Financial Data and Key Metrics Changes - Revenue increased by 6% to $263 million and adjusted EBITDA rose by 10% to $87 million, marking the highest Q3 EBITDA margin ever reported at 32.9% [4][19] - Comparable store sales growth was 3.1%, representing the 10th consecutive quarter of comp gains [4][12] - Adjusted EPS increased by 38% year over year to $0.11 [12] Business Line Data and Key Metrics Changes - UWC (Unlimited Wash Club) membership grew by 6% year over year, reaching approximately 2.2 million members, with the Titanium 360 tier achieving about 25% penetration of the total membership base [4][17] - UWC sales represented 77% of total wash sales, with UWC comps increasing in high single digits [16][17] - Retail comps performed in line with expectations, showing a low double-digit decrease [16] Market Data and Key Metrics Changes - The pace of new competitor openings has moderated, with an estimated 40% fewer new builds year to date compared to the previous year, contributing to a healthier competitive environment [14] - Locations facing competition less than a year old comped down low single digits, while those with competition older than two years or no competition comped up mid to high single digits on average [15] Company Strategy and Development Direction - The company is focused on expanding its footprint, with plans to open approximately 30 new stores in 2025, in addition to five recently acquired stores in Lubbock, Texas [7][24] - Strategic M&A opportunities are anticipated as the industry consolidates, with a belief that the market is entering a healthier phase [6][11] - Innovation remains a core focus, with ongoing investments in technology and R&D to differentiate the brand [8][10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the strength of the markets and the resilience of the business model, indicating a favorable setup for future growth [26] - The company is actively managing variability in retail performance and capitalizing on M&A opportunities to fuel growth [11][26] - There is confidence in the ability to accelerate growth moving forward, supported by a strong subscription base and unit economics [7][11] Other Important Information - Free cash flow for the nine months ended September 30 was $202 million, compared to $174 million in the same period last year, representing 26% of sales [23] - The company has reduced its total outstanding debt by more than $100 million over the last 12 months, with a leverage ratio of 2.4 times adjusted EBITDA [20][23] Q&A Session Summary Question: Where did the sales upside materialize in Q3? - Management noted that all months in Q3 were positive, with July being the strongest due to a softer comparison [28][29] Question: What is the pecking order of cash flow usage? - The company indicated that Greenfield development remains the highest use of capital, with options for share buybacks and debt pay down being considered [31][32] Question: How does the base price increase impact 2026? - The base price increase rollout is expected to contribute roughly a quarter to one-third of its total impact in 2026 [36][37] Question: Can you provide insight into membership trends? - Membership has been relatively flat sequentially, with a focus on increasing retail traffic to convert more customers into members [41][42] Question: What is the competitive response to marketing tests? - There have been no unusual competitive responses noted in the markets where marketing spend has been tested [79]

Financial Performance - Net revenues increased 6% to $263.4 million, up from $249.3 million in Q3 2024[6] - Adjusted EBITDA increased 10% to $86.8 million from $78.8 million in Q3 2024[6] - Net revenues for Q3 2025 were $263,417,000, an increase of 5.4% from $249,329,000 in Q3 2024[29] - Operating income for the nine months ended September 30, 2025, was $158,966,000, up 8.1% from $147,130,000 in the same period of 2024[29] - Net income for Q3 2025 was $27,411,000, representing a 22.5% increase compared to $22,342,000 in Q3 2024[29] - Adjusted net income for the nine months ended September 30, 2025, was $108.0 million, with adjusted net income per diluted share at $0.33[6] - Adjusted EBITDA for the nine months ended September 30, 2025, reached $259,487 million, up 6.9% from $242,668 million in the same period of 2024[36] - Adjusted net income for Q3 2025 was $36,438 million, up from $27,496 million in Q3 2024, representing a 32.5% increase[36] Membership and Sales Growth - Comparable-store sales increased 3.1% during the quarter, marking the tenth consecutive quarter of growth[2] - Unlimited Wash Club® memberships increased by 6%, totaling over 2.2 million members, a year-over-year increase of 117 thousand members[6] Cash Flow and Expenses - Free cash flow totaled $47.1 million compared to $(61.1) million for the nine months ended September 30, 2024[12] - Cash flows from operating activities for the nine months ended September 30, 2025, were $225,733,000, compared to $198,840,000 in 2024, reflecting a growth of 13.5%[32] - Free cash flow for the nine months ended September 30, 2025, was $47,079 million, a significant improvement from a negative $61,056 million in 2024[38] - Free cash flow excluding growth capital expenditures for the same period was $202,016 million, compared to $174,216 million in 2024, reflecting a 15.9% increase[38] - The company incurred interest expense of $14,054,000 in Q3 2025, down from $20,653,000 in Q3 2024[29] - Interest expense for Q3 2025 was $14,054 million, a decrease from $20,653 million in Q3 2024, indicating improved cost management[36] Expansion and Acquisitions - The company opened 5 new greenfield locations, bringing the total to 527 locations, a 5% increase year-over-year[6] - The company expects to open approximately 30 new greenfield locations in 2025[10] - The company completed the acquisition of five stores in Lubbock, TX, expanding its market presence significantly[2][9] - The company incurred acquisition expenses of $1,201 million in Q3 2025, compared to $863 million in Q3 2024, reflecting ongoing strategic investments[36] Assets and Liabilities - Total assets as of September 30, 2025, were $3,142,930,000, an increase from $3,101,796,000 as of December 31, 2024[34] - Total liabilities decreased to $2,037,773,000 as of September 30, 2025, from $2,103,444,000 at the end of 2024[34] Earnings Per Share - The company reported a basic earnings per share of $0.08 for Q3 2025, up from $0.07 in Q3 2024[29] - Diluted adjusted net income per share for Q3 2025 was $0.11, consistent with Q3 2024, while adjusted net income per share beginning 2025 was also $0.11[36] Retained Earnings and Compensation - The company’s retained earnings increased to $247,852,000 as of September 30, 2025, from $164,846,000 at the end of 2024[34] - Stock-based compensation expense for the nine months ended September 30, 2025, was $20,991 million, slightly up from $20,367 million in 2024[36]

Core Insights - Mister Car Wash reported a 6% increase in net revenues to $263.4 million for Q3 2025, compared to $249.3 million in Q3 2024 [8] - Comparable-store sales grew by 3.1% during the quarter, marking the tenth consecutive quarter of growth [3][8] - The company expanded its Unlimited Wash Club® memberships by 6%, reaching over 2.2 million members, a year-over-year increase of 117,000 members [8] - Five new greenfield locations were opened, bringing the total number of car wash locations to 527, a 5% increase from 501 locations a year earlier [8][9] - The company reiterated its full-year 2025 outlook, projecting net revenues between $1,046 million and $1,054 million [12] Financial Performance - Adjusted EBITDA for Q3 2025 increased by 10% to $86.8 million, up from $78.8 million in Q3 2024 [8] - Net income for Q3 2025 was reported at $27.4 million, with adjusted net income at $36.4 million [8] - For the nine months ended September 30, 2025, net revenues totaled $790.5 million, up from $743.6 million in the prior year [8] - Free cash flow for the nine months ended September 30, 2025, was $47.1 million, a significant improvement from $(61.1) million in the same period of 2024 [14][43] Operational Highlights - The company completed the acquisition of five stores in Lubbock, Texas, enhancing its market presence from four to nine locations [11] - UWC sales accounted for 77% of total wash sales, up from 74% in Q3 2024 [8] - The company plans to open approximately 30 new greenfield locations in 2025 [12] Balance Sheet and Cash Flow - As of September 30, 2025, cash and cash equivalents totaled $35.7 million, down from $67.5 million at the end of 2024 [14] - Net cash provided by operating activities for the nine months ended September 30, 2025, was $225.7 million, compared to $198.8 million for the same period in 2024 [14] - Total assets as of September 30, 2025, were $3.14 billion, an increase from $3.10 billion at the end of 2024 [36]

Core Insights - Mister Car Wash, Inc. has acquired five Whistle Express locations in Lubbock, Texas, increasing its presence in the market from four to nine locations, thereby solidifying its market leadership in the area [1][2] Group 1: Acquisition Details - The acquisition enhances Mister Car Wash's footprint in Lubbock, establishing a leading market position with a total of nine locations [1] - Stephens Inc. acted as the exclusive financial advisor to Whistle Express during this divestiture [1] Group 2: Company Commitment - The company emphasizes its commitment to making car care more accessible while maintaining high-quality service for customers [2] - A seamless transition for Whistle Express customers and team members is planned to ensure continued access to reliable car wash services [2] Group 3: Company Overview - Mister Car Wash operates approximately 525 locations and boasts North America's largest car wash subscription program [4] - The company is dedicated to providing clean, shiny, and dry vehicles, with a focus on exceptional customer experiences and responsible environmental practices [4]

Core Viewpoint - Mister Car Wash, Inc. will release its financial results for Q3 2025 on October 29, 2025, followed by a conference call to discuss these results [1]. Group 1: Financial Results Announcement - The financial results for the third quarter of 2025 will be released after market close on October 29, 2025 [1]. - A conference call to discuss the financial results will take place at 4:30 p.m. Eastern Time on the same day [1]. Group 2: Conference Call Participation - Investors and analysts can participate in the call by dialing 855-209-8213 or 1-412-542-4146 for international callers [2]. - A live audio webcast of the conference call will be available online [2]. - A recorded replay of the conference call will be accessible approximately three hours after its conclusion [2]. Group 3: Company Overview - Mister Car Wash, Inc. is headquartered in Tucson, Arizona, and operates approximately 525 locations [3]. - The company has the largest car wash subscription program in North America [3]. - Mister Car Wash is committed to providing exceptional customer experiences and responsible environmental practices [3].

Core Insights - The article discusses the investment positions held by analysts in specific companies, indicating a long position in MCW and DRVN, suggesting a positive outlook on these stocks [1][2] Company Analysis - MCW is highlighted as a company in which analysts have a beneficial long position, indicating confidence in its future performance [1] - DRVN is also mentioned as a company with a long position, reflecting a similar positive sentiment among analysts [2] Industry Context - The article emphasizes that past performance of stocks does not guarantee future results, which is a critical consideration for investors in the current market environment [2] - It notes that the views expressed may not represent the broader consensus of Seeking Alpha, indicating a diverse range of opinions within the investment community [2]

Group 1 - The article expresses a long position in the shares of MCW, indicating a positive outlook on the company's stock performance [1] - The author also holds a long position in DRVN, suggesting potential investment interest in this company as well [2] Group 2 - The disclosures highlight that past performance is not indicative of future results, emphasizing the importance of careful investment consideration [2] - The article clarifies that no specific investment recommendations are being made, which is crucial for investors to understand the context of the analysis [2]

Core Viewpoint - The analyst previously held a "hold" rating for Mister Car Wash (NASDAQ: MCW) due to concerns over potential near-term earnings weakness, although UWC is performing well in 2Q25 [1] Group 1: Investment Philosophy - The investment approach is fundamentally driven, focusing on identifying businesses with potential for scaling and unlocking significant terminal value [1] - Key factors considered include competitive moat, unit economics, reinvestment runway, and management quality, which are essential for long-term free cash flow generation and shareholder value creation [1] - The analyst emphasizes the importance of fundamental research and targets sectors with strong secular tailwinds [1] Group 2: Professional Background - The analyst has 10 years of experience in investment banking and is currently managing personal funds sourced from friends and family [1] - The motivation for writing on Seeking Alpha is to share investment insights and receive feedback from fellow investors [1] - The aim is to help readers focus on the drivers of long-term equity value, with a belief that good analysis should be both analytical and accessible [1]

[FORWARD-LOOKING STATEMENTS](index=3&type=section&id=FORWARD-LOOKING%20STATEMENTS) This report contains forward-looking statements subject to risks and uncertainties, protected under safe harbor provisions - This section highlights that the Quarterly Report on Form 10-Q contains forward-looking statements, which are covered by safe harbor provisions[11](index=11&type=chunk) - Readers are cautioned that actual results may differ materially from forward-looking statements due to known and unknown risks, uncertainties, and assumptions[12](index=12&type=chunk)[13](index=13&type=chunk) - The Company does not undertake any obligation to update or revise forward-looking statements after the report date, except as required by law[14](index=14&type=chunk) [PART I - FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) This part presents the unaudited financial statements and management's analysis of financial condition and operations [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)%3A) This section presents the unaudited consolidated financial statements, including operations, cash flows, and balance sheets [Consolidated Statements of Operations and Comprehensive Income](index=4&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income) The company reports increased net revenues and net income for the three and six months ended June 30, 2025 Consolidated Statements of Operations and Comprehensive Income (Unaudited) - Key Figures (Amounts in thousands) | 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 | | Operating income | $54,146 | $55,000 | $107,113 | $97,545 | | Net income | $28,595 | $22,091 | $55,595 | $38,728 | | Total comprehensive income | $28,945 | $22,091 | $55,945 | $38,728 | | Basic EPS | $0.09 | $0.07 | $0.17 | $0.12 | | Diluted EPS | $0.09 | $0.07 | $0.17 | $0.12 | - Net revenues increased by **4%** for the three months ended June 30, 2025, and by **7%** for the six months ended June 30, 2025, compared to the respective prior periods[19](index=19&type=chunk) - Net income increased by **29.4%** for the three months ended June 30, 2025, and by **43.5%** for the six months ended June 30, 2025, compared to the respective prior periods[19](index=19&type=chunk) [Consolidated Statements of Cash Flows](index=5&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow increased while investing cash use decreased, and financing activities shifted to a net outflow Consolidated Statements of Cash Flows (Unaudited) - Key Figures (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 | - Net cash provided by operating activities increased by **$15.5 million (13%)** for the six months ended June 30, 2025, compared to the same period in 2024[22](index=22&type=chunk) - Net cash used in investing activities decreased by **$33.3 million (23%)** for the six months ended June 30, 2025, primarily due to lower purchases of property and equipment[22](index=22&type=chunk) - Net cash from financing activities shifted from a **$10.4 million inflow** in 2024 to a **$64.0 million outflow** in 2025, mainly due to significant debt payments[22](index=22&type=chunk) [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) Total assets remained stable, while liabilities decreased and stockholders' equity increased from year-end 2024 Consolidated Balance Sheets (Unaudited) - Key Figures (Amounts in thousands) | Metric | As of June 30, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | Total current assets | $57,676 | $99,090 | | Total assets | $3,105,997 | $3,101,796 | | Total current liabilities | $176,388 | $186,968 | | Total liabilities | $2,035,014 | $2,103,444 | | Total stockholders' equity | $1,070,983 | $998,352 | - Total current assets decreased by **$41.4 million (41.8%)** from December 31, 2024, to June 30, 2025, primarily due to a decrease in cash and cash equivalents[25](index=25&type=chunk) - Total liabilities decreased by **$68.4 million (3.3%)** from December 31, 2024, to June 30, 2025, driven by reductions in long-term debt and operating lease liabilities[25](index=25&type=chunk) - Total stockholders' equity increased by **$72.6 million (7.3%)** from December 31, 2024, to June 30, 2025, mainly due to retained earnings and additional paid-in capital[25](index=25&type=chunk) [Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Consolidated%20Statements%20of%20Stockholders'%20Equity) Stockholders' equity grew, driven primarily by net income and stock-based compensation expense Consolidated Statements of Stockholders' Equity (Unaudited) - Key Changes (Amounts in thousands) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Balance as of December 31, 2024/2023 | $998,352 | $915,035 | | Stock-based compensation expense | $13,320 | $12,152 | | Net income | $55,595 | $38,728 | | Balance as of June 30, 2025/2024 | $1,070,983 | $949,400 | - Stockholders' equity increased by **$72.6 million** in the first six months of 2025, primarily driven by net income of **$55.6 million** and stock-based compensation expense of **$13.3 million**[28](index=28&type=chunk) - The number of common shares outstanding increased from 323,693,863 as of December 31, 2024, to **327,257,547** as of June 30, 2025, due to employee stock plans[28](index=28&type=chunk) [Notes to Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) These notes provide detailed disclosures on accounting policies, financial statement items, and other relevant information [1. Nature of Business](index=8&type=section&id=1.%20Nature%20of%20Business) The company operates as a leading provider of conveyorized car wash services across the United States - Mister Car Wash, Inc. is a provider of conveyorized car wash services, primarily operating Express Exterior Locations with free vacuum services[31](index=31&type=chunk) - As of June 30, 2025, the Company operated **522 car washes** across 21 states[31](index=31&type=chunk) [2. Summary of Significant Accounting Policies](index=8&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) This note details the U.S. GAAP basis of preparation, key estimates, revenue composition, and new accounting pronouncements - The unaudited consolidated financial statements are prepared in accordance with U.S. GAAP and SEC rules for interim financial statements[32](index=32&type=chunk) - Management makes estimates and assumptions affecting reported amounts, particularly for deferred tax assets/liabilities and impairment evaluations[34](index=34&type=chunk) Net Revenues Composition (Amounts in thousands) | Revenue Type | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Recognized over time | $200,191 | $184,082 | $392,039 | $360,341 | | Recognized at a point in time | $64,917 | $70,861 | $134,601 | $133,707 | | Other revenue | $307 | $100 | $431 | $178 | | **Net revenues** | **$265,415** | **$255,043** | **$527,071** | **$494,226** | - The Company recognized a **$4,663 thousand Employee Retention Credit** (net of tax advisory costs) in March 2024, recorded in Other income[44](index=44&type=chunk)[45](index=45&type=chunk) - New accounting pronouncements include ASU No. 2023-09 (Income Taxes) and ASU No. 2024-03 (Expense Disaggregation Disclosures)[46](index=46&type=chunk)[49](index=49&type=chunk) [3. Property and Equipment, Net](index=12&type=section&id=3.%20Property%20and%20Equipment%2C%20Net) This note details the components and changes in the company's net property and equipment balances Property and Equipment, Net (Amounts in thousands) | Category | As of June 30, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | Property and equipment, gross | $1,238,908 | $1,141,487 | | Accumulated depreciation | $(353,692) | $(322,676) | | Accumulated amortization - finance leases | $(4,689) | $(4,211) | | **Property and equipment, net** | **$880,527** | **$814,600** | - Depreciation expense for the six months ended June 30, 2025, was **$41,239 thousand**, up from $36,072 thousand in the prior year period[50](index=50&type=chunk) - During Q2 2025, the Company sold a car wash location, recording a gain of **$338 thousand**[52](index=52&type=chunk) [4. Other Intangible Assets, Net](index=12&type=section&id=4.%20Other%20Intangible%20Assets%2C%20Net) This note outlines the composition of intangible assets and related amortization expense Other Intangible Assets, Net (Amounts in thousands) | Category | Gross Carrying Amount (June 30, 2025) | Accumulated Amortization (June 30, 2025) | Gross Carrying Amount (Dec 31, 2024) | Accumulated Amortization (Dec 31, 2024) | | :--- | :--- | :--- | :--- | :--- | | Trade names and trademarks | $107,000 | $0 | $107,000 | $0 | | Customer relationships | $9,700 | $7,253 | $9,700 | $7,019 | | Covenants not to compete | $6,940 | $4,810 | $13,230 | $10,404 | | **Other intangible assets, net** | **$123,640** | **$12,063** | **$129,930** | **$17,423** | - Amortization expense for finite-lived intangible assets decreased significantly to **$930 thousand** for the six months ended June 30, 2025, from $3,282 thousand in the prior year period[54](index=54&type=chunk) Estimated Future Amortization Expense (Amounts in thousands) | Fiscal Year Ending | Amount | | :--- | :--- | | 2025 (remaining) | $897 | | 2026 | $1,585 | | 2027 | $758 | | 2028 | $433 | | 2029 | $310 | | Thereafter | $594 | | **Total** | **$4,577** | [5. Other Accrued Expenses](index=13&type=section&id=5.%20Other%20Accrued%20Expenses) This note provides a breakdown of other accrued expenses, highlighting a decrease in greenfield development accruals Other Accrued Expenses (Amounts in thousands) | Category | As of June 30, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | Utilities | $7,444 | $6,685 | | Accrued tax expense | $12,028 | $11,485 | | Insurance expense | $6,540 | $4,843 | | Greenfield development accruals | $3,983 | $9,653 | | Other | $4,913 | $6,496 | | **Total other accrued expenses** | **$34,908** | **$39,162** | - Greenfield development accruals decreased from **$9,653 thousand** at December 31, 2024, to **$3,983 thousand** at June 30, 2025[56](index=56&type=chunk)[57](index=57&type=chunk) [6. Income Taxes](index=13&type=section&id=6.%20Income%20Taxes) This note details the effective income tax rate and factors influencing the tax provision - The effective income tax rate for the six months ended June 30, 2025, was **26.8%**, a decrease from 36.1% in the prior year period[58](index=58&type=chunk) - The year-to-date provision for income taxes included a net unfavorable tax impact of **$1,095 thousand** from stock options, significantly lower than the $6,399 thousand impact in the prior year[59](index=59&type=chunk)[60](index=60&type=chunk) - The 'One Big Beautiful Bill Act' (OBBBA) was signed into law on July 4, 2025, and the Company is evaluating its impact[61](index=61&type=chunk) [7. Debt](index=14&type=section&id=7.%20Debt) This note describes the company's long-term debt structure, recent changes, and covenant compliance Long-term Debt (Amounts in thousands) | Category | Maturity | Stated Interest Rate | Effective Interest Rate | As of June 30, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | First lien term loan | Mar 27, 2031 | 6.83% | 6.95% | $853,074 | $920,381 | | Unamortized discount and debt issuance costs | | | | $(4,019) | $(4,367) | | Current maturities of debt | | | | $0 | $(6,920) | | **Total long-term portion of debt, net** | | | | **$849,055** | **$909,094** | - Long-term debt, net, decreased by **$60.0 million** from December 31, 2024, to June 30, 2025, due to principal payments on the First Lien Term Loan[63](index=63&type=chunk) - The Revolving Commitment borrowing capacity increased from $150,000 thousand to **$300,000 thousand** in March 2024, with $299,791 thousand available as of June 30, 2025[69](index=69&type=chunk)[70](index=70&type=chunk) - The Company was in compliance with all debt covenants as of June 30, 2025[74](index=74&type=chunk) [8. Fair Value Measurements](index=16&type=section&id=8.%20Fair%20Value%20Measurements) This note presents the fair value hierarchy for the company's financial assets and liabilities Fair Value Measurements (Amounts in thousands) | Category | Total (June 30, 2025) | Level 1 (June 30, 2025) | Level 2 (June 30, 2025) | Level 3 (June 30, 2025) | | :--- | :--- | :--- | :--- | :--- | | Deferred compensation plan (Assets) | $7,059 | $7,059 | $0 | $0 | | Interest rate swap (Assets) | $466 | $0 | $466 | $0 | | Deferred compensation plan (Liabilities) | $4,266 | $4,266 | $0 | $0 | | Contingent consideration (Liabilities) | $4,328 | $0 | $0 | $4,328 | - The fair value of the First Lien Term Loan approximated its carrying value due to its variable interest rate terms[78](index=78&type=chunk) - The **Level 3 contingent consideration liability** of $4,328 thousand remained unchanged as of June 30, 2025[79](index=79&type=chunk) [9. Interest Rate Swap](index=18&type=section&id=9.%20Interest%20Rate%20Swap) This note details the interest rate swap agreement executed to hedge against interest rate variability - On April 28, 2025, the Company executed a pay-fixed, receive-floating interest rate swap with a notional amount of **$250,000 thousand**[81](index=81&type=chunk) Interest Rate Swap Details (As of June 30, 2025, Amounts in thousands) | Notional Amount | Fair Value | Pay-Fixed Rate | Receive-Floating Rate | Maturity Date | | :--- | :--- | :--- | :--- | :--- | | $250,000 | $466 | 3.369% | 4.327% | June 30, 2027 | - The swap is designated as a cash flow hedge, with changes in fair value recorded in Other comprehensive income (loss), net of tax[39](index=39&type=chunk)[81](index=81&type=chunk) [10. Leases](index=18&type=section&id=10.%20Leases) This note provides comprehensive information on the company's operating and finance leases Lease Balance Sheet Information (Amounts in thousands) | Category | As of June 30, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | Operating right of use assets, net | $905,229 | $924,896 | | Property and equipment, net (Finance) | $11,809 | $12,344 | | Current maturities of operating lease liability | $51,020 | $48,986 | | Operating lease liability (Long-term) | $874,858 | $890,613 | | Financing lease liability (Long-term) | $12,795 | $13,262 | Total Lease Cost (Amounts in thousands) | Lease Cost Component | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Operating lease expense | $30,783 | $27,659 | $61,487 | $54,871 | | Finance lease expense | $488 | $511 | $982 | $1,026 | | Short-term lease expense | $22 | $52 | $39 | $103 | | Variable lease expense | $3,015 | $2,756 | $10,909 | $10,020 | | **Total lease expense** | **$34,308** | **$30,978** | **$73,417** | **$66,020** | - The weighted-average remaining operating lease term is **13.59 years** with a discount rate of **8.13%** as of June 30, 2025[85](index=85&type=chunk) - As of June 30, 2025, the Company had **11 forward-starting leases** for car wash locations[86](index=86&type=chunk) - No sale-leaseback transactions were completed during the three and six months ended June 30, 2025[87](index=87&type=chunk)[88](index=88&type=chunk) [11. Stockholders' Equity](index=19&type=section&id=11.%20Stockholders'%20Equity) This note details the changes in the company's common stock and treasury stock accounts - As of June 30, 2025, there were **327,257,547 shares of common stock outstanding**, an increase from 323,693,863 shares at December 31, 2024[89](index=89&type=chunk) - The Company had **6,172,921 shares of treasury stock** as of June 30, 2025, accounted for using the cost method[91](index=91&type=chunk) [12. Stock-Based Compensation](index=21&type=section&id=12.%20Stock-Based%20Compensation) This note outlines the company's stock-based compensation plans and associated expenses - Stock-based compensation expense is recognized for stock options, restricted stock units (RSUs), and stock purchase rights[92](index=92&type=chunk) Stock-Based Compensation Expense (Amounts in thousands) | Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Cost of labor and chemicals | $2,794 | $2,465 | $5,576 | $4,938 | | General and administrative | $3,683 | $3,441 | $7,744 | $7,214 | | **Total expense** | **$6,477** | **$5,906** | **$13,320** | **$12,152** | - Total unrecognized compensation expense as of June 30, 2025, was **$9,258 thousand** for Time Vesting Options, **$25,919 thousand** for RSUs, and **$289 thousand** for 2021 ESPP stock purchase rights[103](index=103&type=chunk)[104](index=104&type=chunk)[105](index=105&type=chunk) [13. Commitments and Contingencies](index=24&type=section&id=13.%20Commitments%20and%20Contingencies) This note discloses the company's legal proceedings and insurance-related accruals - The Company is involved in various legal proceedings but does not believe any will have a material adverse effect on its financial position[106](index=106&type=chunk) - Accrued insurance claims were **$6,468 thousand** as of June 30, 2025, with corresponding receivables from carriers of $5,622 thousand[107](index=107&type=chunk) [14. Segment Information](index=24&type=section&id=14.%20Segment%20Information) This note confirms the company operates as a single reportable segment - The Company operates as a **single operating segment**, deriving revenue from car wash services across the United States[108](index=108&type=chunk) - The Chief Executive Officer, as the chief operating decision maker (CODM), evaluates consolidated performance primarily through net income and total assets[109](index=109&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on financial condition, results of operations, and key performance indicators [Who We Are](index=25&type=section&id=Who%20We%20Are) Mister Car Wash is the leading U.S. car wash brand, focusing on express exterior services and its subscription program - Mister Car Wash, Inc. is the leading car wash brand in the U.S., operating **522 locations** in 21 states as of June 30, 2025[111](index=111&type=chunk) - The **Unlimited Wash Club® (UWC)** monthly subscription program is a core offering, providing flexible, quick, and convenient services[111](index=111&type=chunk) [Factors Affecting Our Business and Trends](index=25&type=section&id=Factors%20Affecting%20Our%20Business%20and%20Trends) Business performance is influenced by comparable store sales, UWC membership, labor management, and macroeconomic conditions - The Company's business and growth are influenced by factors such as comparable store sales growth, the number and loyalty of UWC Members, and effective labor management[117](index=117&type=chunk) - Potential macroeconomic impacts from tariffs or other factors affecting consumer discretionary income could materially impact the business[113](index=113&type=chunk) [Factors Affecting the Comparability of Our Results of Operations](index=25&type=section&id=Factors%20Affecting%20the%20Comparability%20of%20Our%20Results%20of%20Operations) The ongoing greenfield development of new locations can affect the year-over-year comparability of financial results - The Company's growth strategy includes greenfield development of new locations, which can impact comparability of financial results[115](index=115&type=chunk)[116](index=116&type=chunk) [Key Performance Indicators](index=26&type=section&id=Key%20Performance%20Indicators) The company tracks location count, comparable store sales growth, UWC membership, and profitability metrics Key Performance Indicators (Dollars in thousands) | 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 | | :--- | :--- | :--- | :--- | :--- | | Location count (end of period) | 522 | 491 | 522 | 491 | | Comparable store sales growth | 1.2% | 2.4% | 3.6% | 1.6% | | UWC Members (in thousands, end of period) | 2,228 | 2,126 | 2,228 | 2,126 | | UWC sales as a percentage of total wash sales | 76% | 72% | 74% | 73% | | Net income | $28,595 | $22,091 | $55,595 | $38,728 | | Net income margin | 10.8% | 8.7% | 10.5% | 7.8% | | Adjusted EBITDA | $87,046 | $88,692 | $172,695 | $163,864 | | Adjusted EBITDA margin | 32.8% | 34.8% | 32.8% | 33.2% | - Location count increased by 31 year-over-year to **522** as of June 30, 2025, with 8 greenfield locations added in the first six months of 2025[119](index=119&type=chunk)[120](index=120&type=chunk) - UWC Members grew by approximately **5%** from December 31, 2024, to June 30, 2025, reaching **2.2 million**[119](index=119&type=chunk)[124](index=124&type=chunk)[125](index=125&type=chunk) - Adjusted EBITDA decreased by **1.9%** for the three months ended June 30, 2025, but increased by **5.4%** for the six months ended June 30, 2025[119](index=119&type=chunk) [Results of Operations for the Three Months Ended June 30, 2025 and 2024](index=28&type=section&id=Results%20of%20Operations%20for%20the%20Three%20Months%20Ended%20June%2030%2C%202025%20and%202024) Net revenues increased by 4% to $265.4 million, and net income rose by 29% to $28.6 million Results of Operations - Three Months Ended June 30 (Amounts in thousands) | Metric | 2025 Amount | 2025 % of Revenue | 2024 Amount | 2024 % of Revenue | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Net revenues | $265,415 | 100% | $255,043 | 100% | $10,372 | 4% | | Cost of labor and chemicals | $76,627 | 29% | $72,691 | 29% | $3,936 | 5% | | Other store operating expenses | $108,850 | 41% | $99,543 | 39% | $9,307 | 9% | | General and administrative | $25,113 | 9% | $24,912 | 10% | $201 | 1% | | Operating income | $54,146 | 20% | $55,000 | 22% | $(854) | (2)% | | Interest expense, net | $15,172 | 6% | $20,254 | 8% | $(5,082) | (25)% | | Net income | $28,595 | 11% | $22,091 | 9% | $6,504 | 29% | - Net revenues increased by **$10.4 million (4%)** due to growth in UWC Members, wash package mix, and the addition of 31 locations year-over-year[135](index=135&type=chunk) - Other store operating expenses increased by **$9.3 million (9%)**, primarily due to new locations, increased utilities, maintenance, and rent expenses[137](index=137&type=chunk) - Total other expense, net, decreased by **$5.1 million (25%)**, driven by a $5.1 million decrease in interest expense[140](index=140&type=chunk) [Results of Operations for the Six Months Ended June 30, 2025 and 2024](index=31&type=section&id=Results%20of%20Operations%20for%20the%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) Net revenues grew by 7% to $527.1 million, and net income significantly increased by 43% to $55.6 million Results of Operations - Six Months Ended June 30 (Amounts in thousands) | Metric | 2025 Amount | 2025 % of Revenue | 2024 Amount | 2024 % of Revenue | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Net revenues | $527,071 | 100% | $494,226 | 100% | $32,845 | 7% | | Cost of labor and chemicals | $150,879 | 29% | $144,349 | 29% | $6,530 | 5% | | Other store operating expenses | $218,517 | 41% | $196,346 | 40% | $22,171 | 11% | | General and administrative | $49,772 | 9% | $54,622 | 11% | $(4,850) | (9)% | | Operating income | $107,113 | 20% | $97,545 | 20% | $9,568 | 10% | | Interest expense, net | $31,195 | 6% | $40,278 | 8% | $(9,083) | (23)% | | Net income | $55,595 | 11% | $38,728 | 8% | $16,867 | 43% | - Net revenues increased by **$32.8 million (7%)** due to UWC Member growth, increased retail customer traffic, and the addition of 31 locations[144](index=144&type=chunk) - General and administrative expenses decreased by **$4.9 million (9%)**, primarily due to lower debt refinancing costs and decreased amortization expense[147](index=147&type=chunk)[149](index=149&type=chunk) - Total other expense, net, decreased by **$5.8 million (16%)**, driven by a $9.1 million decrease in interest expense[151](index=151&type=chunk) [Liquidity and Capital Resources](index=34&type=section&id=Liquidity%20and%20Capital%20Resources) The Company's liquidity is deemed sufficient for the next 12 months, supported by cash reserves and available credit - As of June 30, 2025, the Company had **$26.4 million** in cash and cash equivalents and **$299.8 million** in available borrowing capacity[155](index=155&type=chunk) - Net cash provided by operating activities was **$134.4 million** for the six months ended June 30, 2025, an increase from $118.9 million in the prior year[157](index=157&type=chunk)[158](index=158&type=chunk) - Net cash used in investing activities decreased to **$111.3 million** for the six months ended June 30, 2025, from $144.6 million in the prior year[159](index=159&type=chunk)[160](index=160&type=chunk) - Net cash used in financing activities was **$64.0 million** for the six months ended June 30, 2025, a shift from a $10.4 million inflow in the prior year[161](index=161&type=chunk)[162](index=162&type=chunk) [Critical Accounting Policies and Estimates](index=34&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) The company's critical accounting policies, which require significant management judgment, have not materially changed - The preparation of financial statements requires estimates and judgments, particularly for revenue recognition, goodwill, income taxes, and stock-based compensation[163](index=163&type=chunk)[164](index=164&type=chunk) - There have been no material changes to the Company's significant accounting policies during the six months ended June 30, 2025[165](index=165&type=chunk) [Recent Accounting Pronouncements](index=36&type=section&id=Recent%20Accounting%20Pronouncements) This section refers to Note 2 for details on recently issued accounting standards - This section refers to Note 2 of the consolidated financial statements for a discussion of recent accounting pronouncements[166](index=166&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=36&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) There have been no material changes to the Company's exposure to market risk since its 2024 Form 10-K - No material changes in market risk exposure were reported compared to the 2024 Form 10-K[167](index=167&type=chunk) [Item 4. Controls and Procedures](index=36&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective [Disclosure Controls and Procedures](index=36&type=section&id=Disclosure%20Controls%20and%20Procedures) The company's disclosure controls and procedures were evaluated and found to be effective as of June 30, 2025 - Management, with the participation of the CEO and CFO, evaluated and concluded that the Company's disclosure controls and procedures were effective as of June 30, 2025[168](index=168&type=chunk) [Changes in Internal Control over Financial Reporting](index=36&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) No material changes to internal control over financial reporting occurred during the second quarter of 2025 - No changes in internal control over financial reporting occurred during the three months ended June 30, 2025, that materially affected, or are reasonably likely to materially affect, internal controls[169](index=169&type=chunk) [PART II - OTHER INFORMATION](index=37&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) This part covers legal proceedings, risk factors, equity sales, and other required disclosures [Item 1. Legal Proceedings](index=37&type=section&id=Item%201.%20Legal%20Proceedings) No material changes to legal proceedings are reported beyond disclosures in the financial statement notes - No material changes to legal proceedings were reported, other than those in Note 13 of the consolidated financial statements[172](index=172&type=chunk) [Item 1A. Risk Factors](index=37&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the risk factors previously described in the Company's 2024 Form 10-K have occurred - No material changes to risk factors were reported compared to the 2024 Form 10-K[173](index=173&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=37&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities or use of proceeds to report during the period - No unregistered sales of equity securities or use of proceeds occurred[174](index=174&type=chunk) [Item 3. Defaults Upon Senior Securities](index=37&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities to report during the period - No defaults upon senior securities occurred[175](index=175&type=chunk) [Item 4. Mine Safety Disclosures](index=37&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the Company - This item is not applicable[176](index=176&type=chunk) [Item 5. Other Information](index=37&type=section&id=Item%205.%20Other%20Information) This section reports on other information, specifically regarding Rule 10b5-1 trading plan arrangements [Rule 10b5-1 Trading Plan Arrangements](index=37&type=section&id=Rule%2010b5-1%20Trading%20Plan%20Arrangements) No directors or officers adopted, modified, or terminated Rule 10b5-1 trading arrangements during the quarter - None of the Company's directors or officers adopted, modified, or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the three months ended June 30, 2025[177](index=177&type=chunk) [Item 6. Exhibits](index=38&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed or furnished with the Quarterly Report on Form 10-Q - The report includes certifications from the Principal Executive Officer and Principal Financial Officer (Exhibits 31.1, 31.2, 32.1, 32.2)[179](index=179&type=chunk) - XBRL (eXtensible Business Reporting Language) documents are filed herewith, including the Inline XBRL Instance Document and related files[179](index=179&type=chunk) [SIGNATURES](index=39&type=section&id=SIGNATURES) The report is duly signed by the Chief Executive Officer and Chief Financial Officer as of August 1, 2025 - The report was signed on August 1, 2025, by John Lai, Chairperson, President and Chief Executive Officer, and Jedidiah Gold, Chief Financial Officer[182](index=182&type=chunk)

Company Performance - Mister Car Wash reported quarterly earnings of $0.11 per share, missing the Zacks Consensus Estimate of $0.13 per share, representing an earnings surprise of -15.38% [1] - The company posted revenues of $265.42 million for the quarter ended June 2025, missing the Zacks Consensus Estimate by 2.36%, compared to year-ago revenues of $255.04 million [2] - Over the last four quarters, the company has surpassed consensus EPS estimates three times and topped consensus revenue estimates three times [2] Stock Performance - Mister Car Wash shares have lost about 14.3% since the beginning of the year, while the S&P 500 has gained 8.3% [3] - The current consensus EPS estimate for the coming quarter is $0.10 on $263.01 million in revenues, and $0.44 on $1.06 billion in revenues for the current fiscal year [7] Industry Outlook - The Automotive - Replacement Parts industry, to which Mister Car Wash belongs, is currently in the bottom 21% of the Zacks industries, indicating potential challenges ahead [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact stock performance [5][6]