Black Rock Coffee Bar, Inc.

Good afternoon, and welcome to BlackRock Coffee Bar's third quarter 2025 results conference call. Today's call is being recorded, and we have allocated one hour for prepared remarks and Q&A. At this time, I would like to turn your call over to Will McIntosh, Chief Investor Relations Officer for BlackRock Coffee Bar. Thank you. You may begin.

Good afternoon, everyone, and thanks for joining us for BlackRock Coffee Bar's third quarter results. Before we begin, we would like to remind you that this conference call may include forward-looking statements. These statements, which are subject to various risks, uncertainties, and assumptions, could cause our actual results to differ materially from these statements. These risks, uncertainties, and assumptions are detailed in this morning's press release, as well as our filings with the SEC, which can be found on our IR website. We undertake no obligation to revise or update any forward-looking statements or information except as required by law. During our call today, we will also reference certain non-GAAP financial information. We use non-GAAP measures to assist investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our operating performance. The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. Reconciliations of GAAP to non-GAAP measures can be found in this morning's press release and in our SEC filings. Joining me on the call today is our CEO, Mark Davis, and our CFO, Rod Booth. Following our prepared remarks, we'll open the call for your questions. With that, I'll turn it over to Mark.

Thank you, Will. Good afternoon, everyone. We appreciate you joining us today on our first earnings call as a public company. While our recent IPO marks a significant milestone in BlackRock's growth journey, we are even more excited about the opportunities we see ahead for this business. On today's call, I'll begin with a brief recap of the BlackRock equity story we introduced during our IPO, followed by highlights from our third quarter performance. Then you'll hear from our CFO, Rod Booth, providing updates on our third quarter financials, along with our outlook for the remainder of 2025. For those of you new to our story, BlackRock was founded in 2008 with a simple mission, to build connections through caffeine and community. What began as a single store has grown into 169 locations across seven states as of September 30th, 2025. We believe BlackRock is uniquely positioned to become a leading force in the specialty beverage space with a long-term goal of reaching 1,000 stores by 2035. We've demonstrated the strength of our model and the demand for our brand through our strong unit economics and rapid expansion. Our growth is fueled by, one, our people-first culture, Two, a differentiated guest experience. And three, a disciplined expansion strategy that thrives across geographies. Starting with our people-first culture. At BlackRock, our culture is our competitive advantage. We foster a workplace where team members feel empowered, valued, and inspired to deliver exceptional service. This collaborative and performance-driven culture translates directly into guest satisfaction and operational excellence. Our commitment to staying true to our values while hiring and developing exceptional individuals drives high team member retention, which in turn fuels strong store performance and guest loyalty. When we take care of our team, They take care of our guests. That's how we win together. Next, turning to our guest experience. At BlackRock, every guest interaction is designed to be personal, memorable, and rooted in connection. Our baristas are the heart of the experience, creating premium, handcrafted beverages with speed, care, and a human touch. The menu is built with simplicity and intentionality, featuring core coffee forward offerings, while also providing our signature fuel energy drinks. We also provide chillers, teas, and curated food offerings designed for all-day engagement, which is reflected in our balanced day part and by-day mix. Guests can personalize their drinks based on espresso strength, sweetness, flavor, and toppings supported by our small batch roasting at two company-owned facilities to ensure quality, freshness, and consistency. Whether in our drive-thrus or welcoming lobbies, guests find spaces that foster community, often referring to their local store as my BlackRock, a reflection of the belonging we strive to create. Furthermore, we're focused on meeting our guests wherever they are, whether in store, drive-thru, or online. Our modern inviting store format paired with a robust digital platform allows us to deliver a dynamic, multifaceted experience that balances convenience with connection. With the launch of our mobile app, online ordering, and expanded loyalty platform in July of 2024, we've created seamless pathways for engagement that reflect how our guests live, work, and interact with our brand. These tools are driving deeper relationships and increasing frequency while reinforcing our commitment to innovation and guest-first service. As it relates to our guests, our broad and balanced demographic exposure, ranging from ages 18 to to 45 years old, leaning higher in income and slightly more male, also highlights the broad appeal we have in the communities where we operate, while also providing significant opportunity to continue driving penetration across more targeted guest cohorts. And last, we're expanding our presence and experience to new consumers every day. BlackRock's expansion strategy is centered on company operated stores, which allows us to maintain consistent execution, strong unit economics, and scalable growth. A key driver of this strategy is our internal career development pathway. which equips team members with business acumen and leadership skills empowering them to grow from barista to multi-unit manager to senior leadership and beyond this approach creates a deep bench of experienced operators who understand our culture values and operational standards enabling us to open new stores with confidence and consistency. The ownership mindset fostered through this pathway drives alignment, engagement, performance, and retention across the organization, ensuring that each new store is led by someone deeply invested in its success. As it relates to new unit growth, we follow a disciplined data-driven approach to site selection, focusing on high-traffic suburban areas and expanding outward from our proven markets and concentric circles. This strategy allows us to build awareness with limited sales transfer and ensure operational consistency while also leveraging overhead effectively. Our dual format model is designed for connection, high volume, speed, and efficiency. Every location has a drive-through with lobbies at 75% of our stores, balancing convenience with community and offering flexible spaces for guests to connect. As we grow, we continue to prioritize lobby inclusion, staying true to our vision of being more than a coffee shop, a place of connection. With significant white space opportunity in both new and existing markets, our cost-efficient and proven concept is well-positioned to support our expansion ambitions. With that, let me now shift to our third quarter performance. BlackRock delivered excellent third quarter results, continuing our strong momentum from the first half of the year with revenue and adjusted EBITDA growth of 24% and 35%, respectively, compared to the prior year. We continue to drive store expansion opening 11 new locations in the third quarter and totaling 20 new stores opened year to date. Same store sales finished ahead of expectations at 10.8% in the third quarter, with positive comp growth in all of our markets. Our teams have done a terrific job executing against our plan and driving our three strategic initiatives forward. Customer engagement, fostering a people-oriented culture, and market expansion. These three priorities are at the core of what we do, so let me take a few minutes to talk through our progress against each during the quarter. Starting with customer engagement, in the third quarter, our loyalty rewards platform participation rate continued to increase, signaling strong guest adoption and growing engagement since its launch in July 2024. Loyalty guest frequency rate and check have both increased as a result, highlighting the program's effectiveness in driving repeat business, retention, and deeper customer relationships. Overall, same-store transaction growth was 6.1%, showing continued healthy momentum. Digital sales continued to grow sequentially as a percent of total sales, as app, online ordering, and third-party delivery saw increased guest frequency following our native OLO launch last year. We're pleased with the continued traction we're seeing in these initiatives, which drive higher engagement, reach, and optionality for our customers. As it relates to product mix assortment and menu performance during our seasonal LTO windows in the quarter, we saw standout performance from the Pumpkin Blondie and Butterscotch Brevet. Our three pumpkin-inspired LTO drinks have sustained strong momentum, which has continued into the fourth quarter. We continue to explore new avenues of product innovation across our menu, from expanding into functional and flavor-forward offerings to potential seasonal food items while maintaining a strong focus on testing new beverage and food ideas that align with evolving guest preferences. Importantly, we are closely tracking menu adjustments across markets with ongoing regional menu optimization efforts to ensure we're addressing the unique preferences of guests across various markets to maximize our same store sales and auvs to that end we're especially encouraged by the early success of our newest food offering egg bites which officially launched in July and is gaining solid traction with guests across our locations. Product mix for both coffee-based beverages and food increased sequentially during the third quarter, reflecting continued demand and engagement with our menu innovation and elevated sweet and savory food options. We expect the addition of egg bites as a new savory and protein-focused food offering will support both food product mix growth as well as day part mix growth in the coming quarters as we continue to lean in. All in all, our broad range of offerings across menu and point of service continue to support our strong customer engagement performance And we see significant opportunity to continue leveraging these to build brand awareness and expand our presence in our existing markets. Turning to our robust, people-oriented culture. As I touched on earlier, at the heart of our brand is a simple belief. Investing in our people and culture drives stronger guest connections and better experiences. Our overall strong retention rates, driven by our clear career growth paths and meaningful incentives, speaks to the strength of our people-first approach. Our team member and store lead turnover both improved year over year. The initiatives we've implemented over the years focused on business acumen, skill development, career growth, and operational efficiency across stores have contributed meaningfully to our success and continue to strengthen our foundation for long-term growth. For example, our learning management system delivers strong onboarding and training support, builds business acumen, and ultimately leads to more confident new hires and improved engagement outcomes. To further strengthen our people pipeline and help our store leads run the stores more effectively, We launched our career roadmap training program earlier this year. This initiative is designed to build leadership capabilities, enhance team management, and drive greater structure and consistency across our operations, supporting long-term growth through talent development. We are actively scaling our career roadmap training program across all growth markets with the continuous goal of building a strong bench of future leaders to support BlackRock's expansion strategy. Store lead retention continues to outperform the top quartile of industry benchmarks, sustaining the positive momentum we built over the past 24 months. We're proud of the strong traction we're seeing and remain deeply committed to equipping our teams with the tools, training, and support they need to manage their stores effectively and thrive in their roles. These efforts have been bearing fruit with team member engagement up, strong guest satisfaction, and overall strong turnover. In addition to our training programs, we also recently launched our inventory management module, which is designed to enhance COGS performance and elevate business acumen across our employee base. While still in the early stages of rollout, our team has shown strong initiative in applying early learnings to refine and strengthen the program, positioning us to drive meaningful impact across the organization as implementation scales. Finally, I'll touch on market expansion progress in the third quarter. We opened 11 new locations in the period across several growth markets, Arizona, Texas, Colorado, and California, bringing our year-to-date store openings to 20, and our total store count to 169. Notably, we opened our first drive-through store with a lobby in Southern California, which is driving strong brand awareness and AUV growth. This early traction reinforces our confidence as we expand our footprint in the region. Overall, we're pleased with the year-to-date performance of our newest cohort, encompassing our new units in 2025, which continues to exceed sales projections and store-level profit goals while delivering strong cash-on-cash returns and outperforming the system on retention and guest satisfaction. The consistently strong performance of our new cohorts combined with the depth of our development pipeline gives us great confidence in our ability to drive continued AUV growth, building off our reported 1.3 million this quarter. Importantly, we take a disciplined and data-driven approach to site selection. identifying high performing and high traffic locations for our stores. During the quarter of our 11 new store openings, all except one included lobbies, and one leveraged our modular prototype, which we are rolling out to further accelerate our speed to market and drive cash on cash returns. Build costs remain stable despite a volatile environment, a testament to our disciplined project management and vendor relationships. Looking ahead, we see substantial white space for continued growth across the seven states we operate in today, and we will continue to drive new store momentum with our proven and scalable development playbook, supported by our deep bench of experienced team members and leaders. While we're still early in our accelerated expansion efforts, we're energized by the opportunity we see ahead, and I'm confident in our ability to open a thousand units over the next 10 years. Before I turn it over to Rod, I want to take a moment and thank the BlackRock team, our baristas, our leadership team, and our home office for their hard work, commitment, and passion they bring every day to delight our guests and build connections through caffeine and community. I also want to thank our shareholders for supporting us as we embark on this exciting journey where we see tremendous runway to drive long-term sustainable growth and ultimately shareholder value creation. With that, I'll turn the call over to Rod to provide an update on our third quarter 2025 financial performance.