing strong visit and rate growth, expense discipline, growth initiatives and favorable market conditions. The company now expects:
- Revenue of $2.325 billion to $2.375 billion.
- Adjusted EBITDA of $485 million to $495 million.
- Free cash flow of $220 million to $240 million.
- Capital expenditures of $70 million to $80 million, unchanged from prior guidance.
Newton said Concentra is substantially complete with its separation from Select Medical. The company has completed most employee hiring, process and technology work, including conversion to its own ERP system in May. Transition-services spending is expected to continue declining and be eliminated when the agreement ends in November.
The board also declared a quarterly cash dividend of $0.0625 per share on Aug. 5, payable on or about Aug. 28 to shareholders of record as of Aug. 20.
About Concentra Group Holdings Parent (NYSE:CON)
Concentra Group Holdings Parent (NYSE:CON) is a Canada-based financial services holding company that specializes in serving Canadian credit unions and their members. Through its operating subsidiaries, the group provides wholesale funding, lending solutions and investment management services tailored to the unique needs of cooperative financial institutions. Concentra’s broad suite of offerings includes trust and custody services, mortgage investment products and equipment financing, all designed to support credit-union growth and stability.
In addition to wholesale funding and lending, Concentra Group Holdings Parent distributes life and general insurance products through affiliated insurance brokers and credit-union channels.
