CarParts.com, Inc. Q1 FY2026 earnings call

• Achieved first positive adjusted EBITDA since Q1 2024, with a swing of nearly $7 million from Q1 2025.
• Established two frameworks: measuring profitability by contribution margin dollars and focusing on long-term free cash flow; strategic framework of building digital and physical layers of the business.
• 8 premium partnerships' annualized revenue run rate approaching $45 million, with path to $50 million and potentially over $100 million.
• J.C. Whitney 30,000 SKU catalog with 7,000 live on Amazon and scaling; $8 million private placement for inventory investment.
• Last mile delivery pilot with target of 300,000 packages in 12-24 months for big and bulky parts.
• Two AI systems in production: Spark and Zap; branch office in Taipei for supply chain strengthening.
• Responded to industry headwinds like oil price increase and weather-related order volume reduction with pricing actions.
• Launched CarParts.com MasterCard for customer loyalty, part of Capital Life fee income platform.

In the first quarter of 2026, carparts.com achieved a milestone with positive adjusted EBITDA of $585,000, a swing of nearly $7 million from the same quarter last year. The 8 premium partnerships have an annualized revenue run rate approaching $45 million, up from $35 million at year end. The J.C. Whitney branded product line launched in March, with 7,000 SKUs live on Amazon and revenue growing week over week. The company has been building digital and physical layers of the business, with AI systems Spark (customer-facing shopping assistant) and Zap (internal system automating returns, etc.) in production. A branch office in Taipei was opened to strengthen supply chain relationships. The CarParts.com MasterCard was launched, with cardholders earning cash back on purchases.

• Path to sustainable free cash flow runs through growing contribution margin dollars, lower fixed cost base, and improving capital efficiency as J.C. Whitney and A. Freeman scale.
• Requires continued execution, no shortcut, and building a more resilient model.

• Industry headwinds: oil prices increased ~50% driving freight costs and fuel surcharges, weather in Jan-Feb reduced order volume.
• AIPA tariff claims: estimated up to $4.3 million in outstanding claims pursued through CBP process, not built forward plan around but noted as potential cash source.