Executive Summary

Q4 2024 delivered accelerating top-line growth from continuing operations: revenue rose 14% year over year to $14.45M, while system-wide sales grew 9% to $145.2M and comp sales improved to 6% from 4% in Q3 .
Profitability on continuing ops flipped positive: net income from continuing operations was $0.99M ($0.06 diluted EPS) vs a $(10.18)M loss in Q4 2023 (impacted by a large tax valuation allowance); consolidated Adjusted EBITDA was $3.32M vs $4.04M in Q4 2023 .
2025 outlook frames a transition year: system-wide sales guided to $550–$570M, mid-single-digit comps, and consolidated Adjusted EBITDA of $10.0–$11.5M as the company refranchises its ~125 corporate clinics and reduces overhead to become a “pure-play franchisor” .
Near-term catalysts: completion of refranchising (majority of corporate portfolio under LOIs; targeting wrap closer to 1H 2025), dynamic revenue management (pricing), and launch of a patient-facing mobile app expected by end of Q2 2025 to drive conversion and retention .

What Went Well and What Went Wrong

What Went Well
- Momentum in the core: system-wide comp sales accelerated to 6% in Q4 (from 4% in Q3), and revenue from continuing operations increased 14% YoY as royalty, software and other franchise-related fees grew across a larger base of clinics .
- Strategic clarity and execution: management reiterated the refranchising strategy with “vast majority” of corporate clinics in final LOI stages; focus is to reduce overhead and increase operating leverage as a “world-class, pure-play franchisor” .
- Management tone and tactical levers: CEO emphasized “dynamic revenue management,” stronger digital marketing/promotions, and patient-facing tech; mobile app targeted by end of Q2 2025 to improve conversion and engagement (“frictionless” experience) .
What Went Wrong
- Elevated operating costs: selling & marketing +64% YoY (to $2.7M) and G&A +5% YoY (to $7.2M); CFO cited a $1.5M medical malpractice settlement accrued in Q4 along with bonuses, search/restructuring, IT and audit costs .
- Discontinued ops drag: consolidated net loss of $(2.72)M in Q4 (driven by $(3.70)M discontinued ops), and FY24 consolidated Adjusted EBITDA down modestly to $11.4M vs $12.2M in 2023 .
- Estimate “miss” optics due to reporting change: S&P consensus still reflected pre-recast revenue constructs (est. ~$29.0M) while reported continuing ops revenue was $14.45M, creating an apparent miss; management did not guide GAAP revenue given refranchising timing uncertainty [functions.GetEstimates]* .

Financial Results

Note: Results below reflect continuing operations unless stated.

Metric	Q4 2023	Q3 2024	Q4 2024
Revenue ($USD Millions)	$12.71	$12.65	$14.45
Operating Income (Loss) ($USD Millions)	$0.99	$(0.49)	$0.94
Net Income from Continuing Ops ($USD Millions)	$(10.18)	$(0.41)	$0.99
Diluted EPS – Continuing Ops ($)	$(0.68)	$(0.03)	$0.06
Adjusted EBITDA – Consolidated ($USD Millions)	$4.04	$2.43	$3.32

Revenue composition (Q4 YoY):

Revenue Component ($USD)	Q4 2023	Q4 2024
Royalty Fees	$7,978,859	$8,840,890
Franchise Fees	$703,072	$925,184
Advertising Fund Revenue	$2,277,481	$2,525,307
Software Fees	$1,340,168	$1,454,193
Other Revenues	$409,121	$701,883
Total Revenues	$12,708,701	$14,447,457

Key KPIs:

KPI	Q3 2024	Q4 2024
System-wide Sales ($USD Millions)	$129.3	$145.2
System-wide Comp Sales (%)	4%	6%
Total Clinics (end of period)	963	967 (YE)

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
System-wide Sales	FY 2025	N/A	$550–$570M	New
System-wide Comp Sales (clinics ≥13 months)	FY 2025	N/A	Mid-single digits	New
Adjusted EBITDA – Consolidated	FY 2025	N/A	$10.0–$11.5M (includes ~$4.4M adj. for SBC, D&A; excludes potential refranchising impairments/restructuring)	New
New Franchised Clinic Openings (excl. refranchised)	FY 2025	N/A	30–40 (vs 57 in 2024)	New

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 & Q3 2024)	Current Period (Q4 2024)	Trend
Refranchising	Engaged Capstone; early LOIs; timing likely to spill into 2025	Vast majority of 125 corporate clinics in final LOI stages; aim to wrap closer to 1H 2025	Advancing; larger bundles lengthen diligence
Pricing / Dynamic Revenue Management	Evaluating levers incl. walk-in, legacy pricing; tested promotions	Walk-in rate raised; dynamic RM to continue, potentially smaller, ongoing adjustments; price influence ~1.5–2% of comps	More active pricing discipline
Patient-facing Technology	Beta mobile check-in/app planned; digital intake; initial visit booking rollout	App targeted in stores by end Q2 2025; features include clinic finder, doctor schedules, in-clinic check-in, push notifications	Building moat via UX
Marketing / Lead Gen	Shift toward top-of-funnel, co-op optimization, TikTok/PMAX, influencer efforts	Enhance digital marketing/promotional calendar to drive organic leads and conversion	Scaling newer channels
Macro / Demand	Consumer headwinds; comps cooled in Q2; 4Q promos anticipated	Q1-to-date cadence broadly consistent; inflation-sensitive cohort $50–100k HHI	Cautious near-term tone
Labor / Provider Supply	School relationships, preceptorships; retention focus	DOC and coordinator labor costs relatively stable in 2024	Stable labor backdrop
Legal/Other Costs	$1.5M CA wage/time litigation in Q2	$1.5M med-mal settlement accrued in Q4 G&A	One-offs weighed on G&A

Management Commentary

“We are focused on…becoming a world class, pure play franchisor… strengthen our core, reignite growth and improve…profitability.”
“We will initiate dynamic revenue management, enhance our digital marketing and promotional calendar, and upgrade our patient facing technology.”
“We are in the final stages of executing letters of intent for the vast majority of our corporate portfolio.”
“Our new mobile app…anticipated to be in the app store by the end of Q2 2025…with features like clinic finder…in clinic check-in and push notifications.”

Q&A Highlights

Near-term trends and cadence: Management expects quarterly cadence similar to historical patterns; Q1-to-date broadly consistent with late Q4 trends, with February noise from leap year and promo structure .
Refranchising valuation: Bidders generally apply a multiple to franchise-centric EBITDA on adjusted corporate-clinic pro formas, accounting for royalty streams and modest above-store G&A for clusters; timing targeted closer to 1H 2025 .
Pricing/attrition: Walk-in price increases boosted conversion to memberships; January attrition seasonally elevated but leveled in February; management pursuing ongoing, smaller pricing actions, including legacy cohorts .
Royalty math and GAAP revenue: Roughly 10–10.5% of corporate gross sales convert to royalties/fees post-refranchising; no GAAP revenue guidance due to transaction timing uncertainty; focus on G&A rationalization to lift profitability .

Estimates Context

Q4 2024 vs S&P Global consensus (Primary EPS, Revenue, EBITDA): EPS beat; revenue and EBITDA misses reflect the shift to continuing ops reporting (recasting corporate clinics to discontinued operations).
- EPS: $0.01 est vs $0.1651 actual (Primary EPS) → Beat*
- Revenue: $28.99M est vs $14.45M actual → Miss*
- EBITDA: $2.70M est vs $1.29M actual → Miss*
- Estimate counts: EPS (5), Revenue (5)*
  Values retrieved from S&P Global.* [functions.GetEstimates]
Important context: The company recast corporate clinics as discontinued operations for all periods presented; analysts’ models may not have fully reflected this at the time, distorting revenue/EBITDA comparisons to consensus .

Key Takeaways for Investors

Transition to franchisor model is the crux: Completing refranchising (majority under LOIs) and rightsizing G&A should expand operating leverage and durability of cash flows .
Demand momentum improving: Q4 comps up to 6% and system-wide sales up 9% YoY; near-term comps likely helped by pricing/mix and improved marketing execution .
Pricing is turning from reactive to programmatic: Dynamic revenue management (walk-in changes, legacy migration) targets 1.5–2% comp lift with sensitivity to value positioning .
Digital and product roadmap adds optionality: Mobile app by end Q2 2025, enhanced intake/booking, and exploration of new use occasions/services should aid conversion and retention .
FY25 is a bridge year; FY26 the payoff: Guidance implies modest EBITDA compression during refranchising, with management pointing to higher royalties/margins and stronger KPIs in 2026 .
Watch items: pace/terms of refranchising closings, G&A reductions, new patient traffic recovery, and one-off legal/settlement costs in G&A .

Appendices

Additional Context and Selected Data

Balance sheet/liquidity: YE cash of $25.1M; access to $20M JPMorgan LOC through Feb 2027; federal NOL carryforward $9.1M .
FY 2024: revenue $51.9M (+10%); consolidated Adjusted EBITDA $11.4M (vs $12.2M in 2023) .
FY operating metrics: 14.7M adjustments, 957k new patients, 967 clinics YE (842 franchised; 125 company-managed) .

Footnote: Values marked with * are retrieved from S&P Global consensus/actuals via GetEstimates (Primary EPS, Revenue, EBITDA, and # of estimates). Methodological differences (e.g., normalized EPS, continuing vs consolidated presentation) may cause variances relative to GAAP figures reported in company filings. [functions.GetEstimates]

Sources: Company 8-K/press release, earnings presentation, and transcript for Q4 2024, prior quarters’ earnings materials, and S&P Global estimate data: .

JOINT Corp (JYNT)·Q4 2024 Earnings Summary