Concentra Group’s 2026 Outlook: Workers’ Comp Rate Growth and De Novo Center Timelines Clash in Earnings Call

Date of Call: Aug 7, 2026

Financials Results

• Revenue: $606 million, up 10% YOY, with organic revenue $589.1 million, up 8% YOY
• EPS: $0.52 per share, up approximately 40% YOY
• Operating Margin: 23.3%, up 240 basis points YOY

Guidance:

• Raised 2026 revenue target range low end by $50M to $2.325B-$2.375B.
• Raised low end of adjusted EBITDA target range by $25M to $195M-$220M.
• Raised low end of free cash flow target range by $50M to $200M-$240M.
• CapEx range unchanged at $70M-$80M.
• Work comp visit growth expected to align with low single-digit long-term algorithm.

Business Commentary:

Leadership Transition and Business Performance:

• The company announced a leadership transition with Matt DeCanio set to become CEO effective November 1st, succeeding Keith Newton.
• This transition is the result of a multi-year succession plan and is seen as a time of continuity with no change in strategy.
• The business is performing exceptionally well, with strong visit growth and operational efficiencies.

Revenue and Visit Growth:

• Total company revenue was $606 million in Q2 2026, compared to $550.8 million in Q2 of the prior year, representing 10% growth year-over-year.
• This growth includes contributions from the Pivot acquisition.
• The increase in revenue was driven by a 2.6% increase in total occupational health center patient visits and a 3.7% increase in employer services visits.

EBITDA and Margin Improvement:

• Adjusted EBITDA was $140.9 million this quarter versus $115 million in the same quarter of the prior year, an increase of 22.5%.
• The adjusted EBITDA margin increased to 23.3%, reflecting strong rate and volume growth coupled with good execution and operational efficiencies.
• Q2 2025 included one-time integration costs related to the NOVA acquisition, which have since been eliminated through synergies.

Onsite Health Clinics Growth:

• The onsite health clinics operating segment reported revenue of $38.8 million, a 72.1% increase from the same quarter of the prior year.
• Excluding the impact from the Pivot acquisition, the segment's revenue grew 27.9%.
• Growth in this segment is indicative of strong organic growth and a robust pipeline of new opportunities.

De Novo Development and M&A Pipeline:

• The company opened one new de novo center in Q2 and has plans to open 8 to 10 locations this year.
• The Boise Center marks the first location in the state of Idaho, representing a significant milestone.
• The company has a strong M&A pipeline and expects additional announcements, focusing on mid-sized opportunities that will not significantly impact leverage.

Sentiment Analysis:

Overall Tone: Positive

• Management described Q2 as "one of our strongest core revenue growth quarters in some time" and "best quarter we've ever had" with visit growth above long-term averages. They noted "tremendous stability" and "great momentum" and are raising guidance due to strong performance and favorable market tailwinds.

Q&A:

• Question from Anne Hines (Mizuho Securities): Are you being conservative in guidance given the beat, and what is the long-term growth rate for workers' comp visits and potential impact from reshoring/data centers?
  Response: Management sees potential conservatism in second-half outlook but continues to expect low single-digit long-term work comp visit growth, with reshoring/data center trends potentially contributing.

• Question from Joanna Gajuk (Bank of America): How should we think about EBITDA margin trajectory going forward given strong Q2 and implied 21% guide?
  Response: Management expects roughly 21% margins for the year, sees tailwinds from growth and synergies, but notes Q2/Q3 are seasonally highest margins.

• Question from Justin Bowers (Deutsche Bank): Could workers' comp visit growth exceed low single-digit trend due to reshoring/data center activity?
  Response: CEO sees strong visit growth continuing, driven by manufacturing/construction strength and market share gains, with employer services as a leading indicator.

• Question from Scott Seidel (Goldman Sachs): Any strategic or operational focus shifts post-transition, and sustainability of free cash flow and industrial injury trends?
  Response: Strategy remains unchanged; focus is on execution. Free cash flow expected to be strong; early signs of data center-related injuries are being monitored.

• Question from Jared Hossie (William Blair): Update on onsite business pipeline and de novo contribution timing/upside?
  Response: Onsite pipeline is robust, sales are accelerating. De novo sites (8-10 targeted in 2026) ramp quickly but minimal near-term contribution; significant runway exists for future growth.

• Question from Ben Hendricks (RBC Capital Markets): Outlook for state rate changes and updated leverage target post-achievement of below 3x?
  Response: No significant rate catalysts expected for remainder of 2026; long-term leverage target remains near 2.5x, with prioritized M&A/de novo and share repurchases continuing.

Contradiction Point 1

Workers' Compensation Rate Growth and Outlook

Contradiction on the expected rate of workers' compensation rate growth for the full year.

Anne Hines (Mizuho Securities) - Anne Hines (Mizuho Securities)

2026Q2: Regarding workers' comp, the long-term visit growth algorithm is low single-digits (historically 2%-3%). Recent quarters have seen 3%-6% growth... Rate growth is expected to normalize closer to 3% for the remainder of the year. - Matt DiCanio(CFO)

Is the guidance conservative given the 13% beat and 4% guidance raise, and what long-term growth rate for workers' comp visits (2%-3%) and potential impact of reshoring/data center activity should we expect? - Mitchell (Wells Fargo) [on for Stephen Baxter]

2026Q1: The company is still on track for 3%+ rate growth for the full year 2026, with potential upside. - Matt DiCanio(CFO) & Keith Newton(CEO)

Contradiction Point 2

Impact and Timing of Rate Increases

Contradiction on whether the benefit from rate increases is largely recognized or still unfolding.

Joanna Gajuk (Bank of America) - Joanna Gajuk (Bank of America)

2026Q2: The higher work comp rate per visit (+4.9% in Q2) was driven by the California and Tennessee rate bumps... Rate growth is expected to normalize closer to 3% for the remainder of the year. - Matt DiCanio(CFO)

Given the strong Q2 margins (20.9%) and conservative guidance implying ~21% EBITDA margins, how should we think about margin progression going forward, and what were the Tennessee and California rate increases, along with the factors driving the higher work comp rate per visit? - Benjamin Rossi (JPMorgan)

2026Q1: The bulk of the 2026 rate benefit (~75-80%) did occur in Q1. Other meaningful increases include Tennessee in Q2 and potential inflation-adjusted updates in other states (e.g., Arizona) throughout the summer and early fall. No other material step-ups are anticipated. - Keith Newton(CEO)

Contradiction Point 3

Growth Rate Expectations

The expected contribution from new de novo centers shifted from minimal in 2026 to significant in 2027/2028.

Questioner (William Blair - Jared Hossie) - Questioner (William Blair - Jared Hossie)

2026Q2: The company is targeting 8-10 de novo centers in 2026 and 30-40 sites for 2027. New centers ramp quickly but have minimal visit contribution in the first 6-12 months, becoming profitable around 12-24 months. Thus, the 2026 openings will have a more significant impact in 2027 and 2028. - Matt DiCanio(CFO)

What is the expected ramp and contribution from the 2026 de novo targets and the 2027 pipeline? - Justin Bowers (Deutsche Bank AG, Research Division)

2025Q4: Targeting 7-9 openings in 2026 (a record), aiming to spread them throughout the year. Permitting and construction timelines will influence the exact cadence. - Matt DiCanio(CFO)

Contradiction Point 4

Margin Seasonality

The expectation for Q2 being the highest-margin quarter was absent in the prior year's outlook.

Joanna Gajuk (Bank of America) - Joanna Gajuk (Bank of America)

2026Q2: Q2 and Q3 are typically the highest-margin quarters due to seasonality. - Matt DiCanio(CFO)

Given the strong Q2 margins (20.9%) and conservative guidance implying ~21% EBITDA margins, how should we think about margin progression going forward, and what were the Tennessee and California rate increases and what drove the higher work comp rate per visit? - Benjamin Hendrix (RBC Capital Markets, Research Division)

2025Q4: Hiring for the separation continues (currently >80% complete) through the first half of 2026, which will result in incremental costs. Concurrently, TSA costs will ramp down to near zero by mid-2026. These dynamics are already factored into 2026 guidance. The separation process is nearing completion, with the goal to finalize hires and activities well ahead of the November 2026 TSA expiration. - Keith Newton(CEO)

Contradiction Point 5

Outlook on Economic Tailwinds and Headwinds

Contradiction on the economic environment's impact, from stable and positive to choppy and challenging.

Ann Hynes (Mizuho Securities USA LLC) - Ann Hynes (Mizuho Securities USA LLC)

2026Q2: Management does not foresee any specific headwinds or obstacles and feels bullish about next year, anticipating a good year. - William Newton(CEO)

As 2026 approaches, what major headwinds or tailwinds should be considered when finalizing models? - Ann Hynes (Mizuho Securities USA LLC)

2025Q3: The company has performed well despite a choppy economic environment. - William Newton(CEO)