Park Dental Partners (NASDAQ:PARK) released first-quarter financial results and hosted an earnings call on Thursday. Read the complete transcript below.

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The full earnings call is available at https://edge.media-server.com/mmc/p/78cxv4jt/

Summary

Park Dental Partners reported a 6.2% year-over-year revenue increase for Q1 2026, driven by increased patient visits and expanded clinical hours.

The company continues to execute its growth strategy through provider additions, selective acquisitions, and identifying new location opportunities.

Despite a net loss of $0.4 million for the quarter, the company maintains a positive outlook for 2026, with expectations of continued growth and strategic expansion.

Patient retention remains high at over 90%, reflecting strong patient relationships and care consistency.

The company remains disciplined in its M&A approach, prioritizing cultural fit and long-term value, and plans to enter two to three new markets in the coming years.

Full Transcript

OPERATOR

Good morning and welcome to Park Dental Partners first quarter 2026 earnings conference call. Today's call is being recorded and at this time all participants are in a listen only mode. Following the prepared remarks, management will open the call for questions from its analysts. Certain statements made during the call today constitute forward looking statements made pursuant to and within the meaning of the safe harbor provisions of the Private Litigation Reform act of 1995, as amended. Such forward looking statements are subject to both known and unknown risks and uncertainties that could cause actual results to differ materially from such statements. Those risks and uncertainties are described in the Company's earnings press release issued yesterday and in the Company's filings with the SEC. The forward looking statements made today are as of the date of this call and Company does not undertake any obligation to update the forward looking statements. Today's call will also include certain non GAAP measurements. Please see the Company's earnings press release for the reconciliation of those non GAAP financial measures. The press release is available on the Company's website. I will now turn the call over to Pete Swenson, Chief Executive Officer and Chair of the Board at Park Dental Partners.

Pete Swenson (Chief Executive Officer and Chair of the Board)

Thank you Tyler Good morning everyone and thank you for joining Park Dental Partners first quarter 2026 earnings call. Joining me today is our CFO C.J. Bernander. I'll start off by recognizing our doctors and team members across the organization. Our people are our greatest asset. Every day in every practice, you show up with a shared commitment to deliver the best patient experience to every patient every time. That consistency is the foundation of our reputation, our performance and our ability to grow. I'm grateful for the professionalism and dedication our teams bring to patients and to one another. Our first quarter results were consistent with our expectations and reflect continued execution against the plan we outlined at the time of our IPO. We delivered a solid start to 2026 with revenue increasing 6.2% year over year, supported by healthy same practice growth and continued patient demand across our markets. Growth in the quarter was driven by a combination of increased patient visits, expanded clinical hours and continued growth in our provider base. Importantly, patient retention remains strong at just over 90%, reflecting the consistency of care and the relationships our affiliated doctors continue to build with their patients. We continue to execute on our growth strategy by adding providers within our existing practices, selectively acquiring new practices and identifying future de novo location opportunities. Today we have 221 doctors across three states and we believe we can continue to grow that significantly over time. We believe in building market density over time to unlock operating efficiency, expand integrated specialty care services and to strengthen our brands. Our approach to M&A is disciplined. Our strategy prioritizes cultural fit and focuses on opportunities that we believe have the potential for long term value creation. Looking ahead, we intend to continue acquiring and opening de novo practices in existing markets to grow share while entering two to three new markets over the next few years with a land and expand playbook. During the quarter we completed one acquisition and continue to see a healthy pipeline of opportunities that are aligned with our discipline around cultural fit and long term value creation. The timing of acquisitions is difficult to predict and while we strive to have a regular cadence of closings, we will not sacrifice our long term goals to hit certain short term metrics. We are patient centered in everything we do which leads to that high patient satisfaction and retention and ultimately that's what drives long term value for our shareholders. As expected, our first quarter results reflect continued investment in clinical capacity including recruiting, resources, staffing and supporting our affiliated practices. Underlying performance was consistent with our expectations and we believe these investments position us well for continued growth. With strong liquidity and a flexible balance sheet, we remain well positioned to continue executing on our growth strategy while maintaining a disciplined approach to capital allocation. I'll conclude my remarks by reiterating something that I hope resonates with all of our stakeholders. We have a patient first culture, we think long term and we are committed to keeping doctors at the center of of governance and management. We continue to believe this will translate nicely to shareholder returns long term. Before I turn the call over to cj, I would like to take a moment to recognize one of our clinical leaders and longtime colleague of ours, Dr. Alan Law. Dr. Law recently received the Edgar D. Coolidge Award from the American association of Endodontists, the national specialty organization representing endodontics. This award is the AAE's highest honor. It is named after Dr. Edgar Coolidge, one of the pioneers of endodontics and an important figure in the establishment of the association. The award recognizes individuals whose careers reflect extraordinary vision, leadership and a dedication to the specialty. For those of us at Park Dental Partners, Dr. Law's recognition is not a surprise. Dr. Law's work in the field of endodontics has benefited patients, doctors, educators and the broader dental profession. It has also benefited Park Dental Partners. He has long represented the best of what it means to dedicate one's life to the profession of dentistry clinical excellence, humility, service and a commitment to advancing care for patients and colleagues. We are fortunate to have Dr. Law as a colleague and a leader, and we congratulate him on receiving one of the highest recognitions in his field. With that, I'll turn it over to CJ for the financial update.

CJ Bernander (Chief Financial Officer)

Thanks Pete. Good morning everyone. For the first quarter revenue was 62.7 million representing growth of 6.2% year over year. Same practice revenue growth was 4.1% driven by increased patient visits, clinical hours and modest fee and reimbursement growth. Our general practice revenue grew 6.4% to 46.1 million and our multi specialty practice revenue grew 5.7% to 16.6 million. Overall revenue growth in the quarter represents a combination of organic patient demand and continued expansion of our provider base. As expected, our first quarter results reflect continued focus on growing clinical capacity including recruiting, staffing and supporting our affiliated practices. On a GAAP basis, cost of services increased year over year primarily reflecting higher share based compensation following our IPO and increased doctor and team member costs aligned with the increased revenue growth. Restricted shares with IPO vesting triggers drove the higher share based comp expense in Q1 as well as last quarter Q4. Of note, the expense is recognized using an accelerated method, not a straight line basis. Thus, share based compensation related to pre IPO shares will continue declining over the remaining quarters as they are fully recognized for GAAP purposes. And As a reminder, Dr. Shareholders make up the majority of the share based compensation expense accounting for approximately 91% of share based compensation in the quarter. General and administrative expenses increased modestly driven by share based compensation, public company costs and acquisition related activity in the first quarter. On a GAAP basis, we recorded a Net loss of 0.4 million or 9 cent loss per share compared with net income of 1.6 million or 88 cents per share in Q1 2025 respectively. On a non GAAP basis, adjusted EBITDA was 4.7 million or 7.6% of revenue. Adjusted EPS was 44 cents per share. Year over year earnings declined due to the share based compensation and absorbing public company costs, both of which were expected post IPO and were partially offset by revenue growth and operating leverage. As we previously disclosed, our shares outstanding increased substantially as a result of the ipo. Therefore, the year over year EPS comparisons are also impacted by that factor. Importantly, our expectations of public reporting costs and share based compensation are consistent with what we have outlined on our last call. Overall performance in the quarter was consistent with our expectations and we believe we're well positioned for continued growth. Turning to the balance sheet, we ended the quarter with $24.4 million in cash, $11.5 million in total debt and an undrawn $15 million revolver. Operating cash flow was $5 million for the quarter and our balance sheet remains a source of flexibility to as we continue to invest in growth Based on our first quarter performance, we are maintaining our full year 2026 outlook. Results in the quarter were consistent with our expectations and our outlook continues to reflect solid patient demand and continued focus on expanding clinical capacity to support more patient visits. And while we only provide an outlook on a full year basis, I would like to add some color on quarterly seasonality within 2026 for revenue. We expect Q2 to grow at a lower rate than Q1. Q3 and Q4 are expected to track at or above Q1's growth rate. This is driven by the timing of hiring across doctor and hygiene positions which typically peak in the summer and align with typical new grad timing. We also expect acquisitions closed at year end 2025 and in the first quarter will be integrated by the second half of the year. Overall, we're pleased with our start to the year and remain focused on high quality, recurring organic growth, disciplined M&A execution and long term value creation. Before I turn it back to Pete, I I'd like to highlight two things. First, we will be filing our 10-Q after market close today and secondly, Park Dental Partners will be attending the following investor conferences in the quarter. On May 27, we'll be presenting at the Stifel, PAWS and JAWS Conference in New York. On May 28, we'll be attending the Craig Hallam Annual Institutional Investor conference in Minneapolis, Minnesota. And on June 23rd we'll be participating virtually in the Northland Growth Conference. With that, I'll turn it back to Pete.

Pete Swenson (Chief Executive Officer and Chair of the Board)

Thanks CJ we believe the first quarter reflects a continuation of the consistency we've delivered historically and reinforces the strength of our model. We're early in our journey as a public company and our priorities remain unchanged. We're committed to our patients, our people and our performance, all of which we believe will lead to long term value creation for all stakeholders. We appreciate your time today and your continued interest in Park Dental Partners. Tyler, we're ready to take questions.

OPERATOR

Thank you. At this time we will conduct the question and answer session. As a reminder to ask a question, you will need to press Star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q and A roster. Our first question comes from Mike Grundahl from Northland. Mike, your line is now open.

Mike Grundahl (Equity Analyst)

Hey Pete and C.J. good morning. First question, I'd just like to dig into the acquisition pipeline a little bit. How does it look, say compared to six months ago? And secondly, as we've progressed through 2026, are there any deals that you've lost in 2026 and why potentially?

Pete Swenson (Chief Executive Officer and Chair of the Board)

Thanks Mike and good morning. Appreciate the question. You know, I feel good about where things stand with regard to the pipeline. If you look at the pipeline today versus say a year ago, we have substantially more qualified opportunities that we're investing time into and we're seeing more opportunities of various sizes as well that are in the pipeline from solo practices to mid size and some larger groups. And our team is very engaged in the process of evaluating those opportunities and we're at various stages in the pipeline in pursuing opportunities. In regard to your question about 2026 and have we lost any deals, I would say not anything that we felt met all the criteria for us in terms of being a steward of that practice post close. So things are competitive out there, but I think our model is being received well and it's just been a lot of fun meeting people that have built groups, built solo practices. There's some terrific people out there, but each of those opportunities is a little bit different and just glad that we have a team, very experienced team here that can apply their skills and experience to evaluating those opportunities.

Mike Grundahl (Equity Analyst)

Got it. And then another question. Last summer I think you hired about 10 or 12 and I don't have the exact number in front of me but like recent graduates, can you remind us what that number was last summer and what kind of the plans look like for this summer for those hires?

CJ Bernander (Chief Financial Officer)

Mike, I'll take that one. I think that we, I don't know if we disclose the exact number, but we have a very strong pipeline process into the universities and the markets that we operate in to hire new grads into roles. It's one of our capacity growth drivers and we're excited about that. We continue to operate and act in ways similar to last year and, and while I can't say we'll see similar levels of Dr. Growth or not, we feel good about the team that we have coming in and the new grads that have signed to join us, we're excited about their additions and we hope to get a few more. As you know, the number of doctors is critical to key metric of ours from a growth perspective and we feel like in Q1 we did see that number increase and we're looking to just continue to expand it in the quarters as they go forward. There will be a little bit of seasonality in that, but we expect to see that number just continue to move up and to the right as the quarters roll out in the future here.

Mike Grundahl (Equity Analyst)

Got it. And then maybe just lastly, higher oil prices, a little bit of inflation out there. I have to believe dental appointments and visits are kind of above that fray, if you will, and consumer spending pressure. But any comment just on the market we're in and what you guys are seeing?

Pete Swenson (Chief Executive Officer and Chair of the Board)

Yeah, Mike, we're not seeing any changes in patient behavior at this time. It's something we continue to monitor. And as you mentioned, there's a lot of dynamics happening in the macro environment, but what we've seen does not indicate to us that there's been material shifts or changes in patient visits or demand. Got it. Thank you. Thank you. Thanks, Mike.

OPERATOR

Our next question comes from the line. Our next question comes from the line of Talif Korman of Craig Hallam. Talif. The line is now open.

Talif Korman (Equity Analyst)

Hello and thank you for taking the questions. Are there any updates on potential de novo practices you could be opening? And then with the big leap into Arizona, can you talk about how the integration has been going? Thank you. Yes, C.J. maybe I'll let you take the first one. I'll answer the Arizona integration question. Our team, very experienced team of individuals with decades of experience on our end, engaging really well with the teams in Arizona. I'll give you an example of a milestone we've reached here. We're going to be converting both of those practices to our practice management system. So we'll have a common practice management system here within a couple of weeks. So those teams have been through our training and things are going smoothly. It's a relationship building endeavor with integration. And one of our values is lifelong learning. And I'd say that our team carries themselves with that at the forefront of their minds as we're engaging with integration activities. While we're experienced, we're also learning along the way and partnering with those practices.

Pete Swenson (Chief Executive Officer and Chair of the Board)

And Tala, to cover your question on de novo, similar to our practice, is to announce de novo deals upon their opening. So we don't typically provide or disclose future de novo activity. However, when those locations open, we would make that announcement. What I would add to that is as we think about the broader market and revenue growth, I think Pete and I both feel like M and A and acquisitions are going to be the larger lever from a growth perspective. We're still focused on de novo. We've got the capacity to go out and execute that playbook and we see that as an opportunity to grow and expand our existing markets, but we do expect that to be a smaller overall driver of growth for the next number of quarters and MA to be the larger driver.

Talif Korman (Equity Analyst)

Great. Thank you very much.

Pete Swenson (Chief Executive Officer and Chair of the Board)

Thank you.

OPERATOR

Thank you. I am showing no questions at this time. I would now like to turn it back to CJ Bernander for closing remarks.

CJ Bernander (Chief Financial Officer)

Thank you for attending our earnings call. We appreciate the time and look forward to our next interaction with you. Have a great day, everyone.

Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company's SEC filings and official press releases. Corporate participants' and analysts' statements reflect their views as of the date of this call and are subject to change without notice.