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Driven Brands Holdings Inc. (DRVN)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 revenue was $535.7M (+6.6% YoY), Adjusted EBITDA $136.3M, and Adjusted diluted EPS $0.34; same-store sales increased 2.8%, marking the 19th consecutive quarter of positive comps .
  • Versus Street: EPS beat (Adj. EPS $0.34 vs $0.30 consensus), revenue was essentially in line (~$535.7M vs $535.7M); SPGI’s EBITDA consensus ($136.3M) tracks GAAP EBITDA, and actual GAAP EBITDA was ~$98.99M while company emphasizes Adjusted EBITDA of $136.3M (see reconciliation) .*
  • FY25 guidance narrowed: revenue to $2.10–$2.12B, Adjusted EBITDA to $525–$535M, and Adjusted EPS to $1.23–$1.28; same-store sales guided to the low end of 1–3% and net store growth maintained at 175–200 .
  • Balance sheet progress and catalysts: net leverage improved to 3.8x Adjusted EBITDA, liquidity was $755.7M; post-quarter, the company completed a $500M securitized notes offering, simplifying maturities and lowering annualized interest expense .

What Went Well and What Went Wrong

What Went Well

  • Take 5 momentum: same-store sales +6.8%, revenue $306.4M (+13.5% YoY), Adjusted EBITDA $107.3M with 35% margin; management highlighted continued non-oil growth and service expansion .
    Quote: “Take 5… delivered its 21st consecutive quarter of same-store sales growth… Adjusted EBITDA margins expanded to 35%” .
  • Non-oil services acceleration: non-oil change revenue reached >25% of Take 5 sales, attachment rates increased from mid-40s to low-50s; differential fluid service fully rolled out with favorable margins and no cannibalization .
  • Deleveraging and cash generation: net leverage improved to 3.8x; free cash flow in Q3 was $51.9M; seller note monetization and refinancing simplified the capital structure and reduced interest expense .

What Went Wrong

  • Margin compression: Adjusted EBITDA margin fell ~85 bps YoY to 25.4% on higher store expenses and growth investments .
  • Franchise Brands and collision headwinds: segment revenue down 2.3% and ongoing Maaco pressure; management flagged Q4 macro “choppiness” and noted consolidated comps could be negative at the low end of the annual range .
  • Car Wash moderation: same-store sales +3.9% but Adjusted EBITDA down $1M to $15.0M on higher commissions and utilities; weather normalization vs strong prior-year periods weighed .

Financial Results

Consolidated Results vs Prior Quarters

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$516.2 $551.0 $535.7
Adjusted EBITDA ($USD Millions)$125.1 $143.2 $136.3
Adjusted EBITDA Margin %—26.0% 25.4%
GAAP Diluted EPS – Continuing Ops ($)$0.11 $0.07 $0.37
Adjusted Diluted EPS – Continuing Ops ($)$0.27 $0.36 $0.34
Same-Store Sales (Total)0.7% 1.7% 2.8%

Same-Store Sales by Segment (Trajectory)

Segment SSSQ1 2025Q2 2025Q3 2025
Take 58.0% 6.6% 6.8%
Franchise Brands(2.9%) (1.5%) 0.7%
Car Wash26.2% 19.4% 3.9%

Q3 2025 Segment Breakdown

SegmentRevenue ($USD Millions)Adjusted EBITDA ($USD Millions)SSS %Store Count
Take 5$306.4 $107.3 6.8% 1,282
Franchise Brands$75.3 $49.7 0.7% 2,676
Car Wash$54.1 $15.0 3.9% 717
Corporate & Other$99.9 $(35.8) N/A 213
Total$535.7 $136.3 2.8% 4,888

Key KPIs (Q3 2025)

KPIQ3 2025
System-wide Sales ($USD Billions)$1.625
Same-Store Sales (Total)2.8%
Net New Stores (Quarter)39
Take 5 Non-Oil Revenue Mix>25% of sales
Take 5 Attachment RateLow 50s (%)
Take 5 NPSHigh 70s

Q3 2025 Actuals vs Street Consensus (SPGI)

MetricConsensusActual
Primary EPS ($)0.300.34*
Revenue ($USD Millions)535.7535.7*
EBITDA ($USD Millions)136.399.0*

*Values retrieved from S&P Global. Note: SPGI “EBITDA” aligns with GAAP EBITDA; company’s Adjusted EBITDA was $136.3M per 8‑K/press release .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY 2025$2.05–$2.15B $2.10–$2.12B Raised/Narrowed
Adjusted EBITDAFY 2025$520–$550M $525–$535M Narrowed
Adjusted Diluted EPSFY 2025$1.15–$1.25 $1.23–$1.28 Raised/Narrowed
Same-Store SalesFY 20251–3% Low end of 1–3% Lowered (range position)
Net Store GrowthFY 2025~175–200 ~175–200 Maintained
Net CapexFY 20256.5–7.5% of revenue Near high end of 6.5–7.5% Directionally higher
Interest ExpenseFY 2025$130–$135M ~$120M Lowered

Earnings Call Themes & Trends

TopicQ1 2025 (Prior-2)Q2 2025 (Prior-1)Q3 2025 (Current)Trend
Take 5 growthSSS +8%; non-oil growing; differential pilot underway SSS +6.6%; non-oil >20%; rollout progressing SSS +6.8%; non-oil >25%; differential fully rolled out; margins ~35% Sustained strength, mix upgrade
AI/Technology——Testing AI-driven camera tech to improve throughput; new media mix model to optimize ROAS New initiatives
Macros/consumerNon-discretionary resilience; divestiture completed Lower-income consumer pressure; cautious back half Q4 “choppiness”; cautious stance; Take 5 remains healthy More cautious
Tariffs/supply chainFluid environment; diversified sourcing No material tariff change vs Q1 posture Forward-looking risks noted; no specific new impacts disclosed Stable posture
Collision industrySoftness; headwinds observed Estimates down high-single-digits; share gains Sequential improvement in Q3; Q4 may resemble Q2; continued share gains Gradual stabilization
Capital structureSale of U.S. car wash business (April) Seller note monetized; pro forma leverage 3.9x Net leverage 3.8x; issued $500M securitized notes; 92% fixed-rate debt at ~4.4% Deleveraging progress

Management Commentary

  • “Same store sales increased for the 19th consecutive quarter, with high single-digit growth in Take 5 driving solid gains in revenue, adjusted EBITDA and adjusted earnings per share” — Danny Rivera, CEO .
  • “We’re testing AI-driven camera technology that detects queuing issues in real time… move more cars more efficiently” — Danny Rivera .
  • “Our net leverage stood at 3.8x… we remain on track to reach 3x by the end of 2026” — Mike Diamond, CFO .
  • “Adjusted diluted EPS… excludes the positive tax valuation adjustment in the quarter” — Mike Diamond .

Q&A Highlights

  • Macro/comp outlook: Management cited a “choppy” start to Q4 across brands and noted consolidated comps could be negative at the low end of the annual range; Take 5 expected to grow despite tough prior-year lap .
  • Free cash flow conversion and CapEx: Focus on converting EBITDA to FCF while staying opportunistic on high-return corporate Take 5 builds; long-term deleveraging priority remains intact .
  • Unit growth cadence: 150+ Take 5 openings annually for “next several years”; ~170 in 2025 with ~900 pipeline, >1/3 site-secured; mix shifts toward franchise over time .
  • Collision dynamics: Industry headwinds driven by claim avoidance and high total-loss rates; sequential Q3 improvement; Q4 may resemble Q2; DRVN continues to take share .
  • Marketing optimization: New media mix model to fine-tune spend by geography/channel and assess incremental returns as scale increases .

Estimates Context

  • Q3 2025 results vs S&P Global consensus: Adj. EPS beat ($0.34 vs $0.30), revenue in line ($535.7M vs $535.7M). SPGI “EBITDA” consensus ($136.3M) compares to GAAP EBITDA ($99.0M actual), while management focuses on Adjusted EBITDA ($136.3M) for performance and guidance .*
  • Implications: Estimate revisions likely to drift higher on EPS given beat and lower interest run-rate; revenue trajectory steady with narrower FY guide; caution on Q4 comps may cap near-term upward revisions.

*Values retrieved from S&P Global.

Key Takeaways for Investors

  • Take 5 continues to be the growth engine with durable SSS, margin, and mix tailwinds (premium oils, non-oil services), supporting multi-year unit expansion and franchise appetite .
  • The EPS/revenue print was solid and in line-to-better than consensus; Street may recalibrate toward the tighter FY ranges and lower interest expense .
  • Margin headwinds from store operating costs and growth investments persist; watch Adjusted EBITDA margin stabilization around mid-20s as scale and mix improve .
  • Franchise/collision headwinds are moderating but remain sensitive to consumer/inflation dynamics; DRVN appears to be taking share, which should aid through-cycle recovery .
  • Balance sheet actions (seller note monetization, securitization refinancing) de-risk maturities and lower interest, supporting deleveraging to 3x by 2026 — a potential catalyst for capital allocation optionality .
  • Near-term trading setup: Positive on Take 5 momentum and EPS beat, tempered by management’s cautious Q4 tone and potential consolidated comp pressure; focus on Q4 run-rate and holiday-season consumer trends .
  • Medium-term thesis: Resilient, need-based services with a scalable Take 5 model, improving mix and cash generation, and disciplined leverage reduction underpin multi-year value creation .