Financial Data and Key Metrics Changes - Driven Brands reported a revenue increase of 6% year-over-year, totaling $551 million for Q2 2025 [9][18] - Adjusted EBITDA for the quarter was $143.2 million, reflecting a slight decrease of approximately $200,000 compared to the previous year [19][20] - The adjusted EBITDA margin decreased by roughly 160 basis points to 26% due to increased operating expenses [20] - Net income from continuing operations was $11.8 million, with adjusted net income of $59.1 million, leading to an adjusted diluted EPS of $0.36, down $0.01 from the previous year [20] Business Line Data and Key Metrics Changes - The Take Five Oil Change segment, which represents about 75% of the company's overall adjusted EBITDA, saw same-store sales increase by 6.6% and revenue growth of 14.7% [21] - Franchise Brands experienced a 1.5% decline in same-store sales, although this marked a sequential improvement from Q1 [22] - The Car Wash segment reported same-store sales growth of 19.4%, with adjusted EBITDA increasing to $27.3 million [23] Market Data and Key Metrics Changes - System-wide sales increased by 3.1% to $1.6 billion, supported by the addition of 52 net new stores in Q2 [18] - The company added 184 net new stores over the last twelve months, with 41 new stores opened in the current quarter [9][18] Company Strategy and Development Direction - The company remains focused on delivering consistent growth, particularly through the Take Five segment, and aims to reduce leverage to three times by 2026 [13][14] - Driven Brands is committed to expanding its service offerings, including the rollout of differential services across locations [10][11] - The company plans to continue opening over 150 new locations annually, enhancing brand awareness and customer loyalty [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's resilience despite a dynamic macro environment, noting strong performance in the Take Five segment and market share gains in Collision and Mako [12][29] - The company anticipates ongoing softness in the Collision and Mako segments due to discretionary spending pullbacks among lower-income consumers [12][29] - For the full year, the company reiterated its revenue guidance of $2.05 billion to $2.15 billion and adjusted EBITDA of $520 million to $550 million [29][30] Other Important Information - The company successfully monetized a seller note from its U.S. Car Wash transaction for $113 million, which was used to retire its term loan and reduce net leverage to 3.9 times on a pro forma basis [13][26] - Driven Brands has paid down approximately $700 million of debt since the end of 2023, reducing net leverage from five times to 3.9 times [14][26] Q&A Session Summary Question: Can you dive deeper into the traffic versus ticket side within Take Five? - Management indicated satisfaction with the comps for Take Five, noting strong performance in both traffic and ticket metrics, with non-oil change revenue being a significant driver [34][36] Question: What are the profitability implications for the Take Five segment in the back half of the year? - Management expressed confidence in maintaining mid-30s margins for Take Five, despite some expected variability due to increased repair and maintenance costs [38][39] Question: How much of the strength in the Car Wash business is attributed to internal initiatives? - Management acknowledged that both internal initiatives and favorable weather contributed to the Car Wash segment's strong performance, but anticipated moderation in growth due to weather conditions [47][50] Question: What is the outlook for non-oil change services? - Management sees significant growth potential in non-oil change services, with attachment rates improving and new services being introduced [54][56] Question: Can you provide insights on the collision industry softness? - Management noted that the collision industry is facing challenges due to claim avoidance and high total loss rates, but Driven Brands is gaining market share [66][68] Question: What is the current state of franchisee profitability in the Mako and Collision segments? - Management reported that while some franchisees are facing challenges, the overall health of the franchise system remains strong, with some closures but net positive growth in Q2 [82][83]

Driven Brands Holdings Inc. (DRVN) came out with quarterly earnings of $0.36 per share, beating the Zacks Consensus Estimate of $0.34 per share. This compares to earnings of $0.35 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of +5.88%. A quarter ago, it was expected that this company would post earnings of $0.23 per share when it actually produced earnings of $0.27, delivering a surprise of +17.39%.Over the last four quarters, ...

Financial Data and Key Metrics Changes - Driven Brands reported a revenue increase of 6% year-over-year, totaling $551 million for Q2 2025 [17][18] - Adjusted EBITDA for the quarter was $143.2 million, reflecting a slight decrease of approximately $200,000 compared to Q2 2024 [18] - The adjusted EBITDA margin decreased by roughly 160 basis points to 26% due to increased operating expenses [19] - Net income from continuing operations was $11.8 million, with adjusted net income of $59.1 million, resulting in adjusted diluted EPS of $0.36, down $0.01 from the previous year [19] Business Line Data and Key Metrics Changes - The Take Five Oil Change segment, which represents about 75% of overall adjusted EBITDA, achieved same-store sales growth of 6.6% and revenue growth of 14.7% [20] - Franchise Brands experienced a 1.5% decline in same-store sales, although this marked a sequential improvement from Q1 2025 [21] - The Car Wash segment reported same-store sales growth of 19.4%, with adjusted EBITDA increasing to $27.3 million and adjusted EBITDA margin rising to 37% [22] Market Data and Key Metrics Changes - System-wide sales increased by 3.1% to $1.6 billion, supported by the addition of 52 net new stores in Q2 2025 [17] - The company added 184 net new stores over the last twelve months, with 41 new stores opened in the current quarter [7][17] - The collision industry remains under pressure, with Driven Brands gaining market share despite overall industry softness [11][66] Company Strategy and Development Direction - The company aims to reduce net leverage to three times by 2026, having already paid down nearly $700 million of debt since the end of 2023 [12][13] - Driven Brands is focused on delivering consistent growth through Take Five, generating strong free cash flow from Franchise Brands, and executing on its deleveraging plan [7][14] - The company is expanding its service offerings, including the rollout of differential fluid service, which is expected to enhance non-oil change revenue [9][56] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's resilience despite a dynamic macro environment, noting strong performance in the Take Five segment and sequential improvement in Franchise Brands [27] - The company anticipates ongoing softness in the collision and Mako segments due to discretionary spending pullbacks among lower-income consumers [11][27] - For the full year 2025, the company reiterated its revenue guidance of $2.05 billion to $2.15 billion and adjusted EBITDA of $520 million to $550 million [27][28] Other Important Information - The company successfully monetized a seller note from the U.S. Car Wash transaction for $113 million, which was used to retire its term loan and reduce its revolving credit facility [12][22] - Free cash flow for the quarter was $31.9 million, driven by strong operating performance [23] - The company expects net store growth between 175 and 200 units for the year, with capital expenditures projected to be between 6.5% and 7.5% of revenue [28] Q&A Session Summary Question: Can you dive deeper into the traffic versus ticket side within Take Five? - Management indicated satisfaction with the 7% same-store sales growth and noted that both traffic and ticket metrics are performing well [32][34] Question: What are the profitability implications for the Take Five segment in the back half of the year? - Management expressed confidence in maintaining mid-30s margins, despite some expected variability due to increased costs [36][37] Question: How much of the strength in the Car Wash business is due to internal initiatives? - Management acknowledged both internal initiatives and favorable weather as contributing factors, but anticipated moderation in growth rates in the back half of the year [46][48] Question: What is the outlook for non-oil change services? - Management sees significant growth potential in non-oil change services, with attachment rates continuing to improve [51][56] Question: Can you comment on the collision industry softness? - Management noted that the collision industry is facing challenges due to claim avoidance and high total loss rates, but Driven Brands is gaining market share [65][66] Question: What is the competitive dynamic for the Take Five business? - Management highlighted Take Five's unique value proposition of a quick, convenient service, which continues to attract customers and franchisee interest [116]

Financial Performance - The net leverage ratio as of Q2 2025 was 4.1x[1,2] - Net loss for the six months ended December 28, 2024, was $326.916 million, while net income for the six months ended June 28, 2025, was $29.299 million[1] - Interest expense, net, for the six months ended December 28, 2024, was $81.396 million, and for the six months ended June 28, 2025, was $67.893 million[1] - Depreciation and amortization for the six months ended December 28, 2024, was $92.250 million, and for the six months ended June 28, 2025, was $68.055 million[1] - Adjusted EBITDA for the twelve months ended June 28, 2025, was $537.822 million[1] - Debt Agreement Adjusted EBITDA for the twelve months ended June 28, 2025, was $532.968 million[1] Debt and Cash Flow - Total debt as of June 28, 2025, was $2.376724 billion[1] - Cash and cash equivalents as of June 28, 2025, were $166.131 million[1] - Net debt as of June 28, 2025, was $2.210593 billion[1] Adjustments to EBITDA - Pro forma EBITDA adjustments resulted in a decrease of $23.535 million[1] - Run rate adjustments related to store openings and closings resulted in an increase of $11.395 million[1] - Other adjustments permitted under the Debt Agreement resulted in an increase of $7.287 million[1]

For the second quarter, Driven Brands delivered revenue of $551.0 million, an increase of 6.2% versus the prior year. System-wide sales increased 3.1% to $1.6 billion, driven by a 1.7% increase in same store sales and 3.9% increase in store count versus the prior year. Net income from continuing operations was $11.8 million or $0.07 per diluted share versus net income from continuing operations of $37.2 million or $0.22 per diluted share in the prior year. Adjusted Net Income was $59.1 million or $0.36 per ...

Driven Brands (DRVN) 2025 Conference Summary Company Overview - Driven Brands is the largest automotive services platform in North America with approximately 4,800 locations, providing essential services such as oil changes, maintenance, paint, collision, and glass work [1][2] Key Points and Arguments Business Model and Strategy - About 80% of Driven Brands' locations are franchised or independently operated, with a recent divestiture of the U.S. car wash business, which was capital intensive and discretionary [2] - The company is at an inflection point for free cash flow, aiding in deleveraging efforts [3] - The CFO, Mike Diamond, emphasizes growth, capital allocation, and value creation as key focuses since taking over [5][7] Take Five as Growth Engine - Take Five is highlighted as the crown jewel of Driven Brands, with over 1,300 units and significant growth potential [14] - Same-store sales for Take Five increased by 8% in the last quarter, attributed to its unique service model of a 10-minute oil change while customers remain in their cars [14][15] - The company has a pipeline of about 1,000 units, with expectations to open 175 to 200 new units in the current year, transitioning towards a more balanced mix of corporate and franchise locations [18][19] Financial Performance and Projections - The expected adjusted EBITDA for the year is between $520 million and $550 million, with a focus on maintaining strong free cash flow [64][66] - Cash on cash return for franchisees is projected at about 30%, with a payback period of under three years for new units [22][20] - Non-oil change revenue currently accounts for about 20% of total revenue, with significant growth potential in this area [26] Market Position and Competitive Landscape - Driven Brands is positioned to capture market share from smaller competitors and dealerships, with a focus on convenience and customer satisfaction [30][31] - The company believes there is still a long runway for growth in the oil change market, despite competition [32] Margin and Cost Management - The EBITDA margin for the business is in the mid-30s, with expectations for consistency throughout the year despite some minor dips due to G&A and rent costs [33][34] - Capital expenditures are projected at 6.5% to 7.5% of sales, with half allocated to supporting Take Five growth [57][59] Franchise Business and Cash Flow Generation - The franchise segment is crucial for cash flow generation, providing stability and funding for future growth initiatives [36][38] - Relationships with fleet and insurance companies are enhanced through franchise brands, aiding in business development [37] Future Growth Opportunities - The glass business is seen as a promising growth area, leveraging existing insurance relationships [39][40] - Driven Advantage, the company's procurement engine, aims to enhance purchasing power and expand product offerings [42][44] Tariff Exposure and Economic Resilience - Driven Brands has modest exposure to tariffs, with a strong demand outlook due to the nondiscretionary nature of its services [45][48] - The company is well-positioned to navigate economic uncertainties, as car maintenance remains a priority for consumers [45] Additional Insights - The transition in leadership from Jonathan to Danny is expected to maintain continuity in strategy while enhancing operational focus [10][12] - The company is committed to deleveraging, aiming for a net leverage ratio of three times by the end of 2026, with ongoing asset sales contributing to this goal [68][71] - The potential of the AGN business is viewed as a call option for future growth, not yet reflected in current valuations [73][74]

Core Insights - Driven Brands Holdings Inc. reported a revenue of $516.16 million for the quarter ended March 2025, reflecting a year-over-year decline of 9.8% but exceeding the Zacks Consensus Estimate by 4.02% [1] - The company's EPS for the quarter was $0.27, up from $0.23 in the same quarter last year, resulting in an EPS surprise of 17.39% compared to the consensus estimate [1] Financial Performance Metrics - Same-store sales increased by 0.7%, falling short of the average estimate of 1.9% [4] - Total store count was reported at 4,797, below the average estimate of 5,036 [4] - Car wash store count was 718, significantly lower than the estimated 914 [4] - Same-store sales for car wash services surged by 26.2%, compared to the average estimate of 1.4% [4] - Company-operated store count was 964, below the average estimate of 1,156 [4] - Revenue from company-operated store sales was $314.13 million, down 16.1% year-over-year and below the average estimate of $326.76 million [4] - Revenue from independently-operated store sales reached $66.64 million, exceeding the estimate of $52.68 million and representing a year-over-year increase of 25.6% [4] - Advertising contributions generated $25.33 million, slightly below the estimate of $25.51 million, but up 5.2% year-over-year [4] - Franchise royalties and fees totaled $44.71 million, below the estimate of $48.39 million, with a slight decline of 0.7% year-over-year [4] - Revenue from supply and other sources was $65.36 million, below the average estimate of $74.85 million, reflecting a year-over-year decrease of 13.6% [4] - Corporate/Other revenue was reported at $83 million, significantly exceeding the estimate of $6.51 million, marking a dramatic increase of 1382.1% year-over-year [4] - Revenue from car wash services was $68 million, below the estimate of $85.71 million, representing a decline of 53% year-over-year [4] Stock Performance - Driven Brands Holdings' shares have returned +12.3% over the past month, outperforming the Zacks S&P 500 composite's +11.5% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

分组1 - Driven Brands Holdings Inc. reported quarterly earnings of $0.27 per share, exceeding the Zacks Consensus Estimate of $0.23 per share, and showing an increase from $0.23 per share a year ago, representing an earnings surprise of 17.39% [1] - The company achieved revenues of $516.16 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 4.02%, although this is a decrease from year-ago revenues of $572.23 million [2] - Driven Brands Holdings has outperformed the S&P 500, with shares increasing about 7.4% since the beginning of the year, while the S&P 500 has declined by 3.9% [3] 分组2 - The current consensus EPS estimate for the upcoming quarter is $0.35 on revenues of $535.75 million, and for the current fiscal year, it is $1.22 on revenues of $2.09 billion [7] - The Automotive - Retail and Wholesale - Parts industry, to which Driven Brands Holdings belongs, is currently ranked in the top 18% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8]

Financial Data and Key Metrics Changes - Driven Brands reported Q1 2025 revenue of $516 million, a 7.1% increase year-over-year, supported by 177 net new stores and 0.7% same-store sales growth, marking the seventeenth consecutive quarter of positive same-store sales growth [7][19] - Diluted adjusted EPS from continuing operations was $0.27, and adjusted EBITDA was $125 million, reflecting a 1.9% increase [8][21] - Operating income declined by $6.8 million to $61.3 million for Q1, while adjusted EBITDA margin decreased by approximately 120 basis points to 24.2% [20][21] Business Line Data and Key Metrics Changes - Take Five Oil Change achieved same-store sales growth of 8% and revenue growth of 15.3%, with adjusted EBITDA of $100.9 million, reflecting a 13.5% increase [10][22] - Franchise Brands experienced a 2.9% decline in same-store sales, with segment revenue down by $4.6 million or 6.1% [11][24] - The international car wash segment reported same-store sales growth of 26.2%, with adjusted EBITDA increasing by $6.4 million to $24.4 million [12][25] Market Data and Key Metrics Changes - System-wide sales for the company grew by 2.2% in Q1 to $1.5 billion [19] - The company closed a net of 19 units in the Franchise Brands segment due to the departure of a franchisee [19][24] - The U.S. Car Wash transaction closed on April 10, 2025, providing liquidity for debt repayment and simplifying the company's portfolio [13][28] Company Strategy and Development Direction - The company aims to utilize excess free cash flow to reduce debt, targeting a net leverage ratio of three times by the end of 2026 [7][14] - Driven Brands is focused on maintaining growth in its Take Five business while managing the performance of its franchise segment [32][33] - The divestiture of the U.S. Car Wash business is expected to support the company's outlook for net capital expenditures, which are projected to be approximately $70 million less than the previous year [13][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver results despite macroeconomic uncertainties, emphasizing the essential nature of their services [15][17] - The company remains cautious about the potential impact of tariffs on margins and demand but believes its diversified sourcing strategy will mitigate risks [14][30] - Management reiterated its fiscal 2025 outlook, expecting moderate growth in Take Five and continued softness in the discretionary business, Mako [31][32] Other Important Information - The company has paid down nearly $290 million in debt since the beginning of 2025, with total debt repaid exceeding $5 billion since 2024 [8][27] - Free cash flow for the quarter was $27.6 million, driven by strong operating performance [26] Q&A Session Summary Question: Can you discuss the margin management for Take Five? - Management noted that margin pressure was due to increased repair and maintenance and rent expenses, but they remain confident in the team's ability to manage costs effectively [35][36] Question: What is the outlook for Franchise Brands if same-store sales softness continues? - Management indicated that while there are limited levers in a franchise model, they are optimistic about the long-term trajectory of the franchise brands despite current softness [37][38] Question: What are the expectations for Q2 comps? - Management refrained from providing specific quarter guidance but indicated they expect to see trends stabilize, with a potential for 1% to 3% growth based on current trends [42][44] Question: How is the Auto Glass business performing? - Management confirmed that the Auto Glass business is still in the early stages of growth, with positive developments in securing insurance and commercial accounts [50][63] Question: Are there any signs of increased price competition in the Quick Lubes market? - Management reported no significant material changes in competitive pricing dynamics, although some localized competition may exist [100] Question: How does the company view the impact of economic downturns on its business? - Management emphasized that the majority of their services are nondiscretionary, which positions them well during economic uncertainty, as consumers will still need vehicle maintenance [90][112]

Financial Data and Key Metrics Changes - Driven Brands reported Q1 2025 revenue of $516 million, a 7.1% increase year-over-year, supported by 177 net new stores and 0.7% same-store sales growth, marking the seventeenth consecutive quarter of positive same-store sales growth [5][18] - Adjusted EBITDA for Q1 increased by 1.9% to $125.1 million, with an adjusted EBITDA margin of 24.2%, a decrease of approximately 120 basis points compared to the previous year [20][21] - The company generated diluted adjusted EPS from continuing operations of $0.27, up $0.02 from Q1 last year, driven by strong operating performance and continued debt paydown [6][20] Business Line Data and Key Metrics Changes - Take Five Oil Change achieved same-store sales growth of 8% for the quarter, marking its nineteenth consecutive quarter of positive same-store sales, with revenue growth of 15.3% and adjusted EBITDA growth of 13.5% [8][21] - The Franchise Brands segment experienced a 2.9% decline in same-store sales, primarily due to softness in the Mako brand, with segment revenue declining by 6.1% [10][22] - The international car wash segment reported same-store sales growth of 26.2%, with revenue and adjusted EBITDA increasing by 2536% year-over-year [11][24] Market Data and Key Metrics Changes - System-wide sales for the company grew by 2.2% in Q1 to $1.5 billion [18] - The company closed a net of 19 units in the Franchise Brands segment due to the negotiated departure of a franchisee [17] Company Strategy and Development Direction - The company aims to utilize excess free cash flow to reduce debt, with a target of reducing net leverage to three times by the end of 2026 [5][12] - The divestiture of the U.S. Car Wash business is expected to simplify the portfolio and support the goal of reducing net CapEx [12][28] - The company remains focused on growing the Take Five business and maintaining the strength of its franchise segment while generating cash and executing its deleveraging plan [32][33] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver despite macroeconomic uncertainties, highlighting the essential nature of their services [14][32] - The company anticipates that the second half of 2025 will contribute a percentage in the low 50s for full-year revenue and adjusted EBITDA [32] - Management noted that while there may be softness in discretionary services like Mako, the overall business model remains resilient due to the nondiscretionary nature of most services [91][92] Other Important Information - The company has paid down nearly $290 million in debt since the beginning of 2025, with total debt repaid exceeding $5 billion since the start of 2024 [6][29] - The company extended its revolving credit facility for an additional five years, maintaining a capacity of $300 million [26][27] Q&A Session Summary Question: Regarding Take Five's EBITDA margin and potential for margin increase if same-store sales slow - Management indicated that margin pressure was due to increased repair and maintenance and rent expenses, but they remain confident in the team's ability to manage costs effectively [38][39] Question: Update on Franchise Brands and potential for driving EBITDA amidst softness - Management noted that while there are limited levers in a franchise business, they are optimistic about the long-term trajectory of the franchise brands despite current softness [40] Question: Expectations for Q2 comps and potential acceleration in the back half of the year - Management refrained from providing specific quarter guidance but indicated that they expect some moderation in growth due to the larger base created by new openings [44][46] Question: Update on the Auto Glass business performance - Management confirmed that the Auto Glass business is still in the early stages of growth, with positive developments in securing insurance and commercial accounts [50][52] Question: Observations on oil change customer behavior amidst economic pressures - Management reported strong performance in the Take Five business, with no significant changes in customer trends despite economic pressures [59][61] Question: Insights on the impact of tariffs on franchisee costs - Management acknowledged the potential impact of tariffs but indicated that they have not seen significant effects on costs thus far [72][73] Question: Discussion on the performance of the Mako brand and collision repair services - Management confirmed that Mako is experiencing softness due to its discretionary nature, but they believe they can get the business back on track in the second half of the year [81][84]