Mister Car Wash, Inc.

Good afternoon and welcome to Mr. Car Wash first quarter 2025 conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session and instructions will follow at that time. Please note that this is being recorded and a reproduction of this call in the whole or in part is not permitted without written authorization from the company. I will now turn the conference over to Eddie Plank, Vice President of Investor Relations.

Good afternoon, everyone, and thank you for joining us to discuss our first quarter financial results. With me on the call today are John Lai, Chairman and Chief Executive Officer, and Jed Gold, Chief Financial Officer. After John and Jed have made their formal remarks, we'll open the call to questions. During this conference call, references to non-GAAP financial measures will be made. A complete reconciliation of these measures to the most comparable GAAP measures have been included in the company's earnings press release issued earlier today and posted to the investor relations section of the company's website at mrcarwash.com. As a reminder, comments made on today's call may include forward-looking statements, which are subject to significant risks and uncertainties that could cause the company's actual results to differ materially from management's current expectations. While the company may choose to update these statements in the future, it is under no obligation to do so unless required by applicable law or regulation. Please review the forward-looking statements disclaimer contained in the company's SEC filings, including its most recent 10-K and 10-Q reports, as such factors may be updated from time to time with the Securities and Exchange Commission. I'll now turn the call over to John.

Thanks, Eddie. Good afternoon, everyone, and thanks for joining our first quarter 2025 earnings call. We are very pleased with our continued momentum in Q1, during which we delivered strong comp store sales growth of 6% and record revenues and adjusted EBITDA, which increased 9% and 14% respectively. These results exceeded our expectations, led primarily by strong demand during the quarter and efficient execution by our best-in-class operations team, who maximized throughput and continue to drive UWC membership. Q1 marked eight consecutive quarters of overall comp growth for MISTER and the first back-to-back quarters of positive retail comps in three years, which also helped fuel better-than-expected UWC member growth. In terms of industry dynamics, we've seen a steady reprieve to competitive intrusion, with the number of competitor new bills opening within the three-mile radius of MISTER becoming less intense since the peak of 2023. We view this along with some of the recent industry restructurings, as an opportunity to extend our leadership position and build upon our strong foundation. As the market rationalizes over the next several years, we believe we're optimally positioned to capitalize on the shifting landscape in our space. While there's still uncertainty around the tariff environment, our exposure is primarily limited to the indirect impacts that tariffs may have on consumer spending and on our supplier base. As a consumer services company, we are better positioned than most traditional retailers, and our cost structure eliminates most of the direct exposure, keeping it fairly well contained as a percentage of our total spend. Moving forward, we continue to make meaningful progress on our four strategic pillars to drive sustainable long-term growth. I'll now provide a brief update on each pillar, starting with expanding our footprint. We opened four new Greenfield stores in the first quarter, fortifying our position in key markets, and we remain on track to add 30 to 35 new stores in 2025. As a reminder, we're taking an even greater data-driven approach in our analysis of both core and new markets to identify sites that will generate the highest ROI as we aim to increase our share and expand our store footprint across the country. Given the large opportunity in front of us, we remain confident in our potential to organically double our store count in the U.S. over time, That said, as our history demonstrates, we are agnostic with respect to avenues of growth and will opportunistically pursue M&A where it makes strategic and financial sense. Next, increasing our innovative solutions. We believe one of our many competitive advantages is our ability to consistently innovate and develop new products and services to create even more value for our customers. Our motivation is to continuously elevate and enhance the customer experience and look for ways to further distinguish ourselves to create an even bigger competitive advantage. Innovations like our proprietary titanium 360 with its mirror-like finish and underbody protection developed by our in-house R&D team have had a tremendous impact on our top and bottom line while delivering an exceptional car to our customers. We're also continuously assessing our value to price ratio across the country and saw an opportunity to implement a $3 price increase in most markets to our base UWC program, which represents approximately 40% of our membership tiers. This puts us in line with many of our competitors and is the first increase to our base program since inception. Moving on to driving traffic and growing membership. We increased UWC membership by 5% year over year in Q1 to over 2.2 million members. As we increase our investment in marketing this year, Our goal is to drive retail traffic with messages and offers that resonate down to the individual level. To that end, we're running a media test in six different regions across digital, radio, and paid social to drive visitation. And we've also run targeted promotions to increase membership sign-ups. As we refine and more fully implement these efforts, we believe it will help expand our customer reach, drive increased traffic, and deliver higher membership growth. Finally, building a best-in-class team. From our senior management team to our rock stars in the stores, we continue to strengthen our bench, improve our capabilities, and increase our capacity for growth while working diligently to improve our culture. In the end, it's all about people, and I couldn't be prouder of our team who have an extraordinary will to succeed and are constantly evolving and getting better each day. Looking ahead, and with a somewhat uncertain macro environment in the near term, we remain confident in our ability to deliver positive results and build upon our leadership position. The American consumer has embraced express exterior car washing as part of their regular routine, and the popularity of our subscription program is driven by its convenience and affordability. Over the last 30 years, we've managed through various economic cycles and demonstrated how resilient our service remains. Before I hand the call off to Jed, I want to express our sincere gratitude to our amazing team who shows up every day, works incredibly hard, and makes our strong results possible. I'll now pass it to Jed to provide more commentary around our financial results.