ATI Physical Therapy Reports $54M Net Loss, Revenue Increases Amid Operational Challenges

ATI Physical Therapy, Inc. reported a net loss of $54.0 million for the fiscal year ending December 31, 2024, a decrease from a loss of $66.1 million in the previous year. The company's net patient revenue increased by 8.5% to $690.0 million, up from $636.1 million in 2023, driven by a rise in patient visit volumes and a slight increase in revenue per visit. Total patient visits rose by approximately 6.2%, reflecting improved clinician staffing levels. However, the company continues to face challenges, including rising labor costs and ongoing adjustments to reimbursement rates from Medicare and Medicaid, which have been subject to cuts in recent years.

In terms of operational changes, ATI Physical Therapy operated 866 clinics across 24 states as of December 31, 2024, a reduction from 896 clinics the previous year, with 35 clinics closed or sold during the year. The company opened five new clinics, down from 13 in 2023. The average visits per day increased to 28.2, compared to 26.7 in the prior year, indicating improved engagement metrics. The company also reported a Net Promoter Score of 75 and an average Google Review rating of 4.9 stars, suggesting high customer satisfaction levels.

Strategically, ATI has undergone significant organizational changes, including a recent leadership transition with the resignation of Chief Financial Officer Joseph Jordan and the appointment of Scott Rundell as interim CFO. The company also faced a delisting from the New York Stock Exchange in December 2024 due to non-compliance with market capitalization requirements, and its shares are now traded on the OTC Pink Open Market. In December, ATI initiated a tender offer to repurchase shares but later terminated it due to unmet conditions related to a debt issuance.

The company’s financial position remains precarious, with ongoing liquidity concerns. As of December 31, 2024, ATI had $39.1 million in cash and cash equivalents but reported negative operating cash flows of $19.2 million for the year. The company has been relying on financing activities to fund operations and anticipates needing additional liquidity to meet future obligations. The management has outlined plans to improve operational performance through increased clinical staffing and productivity, but there is no assurance these measures will be successful.

Looking ahead, ATI Physical Therapy faces a challenging environment with ongoing risks related to reimbursement rates, labor market dynamics, and potential regulatory changes. The company has indicated that it may need to explore additional financing options, including raising debt or equity capital, to sustain operations. The outlook remains uncertain, and the company has acknowledged substantial doubt about its ability to continue as a going concern without significant operational improvements and liquidity enhancements.