Loading...
01/09 19:55
Loading...
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call presents a mixed outlook: strong performance in segments like International Car Wash and Take 5 Oil Change contrasts with declining Franchise Brands sales and EBITDA margin pressures. Management's confidence in cost management and strategic growth in areas like Auto Glass is positive, but lack of specific guidance and franchise challenges balance this. The market cap suggests moderate sensitivity, but the absence of significant catalysts or clear guidance keeps the sentiment neutral, expecting minor fluctuations within -2% to 2%.
Revenue $516 million, up 7.1% year-over-year, supported by 177 net new stores and 0.7% same-store sales growth.
Adjusted EBITDA $125 million, an increase of 1.9% year-over-year, with adjusted EBITDA margin at 24.2%, a decrease of roughly 120 basis points due to increased operating expenses.
Diluted Adjusted EPS $0.27, up $0.02 year-over-year, driven by strong operating performance and continued debt paydown.
Operating Income $61.3 million, a decline of $6.8 million year-over-year, attributed to increased operating expenses.
Net Interest Expense $36.5 million, $7.2 million lower than Q1 last year, driven primarily by ongoing debt paydown.
Free Cash Flow $27.6 million, driven by strong operating performance.
Net Leverage Ratio 4.3 times net debt to adjusted EBITDA, reflecting a debt paydown of $43 million in the quarter.
Same-Store Sales Growth (Take 5 Oil Change) 8%, marking its 19th consecutive quarter of positive same-store sales.
Same-Store Sales Growth (Franchise Brands) Declined by 2.9%, primarily driven by softness in Maaco.
Same-Store Sales Growth (International Car Wash) 26.2%, driven by improved operations and expanded service offerings.
Adjusted EBITDA (Take 5 Oil Change) $100.9 million, reflecting growth of 13.5% compared to Q1 2024.
Adjusted EBITDA (Franchise Brands) $44.4 million, a decline of $3.2 million year-over-year, driven by a decline in revenue.
Adjusted EBITDA (International Car Wash) $24.4 million, an increase of $6.4 million year-over-year.
Net Capital Expenditures $47.5 million, consisting of $56.2 million in gross CapEx, offset by $8.7 million in sale leaseback proceeds.
Take 5 Oil Change Growth: Take 5 Oil Change delivered same-store sales growth of 8% for the quarter, marking its 19th consecutive quarter of positive same-store sales. Revenue growth of 15% and adjusted EBITDA growth of 14% were also reported.
New Store Openings: Driven Brands opened 177 net new stores over the past 12 months, with 22 net new units in Q1 2025.
U.S. Car Wash Business Sale: The U.S. Car Wash transaction closed on April 10, 2025, generating approximately $385 million in proceeds, primarily used for debt repayment.
International Car Wash Performance: The International Car Wash segment reported same-store sales growth of 26%, with revenue and adjusted EBITDA increasing by 25% and 36%, respectively.
Debt Repayment: Driven Brands has paid down nearly $290 million in debt since the beginning of 2025, totaling over $0.5 billion since 2024.
Adjusted EBITDA Margin: Adjusted EBITDA margin for Q1 was 24.2%, a decrease of roughly 120 basis points compared to Q1 of last year.
Deleveraging Strategy: The company aims to reduce net leverage to 3 times by the end of 2026, with free cash flow primarily allocated for debt reduction.
Focus on Non-Discretionary Services: Driven Brands emphasizes its portfolio of non-discretionary services to mitigate risks associated with economic uncertainty.
Regulatory Issues: The company is mindful of potential impacts from tariffs on its business, particularly regarding margin and demand. They have analyzed the situation and believe their diversified sourcing strategy and pricing power will help mitigate foreseeable risks.
Supply Chain Challenges: The company has a geographically diversified supply chain and sources a significant portion of products from domestic suppliers, Mexico, and Canada. They are prepared for potential cost increases due to tariffs but believe their pricing power will help manage these impacts.
Economic Factors: Declining consumer sentiment could affect frequency among more discretionary brands and services, particularly Maaco. The company remains cautious about the potential impact of worsening consumer sentiment on certain segments of their business.
Competitive Pressures: The company acknowledges that while their business model is resilient, they are aware of the competitive pressures that may arise, especially in discretionary segments.
U.S. Car Wash Transaction: The sale of the U.S. Car Wash business closed on April 10, 2025, with proceeds primarily used to repay debt, supporting the company's priority of deleveraging.
Take 5 Oil Change Growth: Take 5 Oil Change continues to be a key growth engine, with 8% same-store sales growth and a robust pipeline of approximately 1,000 sites, aiming for at least 2,000 locations over the next 5 years.
Deleveraging Strategy: Driven Brands aims to reduce net leverage to 3 times by the end of 2026, with free cash flow primarily allocated to debt reduction.
Tariff Management: The company is actively managing potential tariff impacts through a diversified supply chain and pricing power.
Fiscal 2025 Outlook: The company reiterates its fiscal 2025 outlook for revenue, same-store sales, net store growth, adjusted EBITDA, and adjusted diluted EPS.
Second Half 2025 Expectations: The second half of 2025 is expected to contribute a percentage in the low 50s for full year revenue and adjusted EBITDA.
CapEx Guidance: Net CapEx is projected to be approximately $70 million less than last year.
Free Cash Flow Utilization: The majority of free cash flow will be used for reducing outstanding debt on both the revolver and term loan.
Shareholder Return Plan: Driven Brands announced the sale of its U.S. Car Wash business for approximately $385 million, with gross cash proceeds of $255 million and a seller note of $130 million. The majority of the net proceeds from this sale will be used to pay down debt, with a total of $290 million repaid since the beginning of the year and over $0.5 billion since the start of 2024. This debt reduction is part of their strategy to achieve a net leverage target of 3 times by the end of 2026.
Debt Paydown: As of Q1 2025, Driven Brands has paid down a total of $246 million against its term loan, resulting in an outstanding balance of approximately $81 million. This reduction is expected to save the company more than $15 million in annualized interest expense.
The earnings call reflects a mixed outlook. Strong financial metrics and optimistic guidance are countered by challenges in specific segments like Car Wash and Franchise Brands, and ongoing consumer uncertainty. The Take 5 model shows promise with unique offerings and growth potential, but choppiness and pressure on lower-income consumers present risks. Positive elements like successful differential service rollout and stable labor market are balanced by concerns about industry-wide trends and lack of specific guidance in some areas. Overall, the sentiment is neutral, with no clear catalysts for strong stock movement.
The earnings call highlights strong financial performance, growth in key segments like Take 5 Oil Change, and a strategic focus on debt reduction, which are positive indicators. The Q&A revealed management's optimism about non-oil change services, the glass business, and Take 5's market position. Despite some softness in collision and discretionary spending, management is confident in their growth strategy and market share gains. The market cap suggests moderate volatility, leading to a predicted positive stock price movement of 2% to 8% over the next two weeks.
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
