Driven Brands Hldgs Q2 2026 Earnings Call: Complete Transcript

Driven Brands Hldgs (NASDAQ: DRVN ) released second-quarter financial results and hosted an earnings call on Thursday. Read the complete transcript below. APIs provide real-time access to earnings call transcripts and financial data. Visit to learn more.

The full earnings call is available at Summary Driven Brands Holdings reported a 7% increase in revenue to $507 million and adjusted EBITDA of $107 million in Q2 2026. 6 billion. The company added 192 net new stores over the last 12 months, expanding their footprint by 5% to over 4,300 locations, with significant growth led by the Take 5 segment. 6% increase this quarter and systemwide sales growth of 13%.

5% increase in same-store sales and an adjusted EBITDA margin of 59%. Driven Brands is focused on managing inflationary pressures in oil costs and expects to implement modest price increases to offset input costs. 05 billion, and adjusted EBITDA between $430 million and $460 million, leaning towards the lower end due to macroeconomic uncertainties. 1 times.

Management emphasized the potential long-term growth of the Auto Glass Now segment, despite uneven performance in the short term. Driven Brands rejected an acquisition proposal, citing that it undervalued the company and was not in the best interest of shareholders. Full Transcript OPERATOR Thank you for standing by. My name is Matt, and I will be your conference operator today.

At this time, we would like to welcome everyone to the Driven Brands Hldgs second quarter 2026 earnings call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. I would now like to turn the conference over to Steve Alexander, Investor Relations.

You may begin. Steve Alexander, Senior Director Investor Relations Good morning. Welcome to Driven Brands Hldgs second quarter 2026 earnings conference call. com.

On the call with me today are Danny Rivera, President and Chief Executive Officer, and Mike Diamond, Executive Vice President and Chief Financial Officer. In a moment, Danny and Mike will walk you through our financial and operating performance for the quarter. Before we begin our remarks, I would like to remind you that management will refer to certain non-GAAP financial measures. You can find the reconciliations to the most directly comparable GAAP financial measures on the company's investor relations website and in its filings with the Securities and Exchange Commission.

During this call we will also make forward-looking statements regarding our current plans, beliefs, and expectations. These statements are not guarantees of future performance and are subject to a number of risks, uncertainties, and other factors that could cause actual results and events to differ materially from results and events contemplated by these forward-looking statements. Please see our earnings release and our filings with the Securities and Exchange Commission for more information. Today's remarks will be followed by a question-and-answer session.

We ask that you limit yourself to one question and one follow-up. Now I'll turn the call over to Danny. Danny R. Rivera, Chief Executive Officer Good morning, and thank you for joining us to discuss Driven Brands Hldgs second quarter 2026 financial results.

Driven delivered another quarter of positive same-store sales and continued growth, led once again by Take 5. 1 times for the quarter compared to prior year. 6 billion, revenue grew 7% to $507 million, and adjusted EBITDA was $107 million. 4%, and we grew our total footprint 5% to more than 4,300 locations, adding 192 net new stores over the last 12 months.

With growth once again led by Take 5, our strategy remains consistent: drive strong growth through Take 5 and generate reliable free cash flow from Franchise Brands. That combination of growth and cash allows us to invest in our highest-return opportunities while continuing to strengthen the business. The operating environment remains dynamic and is being shaped by several factors, starting with a K-shaped consumer economy in which lower-income households remain under significant pressure.

Moreover, renewed conflict in the Middle East has disrupted energy markets, driving volatility in oil prices and supply and pushing gas prices higher, which weighs directly on consumers and demand. While the broader industry is facing supply chain pressure, our scale and strong supplier relationships mean we do not foresee near-term supply concerns. Absent a significant change in conditions, our largely non-discretionary portfolio is built to perform in exactly this kind of environment. That said, resilient does not mean impervious, so we are approaching the back half of the year with caution and a disciplined focus on execution.

Let me start with Take 5, home of the stay-in-your-car 10-minute oil change. 6% and systemwide sales growth of 13%. 2%, reflecting the underlying strength of the business. As we lap a strong prior-year period, adjusted EBITDA grew 8% with margins of 34%.

We opened 50 net new Take 5 locations in the quarter and have grown the segment by more than 175 stores over the past 12 months, ending the quarter with more than 1,400 locations. The Take 5 model continues to resonate with our customers. Our net promoter scores remain in the mid-70s, and we continue to see meaningful contribution from our non—oil change services, which represented almost 30% of Take 5 sales for the quarter.

Our new unit pipeline remains robust at approximately 800 locations, more than one third of which are site-secured or further along, and we remain committed to opening 150 or more units annually as we progress toward our long-term goal of more than 2,500 total locations. That said, we continue to watch the consumer closely. As we noted last quarter, we are seeing some moderation, particularly among newer customers and lower-income consumers who have been under sustained pressure.

We are at our best when we are the fastest, friendliest, and simplest oil change on the planet, and the team remains focused on delivering that value proposition and on building lasting customer relationships. We believe the largely non-discretionary nature of our services positions us well as we manage through a more dynamic macro environment. A brief word on input costs. Like the broader market, we have seen upward pressure on oil and related input costs in recent months.

Here, Take 5’s scale is an advantage: we benefit from strong, long-standing supplier relationships, a diversified supply chain and healthy product availability, and a seasoned procurement team that continues to manage supply and cost effectively. We have a track record of taking modest, disciplined price increases to offset rising input costs, and we will keep managing that lever thoughtfully while staying focused on protecting the value we deliver to our customers. Turning to Franchise Brands. Home to iconic brands like Meineke, Maaco, and CARSTAR, this segment did exactly what it is designed to do: generating reliable, high-margin cash flow.

5%, and the segment delivered strong adjusted EBITDA margins of 59%. Performance was led by continued strength at Meineke and collision. While the broader industry remained under pressure, we continue to outperform, taking share and running approximately 200 basis points ahead of the industry. Maaco, our most discretionary brand, also remains under pressure, consistent with the trends we have previously discussed.

Even so, this segment continues to be a dependable source of cash that funds our growth. 6% and continued to make steady progress. Since entering the automotive glass market, we have scaled Auto Glass Now into the second-largest operator in the industry, and we see long growth runway ahead. The glass market is large, fragmented, and growing, and we have meaningful opportunity to expand across our retail, commercial, and insurance channels and to continue taking share over time.

As a reminder, this business remains in its incubation period, and performance will be uneven from quarter to quarter. But we are encouraged by the foundation we have built and by the long-term opportunity in front of us. Before turning to our outlook, let me spend a moment on our financial foundation. We remain focused on strengthening the foundation of Driven Brands Hldgs, continuing to invest in our people, systems, and processes, and we are making solid progress.

This work positions us to operate with greater discipline and consistency as we execute our strategy. 05 billion, same-store sales of flat to 2%, and net new unit growth of 160 to 190 units. We are also reiterating our adjusted EBITDA range of $430 million to $460 million. That said, consistent with our approach to providing you visibility into key developments and based on what we are seeing today, we expect to be closer to the lower end of our range.

Given the continued uncertainty around consumer demand, particularly among lower-income households, and the conflict in the Middle East, we believe a measured posture is appropriate in a dynamic environment. Mike will take you through the details in a moment. Let me close with a few key takeaways. First, we delivered another quarter of positive same-store sales growth across all segments.

Second, Take 5 again led the way with another quarter of strong, consistent growth and its 24th consecutive quarter of same-store sales growth. Third, our Franchise Brands segment continued to serve as a reliable, high-margin cash generator. And finally, we remain firmly committed to our capital allocation priorities, including reaching our target of three times net leverage by the end of 2026. I want to thank our more than 7,000 Driven Brands Hldgs team members and our franchise partners for their continued dedication and execution.

Their commitment to taking care of our customers every day is what drives our results. With that, I'll turn it over to my partner and Driven CFO, Mike. Mike Diamond, Chief Financial Officer Thank you, Danny, and good morning, everyone. We are pleased to return to a normal reporting cadence for Q2 and deliver another quarter of same-store sales growth across all our segments.

S. and international car wash businesses, the results for those businesses are included in discontinued operations and are not included in quarterly financial details provided today unless otherwise noted. 4% and added 42 net new units. 6 billion.

8% year over year. 8 million in non-recurring restatement costs, and approximately $4 million of out-of-period costs. Restatement costs were approximately $3 million below our initial Q2 expectations. We expect those costs to shift into Q3 as we complete our audit work on our whole business securitization financials.

9 million. This increase in operating expenses was offset by a decline in SG&A. 7 million, or 8% of system-wide sales. 2% of system-wide sales, in line with our expectation as a growing multi-business platform with both franchise and company operations.

1 million in Q2, driven primarily by the increase in revenue. 9 million to $107 million for the quarter. 4%. 1%, a decrease of approximately 300 basis points versus Q2 2025, driven primarily by restatement costs.

8 million, driven primarily by ongoing debt paydown. 8 million. 3 million. 2 million.

29. 6%, in line with our expectations for Q2, and added 50 net new units in the quarter, of which 24 were franchised units. 9 million, driven by sales growth. Adjusted EBITDA margin decreased roughly 70 basis points, driven by inflation in store operating expenses.

5% increase in same-store sales. 4 million, driven primarily by the sale of our two remaining company-operated collision locations. 4 million, driven by increased technology costs and select investments in people to drive future growth. 6% in Q2.

5 million, driven primarily by the out-of-period costs. Turning to cash flow and leverage, our cash flow statement shows a consolidated view of cash flow inclusive of discontinued operations. 7 million versus Q2 2025, primarily driven by the lapping of CapEx from our divested car wash businesses. 2 million from Q2 2025.

1 times net leverage and remain on track to achieve our target of three times by year end with strong cash flow generation. As previously stated, we remain committed to achieving three times net leverage and will communicate our go-forward capital allocation plans at the appropriate time. As we look to the back half of the year, we want to provide our thoughts on current trends and expectations for the rest of 2026. Sales, we expect current trends to continue in the back half of the year.

For Take 5, we expect softness from lower-income consumers will continue to pressure sales growth. We expect Franchise Brands to continue with flat to modestly positive growth in same-store sales. Given the ongoing softness in Maaco and modest normalization in collision restatement costs, we expect restatement costs to be at the top end of our initial $35 to $45 million range. We continue to view these costs as non-recurring in nature and not reflective of the underlying earnings power of the business.

Adjusted EBITDA, we are maintaining the range, which contemplates a variety of macroeconomic scenarios. However, as Danny mentioned, we expect to be closer to the low end of the range. Based on where we stand today, we see ongoing uncertainty from the lower-income consumer, in the Middle East conflict, restatement costs at the high end of our range, and $4 million of out-of-period costs in Q2. As a result, we are approaching the second half of 2026 with caution.

25; adjusted EBITDA of $430 million to $460 million, trending, as noted, toward the low end of the range. 5% of revenue and expect to generate between $125 and $145 million of. We are confident in the long-term growth trajectory of our individual brands and the broader Driven Brands Hldgs platform, but recognize the work ahead to continue building the appropriate financial foundation. With that, I will now turn it over to the operator, and we are happy to take your questions.

OPERATOR We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you'd like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again.

We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from Craig Kennison with Baird.

Craig, your line is open. Please go ahead. Craig Kennison, Analyst at Baird Hey, good morning. Thanks for taking my question.

I'm wondering what kind of inflationary pressure you are facing with your base oil costs. Danny R. Rivera, Chief Executive Officer Hey, Craig, this is Danny.