The Joint Corp. (JYNT) Earnings

Management highlights

- Continued progress with Joint 2.0 initiative, entered into agreement to sell 45 company-owned or managed clinics in Southern California, with two other refranchising agreements pending. Now just three clinics remain company-owned or managed. - Completed buybacks of three regional developer territories. - Focused on Joint Corp. 3.0, prioritizing growth through new channels like B2B, expansion into underpenetrated U.S. markets, and potential international entry. - Marketing messaging centered on chiropractic care for pain relief. National marketing and advertising program launched in November, seeing sequential improvement in member growth. SEO and AI visibility optimization work driving higher organic traffic and lead quality. Started B2B partnership program and CareCredit program nationwide. Pricing optimization efforts with $5 to $10 price increases rolled out across ~300 clinics. - Q1 comp sales negative 4.2% due to macro headwinds, but expected to improve throughout the year with national campaign maturation, SEO improvements, and pricing optimization. Active member count per clinic improved for four consecutive months. Patient retention rate improved with more flexible offerings and longer contract minimums.

Guidance

- Reiterating full-year 2026 guidance: system-wide sales $519 million to $552 million, comp sales range negative 3% to positive 3%, consolidated adjusted EBITDA range $12.5 million to $13.5 million, new franchise clinic openings range 30 to 35. - Expect comp sales trends to improve throughout the year, with slightly negative comps in Q2, positive in Q3 and Q4, Q4 higher than Q3. - Once refranchising complete, expect pure-play franchisor model in 2026 with gross margin 83% to 85% of revenues, G&A expense 40% to 42% of revenues, capex ~3% of revenues, free cash flow conversion 60% to 70%.

Segment performance

Revenue from continuing operations grew 13% year-over-year to $14.8 million. Adjusted EBITDA from continuing operations was $2.2 million compared to $46 thousand in Q1 2025. Net income from continuing operations was $1.1 million compared to a net loss of $506 thousand in Q1 2025. Cash flow from operating activities improved by $2.2 million from 2025, helping to drive a $2.3 million improvement in free cash flow over the same period. System-wide sales in the first quarter were $126 million, a decline of 4.9% compared to the same period last year. Comp sales were negative 4.2%. Adjusted EBITDA from consolidated operations grew 22% to $3.5 million. Cost of revenues was $2.7 million, down 8% compared to the same period last year. Selling and marketing expenses were $3.7 million, up 6% compared to the same period last year. G&A expenses increased 2% to $7.1 million. Net income from continuing operations was $1.1 million compared to a net loss of $506 thousand in the same period last year, while consolidated net income was $1.3 million compared to $1 million in the prior-year period. Adjusted EBITDA from continuing operations was $2.2 million compared to $46 thousand in the same period last year. Total clinic count was 943 at the end of the first quarter, compared to 960 at year-end 2025. During the first quarter, 3 clinics opened and 20 closed, resulting in 868 franchise clinics and 75 company-owned or managed clinics.

Analyst Q&A

• Q: Hi, everyone. Just wondering on the timeframe to close the refranchising transactions.

  A: The timing on those is dependent on getting the leases assigned to the new owners, and so that is an ongoing process. Over the next couple of months, we should be very near completion of that lease assignment process.

• Q: I am just trying to get a better sense of what you think are the main drivers of getting the same-store sales turned around.

  A: As we have now practically concluded refranchising, it is going to allow this entire team to be single-mindedly focused on growth outcomes. Based on work started late last year: pivoted external messaging to pain relief, transferred $500 per clinic per month from local marketing to national advertising, got caught up on search engine optimization and optimized for AI search. Patient retention improving with extended minimum contract term and new offering. Pricing rolled out to 300 clinics and expected to extend to rest of enterprise.

• Q: Can you just remind us how many RD rights you still have left to buy back if you wanted to buy those back?

  A: Remaining, we have 12 RD territories.

• Q: This is Will on for Jeremy. Thanks for taking my questions. First, I was just wondering if you could give us a sense of the demand elasticity you have seen in geographies where you have taken the most price, and then also what you have seen in terms of comp impact from that $10 raise.

  A: These price increases are just for new patients. Little or no pushback. Conversion rate not gone down, attrition rate improved. Metrics and operators confirm it is working.

• Q: I was just wondering how we should be thinking about SG&A dollars here post-refranchise for the remainder of 2026, and when you would expect to hit stride with the new go-forward run rate.

  A: Should be mostly on new model in back half of this year. G&A likely to see reductions. Slide shared shows where we expect to land in mid-2026.

• Q: wondering how the new clinic pipeline is shaping up — any new interest from new franchisees versus existing — and the cadence of openings for the remainder of the year to get to the guidance.

  A: Guidance of 30 to 35, confident to get to it. Cadence skewed toward back half. New openings outperformed prior openings, tracking to breakeven times at half the time. Seeing interest from new and existing franchisees. Focus on Northeast, had early successes there.

• Q: Hey, everyone. Thanks for taking my questions. First one is on pricing. Maybe I missed it in your prepared remarks, but did you settle on a $10 pricing increase? Do you expect to take some kind of price across the entire base by year end, or by Q3?

  A: We are leveraging a $10 price increase more, and looking at the analytics and working with the operators, that is the preferred increase that we have right now. We expect to take that price across the base by Q3.

• Q: And then you mentioned the four consecutive months of improved active members. Could you give a sort of comp trend over that same timeframe? Where did you exit the quarter, and what kind of comp growth did you generate? I think you said it was slightly negative. Could you just quantify where comps are trending currently?

  A: To end the quarter, they were similar to the full quarter, negative 4.2% — right in that range. However, once we got into April, we did see some improvement, and so quarter-to-date we are running about negative 3%.

• Q: Last question for me. You mentioned the FDD and your optimism around messaging when that comes out, I presume shortly. If you could, the question I have is just on four-wall margin. Has that stabilized? Do you still hear a lot of input from your franchisees about labor inflation and other aspects of inflation, or do you have a sense that four-wall margin is holding in?

  A: Of course the FDD is due out shortly. Labor wage inflation has stabilized. Input cost structure relatively stable. With active members growing and pricing increases, optimistic about unit-level economics as new pricing starts to kick in early Q3.