Mister Car Wash(MCW) - 2025 Q2 - Quarterly Results

Executive Summary Mister Car Wash reported strong Q2 and H1 2025 performance, driven by its UWC model and strategic growth initiatives Second Quarter 2025 Performance Highlights Mister Car Wash reported its ninth consecutive quarter of positive comparable-store sales growth, driven by the strength of its Unlimited Wash Club (UWC) subscription model. Net revenues increased 4%, and UWC memberships grew 5% year-over-year Second Quarter 2025 Key Financial and Operational Highlights | Metric | Q2 2025 | Q2 2024 | Change | | :-------------------------------- | :------ | :------ | :----- | | Net revenues | $265.4M | $255.0M | +4% | | Comparable-store sales growth | +1.2% | N/A | N/A | | UWC sales as % of total wash sales | 76% | 72% | +4 pp | | UWC members (end of quarter) | >2.2M | N/A | +5% YoY | | New greenfield locations opened | 4 | N/A | N/A | | Total locations (as of June 30) | 522 | 491 | +6% | | Net income | $28.6M | N/A | N/A | | Net income per diluted share | $0.09 | N/A | N/A | | Adjusted net income | $36.5M | N/A | N/A | | Adjusted net income per diluted share | $0.11 | N/A | N/A | | Adjusted EBITDA | $87.0M | $88.7M | -2% | - The CEO, John Lai, highlighted the effectiveness of the UWC subscription model in converting retail traffic into recurring revenue and reinforced the durability of the company's strategy[2] Six Month 2025 Performance Highlights For the first six months of 2025, Mister Car Wash achieved a 7% increase in net revenues and a 3.6% rise in comparable-store sales, alongside the opening of 8 new greenfield locations Six Month 2025 Key Financial and Operational Highlights | Metric | H1 2025 | H1 2024 | Change | | :-------------------------------- | :------ | :------ | :----- | | Net revenues | $527.1M | $494.2M | +7% | | Comparable-store sales growth | +3.6% | N/A | N/A | | New greenfield locations opened | 8 | N/A | N/A | | Net income | $55.6M | N/A | N/A | | Net income per diluted share | $0.17 | N/A | N/A | | Adjusted net income | $71.6M | N/A | N/A | | Adjusted net income per diluted share | $0.22 | N/A | N/A | | Adjusted EBITDA | $172.7M | $163.9M | +5% | Operational Overview The company expanded its footprint by opening new greenfield locations, increasing its total car wash count to 522 by mid-2025 Location Count The company's total car wash locations increased to 522 as of June 30, 2025, reflecting the opening of 4 new greenfield locations in Q2 2025 and 8 for the first six months of 2025 Car Wash Location Count | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Beginning location count | 518 | 482 | 514 | 482 | | Greenfield locations opened | 4 | 9 | 8 | 18 | | Ending location count | 522 | 491 | 522 | 500 | Financial Outlook Mister Car Wash revised its full fiscal year 2025 guidance, narrowing ranges for key financial metrics and adjusting capital expenditure plans Full Year 2025 Guidance Mister Car Wash has revised its full fiscal year 2025 outlook, narrowing the ranges for net revenues, comparable-store sales growth, Adjusted EBITDA, and Adjusted net income, while maintaining interest and rent expense estimates Full Year 2025 Outlook (Revised) | Metric | Current Outlook | Previous Outlook | | :-------------------------------------- | :---------------------- | :----------------------- | | Net revenues | $1,046 to $1,054 million | $1,046 to $1,064 million | | Comparable-store sales growth % | 1.5% to 2.5% | 1.5% to 3.0% | | Adjusted EBITDA | $338 to $342 million | $338 to $346 million | | Adjusted net income | $140 to $143 million | $140 to $147 million | | Adjusted net income per diluted share | $0.42 to $0.43 | $0.42 to $0.44 | | Interest expense, net | Approx. $61 million | Approx. $61 million | | Rent expense, net | Approx. $123 million | Approx. $123 million | | Weighted average common shares outstanding, diluted, full year | Approx. 332 million | Approx. 332 million | | New greenfield locations | Approx. 30 | 30 to 35 | | Capital expenditures | $255 to $275 million | $275 to $305 million | | Sale leasebacks | $40 to $50 million | $40 to $50 million | - Total capital expenditures for 2025 are expected to include $205 million to $220 million for new store growth and $50 million to $55 million for other capital expenditures[8] Balance Sheet and Cash Flow Summary The company's balance sheet shows a decrease in cash and cash equivalents, while operating cash flow improved for the first half of 2025 Balance Sheet and Cash Flow Highlights As of June 30, 2025, cash and cash equivalents decreased compared to year-end 2024, while net cash provided by operating activities increased for the six-month period. Rent expense rose due to an increase in car wash leases Balance Sheet and Cash Flow Key Figures | Metric | As of June 30, 2025 | As of December 31, 2024 | Change | | :-------------------------------- | :------------------ | :---------------------- | :----- | | Cash and cash equivalents | $26.4 million | $67.5 million | -$41.1 million | | Net cash provided by operating activities (H1) | $134.4 million | $118.9 million (H1 2024) | +$15.5 million | | Borrowings under Revolving Commitment | $0 | $0 | N/A | | Sale-leaseback transactions (Q2 2025) | 0 | N/A | N/A | | Car wash leases (as of June 30) | 475 | 439 (June 30, 2024) | +36 | | Rent expense, net (Q2 2025) | $30.2 million | N/A | +12% YoY | About Mister Car Wash Mister Car Wash, Inc. is a leading car wash brand headquartered in Tucson, Arizona, operating over 500 locations and boasting North America's largest car wash subscription program. The company emphasizes quality service, customer experience, community engagement, and environmental responsibility - Mister Car Wash operates over 500 locations and has the largest car wash subscription program in North America[12] - The company is committed to providing exceptional customer experiences, delivering quality service, fostering friendliness, and demonstrating a genuine commitment to communities and responsible environmental practices[12] Use of Non-GAAP Financial Measures This section clarifies the definitions, rationale, and limitations of non-GAAP financial measures used by the company, including recent changes to their calculation Definition and Rationale This section defines non-GAAP financial measures such as Adjusted EBITDA, Adjusted Net Income, and Adjusted Net Income per diluted share, explaining their purpose in providing a consistent view of operating performance by excluding non-recurring items, while also acknowledging their limitations - Non-GAAP financial measures include Adjusted EBITDA, Adjusted Net Income, and Adjusted Net Income per diluted share, which are not based on comprehensive GAAP rules[13] - Adjusted EBITDA is defined as net income before interest, tax, depreciation, amortization, (gain) loss on sale of assets, stock-based compensation, acquisition expenses, non-cash rent, debt refinancing costs, and other nonrecurring charges[14] - Management uses these measures to compare operating performance across periods, evaluate business strategies, make budgeting decisions, and assess compliance with credit agreement covenants, despite their limitations as analytical tools[16][17][18] Changes in Definition for 2025 Effective 2025, the company has revised the definition of Adjusted Net Income and Adjusted Net Income per diluted share by no longer including non-cash rent expense in their reconciliation - Beginning in 2025, the company will no longer include non-cash rent expense in its reconciliation of net income to adjusted net income and adjusted net income per diluted share[15] - The updated definition of Adjusted Net Income includes adjustments for (gain) loss on sale of assets, stock-based compensation, acquisition expenses, debt refinancing costs, other nonrecurring charges, income tax impact of stock award exercises, and the tax impact of adjustments to net income[15] Reconciliation Disclaimer The company is not providing a reconciliation of its 2025 outlook for adjusted EBITDA, adjusted net income, and adjusted net income per diluted share to the most directly comparable GAAP measures due to the inability to predict certain reconciling items with reasonable certainty - The company is not providing a reconciliation of its 2025 outlook for adjusted EBITDA, adjusted net income, and adjusted net income per diluted share to GAAP measures[19] - This is because the reconciling items, such as acquisition expenses and other adjustments, are uncertain and cannot be predicted with reasonable certainty without unreasonable efforts[19][20] Consolidated Financial Statements This section presents the unaudited consolidated statements of operations, cash flows, and balance sheets for specified periods, detailing the company's financial performance and position Consolidated Statements of Operations and Comprehensive Income This statement presents the unaudited consolidated results of operations and comprehensive income for the three and six months ended June 30, 2025, and 2024, detailing revenues, expenses, net income, and earnings per share Consolidated Statements of Operations and Comprehensive Income (Amounts in thousands, except share and per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net revenues | $265,415 | $255,043 | $527,071 | $494,226 | | Total costs and expenses | $211,269 | $200,043 | $419,958 | $396,681 | | Operating income | $54,146 | $55,000 | $107,113 | $97,545 | | Interest expense, net | $15,172 | $20,254 | $31,195 | $40,278 | | Income before taxes | $38,995 | $34,746 | $75,939 | $60,574 | | Income tax provision | $10,400 | $12,655 | $20,344 | $21,846 | | Net income | $28,595 | $22,091 | $55,595 | $38,728 | | Basic earnings per share | $0.09 | $0.07 | $0.17 | $0.12 | | Diluted earnings per share | $0.09 | $0.07 | $0.17 | $0.12 | Consolidated Statements of Cash Flows This statement provides the unaudited consolidated cash flow activities for the six months ended June 30, 2025, and 2024, highlighting cash generated from operations, used in investing, and provided by or used in financing activities Consolidated Statements of Cash Flows (Amounts in thousands) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $134,378 | $118,882 | | Net cash used in investing activities | $(111,329) | $(144,642) | | Net cash provided by (used in) financing activities | $(64,032) | $10,395 | | Net change in cash and cash equivalents, and restricted cash | $(40,983) | $(15,365) | | Cash and cash equivalents, and restricted cash at end of period | $26,629 | $3,754 | | Cash paid for interest | $32,245 | $39,646 | | Cash paid for income taxes | $2,204 | $2,181 | Consolidated Balance Sheets This statement presents the unaudited consolidated financial position as of June 30, 2025, compared to December 31, 2024, detailing assets, liabilities, and stockholders' equity Consolidated Balance Sheets (Amounts in thousands) | Metric | As of June 30, 2025 | As of December 31, 2024 | | :-------------------------------- | :------------------ | :---------------------- | | Total current assets | $57,676 | $99,090 | | Property and equipment, net | $880,527 | $814,600 | | Total assets | $3,105,997 | $3,101,796 | | Total current liabilities | $176,388 | $186,968 | | Long-term debt, net | $849,055 | $909,094 | | Total liabilities | $2,035,014 | $2,103,444 | | Total stockholders' equity | $1,070,983 | $998,352 | GAAP to Non-GAAP Reconciliations This section provides detailed reconciliations of GAAP net income to various non-GAAP financial measures, including Adjusted EBITDA and Adjusted Net Income, for comparative periods Reconciliation of Net Income to Adjusted EBITDA This section provides a detailed reconciliation of net income to Adjusted EBITDA for the three and six months ended June 30, 2025, and 2024, outlining specific adjustments made Reconciliation of Net Income to Adjusted EBITDA (Amounts in thousands) | Adjustment | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income | $28,595 | $22,091 | $55,595 | $38,728 | | Interest expense, net | $15,172 | $20,254 | $31,195 | $40,278 | | Income tax provision | $10,400 | $12,655 | $20,344 | $21,846 | | Depreciation and amortization expense | $21,738 | $20,261 | $42,655 | $39,856 | | Loss on sale of assets, net | $679 | $2,897 | $790 | $1,364 | | Stock-based compensation expense | $7,274 | $6,791 | $14,390 | $13,593 | | Acquisition expenses | $1,199 | $548 | $2,613 | $1,113 | | Non-cash rent expense | $1,652 | $1,495 | $3,618 | $2,982 | | Debt refinancing costs | $0 | $0 | $0 | $1,882 | | Employee retention credit | $0 | $0 | $0 | $(5,189) | | Other | $337 | $1,700 | $1,495 | $7,411 | | Adjusted EBITDA | $87,046 | $88,692 | $172,695 | $163,864 | Reconciliation of Net Income to Adjusted Net Income This section reconciles net income to adjusted net income for the three and six months ended June 30, 2025, and 2024, presenting both the definition used through 2024 and the revised definition beginning in 2025, which excludes non-cash rent expense Reconciliation of Net Income to Adjusted Net Income (Amounts in thousands) | Adjustment | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income | $28,595 | $22,091 | $55,595 | $38,728 | | Loss on sale of assets, net | $679 | $2,897 | $790 | $1,364 | | Stock-based compensation expense | $7,274 | $6,791 | $14,390 | $13,593 | | Acquisition expenses | $1,199 | $548 | $2,613 | $1,113 | | Non-cash rent expense | $1,652 | $1,495 | $3,618 | $2,982 | | Debt refinancing costs | $0 | $0 | $0 | $1,882 | | Employee retention credit | $0 | $0 | $0 | $(5,189) | | Other | $337 | $1,700 | $1,495 | $7,411 | | Income tax impact of stock award exercises | $465 | $3,742 | $793 | $6,002 | | Tax impact of adjustments to net income | $(2,398) | $(2,480) | $(4,929) | $(4,515) | | Adjusted net income, as defined through 2024 | $37,803 | $36,784 | $74,365 | $63,371 | | Non-cash rent expense (removed for 2025 def.) | $(1,652) | $(1,495) | $(3,618) | $(2,982) | | Tax impact of adjustments to net income (revised for 2025 def.) | $385 | $33 | $838 | $381 | | Adjusted net income, as defined beginning 2025 | $36,536 | $35,322 | $71,585 | $60,770 | | Diluted adjusted net income per Share, as defined through 2024 | $0.11 | $0.11 | $0.22 | $0.19 | | Diluted adjusted net income per Share, as defined beginning 2025 | $0.11 | $0.11 | $0.22 | $0.18 | - The reconciliation table explicitly shows the impact of the change in definition for adjusted net income, with non-cash rent expense no longer included in the calculation starting in fiscal 2025[32][33] Legal and Investor Information This section includes important disclaimers regarding forward-looking statements and provides essential details for investor and media communications Forward-Looking Statements This section contains a standard disclaimer regarding forward-looking statements, emphasizing that they are based on current expectations, involve known and unknown risks, and are not guarantees of future performance. The company disclaims any obligation to update these statements - Forward-looking statements cover future events, including expansion efforts and financial/operational results for 2025, and are based on management's current expectations and beliefs, not promises or guarantees[21][22] - These statements involve known and unknown risks, uncertainties, and other important factors that could cause actual results to differ materially[22] - The company does not undertake any obligation to update or revise any forward-looking statements, except as required by law[23] Conference Call Details and Contacts Details for the second quarter 2025 earnings conference call, including date, time, access information, and availability of a recorded replay, along with investor and media contact information - A conference call to discuss Q2 2025 financial results was scheduled for July 30, 2025, at 4:30 p.m. Eastern Time[9] - Investors and analysts could participate by dialing 855-209-8213 (US) or 1-412-542-4146 (international), with a live audio webcast and a 90-day replay available online at **https://ir.mistercarwash.com/**[9](index=9&type=chunk)[10] - Investor Relations contact is Edward Plank at IR@mistercarwash.com, and Media contact is media@mistercarwash.com[24]