The ONE Group Hospitality, Inc.

Greetings, and welcome to the One Group Second Quarter 2025 Earnings Conference Call. At this time, all participants are in listen-only mode. A brief question and answer session will follow the formal presentation. Should you need any assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there'll be an opportunity to ask questions. To join the question queue, you may press star, then one on your touchtone phone. To withdraw your question, please press star, then two. As a reminder, this conference is being recorded. I would now like to turn the conference call over to Tyler Loy. Please go ahead.

Thank you, Operator, and hello, everyone. Before we begin our formal remarks, let me remind you that part of our discussion today will include forward-looking statements. These forward-looking statements are not guarantees of future performance, and you should not place undue reliance on them. These statements are also subject to numerous risks and uncertainties that could cause actual results to differ materially from what we expect. Please also note that these forward-looking statements reflect our opinion only as of the date of this call. We undertake no obligation to revise or publicly release any revisions of these forward-looking statements, considering new information or future events. We refer you to our recent SEC filings for a more detailed discussion of the risk that could impact our future operating results and financial condition. During today's call, we will discuss certain non-GAAP financial measures, which we believe can be useful in evaluating our performance. However, the presentation of these measures or other information should not be considered in isolation or as a substitute for results prepared in accordance with GAAP. For reconciliations of these measures, such as adjusted EBITDA, adjusted net income, restaurant EBITDA, comparable sales, and total food and beverage sales at company-owned, managed, licensed, and franchised units to GAAP measures, along with a discussion of why we consider these measures useful. Please see our earnings release issued today. With that, I'd like to turn the call over to Manny Hilario.

Thank you, Tyler, and thanks to everyone joining us on today's call. Before we get into the results, I want to take a moment to recognize the incredible dedication of our more than 10,000 teammates across the organization. Your commitment to excellence not only drives our performance, it creates the great guest memories that keep our guests coming back time and time again. With that, I'd like to discuss our second quarter highlights. We are pleased to have delivered results that met our expectations. We achieved strong top line growth of 20% driven by the successful integration of our Benihana acquisition and continued execution of our key strategic initiatives. Adjusted EBITDA was $23.4 million, underscoring our ability to drive efficiencies and profitability despite the challenging consumer environment. This quarter, we made additional investments in marketing, which helped drive positive sync store sales at Benihana and positive traffic at SDK, the second and third consecutive quarters for each metric, respectively. Integration efforts following the Benihana acquisition are progressing ahead of schedule, and we are already realizing meaningful operational synergies across multiple business areas. And finally, our development strategy continues to gain momentum. So far this year, we have opened three new company-owned restaurants in our second franchise Benihana Express location. Now let's discuss our strategic priorities. Number one, first, drive and accelerate same-store sales growth. Same-store sales growth remains our top priority, and we continue to execute against our proven framework built around three pillars, operational excellence, culinary innovation, and relevant and timely marketing. Demand remains strong during peak periods, particularly on Fridays and Saturdays, and we are focused on maximizing throughput through enhanced reservation systems and centralized logistics. These tools also allow us to better manage high-volume occasions, like a record-breaking Mother's Day, by balancing no-shows and walk-in traffic to deliver exceptional guest experiences. To address weekday traffic, we've continued to emphasize value-focused programming. including our pre-fee menus at $69 for SDK and $39 across all other brands, along with our highly popular $3, $6, $9 happy hour menus. These offerings are resonating with more value-conscious guests while maintaining our premium positioning. As we see more thoughtful spending behavior, particularly SDK, with increased demand for shared dishes and pre-fee selections, we've leaned into these patterns to drive weekday traffic and engagement. On the culinary innovation front, our Wagyu program at Benihana continues to meet expectations, and we are preparing exciting new premium menu enhancements across the portfolio intended to drive engagement and average check. Marketing continues to be a core growth lever. Our new Friends with Benefits loyalty program launched in Q2 is designed to deepen guest relationships across all brands. With more than 7 million contacts in our marketing database, This initiative is already showing strong traction in repeat visitation. Members earn points for every dollar spent and receive exclusive rewards, including birthday and half birthday offers that encourage frequency and celebration across our portfolio. As national casual dining chains intensify promotional campaigns, we are responding with investments in targeted grassroots marketing, including stronger local store marketing,