The Joint's 2026 Q2 Call: Re-Franchising Timelines and Pro Forma Model Activation Clash Over Proceeds and Completion

Date of Call: Aug 6, 2026

Financials Results

• Revenue: $15.2 million, up 14% YOY

Guidance:

• System-wide sales for the year expected to be $519M to $552M.
• Comp sales expected in the range of -3% to +3%.
• Consolidated adjusted EBITDA expected to be $12.5M to $13.5M.
• New franchise clinic openings for the year expected to be 22 to 26%.
• Clinic count at the end of 2026 expected to be lower than 2025.

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Business Commentary:

Financial Performance and Re-franchising Progress:

• Joint Corporation reported a $560,000 year-over-year improvement in consolidated net income and a $1.4 million increase in adjusted EBITDA from continuing operations.
• Revenue grew 14% year-over-year to $15.2 million.
• The improvements were driven by the continued progress on their re-franchising initiative, disciplined capital allocation, and significant improvement in patient retention levels.

Patient Retention and Membership Growth:

• The company posted its best patient retention rate in over five years, which is a direct result of the new flexible and expanded plan options introduced earlier in the year.
• This focus on retention is aimed at reducing attrition while making their offerings more attractive to patients, contributing to the overall growth in membership and active member trends.

Capital Allocation and Share Repurchases:

• Joint Corporation completed three regional developer territory buybacks, bringing the year-to-date total to four, and repurchased approximately $82,000 worth of shares.
• These actions reflect the company's conviction in the long-term value of the business and commitment to balanced capital deployment, enhancing shareholder returns.

Operating Model and Profitability Outlook:

• The company is transitioning to a capital-light pure play franchisor model with lower G&A expenses and higher profitability margins.
• They anticipate achieving an adjusted EBITDA margin of 19% to 21% and net income margin of 13% to 15% once the full benefit of re-franchising is realized, expected to be completed by the back half of 2026.

Sentiment Analysis:

Overall Tone: Positive

• CEO stated 'second quarter was a period of continued execution' and that 'the joint is now reshaped with a capital light operating model with lower G&A expense and higher profitability margins.' CFO noted 'our operating model improvements are progressing as expected' and reiterated full-year financial guidance.

Q&A:

• Question from Nicholas Sherwood (Maxim Group): How are you operating in this new AI search environment? What are you doing to optimize digital marketing?
  Response: Company uses local franchise feedback, a dedicated digital marketing team tracking algorithm changes, and multiple measurement systems to stay ahead. AI visibility score improved from low 70s to high 70s, keeping them competitive.

• Question from Nicholas Sherwood (Maxim Group): What are the reasons patients lapse, and how are you targeting them to return?
  Response: Primary reasons for lapsing are pain relief, time, and money. Lapsed patients have fond memories and are willing to return. Company is targeting digital and local marketing towards them, with a current August promotion, and new flexible pricing plans have increased conversion rates.

• Question from George Kelly (Roth Capital Partners): Can you provide more detail on comp performance trends throughout Q2 and expectations for the back half?
  Response: Comps improved towards the end of Q2 and into July, slightly better than Q2's -2.8%. Expect comps to be better in the back half, with Q4 higher than Q3. Pricing initiatives are helping in the low single-digit range.

• Question from George Kelly (Roth Capital Partners): Can you provide more context on the pro forma profitability slide and expectations for margin improvement?
  Response: The slide represents a starting point for the new pure-play franchisor model, not long-term targets. Margins are expected to improve with sales growth and leverage. Some one-time re-franchising costs (~$500k) will not recur. Further cost optimization opportunities will become clearer post-re-franchising.

• Question from George Kelly (Roth Capital Partners): What are the remaining proceeds and expected timeline to complete re-franchising?
  Response: Remaining proceeds are approximately $500k, potentially slightly less. The process involves lease assignments and working with landlords; it is largely complete but will continue as management service agreements are in place for some clinics.