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MC

Mister Car Wash, Inc. (MCW)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 delivered solid top-line growth with net revenues up 9% to $251.2M, comps +6.0%, and adjusted EBITDA up 13% to $78.3M; adjusted EPS was $0.09 while GAAP EPS was $0.03 .
  • Subscription strength continued: UWC represented 75% of wash sales; membership exceeded 2.1M; Titanium mix was ~23% and drove a 10% lift in express revenue per member to $28.65 .
  • Management introduced FY2025 guidance (revenue $1.038–$1.064B, comps +1–3%, adj. EBITDA $334–$346M, adj. EPS $0.43–$0.45) and signaled base membership price increases in select markets alongside lower interest expense from repricing (SOFR +250 bps) .
  • Notable positives: strongest comps in 2+ years and Q4 adjusted EBITDA/net income above guidance; caution flagged on retail sensitivity to weather and competitive intrusion, with retail expected to be mid-single-digit negative in FY2025 despite near-term strength .
  • Street consensus (S&P Global) was unavailable for this recap due to access limits; estimate comparison omitted (see Estimates Context).

What Went Well and What Went Wrong

What Went Well

  • Strong demand and operating execution: “record revenue and EBITDA with our results improving as the year progressed,” with Q4 comps +6% and adjusted EBITDA +13% YoY .
  • Subscription resilience and premium mix: Titanium reached ~23% of membership, boosting express revenue per member to $28.65 (+10% YoY); member utilization and churn remained stable .
  • Unit growth and funding flexibility: 14 greenfields opened in Q4 (514 stores YE), and 21 sale-leasebacks closed for ~$98M proceeds, supporting self-funded expansion .

What Went Wrong

  • GAAP profitability compressed on below-the-line items: Q4 GAAP EPS fell to $0.03 from $0.04 YoY, and net income to $9.2M, reflecting higher loss on sale of assets and taxes; rent expense rose with more leases .
  • Weather-driven volatility and retail softness: outsized October/January tailwinds emphasized sensitivity; FY2025 planning assumes mid-single-digit retail decline despite recent improvements .
  • Competitive pressure: management highlighted persistent intrusion effects within 3 miles for 18–24 months; benefits from industry rationalization expected over time, not near term .

Financial Results

Quarterly progression (oldest → newest)

MetricQ2 2024Q3 2024Q4 2024
Net Revenues ($USD Millions)$255.043 $249.329 $251.172
GAAP Net Income ($USD Millions)$22.091 $22.342 $9.169
Diluted EPS (GAAP, $USD)$0.07 $0.07 $0.03
Adjusted Net Income ($USD Millions)$36.784 $28.816 $30.661
Adjusted EPS ($USD)$0.11 $0.09 $0.09
Adjusted EBITDA ($USD Millions)$88.692 $78.804 $78.278
EBITDA Margin %N/AN/A31.2%
Comparable-Store Sales (%)+2.4% +2.9% +6.0%

Year-over-year comparison – Q4

MetricQ4 2023Q4 2024
Net Revenues ($USD Millions)$230.140 $251.172
GAAP Net Income ($USD Millions)$12.377 $9.169
Diluted EPS (GAAP, $USD)$0.04 $0.03
Adjusted Net Income ($USD Millions)$23.966 $30.661
Adjusted EPS ($USD)$0.07 $0.09
Adjusted EBITDA ($USD Millions)$69.490 $78.278
Comparable-Store Sales (%)N/A+6.0%
UWC Sales (% of Wash Sales)74% 75%

KPIs and operating metrics

KPIQ2 2024Q3 2024Q4 2024
UWC Members≈2.1M ≈2.1M >2.1M
UWC % of Total Wash Sales72% 74% 75%
Comps (%)+2.4% +2.9% +6.0%
Express Revenue per Member ($USD)N/AN/A$28.65
Membership Mix (Base/Platinum/Titanium, %)N/AN/A41% / 36% / 23%
Greenfields Opened9 10 14
Ending Store Count491 501 514

Guidance Changes

FY2025 outlook vs prior-year actuals

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net RevenuesFY2025N/A$1,038–$1,064M New
Comparable-Store Sales GrowthFY2025N/A1.0%–3.0% New
Adjusted Net IncomeFY2025N/A$141–$149M New
Adjusted EBITDAFY2025N/A$334–$346M New
Adjusted EPS (Diluted)FY2025N/A$0.43–$0.45 New
Interest Expense (net)FY2025N/A$63M New
Rent Expense (net)FY2025N/A~$123M New
Diluted WACSFY2025N/A~330M New
New GreenfieldsFY2025N/A30–35 New
Capital ExpendituresFY2025N/A$275–$305M New
Sale-LeasebacksFY2025N/A$40–$50M New

Note: FY2024 actuals for context: net revenues $994.7M; adjusted EBITDA $320.9M; adjusted EPS $0.37; rent $109.7M; diluted WACS ~329.5M; capex $330.1M; sale-leasebacks $134.9M .

FY2024 guidance – Q3 revised vs prior (company-provided)

MetricPeriodPrevious GuidanceCurrent Guidance (Q3)Change
Net RevenuesFY2024$988–$1,016M $988–$995M Narrowed/lowered high-end
Comparable-Store Sales GrowthFY20240.5%–2.5% 2.0%–2.5% Raised
Adjusted Net IncomeFY2024$99–$111M $114–$117M Raised
Adjusted EBITDAFY2024$291.5–$308M $313–$318M Raised
Adjusted EPS (Diluted)FY2024$0.30–$0.34 $0.35–$0.36 Raised
Interest Expense (net)FY2024~$81M ~$81M Maintained
Rent Expense (net)FY2024~$111M ~$110M Slightly lowered
Diluted WACSFY2024~330M ~330M Maintained
New GreenfieldsFY2024~40 ~40 Maintained
Capital ExpendituresFY2024$364–$405M $330–$350M Lowered
Sale-LeasebacksFY2024$135–$150M $120–$135M Lowered

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024)Previous Mentions (Q3 2024)Current Period (Q4 2024)Trend
Subscription resilience & UWC mixUWC 72%; ~2.1M members; record revenue/adj. EBITDA UWC 74%; ~2.1M members; strong momentum UWC 75%; >2.1M members; utilization/churn stable Improving
Titanium premium offeringDrove revenue per member; strong Q2 Ramp ahead of expectations 23% mix; +10% rev/member; promo churn normalized Maturing
Retail trends & weatherRecord Q2 despite sensitivity Retail “moved in right direction” Strong October/January; mgmt guides mid-single-digit retail decline FY2025 Volatile/guarded
Competitive environmentNot emphasizedMilestone 500+ stores; disciplined growth Industry rationalization expected; 18–24 month competitor impact window Rationalizing slowly
Technology initiativesNot highlightedNot highlightedHired first CTO (Carlos Chavez) to drive tech differentiation Building capability
Financing & rentSale-leasebacks ongoing 4 SLBs; rent +7% YoY 21 SLBs; rent +10% YoY; EBITDAR view to normalize margin trend Active SLB market
Capex & unit growth9 opens; reiterate ~40 FY 10 opens; surpass 500 14 opens; plan 30–35 FY2025; capex $275–$305M Moderating pace
Interest expense outlookNot discussedNot discussedRepriced term loan/revolver; SOFR +250 bps; ~20% interest reduction in 2025 Improving

Management Commentary

  • “Against a challenging consumer backdrop and increased competition, we delivered record revenue and EBITDA…subscription remained a highlight, led by our premium Titanium offering, while retail sales trends showed meaningful improvement.” – John Lai, CEO .
  • “Sales were at the high end of our guidance…adjusted EBITDA and adjusted net income…better than our guidance range.” – Jed Gold, CFO .
  • “We are taking a base membership price increase in select markets…we will never compete solely on price.” – Jed Gold, CFO .
  • “We were able to reduce the spread on our term loan to SOFR plus 250 bps…estimated 20% reduction in interest expense compared to 2024.” – Jed Gold, CFO .
  • “Although the landscape remains crowded, we expect the influx of new entrants to decelerate…industry to rationalize; Mister well positioned to capitalize.” – John Lai, CEO .

Q&A Highlights

  • Pricing and marketing: testing base price increases in markets where underpriced; plan to triple marketing investment in 2025; elasticity tests encouraging .
  • Retail comps bridge: October low double-digit total comp; January similar strength; guidance embeds mid-single-digit retail decline for FY2025 to reflect normalization .
  • Titanium penetration: stepped down from Q3 promo-driven 25% to ~23%; mix still strong with 60% premium (Platinum+Titanium) .
  • Competition/M&A: minimal overlap with a bankrupt private competitor; rationalization benefits longer-term; disciplined approach, lease-adjusted leverage considered .
  • Sale-leasebacks: market remains robust with buyer demand (incl. 1031); focus on lowering cap rates; 21 transactions closed in Q4 .
  • Capex cadence: capex guided down on fewer openings and higher ground-lease mix; core store capex consistent (~$100K/store) .

Estimates Context

  • S&P Global consensus for Q4 2024 and prior quarters was unavailable for this recap due to access limits; estimate comparisons are omitted. If required, we can refresh once access is restored and reconcile reported results versus Street expectations.

Key Takeaways for Investors

  • Strong subscription-led quarter: UWC at 75% of wash sales, comps +6.0%, and adjusted EBITDA +13% YoY; adjusted EPS $0.09, with Q4 EBITDA margin ~31.2% despite rising rent from sale-leasebacks .
  • Premium monetization durable: Titanium at ~23% mix drove higher revenue per member ($28.65), supporting ARPU growth; management signaled measured base price increases in select markets in 2025 .
  • Guidance implies continued expansion and margin discipline: FY2025 adj. EBITDA $334–$346M and adj. EPS $0.43–$0.45, with anticipated G&A leverage and productivity initiatives offsetting modest marketing and rent pressures .
  • Interest expense tailwind: repricing to SOFR +250 bps and revolver paydown underpin ~20% reduction in net interest in FY2025, bolstering EPS growth .
  • Competitive rationalization: near-term impact limited, but over 18–24 months stores facing older competition are comping well; consolidation could create bolt-on opportunities at reasonable multiples .
  • Weather remains a swing factor for retail: recent outperformance tied partly to favorable weather; FY2025 modeling assumes retail mid-single-digit negative to remain conservative .
  • Funding flexibility intact: active sale-leaseback market with strong buyer demand and improving cap rates; sufficient balance sheet liquidity to self-fund 30–35 greenfields in FY2025 .

Bolded highlights:

  • Strongest comps in 2+ years and adjusted results above guidance in Q4 .
  • Repricing debt to SOFR +250 bps likely drives a ~20% interest expense reduction in FY2025 .
  • Premium Titanium mix at ~23% with +10% express revenue per member .