Driven Brands Holdings Inc.

Thank you for standing by. My name is Matt and I will be your conference operator today. At this time, we would like to welcome everyone to the Driven Brands second quarter 2026 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. I would now like to turn the conference over to Steve Alexander, Investor Relations. You may begin.

Good morning. Welcome to Driven Brands' second quarter 2026 earnings conference call. The earnings released and that leverage ratio reconciliation are available for download on our website at investors.drivenbrands.com. On the call with me today are Danny Rivera, President and Chief Executive Officer, and Mike Diamond, Executive Vice President and Chief Financial Officer. In a moment, Danny and Mike will walk you through our financial and operating performance for the quarter. Before we begin our remarks, I would like to remind you that management will refer to certain non-GAAP financial measures. You can find the reconciliations to the most directly comparable GAAP financial measures on the company's investor relations website and in its filings with the Securities and Exchange Commission. During this call, we will also make forward-looking statements regarding our current plans, beliefs, and expectations. These statements are not guarantees of future performance and are subject to a number of risks and uncertainties and other factors that could cause actual results and events to differ materially from results and events contemplated by these forward-looking statements. Please see our earnings release and our filings with the Securities and Exchange Commission for more information. Today's remarks will be followed by a question and answer session. We ask that you limit yourself to one question and one follow-up. Now, I'll turn the call over to Danny.

Good morning and thank you for joining us to discuss Driven Brands' second quarter 2026 financial results. Driven delivered another quarter of positive same-source sales and continued growth, led once again by Take 5. Our franchise brand segment continued to serve as a reliable, high-margin cash generator and we further strengthened the balance sheet during the quarter, reducing net leverage to 3.1 times. For the quarter, compared to prior year, System-wide sales grew 5% to $1.6 billion, revenue grew 7% to $507 million, and adjusted EBITDA was $107 million. Consolidated same-store sales increased 1.4%, and we grew our total footprint 5% to more than 4,300 locations, adding 192 net new stores over the last 12 months, with growth once again led by Take 5. Our strategy remains consistent. drive strong growth through Take 5 and generate reliable free cash flow from franchise brands. That combination of growth and cash allows us to invest in our highest return opportunities while continuing to strengthen the business. The operating environment remains dynamic and is being shaped by several factors, starting with a case-shaped consumer economy in which lower-income households remain under significant pressure. Moreover, Renewed conflict in the Middle East has disrupted energy markets, driving volatility in oil prices and supply, and pushing gas prices higher, which weighs directly on consumers and demand. While the broader industry is facing supply chain pressure, our scale and strong supplier relationships mean we do not foresee near-term supply concerns absent a significant change in conditions. our largely non-discretionary portfolio is built to perform in exactly this kind of environment. That said, resilient does not mean impervious. So we are approaching the back half of the year with caution and a disciplined focus on execution. Let me start with take five, home of the stay in your car 10 minute oil change. Take five delivered its 24th consecutive quarter of same store sales growth with same store sales up 3.6%, and system-wide sales growth of 13%. On a two-year basis, Take 5 same-source sales grew 10.2%, reflecting the underlying strength of the business as we lap a strong prior year period. Adjusted EBITDA grew 8% with margins of 34%. We opened 50 net new Take 5 locations in the quarter and have grown the segment by more than 175 stores over the past 12 months, ending the quarter with more than 1,400 locations. The Take-5 model continues to resonate with our customers. Our net promoter scores remain in the mid-70s, and we continue to see meaningful contribution from our non-oil change services, which represented almost 30% of Take-5 sales for the quarter. Our new unit pipeline remains robust at approximately 800 locations, more than one-third of which are site-secured or further along. and we remain committed to opening 150 or more units annually as we progress toward our long-term goal of more than 2,500 total locations. That said, we continue to watch the consumer closely. As we noted last quarter, we are seeing some moderation, particularly among newer customers and lower income consumers who have been under sustained pressure. We are at our best when we are the fastest, friendliest and simplest oil change on the planet. and the team remains focused on delivering that value proposition and on building lasting customer relationships. We believe the largely non-discretionary nature of our services positions us well as we manage through a more dynamic macro environment. A brief word on input costs. Like the broader market, we have seen upward pressure on oil and related input costs in recent months. Here, Take5's scale is an advantage. We benefit from strong, long-standing supplier relationships, a diversified supply chain, and healthy product availability, and a seasoned procurement team that continues to manage supply and cost effectively. We have a track record of taking modest, disciplined price increases to offset rising input costs, and we will keep managing that lever thoughtfully while staying focused on protecting the value we deliver to our customers. Turning to franchise brands, home to iconic brands like Meineke, Mako, and Carstar. This segment did exactly what it is designed to do, generating reliable, high margin cash flow. Same store sales increased 0.5%, and the segment delivered strong adjusted EBITDA margins of 59%. Performance was led by continued strength at Meineke. In collision, while the broader industry remained under pressure, we continued to outperform. taking share and running approximately 200 basis points ahead of the industry. Mako, our most discretionary brand, also remains under pressure, consistent with the trends we have previously discussed. Even so, this segment continues to be a dependable source of cash that funds our growth. Turning to Auto Glass now, which delivered same-store sales growth of 2.6% and continued to make steady progress. Since entering the automotive glass market, we have scaled auto glass now into the second largest operator in the industry and we see a long growth runway ahead. The glass market is large, fragmented and growing, and we have meaningful opportunity to expand across our retail, commercial and insurance channels and to continue taking share over time. As a reminder, this business remains in its incubation period and performance will be uneven from quarter to quarter. but we are encouraged by the foundation we have built and by the long-term opportunity in front of us. Before turning to our outlook, let me spend a moment on our financial foundation. We remain focused on strengthening the foundation of Driven Brands, continuing to invest in our people, systems and processes, and we are making solid progress. This work positions us to operate with greater discipline and consistency as we execute our strategy. Now turning to our outlook. We are reiterating our full-year 2026 guidance, revenue of $1.95 billion to $2.05 billion, same-source sales of flat to 2%, and net new unit growth of 160 to 190 units. We are also reiterating our adjusted EBITDA range of $430 million to $460 million. That said, consistent with our approach to providing you visibility into key developments, and based on what we are seeing today, we expect to be closer to the lower end of our range. Given the continued uncertainty around consumer demand, particularly among lower income households and the conflict in the Middle East, we believe a measured posture is appropriate in a dynamic environment. Mike will take you through the details in a moment. Let me close with a few key takeaways. First, we delivered another quarter of positive same-source sales growth across all segments. Second, Take 5 again led the way with another quarter of strong, consistent growth and its 24th consecutive quarter of same-store sales growth. Third, our franchise brand segment continues to serve as a reliable, high-margin cash generator. And finally, we remain firmly committed to our capital allocation priorities, including reaching our target of three times net leverage by the end of 2026. I want to thank our more than 7,000 Driven Brands team members and our franchise partners for their continued dedication and execution. Their commitment to taking care of our customers every day is what drives our results. With that, I'll turn it over to my partner and Driven CFO, Mike.