Core Insights - The investment approach emphasizes fundamental, valuation-driven strategies focusing on businesses with potential for long-term growth and significant terminal value [1] Group 1: Investment Philosophy - The company prioritizes understanding core business economics, including competitive advantages, unit economics, reinvestment opportunities, and management quality [1] - The focus is on sectors that exhibit strong secular tailwinds, indicating a preference for industries poised for sustained growth [1] Group 2: Professional Background - The analyst has a decade of self-educated investment experience and currently manages personal funds sourced from friends and family [1] - The motivation for sharing insights on platforms like Seeking Alpha is to provide valuable investment analysis and receive feedback from the investment community [1]

Financial Performance - Net revenues for Q3 2025 reached $263,417,000, a 5.4% increase from $249,329,000 in Q3 2024[19] - Operating income for the nine months ended September 30, 2025, was $158,966,000, up 8.1% from $147,130,000 in the same period of 2024[19] - Net income for the nine months ended September 30, 2025, was $83,006,000, representing a 36.0% increase compared to $61,070,000 in 2024[19] - For the nine months ended September 30, 2025, net revenues increased to $790.5 million, up 6.3% from $743.6 million in the same period of 2024[39] - Net income for the nine months ended September 30, 2025, was $27.0 million, compared to $16.6 million for the same period in 2024, representing a 62.7% increase[39] - Net income for the three months ended September 30, 2025, was $27,411 million, compared to $22,342 million for the same period in 2024, representing a 22.5% increase[40] - Basic earnings per share for Q3 2025 were $0.08, compared to $0.07 in Q3 2024[19] - Basic earnings per share increased to $0.08 for the three months ended September 30, 2025, from $0.07 in 2024, while diluted earnings per share also rose to $0.08 from $0.07[40] - The net income margin for the three months ended September 30, 2025, was 10.4%, up from 9.0% in the same period of 2024[130] - Adjusted EBITDA for the three months ended September 30, 2025, was $86,792 thousand, compared to $78,804 thousand in 2024, reflecting a margin of 32.9%[130] Cash Flow and Liquidity - Cash flows from operating activities for the nine months ended September 30, 2025, totaled $225,733,000, an increase from $198,840,000 in 2024[21] - Net cash provided by operating activities for the nine months ended September 30, 2025, was $225.7 million, supported by net income of $83.0 million and non-cash adjustments[154] - The company believes existing sources of liquidity and capital will be sufficient to finance growth strategy and operations for at least the next 12 months[153] - Free cash flow for the nine months ended September 30, 2025, was $47.1 million, with growth capital expenditures of $154.9 million[162] - The company experienced a decrease in cash provided by operating activities due to changes in working capital balances, which decreased cash by $6.8 million[155] Assets and Liabilities - Total assets as of September 30, 2025, were $3,142,930,000, compared to $3,101,796,000 at the end of 2024[24] - Total liabilities decreased to $2,037,773,000 as of September 30, 2025, from $2,103,444,000 at the end of 2024[24] - Cash and cash equivalents at the end of the period were $35,652,000, down from $67,463,000 at the beginning of the period[24] - Total long-term debt as of September 30, 2025, was $827,231 million, a decrease from $909,094 million as of December 31, 2024[60] - The company’s total stockholders' equity as of September 30, 2025, was $1,105.2 million, up from $998.4 million as of December 31, 2024[39] Operational Highlights - The company operated 527 car washes across 21 states as of September 30, 2025, reflecting continued market expansion[29] - The company plans to continue expanding its market presence and investing in new technologies to enhance service offerings[19] - The number of Unlimited Wash Club (UWC) Members reached 2,227 thousand as of September 30, 2025, up from 2,110 thousand in 2024, representing a growth of approximately 5%[124] - UWC sales accounted for 77% of total wash sales for the three months ended September 30, 2025, compared to 74% for the same period in 2024[125] - Comparable store sales growth for the three months ended September 30, 2025, was 3.1%, compared to 2.9% for the same period in 2024[119] Expenses and Costs - Cost of labor and chemicals for the three months ended September 30, 2025, was $76.6 million, representing 29% of net revenues, a slight decrease from 30% in 2024[138] - Other store operating expenses increased to $109.5 million for the three months ended September 30, 2025, accounting for 42% of net revenues, compared to 41% in 2024[140] - General and administrative expenses decreased to $22.7 million for the three months ended September 30, 2025, representing 9% of net revenues, down from 10% in 2024[142] - Total other expense, net, for the three months ended September 30, 2025, was $14.1 million, a 32% decrease from $20.7 million in 2024, primarily due to lower interest expenses[146] - Income tax provision for the three months ended September 30, 2025, was $10.4 million, a 58% increase from $6.6 million in 2024, driven by higher pre-tax income[148] Investments and Growth Strategy - The company plans to continue its growth strategy through greenfield development, focusing on Express Exterior Locations[115] - The company has increased its location count by 5 greenfield locations in the three months ended September 30, 2025[120] - The company acquired the assets of five express car wash locations in Lubbock, Texas on October 20, 2025[109] - The company entered into 11 forward-starting leases related to build-to-suit arrangements for car wash locations, commencing between 2025 and 2028[83] Debt and Financing - In March 2024, the company amended its Credit Agreement, providing $925,000 in first lien term commitments, including $901,201 to refinance outstanding term loans and $23,799 in additional incremental term commitments[64] - The company increased its borrowing capacity under the Revolving Commitment from $150,000 to $300,000 as part of Amendment No. 5[66] - As of September 30, 2025, the available borrowing capacity under the Revolving Commitment was $299,926, with an unused commitment fee of 0.20%[67][68] - The company was in compliance with all covenants related to its long-term debt as of September 30, 2025[71] Miscellaneous - The company has maintained effective disclosure controls and procedures as of September 30, 2025[167] - There were no material changes in risk factors or legal proceedings during the reporting period[171][170]

Core Insights - Mister Car Wash reported revenue of $263.42 million for the quarter ended September 2025, reflecting a year-over-year increase of 5.7% [1] - The company's EPS for the same period was $0.11, up from $0.09 a year ago, with a surprise of +10% compared to the consensus estimate of $0.10 [1] - The reported revenue exceeded the Zacks Consensus Estimate of $261.17 million, resulting in a surprise of +0.86% [1] Financial Performance Metrics - Comparable store sales growth was 3.1%, surpassing the six-analyst average estimate of 1% [4] - The ending location count was 527, which is lower than the average estimate of 533 by four analysts [4] - Five new Greenfield locations were opened, compared to the average estimate of 11 by three analysts [4] Stock Performance - Shares of Mister Car Wash have returned -2.8% over the past month, while the Zacks S&P 500 composite increased by +3.8% [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

Core Insights - Mister Car Wash (MCW) reported quarterly earnings of $0.11 per share, exceeding the Zacks Consensus Estimate of $0.10 per share, and showing an increase from $0.09 per share a year ago, resulting in an earnings surprise of +10.00% [1] - The company achieved revenues of $263.42 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 0.86% and up from $249.33 million year-over-year [2] - The stock has underperformed, losing approximately 28.9% since the beginning of the year, compared to a 17.2% gain in the S&P 500 [3] Earnings Performance - Over the last four quarters, Mister Car Wash has surpassed consensus EPS estimates three times [2] - The current consensus EPS estimate for the upcoming quarter is $0.10, with expected revenues of $260.69 million, and for the current fiscal year, the estimate is $0.42 on $1.05 billion in revenues [7] Market Outlook - The company's earnings outlook and management's commentary on the earnings call will be crucial for future stock performance [3][4] - The Zacks Rank for Mister Car Wash is currently 4 (Sell), indicating expectations of underperformance in the near future [6] - The Automotive - Replacement Parts industry, to which Mister Car Wash belongs, is currently in the top 27% of Zacks industries, suggesting a favorable industry outlook [8]

Core Insights - The company is well-positioned for long-term growth with the largest subscription base in the industry, strong unit economics, and a history of innovation [1][4][10] Expansion and Market Position - The company opened five new Greenfield locations, increasing the total store count to 527 across 21 states, and celebrated the grand reopening of a flagship store in Tucson [1][4] - The expansion in the market has more than doubled the company's market share, enhancing customer convenience and choices [2] - The company successfully acquired five stores in Lubbock, Texas, strengthening its market position [3][25] Financial Performance - Revenue increased by 6% to $263 million, with adjusted EBITDA rising 10% to $87 million, marking the highest Q3 EBITDA margin ever reported at 32.9% [4][21] - Comparable store sales grew by 3.1%, marking the tenth consecutive quarter of comp gains, with UWC (Unlimited Wash Club) members increasing by 6% year-over-year to approximately 2.2 million [4][12] - The company achieved a 4% year-over-year increase in Express revenue per member, driven by base membership price increases and a shift towards higher-tier memberships [19][22] Innovation and Customer Experience - The Titanium 360 tier reached approximately 25% penetration of the total membership base, indicating strong adoption and retention trends [3][12] - The company is committed to innovation, focusing on improving service quality and introducing proprietary services to differentiate from competitors [5][6] Marketing and Growth Strategy - The company plans to increase marketing investments in Q4 to build a scalable growth engine for 2026 and beyond [7][8] - The marketing tests conducted in Q2 showed promising results, leading to an expansion of the testing program in select markets [7][8] Future Outlook - The company is on track to open approximately 30 new stores in 2025, with a long-term goal of over 1,000 locations across the U.S. [5][26] - Full-year revenue is expected to land near the high end of the guidance range of $1.046 billion to $1.054 billion, incorporating new store openings and marketing test contributions [28][29]

Financial Data and Key Metrics Changes - Revenue increased by 6% to $263 million and adjusted EBITDA rose by 10% to $87 million, marking the highest Q3 EBITDA margin ever reported at 32.9% [4][19] - Comparable store sales growth was 3.1%, representing the 10th consecutive quarter of comp gains [4][12] - Adjusted EPS increased by 38% year over year to $0.11 [12] Business Line Data and Key Metrics Changes - UWC (Unlimited Wash Club) membership grew by 6% year over year, reaching approximately 2.2 million members, with the Titanium 360 tier achieving about 25% penetration of the total membership base [4][17] - UWC sales represented 77% of total wash sales, with UWC comps increasing in high single digits [16][17] - Retail comps performed in line with expectations, showing a low double-digit decrease [16] Market Data and Key Metrics Changes - The pace of new competitor openings has moderated, with an estimated 40% fewer new builds year to date compared to the previous year, contributing to a healthier competitive environment [14] - Locations facing competition less than a year old comped down low single digits, while those with competition older than two years or no competition comped up mid to high single digits on average [15] Company Strategy and Development Direction - The company is focused on expanding its footprint, with plans to open approximately 30 new stores in 2025, in addition to five recently acquired stores in Lubbock, Texas [7][24] - Strategic M&A opportunities are anticipated as the industry consolidates, with a belief that the market is entering a healthier phase [6][11] - Innovation remains a core focus, with ongoing investments in technology and R&D to differentiate the brand [8][10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the strength of the markets and the resilience of the business model, indicating a favorable setup for future growth [26] - The company is actively managing variability in retail performance and capitalizing on M&A opportunities to fuel growth [11][26] - There is confidence in the ability to accelerate growth moving forward, supported by a strong subscription base and unit economics [7][11] Other Important Information - Free cash flow for the nine months ended September 30 was $202 million, compared to $174 million in the same period last year, representing 26% of sales [23] - The company has reduced its total outstanding debt by more than $100 million over the last 12 months, with a leverage ratio of 2.4 times adjusted EBITDA [20][23] Q&A Session Summary Question: Where did the sales upside materialize in Q3? - Management noted that all months in Q3 were positive, with July being the strongest due to a softer comparison [28][29] Question: What is the pecking order of cash flow usage? - The company indicated that Greenfield development remains the highest use of capital, with options for share buybacks and debt pay down being considered [31][32] Question: How does the base price increase impact 2026? - The base price increase rollout is expected to contribute roughly a quarter to one-third of its total impact in 2026 [36][37] Question: Can you provide insight into membership trends? - Membership has been relatively flat sequentially, with a focus on increasing retail traffic to convert more customers into members [41][42] Question: What is the competitive response to marketing tests? - There have been no unusual competitive responses noted in the markets where marketing spend has been tested [79]

Financial Performance - Net revenues increased 6% to $263.4 million, up from $249.3 million in Q3 2024[6] - Adjusted EBITDA increased 10% to $86.8 million from $78.8 million in Q3 2024[6] - Net revenues for Q3 2025 were $263,417,000, an increase of 5.4% from $249,329,000 in Q3 2024[29] - Operating income for the nine months ended September 30, 2025, was $158,966,000, up 8.1% from $147,130,000 in the same period of 2024[29] - Net income for Q3 2025 was $27,411,000, representing a 22.5% increase compared to $22,342,000 in Q3 2024[29] - Adjusted net income for the nine months ended September 30, 2025, was $108.0 million, with adjusted net income per diluted share at $0.33[6] - Adjusted EBITDA for the nine months ended September 30, 2025, reached $259,487 million, up 6.9% from $242,668 million in the same period of 2024[36] - Adjusted net income for Q3 2025 was $36,438 million, up from $27,496 million in Q3 2024, representing a 32.5% increase[36] Membership and Sales Growth - Comparable-store sales increased 3.1% during the quarter, marking the tenth consecutive quarter of growth[2] - Unlimited Wash Club® memberships increased by 6%, totaling over 2.2 million members, a year-over-year increase of 117 thousand members[6] Cash Flow and Expenses - Free cash flow totaled $47.1 million compared to $(61.1) million for the nine months ended September 30, 2024[12] - Cash flows from operating activities for the nine months ended September 30, 2025, were $225,733,000, compared to $198,840,000 in 2024, reflecting a growth of 13.5%[32] - Free cash flow for the nine months ended September 30, 2025, was $47,079 million, a significant improvement from a negative $61,056 million in 2024[38] - Free cash flow excluding growth capital expenditures for the same period was $202,016 million, compared to $174,216 million in 2024, reflecting a 15.9% increase[38] - The company incurred interest expense of $14,054,000 in Q3 2025, down from $20,653,000 in Q3 2024[29] - Interest expense for Q3 2025 was $14,054 million, a decrease from $20,653 million in Q3 2024, indicating improved cost management[36] Expansion and Acquisitions - The company opened 5 new greenfield locations, bringing the total to 527 locations, a 5% increase year-over-year[6] - The company expects to open approximately 30 new greenfield locations in 2025[10] - The company completed the acquisition of five stores in Lubbock, TX, expanding its market presence significantly[2][9] - The company incurred acquisition expenses of $1,201 million in Q3 2025, compared to $863 million in Q3 2024, reflecting ongoing strategic investments[36] Assets and Liabilities - Total assets as of September 30, 2025, were $3,142,930,000, an increase from $3,101,796,000 as of December 31, 2024[34] - Total liabilities decreased to $2,037,773,000 as of September 30, 2025, from $2,103,444,000 at the end of 2024[34] Earnings Per Share - The company reported a basic earnings per share of $0.08 for Q3 2025, up from $0.07 in Q3 2024[29] - Diluted adjusted net income per share for Q3 2025 was $0.11, consistent with Q3 2024, while adjusted net income per share beginning 2025 was also $0.11[36] Retained Earnings and Compensation - The company’s retained earnings increased to $247,852,000 as of September 30, 2025, from $164,846,000 at the end of 2024[34] - Stock-based compensation expense for the nine months ended September 30, 2025, was $20,991 million, slightly up from $20,367 million in 2024[36]

Core Insights - Mister Car Wash reported a 6% increase in net revenues to $263.4 million for Q3 2025, compared to $249.3 million in Q3 2024 [8] - Comparable-store sales grew by 3.1% during the quarter, marking the tenth consecutive quarter of growth [3][8] - The company expanded its Unlimited Wash Club® memberships by 6%, reaching over 2.2 million members, a year-over-year increase of 117,000 members [8] - Five new greenfield locations were opened, bringing the total number of car wash locations to 527, a 5% increase from 501 locations a year earlier [8][9] - The company reiterated its full-year 2025 outlook, projecting net revenues between $1,046 million and $1,054 million [12] Financial Performance - Adjusted EBITDA for Q3 2025 increased by 10% to $86.8 million, up from $78.8 million in Q3 2024 [8] - Net income for Q3 2025 was reported at $27.4 million, with adjusted net income at $36.4 million [8] - For the nine months ended September 30, 2025, net revenues totaled $790.5 million, up from $743.6 million in the prior year [8] - Free cash flow for the nine months ended September 30, 2025, was $47.1 million, a significant improvement from $(61.1) million in the same period of 2024 [14][43] Operational Highlights - The company completed the acquisition of five stores in Lubbock, Texas, enhancing its market presence from four to nine locations [11] - UWC sales accounted for 77% of total wash sales, up from 74% in Q3 2024 [8] - The company plans to open approximately 30 new greenfield locations in 2025 [12] Balance Sheet and Cash Flow - As of September 30, 2025, cash and cash equivalents totaled $35.7 million, down from $67.5 million at the end of 2024 [14] - Net cash provided by operating activities for the nine months ended September 30, 2025, was $225.7 million, compared to $198.8 million for the same period in 2024 [14] - Total assets as of September 30, 2025, were $3.14 billion, an increase from $3.10 billion at the end of 2024 [36]

Core Insights - Mister Car Wash, Inc. has acquired five Whistle Express locations in Lubbock, Texas, increasing its presence in the market from four to nine locations, thereby solidifying its market leadership in the area [1][2] Group 1: Acquisition Details - The acquisition enhances Mister Car Wash's footprint in Lubbock, establishing a leading market position with a total of nine locations [1] - Stephens Inc. acted as the exclusive financial advisor to Whistle Express during this divestiture [1] Group 2: Company Commitment - The company emphasizes its commitment to making car care more accessible while maintaining high-quality service for customers [2] - A seamless transition for Whistle Express customers and team members is planned to ensure continued access to reliable car wash services [2] Group 3: Company Overview - Mister Car Wash operates approximately 525 locations and boasts North America's largest car wash subscription program [4] - The company is dedicated to providing clean, shiny, and dry vehicles, with a focus on exceptional customer experiences and responsible environmental practices [4]

Core Viewpoint - Mister Car Wash, Inc. will release its financial results for Q3 2025 on October 29, 2025, followed by a conference call to discuss these results [1]. Group 1: Financial Results Announcement - The financial results for the third quarter of 2025 will be released after market close on October 29, 2025 [1]. - A conference call to discuss the financial results will take place at 4:30 p.m. Eastern Time on the same day [1]. Group 2: Conference Call Participation - Investors and analysts can participate in the call by dialing 855-209-8213 or 1-412-542-4146 for international callers [2]. - A live audio webcast of the conference call will be available online [2]. - A recorded replay of the conference call will be accessible approximately three hours after its conclusion [2]. Group 3: Company Overview - Mister Car Wash, Inc. is headquartered in Tucson, Arizona, and operates approximately 525 locations [3]. - The company has the largest car wash subscription program in North America [3]. - Mister Car Wash is committed to providing exceptional customer experiences and responsible environmental practices [3].