What were the key takeaways from Driven Brands's earnings call?

What guidance did Driven Brands's management provide for the next earnings period?

What factors drove the changes in Driven Brands's revenue and profit?

What is the revenue and EPS growth rate for Driven Brands year over year?

What does Driven Brands do and what are its main business segments?

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What were the key takeaways from Driven Brands’s earnings call?

- **Revenue Growth**: Q3 revenue up 7% YoY, driven by Take 5's 6.8% same-store sales growth and 13.5% revenue expansion.
- **Store Expansion**: 170 new Take 5 locations expected in 2025, with 900 franchise pipeline sites.
- **Non-Oil Services**: 25% of Take 5 sales from non-oil services, attachment rates rising to low-50s.
- **Leverage Reduction**: Net leverage down to 3.8x, targeting 3x by end-2026.
- **Q4 Caution**: Narrowed full-year guidance due to macroeconomic risks, expecting Q4 same-store sales at 1%-3% low end.
- **Collision Resilience**: Franchise segment EBITDA margins 66%, IMO car wash up 4% YoY despite weather challenges.

**【CEO Summary Section】**
- **Strong Q3 Performance**: Revenue grew 7% YoY, with system-wide sales up 5% and same-store sales rising 3%. Take 5 Oil Change delivered 6.8% same-store sales growth and 13.5% revenue growth.
- **Store Expansion**: Opened 38 net new stores in Q3, with 170 new Take 5 locations expected for 2025. Franchise pipeline includes 900 potential sites, 1/3 of which are secured.
- **Non-Oil Change Growth**: Non-oil services account for 25% of Take 5 sales, with attachment rates increasing to low-50s from mid-40s. Differential fluid service rollout shows strong margins and customer feedback.
- **Franchise & Car Wash Strength**: Franchise segment EBITDA margins improved to 66%, while IMO car wash segment grew 4% YoY with 28% margins.
- **Macroeconomic Caution**: Narrowed full-year guidance due to government shutdown risks, expecting Q4 same-store sales at the low end of 1%-3% range.
- **Organizational Changes**: Appointed Mo Khalid as COO and Tim Austin as Take 5 President to drive operational rigor and growth.

**【CFO Financial Commentary】**
- **Financial Highlights**: Q3 revenue $535.7M (+6.6% YoY), adjusted EBITDA $136.3M (+15% YoY). Take 5 contributed 75% of EBITDA with $107.3M, up 15% YoY.
- **Leverage Reduction**: Net leverage dropped to 3.8x, down from 4.1x in Q2, with $171M debt reduction. Target 3x by end-2026.
- **Cash Flow**: Free cash flow $51.9M, used to pay down debt and refinance $500M securitized notes to extend maturity and reduce interest costs.
- **Full-Year Guidance**: Revenue $2.1B-$2.12B, EBITDA $525M-$535M, EPS $1.23-$1.28. CapEx near high end of 6.5%-7.5% of revenue range.

**【Q&A Key Highlights】**
- **Take 5 Unit Growth**: 170+ new units expected annually, with franchisees on 2nd/3rd area development agreements. Media mix model optimizes ad spend for higher ROI.
- **Franchise Segment**: Sequential improvement in Maaco and CARSTAR, but ongoing headwinds. Collision repair program trends reflect industry-wide claim avoidance and total loss rates.
- **Macroeconomic Impact**: Q4 choppiness due to government shutdown and consumer uncertainty, but Take 5 remains resilient with 10-minute oil change model.
- **Labor Market**: Stable hiring and retention across segments, with no significant cost pressures.
- **Collision Industry**: Driven collision businesses take share despite industry-wide estimate declines, driven by service quality and franchisee support.

Driven Brands Holdings Inc. (DRVN) Q3 2025 Earnings Call Transcript

- **Take 5 dominance**: 7% same-store sales growth, 20% non-oil revenue, and 35.6% EBITDA margin highlight industry-leading performance.
- **Debt reduction success**: $445M debt paid down YTD, net leverage 3.9x (pro forma), with 94% fixed-rate debt at 4.6%.
- **Franchise resilience**: $45M EBITDA (61% margin) despite 1.5% Maaco decline; franchisees remain financially healthy.
- **IMO outperformance**: 19% same-store sales growth vs. 27% Q4 2024, with moderation expected in H2.
- **2025 guidance**: Revenue $2.05-2.15B, EBITDA $520-550M, EPS $1.15-1.25, 1-3% same-store sales growth.

**【CEO Summary Section】**
- Q2 2025 revenue grew 6% YoY to $551 million, driven by Take 5 Oil Change's 14.7% revenue growth and 184 net new stores over 12 months.
- Take 5 achieved 7% same-store sales growth, with non-oil change services accounting for 20% of sales, up from 18% last quarter.
- Franchise segment delivered $45 million in adjusted EBITDA (61% margin), despite 1.5% same-store sales decline in Maaco and collision repair softness.
- International Car Wash (IMO) segment reported 19% same-store sales growth and $27 million EBITDA, though growth expected to moderate in H2.
- Debt reduction: Monetized $113 million seller note from U.S. Car Wash sale, reducing net leverage to 3.9x (pro forma) vs. 4.1x at quarter end.
- 2025 guidance: Revenue $2.05-2.15 billion, EBITDA $520-550 million, EPS $1.15-1.25, same-store sales 1-3%.

**【CFO Financial Commentary】**
- GAAP net income: $11.8 million; adjusted EBITDA: $143 million (flat YoY). Adjusted EPS: $0.36 (down $0.01 YoY due to PH Vitres divestiture).
- Operating expenses rose $84.2 million YoY, driven by store expansion, SG&A investments, and one-time costs (e.g., $14.1M sale-leaseback proceeds).
- Free cash flow: $31.9 million (operating cash flow - CapEx). Year-to-date debt reduction: $445 million, with 94% of debt fixed-rate at 4.6%.
- 2025 outlook: Interest expense $130-135 million, tax rate 28-30%, CapEx 6.5-7.5% of revenue.

**【Q&A Highlights】**
- **Take 5 profitability**: Mid-30% EBITDA margin sustained at 35.6% in Q2, with differential fluid service rollout contributing to non-oil growth.
- **Franchise health**: Franchisees in Meineke, Maaco, and CARSTAR remain healthy despite softness in discretionary spending; no material closures reported.
- **Tariff risk**: Diversified supply chain and non-discretionary service model mitigate tariff impacts; no material changes since Q1 update.
- **Unit growth**: 175-200 net new stores expected in 2025, with Take 5 targeting 150+ annual openings.
- **Car Wash moderation**: IMO same-store sales growth expected to slow in H2 due to weather and base effects (Q4 2024 +27%).

Driven Brands Holdings Inc. (DRVN) Q2 2025 Earnings Call Transcript

- **Revenue Growth**: 7.1% YoY to $516M, driven by 177 net new stores and 0.7% same-store sales growth.
- **Debt Reduction**: $290M debt paid since Q1 2024, targeting 3.0x net leverage by 2026.
- **Take 5 Dominance**: 8% same-store sales growth, 15% revenue growth, 13.5% EBITDA growth. Non-oil services 20% of sales.
- **Franchise Softness**: Maaco-driven 2.9% sales decline, but 61.9% EBITDA margin resilience.
- **Tariff Resilience**: Minimal exposure via USMCA, pricing power mitigates cost increases.
- **H2 Momentum**: 50-55% revenue/EBITDA contribution, Take 5 growth moderating from larger base.

**【CEO Opening Remarks】**
- Q1 2025 revenue of $516 million, up 7.1% YoY, driven by 177 net new stores and 0.7% same-store sales growth.
- Generated $0.27 adjusted EPS and $125 million adjusted EBITDA.
- Repaid $290 million in debt since Q1 2024, with total debt reduction of $500 million since 2024.
- U.S. Car Wash divestiture completed, freeing up $385 million in proceeds for debt repayment.

**【COO Business Update】**
- **Take 5 Oil Change**: 8% same-store sales growth (19th consecutive quarter), 15% revenue growth, 13.5% EBITDA growth to $100.9 million. 22 net new units opened in Q1, 168 over 12 months. Non-oil services now 20% of sales, premium oils used in 90% of changes.
- **Franchise Brands**: 2.9% same-store sales decline, driven by Maaco softness. Adjusted EBITDA margin 61.9%, down 40bps. 19 units closed due to franchisee departure.
- **International Car Wash**: 26% same-store sales growth, 25% revenue growth, 36% EBITDA growth. Margins improved 280bps to 35.9%.

**【CFO Financial Review】**
- Q1 operating income $61.3 million (-11.3% YoY), adjusted EBITDA $125.1 million (+1.9%). EBITDA margin 24.2%, down 120bps due to higher store expenses and SG&A.
- Net income $17.5 million, adjusted net income $44.2 million. Free cash flow $27.6 million, used to reduce debt by $43 million.
- Net leverage 4.3x, target 3.0x by end-2026. Term loan reduced to $81 million post-Car Wash sale.

**【Q&A Highlights】**
- **Take 5 Margin Pressure**: 50bps EBITDA margin decline due to repair/maintenance and rent costs. Offset by 8% sales growth and premium oil pricing power.
- **Maaco Softness**: Discretionary nature of paint jobs, but 55-year brand stability. Plans to improve performance in H2.
- **Tariffs Impact**: Minimal exposure via USMCA, domestic/Mexican sourcing. Pricing power and diversified supply chain mitigate risks.
- **Franchise Growth**: Target 150+ new Take 5 units/year, 2 franchises per corporate store. Franchisees confident in 70+ NPS loyalty.
- **2025 Outlook**: 1-3% same-store sales growth, 50-55% revenue/EBITDA contribution from H2. Take 5 growth moderating as base expands.

Driven Brands (DRVN)-6 May 25-2025 Q1 Earnings call transcript

- **Take 5 Dominance**: 16% revenue growth, 21% EBITDA growth in 2024. 9.2% Q4 same-store sales driven by non-oil services (20% of revenue) and premium oil adoption (35% advanced synthetic).
- **Debt Reduction Progress**: $248M paid in 2024, targeting <3x leverage by 2026. Q1 2025 already saw $35M additional debt paydown.
- **Franchise Expansion**: 108 new franchise stores in 2024, pipeline of 1,000+ sites. Target 50% Take 5 locations franchised over time.
- **Resilient Earnings**: Adjusted EBITDA $553M (+7% YoY) despite macro challenges. 2025 outlook reflects cautious macro assumptions but confident in Take 5's growth trajectory.


**【CEO Opening Remarks】**
- **2024 Performance Highlights**: Q4 revenue of $564M (+2% YoY), full-year revenue $2.3B (+1.5% YoY). Adjusted EBITDA $553M (+7% YoY). Take 5 Oil Change grew 16% in revenue and 21% in EBITDA.
- **2025 Priorities**: Deliver on financial outlook, reduce debt to <3x leverage by 2026, and active portfolio management. Announced sale of U.S. car wash business, expected to close in Q2.
- **Take 5 Growth**: 174 net new stores in 2024 (1,181 total), 9.2% Q4 same-store sales growth. Franchisees now account for ~40% of locations, with pipeline of 1,000+ sites.

**【COO Business Segment Review】**
- **Take 5 Oil Change**: 18th consecutive quarter of same-store sales growth (9.2% Q4, 6.8% FY24). Non-oil change services (filters, coolant, etc.) account for 20% of revenue. Premium oil adoption (35% advanced synthetic) driving margin expansion.
- **Franchise Businesses**: >50% of system sales from sticky commercial partners. Collision repair segment (+1% Q4 same-store) outperformed industry (-7% industry-wide estimates).
- **Auto Glass Now**: Early-stage growth with partnerships in insurance and commercial sectors. Q4 saw sequential same-store sales improvement.

**【CFO Financial Overview】**
- **Q4 2024 Results**: Adjusted EBITDA $130.7M (+4.6% YoY), net loss $312M (impacted by $318M asset impairments). Debt reduced by $248M in FY2024, ending at 4.4x net leverage.
- **2025 Outlook**: Revenue $2.05B-$2.15B, EBITDA $520M-$550M, EPS $1.15-$1.25. Net store growth 175-200 units, CapEx 6.5%-7.5% of revenue.
- **Leverage Target**: Aim to reach <3x by end-2026, using free cash flow ($125M-$130M interest expense in 2025) to pay down debt.

**【Q&A Key Takeaways】**
- **Take 5 Growth Drivers**: Non-oil services (20% of revenue), premium oil adoption (35% advanced synthetic), and 1,000+ pipeline sites. Q4 9.2% same-store growth seen as elevated, 2025 guide assumes normalization.
- **Debt Reduction**: $248M paid in 2024, additional $35M in Q1 2025. Proceeds from U.S. car wash sale (~$50M EBITDA) will further accelerate deleverage.
- **Franchise Mix**: Target 50% Take 5 locations franchised over time. Franchisees signed 108 new stores in 2024, driving unit economics and cash flow.
- **Macro Resilience**: Needs-based businesses (collision repair, oil changes) outperformed industry in Q4. 2025 guide reflects cautious macro outlook but confident in Take 5's growth engine.


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