Pacific Health Care Organization, Inc. (PHCO) reported a total revenue of $6.72 million for the fiscal year ending December 31, 2025, marking an 11% increase from $6.07 million in the previous year. The company's net income rose significantly by 57% to $1.39 million, compared to $883,584 in 2024. This increase in profitability was attributed to a 17% rise in income from operations, alongside a notable 117% increase in other income, primarily from Employee Retention Credit (ERC) refunds totaling $488,655. Basic and diluted earnings per share improved to $0.11 from $0.07 in the prior year.
In terms of operational performance, PHCO experienced varied revenue trends across its service lines. Revenue from Medical Provider Networks (MPN) increased by 6%, while utilization review services saw a 5% rise. Medical case management services surged by 42%, reflecting the expansion of employee advocate services into six states outside California. Conversely, revenue from Health Care Organizations (HCO) and medical bill review services declined by 2% and 4%, respectively, with other services experiencing a significant 70% drop, largely due to the discontinuation of certain network access fee-related services.
The company’s operational expenses also increased by 10%, driven primarily by a 55% rise in professional fees, which were linked to legal services related to ongoing lawsuits. Despite these rising costs, PHCO managed to maintain a healthy income from operations, which reached $1 million, up from $852,623 in 2024. The increase in expenses was partially offset by a decrease in salaries and wages, which fell by 1% to $2.74 million.
PHCO's customer base remains concentrated, with two customers accounting for approximately 34% of total sales in 2025, down from 43% in 2024. The company continues to face risks associated with customer concentration, as the loss of significant clients can materially impact revenue. As of March 2026, PHCO received a notice of termination from a significant customer, which is expected to affect future revenues. The company is actively pursuing strategies to diversify its customer base and reduce reliance on a few key clients.
Looking ahead, PHCO's management expressed optimism about future growth, particularly in expanding its employee advocate services and enhancing its utilization review offerings. However, they acknowledged potential challenges posed by economic conditions, including inflation and labor market fluctuations, which could impact customer demand for their services. The company plans to continue exploring strategic acquisitions and organic growth opportunities to bolster its market position in the workers' compensation cost containment sector.
About PACIFIC HEALTH CARE ORGANIZATION INC
Pacific Health Care Organization, Inc. specializes in workers' compensation cost containment services in California. It manages healthcare networks, including Health Care Organizations and Medical Provider Networks, to control medical treatment costs and ensure timely, appropriate care. The company offers bill review, utilization management, case management, and dispute resolution services, primarily serving employers, insurers, and administrators to reduce claims expenses and improve injury recovery outcomes.
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