ATI Physical Therapy, Inc.

Third quarter 2024 net revenue was $190 million, up 7.1% year over year from $177 million. Net patient revenue was $175 million, up 7.7%, and other revenue was $15 million, essentially flat. Adjusted EBITDA was $12 million, or a 6.4% margin, versus $9 million or 5.3% a year ago. Operating income was $1 million versus a loss of $1 million last year, while net loss was $33 million versus $15 million in Q3 2023, driven in part by $19 million of mark-to-market losses on second lien PIK notes, contingent common shares and warrants. Q4 2024 guidance is for revenue of $182 million to $192 million and adjusted EBITDA of $9 million to $14 million.

Sharon Vitti framed the quarter as another sign of positive momentum, emphasizing that ATI again met both revenue and adjusted EBITDA guidance. She pointed to stronger demand, more patient referrals, higher visits per day, and improved clinician productivity as evidence that operational changes are working. She also highlighted continued real estate optimization, clinic quality, and a 4.9/5 Google rating as proof the company is growing without sacrificing patient experience.

Joseph Jordan gave the key financials and noted that revenue growth was supported by higher patient volume, while rate per visit was $109.83, essentially flat year over year. He said salaries and related costs were $106 million, up 8.7%, with wage inflation running low- to mid-single digits and contractor-to-full-time conversion still a pressure point; rent, supplies, contract labor and other costs rose to $54 million, and doubtful accounts were about $5 million, or 2.8% of PT revenue. He also said year-to-date cash used was approximately $13 million, available liquidity was about $23 million as of September 30, and Q4 guidance assumes one less business day, which will weigh on flow-through.

Analysts focused on wage inflation and reimbursement. Management said wage inflation has not moderated meaningfully, remains a headwind across the industry, and is expected to stay relatively stable rather than accelerate in Q4. On reimbursement, Sharon Vitti said commercial payer discussions are producing some progress but are uneven, and management is pushing with industry groups to educate CMS/MedPAC and seek relief from the scheduled 2025 Medicare cut; Joe added that the flat year-over-year rate still reflected progress given the prior Medicare cut and some commercial rate gains.