Executive Summary

Q3 2024 delivered resilient subscription-driven growth: net revenues $249.3M (+7% YoY), comparable-store sales +2.9%, adjusted EBITDA $78.8M (+10% YoY), and diluted EPS $0.07; adjusted EPS $0.09 .
Management raised FY 2024 guidance for adjusted EBITDA ($313–$318M), adjusted net income ($114–$117M), and adjusted EPS ($0.35–$0.36), tightened comps to the high end (2.0–2.5%), and narrowed revenue to $988–$995M; capex was reduced to $330–$350M and sale-leasebacks to $120–$135M .
Titanium membership continued to exceed expectations (24% mix at Q3-end) with strong stickiness post-promotions; Express revenue per member rose ~9% YoY to $28.33, supporting RPM tailwinds into Q4 .
Retail traffic reaccelerated in the back half of the quarter and into October, aided by pent-up demand following hurricanes; Q4 margins will be pressured by incremental marketing investment as Mister ramps brand and customer acquisition efforts .

What Went Well and What Went Wrong

What Went Well

Titanium adoption and monetization: mix reached ~24% with “amazingly sticky” behavior post-promo; most Titanium members recharged at full rates, driving Express RPM to $28.33 (+9% YoY) .
Subscription resilience and comps reacceleration: UWC represented 74% of wash sales; comps +2.9% marked six successive positive quarters; retail improved sequentially in Aug/Sep and into October .
Cost discipline and margin execution: adjusted EBITDA +10% to $78.8M and margin to 31.6% (+100 bps), with labor/chemicals down to 28.4% and G&A -60 bps to 7.4% (ex certain items) .

Management quotes:

“Our Titanium introduction continues to exceed our expectations…we’re seeing a reacceleration in retail traffic.” — John Lai .
“Adjusted EBITDA…came in ahead of our expectations, driven by better comp sales, tight expense management and timing of some marketing investments.” — Jed Gold .
“We plan to increase our media spend in the fourth quarter.” — Jed Gold .

What Went Wrong

Retail softness persisted on a YoY basis (mid- to high-single-digit decline), albeit improving into late Q3; hurricanes caused temporary closures (pent-up demand later helped) .
Interest expense rose to $20.7M (+8% YoY) on increased borrowings despite lower average rates; long-term debt ended at $931M, adding leverage sensitivity .
Other store operating expense as % of revenue increased 130 bps to 32.6%, driven by higher rent (store growth and sale-leasebacks) and utility inflation .

Financial Results

Quarter-over-Quarter and YoY Core Metrics

Metric	Q1 2024	Q2 2024	Q3 2024
Net Revenues ($USD Millions)	$239.183	$255.043	$249.329
Diluted EPS ($)	$0.05	$0.07	$0.07
Adjusted EPS ($)	$0.08	$0.11	$0.09
Adjusted EBITDA ($USD Millions)	$75.172	$88.692	$78.804
Adjusted EBITDA Margin %	31.4%	~35%	31.6%
Comparable-Store Sales %	0.9%	2.4%	2.9%
UWC % of Total Wash Sales	74%	72%	74%
Express Revenue per Member ($)	N/A	$28.14	$28.33
Net Income ($USD Millions)	$16.637	$22.091	$22.342

YoY for Q3:

Metric	Q3 2023	Q3 2024
Net Revenues ($USD Millions)	$234.076	$249.329
Diluted EPS ($)	$0.06	$0.07
Adjusted EBITDA ($USD Millions)	$71.598	$78.804
Reported YoY Growth Highlights	Revenues +7%	Adjusted EBITDA +10%

Actuals vs Estimates (Q3 2024)

Metric	Actual	Consensus (S&P Global)
Net Revenues ($USD Millions)	$249.329	N/A
Diluted EPS ($)	$0.07	N/A
Adjusted EPS ($)	$0.09	N/A

Note: Wall Street consensus from S&P Global was unavailable at the time of this analysis due to access limitations; thus, beat/miss vs estimates is not presented.

Membership Mix and Stores

Metric	Q1 2024	Q2 2024	Q3 2024
Membership Mix (% Base / Platinum / Titanium)	40% / 40% / 20%	42% / 38% / 20%	39% / 37% / 24%
UWC Members (Millions)	~2.1	~2.1	~2.1 (+39k YoY)
Greenfield Openings (Quarter)	6	9	10
Ending Locations	482	491	501

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Revenues	FY 2024	$988–$1,016M	$988–$995M	Tightened lower-midpoint
Comparable-Store Sales Growth %	FY 2024	0.5%–2.5%	2.0%–2.5%	Tightened to high end
Adjusted Net Income	FY 2024	$99–$111M	$114–$117M	Raised
Adjusted EBITDA	FY 2024	$291.5–$308M	$313–$318M	Raised
Adjusted EPS (Diluted)	FY 2024	$0.30–$0.34	$0.35–$0.36	Raised
Interest Expense (Net)	FY 2024	~$81M	~$81M	Maintained
Rent Expense (Net)	FY 2024	~ $111M	~ $110M	Slightly lowered
Diluted Shares	FY 2024	~330M	~330M	Maintained
New Greenfield Locations	FY 2024	~40	~40	Maintained
Capital Expenditures	FY 2024	$364–$405M	$330–$350M	Lowered
Sale-Leasebacks	FY 2024	$135–$150M	$120–$135M	Lowered

Drivers cited: better comps and tight expense management, timing shift of marketing and greenfields; Q4 incremental media spend will pressure operating income and adjusted EBITDA margins .

Earnings Call Themes & Trends

Topic	Q1 2024 (Prior Two)	Q2 2024 (Prior One)	Q3 2024 (Current)	Trend
Titanium adoption & stickiness	Penetration >20%; premium mix ~60%; promos rolling off; pricing standardized ($39.99 Titanium, $32.99 Platinum)	20% mix, largely off promotion; RPM +$2.27; guidance models RPM steady into H2	~24% mix; “amazingly sticky” post-promo; Express RPM $28.33 (+9% YoY)	Positive, accelerating monetization
Retail traffic & marketing	Retail under pressure in lower-income; shift to targeted acquisition; new VP Marketing; tests across social/search/email	Retail declines moderated; comp cadence steady; hurricane noise; ramping targeted media in H2	Reacceleration in late Q3 and into Oct; incremental Q4 media spend; testing digital out-of-home	Improving traffic; spend ramp near term
Weather impacts	Soft winter; no blaming weather; comps momentum into April	Hurricane Beryl closures (42 stores; ~2.9 days avg); 20–30 bps comp impact for Q3	Two hurricanes; temporary disruption followed by pent-up demand	Transitory; pent-up demand tailwind
Wage inflation & labor	Frontline wage +3.5%; labor/chem efficiencies; rent pressure	Merit increases effective July; margins to low-30s H2	Wage inflation +4.3% in Q3; Q4 expected in line	Manageable inflation; stable outlook
Competitive & M&A backdrop	New unit growth cresting; rationalization; M&A multiples 10–12x	Promotional landscape mixed; focus on value proposition	Less encroachment; M&A quiet; multiples low double/high single-digit	Easing competitive intrusion
Greenfields & capex timing	~40 openings target; paybacks <3 yrs; year 2 cash-on-cash ~50%	Pipeline solid; delays shift openings later in year	~40 in FY; Q4 weighted; capex lowered due to timing	Later-year openings; disciplined capex

Management Commentary

Strategic focus on premiumization and customer experience: “We’re extremely disciplined in making sure we don’t dilute our brand by competing on price…our goal isn’t just to satisfy our customers. We want to delight them.” — John Lai .
Marketing ramp to drive retail trial: “We’ve broadened our reach…experimenting in new channels like digital out-of-home…increase investments in paid social, digital display and search.” — John Lai .
FY outlook update: “We are revising our guidance…tightening revenue to low-midpoint…raising adjusted net income and adjusted EBITDA above previous high end.” — Jed Gold .
Margin caution for Q4: “Incremental marketing spend…will impact our operating income and adjusted EBITDA margins during the fourth quarter.” — Jed Gold .

Q&A Highlights

Comps cadence: sequential improvement each month in Q3, mid-single-digit in Aug/Sep, further in Oct; guidance reflects expectations for Nov/Dec .
RPM outlook: continued benefit from Titanium into 2025; specifics deferred to Q4 call .
Titanium stickiness: “Amazingly sticky and strong…no degradation post-promotional closure” .
Retail trends: mid- to high-single-digit declines in Q3, materially improved in Aug/Sep and into Oct; hurricanes created pent-up demand accelerating throughput post-events .
Wage inflation: +4.3% YoY in Q3 (vs +3.8% in Q2); Q4 expected similar .
M&A multiples: low double-digit/high single-digit; market quiet .

Estimates Context

S&P Global Wall Street consensus for Q3 2024 (EPS, revenue) was unavailable at the time of this analysis due to access limitations; consequently, beat/miss vs consensus is not presented. Actual results: Revenues $249.3M, diluted EPS $0.07, adjusted EPS $0.09 .

Key Takeaways for Investors

Subscription engine intact; premiumization (Titanium/Platinum) is lifting monetization (RPM) while comps reaccelerate—supportive for medium-term margin stability as marketing spend transitions from test to scale .
FY guidance raise is a clear positive: adjusted EBITDA and EPS upgraded; near-term margin pressure in Q4 is strategic (brand/customer acquisition) rather than structural .
Cost discipline offsetting inflation: labor/chemical efficiencies, G&A optimization, and scale benefits help sustain ~31–32% adjusted EBITDA margin ex-Q4 spend .
Balance sheet leverage and rent intensity warrant monitoring: $931M long-term debt and rising lease count drive interest/rent; sale-leasebacks remain a funding lever with ~20 properties under contract/LOI .
Competitive intrusion easing and M&A quiet underpin stable operating backdrop; Mister’s scale and brand remain differentiators for membership growth and conversion .
Watch Q4 cadence: incremental marketing could be a short-term headwind to margins but a catalyst for retail traffic recovery and 2025 membership stabilization .
Store growth on track (~40 greenfields in FY), with timing shifted later in the year; capex trimmed without changing unit targets, indicating improved capital efficiency .

Mister Car Wash, Inc. (MCW)·Q3 2024 Earnings Summary