JOINT Corp Q2 FY2025 earnings call

• Becoming a pure-play franchisor momentum: Corporate clinics attracting multiunit franchisee investments. Started Q2 2025 with 13% corporate clinics, refranchised 37 clinics during the quarter to 8%, sold 31 corporate clinics in Arizona and New Mexico for $11.1 million, received $8.3 million cash, bought regional developer rights to Northwest region for $2.8 million.
• Brand positioning and digital marketing: Working with franchisees to increase brand awareness, pivoting to a pain relief message, launching new brand campaign 'Life, Unpaused', investing in marketing infrastructure for search performance.
• Dynamic revenue management: Shifting to more frequent, smaller price increases, introduced Kickstart plan for new patients to charge for supplemental adjustments.
• Patient-facing technology: Launched mobile app beta in June and made it generally available, aiming to extend patient lifetime value with personalized features and gamification.

System-wide sales were $129.6 million, up 2.6%. Comp sales for all clinics opened 13 months were up 1.4% for the quarter. Revenue from continuing operations increased 5% and consolidated adjusted EBITDA grew to $3.2 million, up 52% compared to Q2 2024. Unrestricted cash and equivalents reached $30 million as of June 30, 2025. Revenue contribution: System-wide sales contributed significantly, with continuing operations revenue and adjusted EBITDA also showing growth.

• System-wide sales: Expected range $530 million to $550 million (previously $550 million to $570 million).
• Comp sales: Expected low single-digit increase (previously mid-single-digit increase).
• Consolidated adjusted EBITDA: Expected range $10.8 million to $11.8 million (previously $10 million to $11.5 million).
• New franchise clinic openings: Expected range 30 to 35 (previously 57).

• Actual results may differ materially from forward-looking statements due to various risks and uncertainties, including macroeconomic headwinds, pricing impact on patient acquisition, and marketing effectiveness uncertainties.

Q: George Kelly from ROTH Capital asked about the lowered comp guide.

A: Scott Bowman said it was due to softer sales trends, macro headwinds, and focused on marketing efforts like top-of-funnel work, SEO optimization, and exploring buy now pay later options.

Q: Jeremy Hamblin from Craig-Hallum Capital Group inquired about system sales traffic and price increase.

A: Scott Bowman said it was a traffic problem for new patients, and Sanjiv Razdan mentioned dynamic revenue management, testing pricing, and balancing affordability.

Q: Nick Sherwood from Maxim Group asked about back-office expenses and dynamic revenue management testing.

A: Scott Bowman said near term would see G&A reduction, longer term would look at various expense line items, and Sanjiv Razdan explained dynamic revenue management as taking nominal price increases and testing with franchisees.

Q: Jeff Van Sinderen from B. Riley asked about refranchising timing and regional developer rights.

A: Sanjiv Razdan said intent to exit 2025 as pure-play franchisor, and there are 15 RDs left with ongoing dialogue for buybacks if value creation opportunity exists.