Joint Q2 Earnings Call Highlights

Joint’s second-quarter financial performance improved significantly: Revenue rose 14% year over year to $15.2 million, while adjusted EBITDA increased to $1.5 million and free cash flow reached $1.9 million. Patient retention also reached its highest level in more than five years. The company is nearing completion of its shift to a capital-light franchisor model. Clinic transfers are progressing, and Joint expects only three company-owned or managed clinics to remain once the transactions are complete, with the new financial model expected to be fully implemented in the second half of 2026. Full-year 2026 financial guidance was reaffirmed, but the clinic-opening outlook was reduced. Joint maintained its system-wide sales, same-store sales and adjusted EBITDA targets, while lowering expected new franchise openings to 22–26 from 30–35 amid portfolio reshaping and anticipated closures. Joint NASDAQ: JYNT reported second-quarter results that reflected progress in its shift toward a capital-light, pure-play franchisor model, while management said patient retention improved to its highest level in more than five years. Revenue increased 14% year over year to $15.2 million for the quarter ended June 30. Consolidated net income rose to $653,000 from $93,000 in the prior-year period, while adjusted EBITDA from continuing operations increased to $1.5 million from $88,000. Cash flow from operating activities rose 152% to $2.2 million, and free cash flow increased by $1.6 million to $1.9 million. President and CEO Sanjiv Razdan said the results reflected execution on the company’s “Joint 2.0” initiative, including refranchising company-operated clinics, improving patient retention and maintaining disciplined capital allocation. Refranchising Nears Completion The company said its three previously announced clinic-sale bundles are progressing, with buyers operating certain clinics under management service agreements while lease assignments and ownership transfers are completed. In Southern California, ownership has transferred for 32 clinics, while 13 remaining clinics are operated by the buyer under management service agreements. In Northern California, the company has signed an asset purchase agreement covering four clinics. In the Southeast, ownership has transferred for six clinics, while the buyer operates 15 remaining clinics under management service agreements. Once the transfers are finalized, The Joint expects to have three company-owned or managed clinics remaining. Razdan said that position would effectively make the company a capital-light, pure-play franchisor. CFO Scott Bowman said the company expects to receive about $500,000 or slightly less in remaining proceeds from the clinic transfers. He said the timeline depends on working with landlords to complete lease assignments. The company expects the new financial model to be fully in place in the second half of 2026 after the remaining transfers are completed. Its stated starting points for the model include gross margin of 83% to 85% of revenue, general and administrative expenses of 40% to 42% of revenue, capital expenditures of about 3% of revenue, free-cash-flow conversion of 60% to 70%, adjusted EBITDA margin of 19% to 21%, and net income margin of 13% to 15%. Bowman emphasized that these figures are starting points rather than long-term targets. He said management expects additional sales growth to provide an opportunity to leverage the company’s cost structure and expand margins over time, though the company did not provide guidance for 2027 or 2028. Retention, Marketing and Pricing Efforts Same-store sales declined 2.8% in the second quarter, improving by 140 basis points from the first.