Concentra Group Holdings Parent, Inc.CONNYSE
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Operator: Good morning, and thank you for joining us today for Concentra Group Holdings Parent, Inc. Earnings conference call to discuss the third quarter 2025 results. Speaking today are the company's Chief Executive Officer, Keith Newton; and the company's President and Chief Financial Officer, Matt DiCanio. Management will give you an overview and then open the call for questions. Before we get started, we would like to remind you that this conference call may contain forward-looking statements regarding future events or the future financial performance of the company, including, without limitation, statements regarding operating results, growth opportunities and other statements that refer to Concentra's plans, expectations, strategies, intentions and beliefs. These forward-looking statements are based on the information available to management of Concentra today, and the company assumes no obligation to update these statements as circumstances change. At this time, I will turn the conference call over to Mr. Keith Newton.
William Newton: Thanks, operator. Good morning, everyone. Welcome to Concentra's Third Quarter 2025 Earnings Call. We are pleased to report on another strong quarter with the business generating solid year-over-year volume and rate growth across both workers' compensation and employer services. This resulted in 17% year-over-year revenue growth in the third quarter and 10.6% revenue growth, excluding the impact of the Nova acquisition. During the quarter, we finalized the integration and rebranding of the Nova occupational health centers and opened an additional occupational health center, de novo in Atlanta, Georgia, bringing us to 5 de novo centers opened so far this year with 2 more anticipated by the end of the year. Also, our onsite health clinics operating segment performed well during the quarter, fueled by strong and accelerating organic growth as well as the now nearly completed integration of the Pivot Onsite Innovations business. As with prior quarters, I'll touch on some of our key financial highlights and provide a lens on selected metrics, both including and excluding the impact of the Nova acquisition so that folks have a good sense of core business performance. Similar to last quarter, I would note here at the outset that we had the same number of revenue days in Q3 2025 as Q3 2024, so there is no need to adjust any prior year comparisons for days. Total company revenue was $572.8 million in Q3 2025 compared to $489.6 million in Q3 of the prior year, representing 17% growth year-over-year. As previously mentioned, excluding contributions from Nova, revenue was $541.5 million, resulting in a 10.6% increase over the prior year. Total patient visits increased 9.2% in the quarter to more than 55,500 visits per day. Our workers' compensation visits per day increased 9.8% and employer services visit volumes increased 8.9% relative to prior year. Excluding the impact from the acquisition of Nova, total visits per day increased 3.0%. Workers' compensation visits increased 4.4%, outpacing the year-over-year growth observed in the first half of the year and employer services visits increased 1.9%, which was in line with the Q2 2025 growth. We had a strong quarter in terms of workers' comp visits with 2 things going for us to contribute in part to the outsized year-over-year growth. First, Hurricane Beryl led to softer than normal volume in early July 2024. Additionally, we continue to see growth from the visit mix within workers' compensation visits driven primarily by follow-up injury visits and physical therapy visits. Our operations and sales and marketing teams have done a nice job driving visits and gaining market share against the macroeconomic backdrop that I would generally describe as uncertain considering interest rates, tariffs and the shutdown. Some recently published jobs data would seemingly indicate that we're in an economic environment that is slowing down, but we aren't necessarily seeing that play out in our business to date. With respect to macroeconomic data reporting over a long period of time, we have seen correlation between our workers' compensation volume and employment levels reported by the BLS, and there is strong correlation between our employer services volumes and quits and hiring rates within the BLS JOLTS data. However, we have also found that our workers' comp visit data has largely lacked correlation with BLS employment data in the most recent times. I just point that out so that the folks don't rely solely on the publicly reported jobs data as the only proxy for our visit volume. On the rate front, we had strong growth again with a 4.2% increase in revenue per visit this quarter versus the same quarter prior year. This growth was driven by a 4.7% increase in workers' compensation and a 2.7% increase in employer services revenue per visit. Adjusted EBITDA was $118.9 million in the quarter versus $101.6 million in the same quarter prior year or a 17.1% increase. Adjusted EBITDA margin increased slightly from 20.7% in Q3 2024 to 20.8% in Q3 2025. As with prior quarters, we are comparing against prior year margin that was not fully burdened by public company and other separation costs. Additionally, similar to last quarter, we had a number of onetime Nova integration costs that burdened adjusted EBITDA. This expansion in margin even with these dynamics is another strong indicator of the performance of our business. Adjusted net income attributable to the company's $49.9 million and adjusted earnings per share was $0.39 for the third quarter 2025. These compare favorable to prior year adjusted net income attributable to the company and adjusted earnings per share of $44.3 million and $0.37, respectively. As a reminder, adjusted EBITDA and adjusted net income reflect the add-back of transaction expenses related to our acquisition activity as well as onetime costs related to our separation from Select Medical. Now I'll turn it over to Matt to provide additional details on our financial results.
Matthew DiCanio: Thanks, Keith, and good morning, everyone. I'll start by going through some more details on our results in our 3 operating segments. In our occupational health operating segment, total revenue of $526 million in Q3 2025 was 13.6% higher than the same quarter of prior year. Workers' compensation revenue of $343.5 million in Q3 2025 was 15% higher than prior year. Work comp visits per day increased 9.8% from prior year and work comp revenue per visit increased 4.7% versus prior year. Within employer services, revenue of $173.2 million increased 11.9% from prior year. Employer services visits per day increased 8.9% from prior year and employer services revenue per visit increased 2.7% versus prior year. As with the past 2 quarters, here are the same stats excluding the impact of Nova to help isolate our core business from our Q1 acquisition. Total revenue within the occupational health center operating segment was $494.7 million in Q3 2025, a 6.8% increase over the prior year. Total visits per day increased 3% over the same quarter prior year, and revenue per visit increased 3.9% from $141 in Q3 2024 to $147 in Q3 2025. Workers' compensation revenue of $324 million in Q3 2025 was 8.5% higher than prior year. Workers' compensation visits per day were 4.4% higher than prior year and work comp revenue per visit was 3.9% higher than prior year. Within employer services, revenue of $161.7 million in Q3 2025 increased 4.4% from prior year. Employer services visits per day were 1.9% higher than prior year, and employer services revenue per visit was 2.5% higher than prior year. Moving on from our occupational health centers, our, onsite health clinics segment reported revenue of $34.9 million in Q3 2025, 123.8% increase from the same quarter prior year. This was largely driven by the acquisition of Pivot Onsite Innovations in Q2 of this year. Excluding the impact from Pivot, the Onsite segment revenue grew 17.5% year-over-year. The growth in the legacy Onsite business is indicative of the nice momentum we are seeing with the platform as a solution to employers across the country who are seeing double-digit year-over-year increases in employee health benefit costs. We believe we are naturally positioned to further penetrate this growing market given our national presence in infrastructure and deep relationships across approximately 200,000 existing employer customers. We expect this to continue to be an important part of our organic and inorganic growth strategy over the coming years. And finally, other businesses generated revenue of $11.9 million in the quarter, an 8.1% increase against the same quarter of prior year. Now switching to expenses. Cost of services was $405.5 million or 70.8% of revenue in Q3 2025, down from 71.7% of revenue for the same quarter prior year. The decrease as a percentage of revenue can generally be attributed to an overall improvement in staffing efficiencies at our centers. As with the last quarter, we had a number of onetime costs related to the Nova transition that are not adjusted out of adjusted EBITDA. We estimate that the net incremental costs totaled more than $500,000 during the quarter and are now substantially complete as of September. Our total general and administrative expenses were $52.9 million or 9.2% of revenue in Q3 2025 compared to 7.6% of revenue in the same quarter prior year. And just to reiterate, this comparison is not apples-to-apples as we have expenses in Q3 of this year that we did not have in the prior year before we separated from Select and were fully burdened with public company costs. We also have some onetime acquisition-related expenses here related to Pivot and Nova that are adjustments to EBITDA. Excluding items that are added back for the purpose of calculating adjusted EBITDA, including equity compensation expense, onetime Select separation costs and M&A transaction costs, G&A expense was $48.5 million for the quarter or 8.5% of revenue compared to 7.5% of revenue in the same quarter prior year. The increase was largely driven by expected increases in personnel costs since becoming a public company and with our ongoing separation from Select Medical. On the topic of separation, we have onboarded approximately 2/3 of the colleagues needed to fully transition services over from Select, and we have made meaningful progress towards reducing our transition services agreement spend as those folks ramp up and knowledge transfer occurs. We have until November of 2026 to complete the transition. But at this point, we expect to be substantially complete with separation activities by the summer of 2026. As previously communicated, on a run rate basis, we will have net incremental expense as a stand-alone public company, but a significant portion of these costs are already embedded into our 2025 actual results and our guidance. The overall adjusted EBITDA margin in Q3 2025 was 20.8% compared to 20.7% during the same quarter of prior year. Keith mentioned this, but I think it's important to underscore that we're achieving incremental year-over-year gain in margin despite additional public company and separation costs. In Q3 2025, we generated $60.6 million in operating cash flow. This compares to $65.9 million in the third quarter of 2024, with the year-over-year decrease largely driven by a $25 million increase in cash interest payments, offset by a $12 million decrease in cash taxes paid. Investing activities used $20.5 million of cash in the third quarter and was driven by our spend on center de novos, relocations, renovations and normal maintenance. The year-over-year increase from $17 million of spend in Q3 2024 was due in part to approximately $3 million of onetime CapEx related to the Nova integration. The substantial majority of Nova capital has been spent as of the end of the third quarter. Free cash flow or cash flow from operations less cash flow from investing activity, excluding business combinations, totaled $40.2 million, a decrease from prior year third quarter free cash flow of $50.8 million. Additional cash interest expense following the recapitalization of the business in July 2024 and Nova integration CapEx were the primary drivers of the decrease. On an LTM basis, excluding acquisitions, we've generated $176.3 million of free cash flow, which is net of approximately $11 million in onetime Nova integration CapEx. Financing activities during the quarter resulted in net cash outflows of $64.1 million. This was primarily due to repayments of $25 million outstanding on the revolving credit facility in both August and September and an $8 million dividend payment. Subsequent to quarter end, we made another $35 million revolver payment, resulting in 0 outstanding balance on the credit facility. We ended the quarter with total debt balance of $1.61 billion and a cash balance of $50 million. Our net leverage ratio per our credit agreement at the end of September was 3.6x. We continue to focus on deleveraging towards our targets of 3.5x or below by the end of this year and below 3.0x by the end of 2026. Q4 is typically our strongest cash flow period, so meaningful progress will be made towards these targets during the quarter. Now with respect to our growth efforts. Regarding Nova, we have now -- we now have all centers converted to Concentra systems, processes and signage, and our teams have shifted focus towards growing visits and bringing operating efficiencies in line with the rest of our platform. As it relates to cost synergies through the end of Q3, we estimate we have captured just over 85% of our planned operational and back-office synergies. So not all of that was fully reflected across the entire quarter, with the remainder to occur through Q1 of 2026. We still have some running room before we hit expected run rate performance from both a top line and cost perspective, but we are pleased with the progress to date. Similarly, integration of our Pivot acquisition continues to go smoothly with most expected synergies having been captured to date. On the de novo front, we opened 1 location in Atlanta, Georgia in the quarter, and we have 2 more locations in California and Florida planned for the fourth quarter. Shifting to 2026 activity, we currently have 6 sites across Florida, Georgia, Missouri, Idaho and Arizona in advanced stages of development and have a number of other locations that we are actively evaluating. On the M&A front, with the Nova and Pivot integrations largely behind us, we are shifting our focus back towards our core acquisition strategy of practices with around 1 to 5 occupational health centers. We've had a lot of success with these smaller deals over the last decade with an average acquisition multiple of less than 3x EBITDA on a post-synergy basis. We've been building out our deal pipeline, and we have several active targets that we are pursuing that could close over the next 3 to 6 months. From a capital allocation standpoint, we believe we can continue to execute on our growth strategy in parallel with our deleveraging efforts and achieve the leverage targets that we've consistently communicated to the market at or below 3.5x by the end of 2025 and at or below 3x by the end of 2026. In most instances, these smaller M&A deals and de novo sites are actually leverage accretive for us. And now wrapping up with just some several subsequent events. First, we're pleased to announce a continuation of our dividend this quarter with the Concentra's Board of Directors declaring a cash dividend of $0.0625 per share on November 5, 2025. The dividend will be payable on or about December 9, 2025, to stockholders of record as of the close of business on December 2, 2025. Also, the Board of Directors has authorized a share repurchase program of up to $100 million of the company's outstanding common stock. The share repurchase authorization will expire on December 31, 2027, unless extended or terminated earlier by the Board of Directors. While our aforementioned leverage targets and growth objectives remain the priority, we believe the company's robust free cash flow generation provides additional flexibility to execute opportunistic buybacks when market conditions and valuation levels suggest that it's appropriate. And finally, with respect to guidance, we are raising the low end of our 2025 revenue guidance range from $2.13 billion to $2.145 billion and the low end of our 2025 adjusted EBITDA guidance range from $420 million to $425 million. The top end of both ranges remain unchanged. We are also reaffirming our CapEx range of $80 million to $90 million, while noting that we are trending towards the lower end of that range. I also want to remind folks that the CapEx range this year is elevated relative to normal due to the incurrence of approximately $10 million to $15 million in onetime Nova integration-related spend. We are also reiterating our previously stated leverage targets of less than or equal to 3.5x by the end of 2025 and less than 3x by the end of 2026. I'll pass it back to Keith to wrap things up.
William Newton: Thanks, Matt. As you can see with our results, we put together 3 nice quarters to start the year and have solid momentum heading into the fourth quarter. Team is working hard and is motivated to finish out the year strong. Looking forward, in addition to the M&A and de novo growth backlog that Matt touched upon, we are evaluating and expect to invest over the coming year in new technological capabilities that should drive improvements in new customer capture, existing customer retention and general operating efficiencies with our internal systems. Historically, this has been an advantage for us from a value proposition standpoint. We believe that it's of a paramount importance to continue to invest in technologies that improve patient, employer ecosystem partner experiences as well as our colleague efficiencies and help further differentiate ourselves from our competition. Technological initiatives include digital bilateral interconnectivity with customers, systems modernization, payment automation, patient scheduling capabilities and AI initiatives, among others, that we anticipate will all have a meaningful impact upon implementation. With respect to 2026, similar to this year, we expect to provide guidance early next year once we have further visibility into visit trends and updates on state fee schedules. On our last call, we touched on the expected rate tailwinds in California and a few other states. While this gave us some early visibility into 2026 rates for one of our larger states, many states don't finalize fee schedules until late this year or early next year, and we think it's important to have a little more information before issuing formal guidance. Lastly, I'd like to conclude by saying that I'm pleased with the progress we've made as a company since our IPO in July 2024. We outperformed the organic growth algorithm we originally communicated during the roadshow despite a choppy jobs market. We acquired and fully integrated a large player in the occupational health center space in Nova. We substantially bolstered our on-site platform through the acquisition and integration of Pivot Onsite. We've made substantial progress towards full separation from Select and wind down the transition services agreement, maintaining EBITDA margin even with the incremental G&A cost. We've continued to develop and execute on strong core M&A and de novo strategy. We've continued to delever on the time line that we've been communicating throughout the year. We implemented a number of new technological initiatives and we continue to deliver best-in-class care for our patients and outstanding outcomes for our customers. We have obviously had a tremendous number of moving pieces over the past 12 months, but the team has remained focused and performed exceptionally throughout. Very proud of the efforts across the board. This concludes our prepared remarks, and we thank everybody for the time today. We'd like to turn it back over to the operator to open up the call for questions. Thank you.
Operator: [Operator Instructions] Your first question for today is from Ann Hynes with Mizuho.
Ann Hynes: Just heading into 2026. I know that you don't want to give guidance, but would there be any like major headwinds or tailwinds that you would call out while we finalize our models?
William Newton: Ann, this is Keith. No, I don't think so. Like we -- the environment we've been through has been somewhat choppy, as we mentioned on the call, over the last year, 1.5 years, 2 years, and we've done quite well in that. And so other than just continuing to perform as we have performed in the current environment is what we will continue to do. But other than that, I don't really see any headwinds or anything that's obstacles in our way at this point in time. Really feel bullish about next year and anticipate having a really good year.
Operator: Your next question is from Benjamin Rossi with JPMorgan.
Benjamin Rossi: I guess just thinking about volume trend across your employer services segment this year, another good quarter. You have year-to-date volume growth increasing in that 1.5% to 2% range on like a core basis. Can you just walk us through what's maybe driving some of the improvement this year on core and maybe what you're hearing from your employer clients? And then just looking into next year, how are you thinking about that core trend as we begin to lap some of this year's M&A benefit?
William Newton: I'll take it initially. This is Keith again. Yes, so we were coming out of some years as a result of COVID that there had to be some resetting, so to speak, and that's happened. And now we are in a little bit more of a comparable year-over-year comparison as far as the core as we continue to grow that. So just taking those dynamics out, what are the things that we're doing to really add fuel to the fire. A lot of things in our sales and marketing from technology, people, how we're going to market, how we're getting better information, how we're identifying new leads, how we're account managing existing customers, how we're trying to get more pocket share out of those existing customers, how we're trying to eliminate leakage relative to any leakage we could be having out there. So pulling a lot of levers and using technology as a key component of that, I believe, is what's helping drive this so far. Matt, I don't know if you want to add anything.
Matthew DiCanio: Yes, Ben, you were asking specifically about employer services. Is that right?
Benjamin Rossi: Yes.
Matthew DiCanio: Yes. As Keith mentioned, we had the rightsizing coming out of COVID that took quite a while post COVID. And our employer services visits volume flipped positive in Q1 of this year. So this is our third quarter now in a row with positive visit growth there. And what we're seeing right now is stability in that service line. So 1.9% this quarter ex Nova. Last quarter, it was 2%. So almost exactly identical to the prior quarter. It's about half of our visit volume, but it's about 1/3 of our revenue. So obviously, our work comp business is important to the overall trajectory of the business.
Benjamin Rossi: Got it. Okay. And just as a follow-up, I guess, just flip into that workers' comp space. I guess, similarly, on a year-to-date basis, you're kind of just north of that 2.5% year-over-year range on a core basis for visits per day. I guess just thinking about that, are you taking market share at this point within that space? Or do you kind of think of growth in that -- as generally in line with the broader market at that level?
Matthew DiCanio: Yes. So we've had couple strong quarters work comp visit growth rates. There's a lot of variables in there. There's a lot of different visit types, initial injuries, rechecks, physical therapy, specialty visits. So there's a lot of variables that make up that number. But obviously, we're pleased with the last couple of quarters of growth. And we believe we are taking share, but it's complicated to calculate and estimate. But we also had some prior year dynamics with a soft July of last year that helped us in the quarter. But even without that, we would have had a nice quarter. So we do believe we're taking market share.
William Newton: Yes. And I would add that when you look at the components of what drives work comp, as Matt mentioned, it's -- injuries is the initial driver. And after that, you get the follow-up injury visits with the physician, PT, specialty visits. All of those are growing several reasons. Injury severity seems to be a little higher maybe than historically just to aging workforce, comorbidities, things like that. That stretches out the length of the case a little bit as far as instead of 5 visits, it may take 6 visits to get that individual back to full duty. We've implemented, again, several technology-related things to capture follow-up visits. So we've seen appointments and follow-up -- missed appointments and people not skipping out as much. So we're capturing more of that person's injury care as a result of then getting them back to full duty. So it's really several components that kind of drive that. And again, several levers that we're pulling associated with that.
Operator: Your next question for today is from Justin Bowers with Deutsche Bank.
Justin Bowers: So Keith, I just wanted to understand your comments a little more about the decoupling of the historical correlation between workers' comp and your visit -- pardon me, the BLS data and your visit volume there. Just sort of can you elaborate a bit on what period you're referring to? And any thoughts on what some of the factors are driving that? And then part 2 is just you mentioned investing in IT systems. Just curious, is that more of like an offensive or a defensive measure? I mean a lot of our work that we've done on you guys in the past suggests that the connectivity and interconnectedness with employers is one of your competitive advantages out there.
William Newton: Yes. I think really probably over the last 2 years is where there's been somewhat of a, for lack of a better description, decoupling BLS data and what's happening with us. We've scratched our heads at the initial periods of that. Later on, some of the results that we were seeing seem to make more sense after significant revisions in that data. So I don't know what all drives that, what's going on at the levels that, that's happening. But we still look at it at this point in time. It's just been all over the place relative to the results that we're showing. So that's really the comment I'm making there. Historically, prior to that, there was a good correlation as far as job growth and kind of what was happening with our employer services. But again, not so much over the last 2 years or so. So that's really the comment there. As far as technology, yes, there's -- we've got the normal type of things that we're doing as far as modernizing things with our legacy systems and those type of things, but really deploying some new technologies within our business to get stickier with employers and payers, but also to accelerate the sales funnel, so to speak, as far as engaging with certain data firms out there that allow us to better identify potential prospects and then handling 250,000 employers nationwide across our footprint and 30% of those employers have decision-makers that are turning over every year. A lot of those are very, very small employers that we don't necessarily touch base with that often from a company perspective. Our local people may be touching base with them, but they don't need us that often. And if they have a decision-maker turnover, new person comes in, they don't know Concentra. Next thing you know, they're using the local urgent care, the next door or further down. So what we're doing is getting that information sooner, using technology to reengage with those employers before those type things happen. And I think that's really going to give us some win in our sales as we move forward relative to that.
Operator: Your next question for today is from Stephen Baxter with Wells Fargo.
Stephen Baxter: So good to see the volume acceleration in the quarter. And to your point, it doesn't seem like the macro is necessarily impacting you negatively on the demand side. I know this hasn't been as much of an issue for you as providers with greater reliance on nurse labor, but wondering if some of the softness in the broader economic picture is having potentially a positive impact on your ability to hire and retain your workforce and maybe put some moderate downward pressure on wage inflation that we've seen?
Matthew DiCanio: Stephen, it's Matt. I can take this one. I would say, overall, our labor force stats are very stable. We have had some recent success with hiring, but no material changes. Overall, we've seen stability. Our turnover at the total company level has actually come down slightly. And from a cost perspective, very stable throughout the years in that, call it, 3% range. So we have seen some positive movement lately, but I would generalize it as a stable environment.
Stephen Baxter: Got it. And then just a question on the deal pipeline. I appreciate the comments you made there. As we think about what might else be out there on the larger side of the spectrum, I guess, is there any way to kind of use the Nova deal as maybe a benchmark? Like do you think there are other assets out there that are in the ballpark when it comes to size and whether you think that the valuation there was maybe a reasonable way to think about what might be left that you'd be willing to be active on?
William Newton: I would -- this is Keith. I would say on the bricks-and-mortar side, there's not anything out there of that size and unlikely of that valuation. Anything that we would look at would be less than that from a valuations point from a bricks and mortar. And again, so nothing of that size. Where there are potential transactions of that size would be on the onsite health clinics. And we've talked about that in the past where that's a key strategy for us to grow that business. We acquired Pivot this year and doubled our revenue size from roughly $60 million to $120 million as far as that business. But again, Pivot was very synergistic as far as look and scope of services is what Concentra historically provided, which was primarily OccMed. They weren't really providing much advanced primary care. Where we're gaining traction, of course, as I've said in the past, is with the deployment of Epic as our electronic medical record within our onsites, it's opened those doors for us to more aggressively organically grow that business. We are having success there even against the biggies. We're probably a top 10, but still relatively small compared to the #1, #2, #3 onsite health companies in this industry who primarily focus on advanced primary care. But we feel very confident and we're showing the results relative to going head-to-head and winning new business from those entities. As I've said in the past, many of those entities are in a potential transaction mode, so to speak, at some point in time, and they're in it right now. Those are potentials at some point in time, but not anything we are currently aggressively contemplating. We're continuing to build our business. And as Matt mentioned, we're continuing to focus on delevering. That's a key strategy or a key focus for us this year as a result of doing the 2 transactions. Now we're back to driving our leverage down, which seems to be a key point out there. And as we've talked about in the past, we have the ability to do that and do that quickly. We talked about where we're going to be at the end of this year and where we're going to be at the end of next year, and we will be there.
Operator: Your next question is from Ben Hendrix with RBC.
Michael Murray: It's Michael Murray on for Ben. While a weakening economy can impact your volumes, you've shown the ability to weather that in past downturns with a pretty stable EBITDA margin. I wanted to see if you can expand upon the company's ability to flex costs on a potential employment weakness.
Matthew DiCanio: Yes. Sure. We've talked about this in the past a lot when we get this question, and our teams are really good at flexing staffing to the visit volumes that we see every single day on a weekly basis, on a monthly basis. There's seasonality in our business, as you guys have hopefully seen over time period since we've been public, but also through Select's ownership when we were filing financials through Select. We have large part-time labor forces, both on the medical and the therapy side, and the teams can predict visit volumes based on historical trends very well. And so we do that in the normal course of our business. And if there is an uptick or a downturn in the economy, the teams can react very quickly. And we've shown that over a long period of time. The last major economic cycle was many, many years ago, but we performed very well through that time period.
Michael Murray: That's helpful. And my next question, with the understanding that rates are still being finalized, could you just take a moment to talk about your expectations for 2026 at a high level? How much visibility do you have on rate growth on the workers' comp side? And then the same question on the employer services side, how are the rate conversations progressing with employers?
Matthew DiCanio: Yes. So on the work comp side of the equation, we do know a number of states, but we estimate that there's still at least 1/3, if not more of the states that we do not know that will come out later this year or early next year. And so for that reason, we'd obviously like to see all those state fee schedule updates come through before we give guidance. But as we mentioned on the last call, our largest state, we do have very good insight into the state of California, which is going to be a strong rate year for us, and it's going to set the foundation for a solid rate year, next year in terms of work comp. So we expect a good rate year and potentially some upside as we hear more from the remaining states. From an employer services standpoint, that is a process that we control, and we expect that will be very similar to this year and prior years where we'll set the rates -- the rate increases very much in line with inflation. So we expect that to be a normal year in terms of employer services rate increase. So we have always pointed to 3%, that's a 5-, 10-, 15-, 20-year average that we see across both service lines, and we expect that will be pretty close to what we see next year.
William Newton: Yes, that's exactly what I was going to say. You can probably plan on something similar to historical averages based on what we know at this point in time.
Operator: We have reached the end of the question-and-answer session, and I will now turn the call over to Keith Newton for closing remarks.
William Newton: I appreciate everybody being here today. Thank you for joining us, and we'll talk with you next quarter.
Operator: Thank you. This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.