Boyd Group Services Q4 2025 Earnings Report

Boyd Group Services EPS Results

• Actual EPS: C$1.24
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Boyd Group Services Revenue Results

• Actual Revenue: $1.04 billion
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Boyd Group Services Announcement Details

• Quarter: Q4 2025
• Date: 3/18/2026
• Time: Before Market Opens
• Conference Call Date: Wednesday, March 18, 2026
• Conference Call Time: 10:00AM ET

Boyd Group Services (TSE:BYD) is a Canadian corporation and controls The Boyd Group Inc. and its subsidiaries. Boyd Group Services Inc. shares trade on the Toronto Stock Exchange (TSX) under the symbol BYD.TO and the New York Stock Exchange (NYSE) under the symbol BGSI. For more information on The Boyd Group Inc. or Boyd Group Services Inc., please visit our website at https://www.boydgroup.com .

Boyd Group Services Q4 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Company reported a strong 2025 with CAD 3.1 billion revenue, adjusted EBITDA up 12.4% to CAD 376.3 million, and Q4 adjusted EBITDA up 24.2% with margin expansion to 13.1%.
• Positive Sentiment: The Project 360 transformation delivered CAD 40 million of annualized savings in 2025 and, combined with Joe Hudson synergies, forms a CAD 140 million integrated cost program expected to drive further margin improvement (another ~CAD 50 million targeted in 2026).
• Positive Sentiment: Boyd closed the CAD 1.3 billion Joe Hudson's acquisition (Jan 9, 2026); integration is on schedule (≈44% of stores converted, ~30/week) and management expects ~50% of the CAD 35–45 million synergies in 2026 with procurement benefits already beginning.
• Positive Sentiment: Industry conditions are normalizing—repairable claims declines improved from ~9–10% early 2025 to ~2–4% in Q4 and management says trends continued into early 2026, supported by falling insurance premium growth and rising used-car prices, which should support volumes and pricing over time.
• Negative Sentiment: Near-term headwinds include unusual southern winter storms that temporarily reduced Q1 volumes, higher early-year payroll taxes and one-time transformation/integration costs (Project 360 implementation and Joe Hudson integration roughly CAD 20–30 million each) that weighed on 2025 net earnings.

Presentation

[Operator]

Thank you for standing by and welcome to The Boyd Group Services Q4 and year-end 2025 earnings conference 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. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press star one. Thank you. I'd now like to turn the call over to Linda Funk, VP Finance. You may begin.

[Linda Funk, VP of Finance at The Boyd Group Services]

Good morning, everyone. Welcome to The Boyd Group Services Inc.'s 2025 Q4 results conference call. Listeners are reminded that certain matters discussed in today's conference call or answers that may be given to questions asked could constitute forward-looking statements that are subject to risks and uncertainties relating to Boyd's future financial or business performance. Actual results could differ materially from those anticipated in these forward-looking statements. The risk factors that may affect results are detailed in Boyd's annual information form and other periodic filings and registration statements, and you can access these documents at SEDAR's database found at sedarplus.ca and EDGAR at sec.gov. I'd like to remind everyone that this conference call is being recorded today, Wednesday, March 18, 2026. I would now like to introduce Mr. Brian Kaner, President and Chief Executive Officer of The Boyd Group Services Inc. Please go ahead, Mr. Kaner.

[Brian Kaner, President and CEO at The Boyd Group Services]

Good morning, everyone, and thank you for joining us on today's call. On call with me today is Jeff Murray, our Executive Vice President and Chief Financial Officer. We released our 2025 Q4 and year end results before markets opened today. You can access our news release as well as our complete financial statements and management discussion and analysis on our website at boydgroup.com. Our news release, financial statements, and MD&A have also been filed on SEDAR+ and EDGAR this morning. On today's call, we will discuss the financial results for the three-month period and the year ended December 31, 2025, provide a general business update and discuss our long-term growth strategy. We will then open the call up for questions. Our 2025 fiscal year was both busy and highly successful for Boyd.

[Brian Kaner, President and CEO at The Boyd Group Services]

In the first half of the year, we focused on implementing a number of key initiatives, including Project 360, an enhanced go-to-market strategy, and a more localized customer service approach. As we moved into the second half, we saw strong execution on these initiatives, driving meaningful adjusted EBITDA, margin expansion, and industry outperformance. Combined with the continued improvement in repairable claims, this supported a return to positive same-store sales in the second half of the year, a trend that has continued into early 2026. Alongside these operational improvements, we also took advantage of an improving acquisition environment and our strong balance sheet to complete four small MSO acquisitions and announced the acquisition of Joe Hudson's Collision Center.

[Brian Kaner, President and CEO at The Boyd Group Services]

We also listed our shares on the New York Stock Exchange and completed two unsecured note offerings, important milestones in Boyd's evolution that will broaden our access to U.S. investors and further strengthen our capital markets profile. Before I discuss our results in more detail, I want to thank our employees and senior leadership team. Their dedication and hard work are the foundation of our success, and these results are a direct reflection of their commitment. Turning to our financial performance, in 2025, we delivered CAD 3.1 billion in revenue, representing growth of 2.4% year-over-year.

[Brian Kaner, President and CEO at The Boyd Group Services]

Adjusted EBITDA increased by 12.4%, with adjusted EBITDA margins expanding by 110 basis points to 12%, driven by the successful execution of Project 360, our cost transformation plan, and the internalization of scanning and calibration. We exited the year with strong momentum. In the Q4, we generated our second consecutive quarter of positive same-store sales growth of 2.2% and grew EBITDA by 24.2% year-over-year. Our EBITDA margin expanded to 13.1% in the Q4, up from 11.1% in the Q4 of 2024.

[Brian Kaner, President and CEO at The Boyd Group Services]

As we've discussed on previous calls, throughout 2025, we saw consistent improvement in several of the industry headwinds that had been negatively impacting repairable claims, namely moderation of insurance premium growth and the increasing used vehicle prices. This resulted in a reduction in estimated declines in claims activity from 9%-10% in the Q1, down to 2%-4% by the Q4 of 2025. I'm pleased to report that this improvement has continued into 2026. Auto insurance premium growth is now running below CPI levels. Insurance carriers have implemented rate reductions and used car prices are increasing. These improvements, combined with increased activity levels we've seen in our business since the end of the Q2, give us confidence that the industry conditions continue to normalize.

[Brian Kaner, President and CEO at The Boyd Group Services]

In the early months of 2026, while winter storms benefited our northern regions, this benefit was partially offset by unusual storm activity in the south. These storms resulted in lower driving activity and therefore a short-term reduction in volume in our southern locations, including Joe Hudson's. As the quarter progressed, we've seen the volumes in the south normalize with overall same-store sales thus far tracking similar to Q4 levels. Throughout 2025, we also continued to expand our location footprint through the execution of our long-standing growth strategy. During the year, we opened 70 new locations, including 27 startup locations and 43 through acquisitions. Looking ahead, we continue to have a robust pipeline of startup locations under development through 2026. We expect to open eight new locations in the Q1 with an additional 24 locations in development for the remainder of the year.

[Brian Kaner, President and CEO at The Boyd Group Services]

In addition, 2025 marked a return to MSO acquisitions for Boyd as our strong balance sheet enabled us to capitalize on an improved acquisition landscape. In August, we completed our first small acquisition since 2021 with the acquisition of L&M Body Shop in Virginia. We also completed 3 additional MSO acquisitions in the Q4 in Nevada, Hawaii, and Nova Scotia, with the Nova Scotia acquisition representing our initial entry into that province and underscores our commitment to continued growth in the Canadian market. Looking ahead, our pipeline for single shop and small MSO acquisition remains strong and will complement our startup expansion. Our roadmap focuses on building density in our existing markets and achieving leading positions where we operate.

[Brian Kaner, President and CEO at The Boyd Group Services]

Our goal is to establish a number one or two position in all of our markets, which strengthens our ability to serve our insurance company clients and its customers while driving long-term shareholder value through margin expansion and market share gains. Turning now to Joe Hudson's. We successfully closed the acquisition in early January, and the integration is progressing well and in line with our expectations despite some softness in activity levels early in the quarter due to the unusual winter storm activity in the southern region. I've been very encouraged with the Joe Hudson's team. From the outset, they have shown strong enthusiasm about joining Boyd, and the teams have worked well together, combining the strengths of both organizations as we continue to integrate and operate as one team.

[Brian Kaner, President and CEO at The Boyd Group Services]

Our initial focus has been on converting Joe Hudson's locations to Boyd's information technology platforms and branding. Similar to the successful rollout of our indirect staffing model in 2025, we began this process gradually to ensure operational stability. We initially converted six stores in our first week and have steadily increased the pace. We are now converting approximately 30 stores per week, which will remain the cadence until the process is completed. To date, we have converted approximately 44% of the stores and expect the remaining locations to be completed early in the Q2 of 2026. We have also begun realizing early synergy captured through direct procurement savings to date in the Q1. Synergy realization is expected to accelerate once store conversions are complete and we are able to fully leverage our scale and market position.

[Brian Kaner, President and CEO at The Boyd Group Services]

We remain on track to achieve approximately 50% of the CAD 35 million-CAD 45 million in expected synergies in 2026. Before turning the call over to Jeff, I'd like to provide a brief update on Project 360. When we launched the CAD 100 million cost transformation plan in the Q4 of 2024, we set ambitious targets. I'm pleased to report that we delivered on those targets in 2025. We realized CAD 40 million in annualized cost savings in 2025 from the successful implementation of our indirect staffing model, as well as procurement savings. Going forward, we will report Project 360 savings and Joe Hudson's synergies together as the team will oversee both initiatives. This team has successfully executed our Project 360 transformation since its launch and will now also lead the realization of Joe Hudson's synergies.

[Brian Kaner, President and CEO at The Boyd Group Services]

As a result, these initiatives will be managed and disclosed as a single integrated cost program totaling CAD 140 million, consisting of CAD 100 million from Project 360 and approximately CAD 40 million in synergies. To date, CAD 40 million of the Project 360 savings were realized in 2025, with an additional CAD 50 million expected in 2026 and the remaining CAD 50 million to be realized between 2027 and 2029. With that, I'll turn the call over to Jeff.

[Jeff Murray, EVP and CFO at The Boyd Group Services]

Thanks, Brian. I will start off with an overview of our Q4 results, followed by a brief summary of our full year 2025 results. As Brian highlighted, we had a strong Q4 and positive same-store sales growth and solid margin improvement as we continued to execute on Project 360. During the Q4, our sales increased by 5.5% year-over-year to CAD 793.9 million, with the same-store sales excluding foreign exchange increasing by 2.2%. In addition, CAD 26.9 million in incremental sales were generated from 83 new locations that were not in operation for the full comparative period. Industry conditions continued to improve in the Q4.

[Jeff Murray, EVP and CFO at The Boyd Group Services]

Based on claims processing platform data, we estimate that repairable claims declined by approximately 2%-4%, a meaningful improvement from the first three quarters of 2025, with claims volume improving sequentially each quarter. Boyd continued to solidly outperform the industry during the Q4. Gross margin was 46.3% in the Q4 of 2025, compared to 45.8% achieved in the same period of 2024. The gross margin percentage benefited from internalization of scanning and calibration, an increase in parts margins, and improvements in performance-based pricing.

[Jeff Murray, EVP and CFO at The Boyd Group Services]

The improvement in parts margin was a result of Project 360 initiatives, while the improvement in performance-based pricing was driven by improved alignment across our regional teams to meet the unique KPIs of their insurance company clients. Turning to operating expenses, for the Q4 of 2025, operating expenses as a percentage of sales were 33.3%, down 150 basis points from 34.8% of sales for the same period in 2024. Operating expenses as a percentage of sales were positively impacted by Project 360 and our return to positive same-store sales growth, which provided improved operating leverage on certain operating costs. Adjusted EBITDA increased 24.2% year-over-year to CAD 103.6 million.

[Jeff Murray, EVP and CFO at The Boyd Group Services]

Adjusted EBITDA margins improved 200 basis points to 13.1% in the Q4, up from 11.1% in the same period of the prior year. The increase was a result of an improvement in same-store sales, benefits from the internalization of scanning and calibration, and cost savings from Project 360. In 2026, we expect to achieve additional cost savings from Project 360, including continued procurement savings and operational efficiencies. I would like to highlight that as we enter 2026, Q1 expenses consistent with prior years are impacted by higher payroll taxes that occur early in the year. In addition, the Q4 of 2025 benefited from reductions in expense accruals as certain estimates were finalized at amounts lower than previously accrued.

[Jeff Murray, EVP and CFO at The Boyd Group Services]

These items should be considered when comparing sequential margin performance between the Q4 of 2025 and the Q1 of 2026. Net earnings for the Q4 of 2025 was CAD 4.8 million compared to CAD 2.4 million in the same period of 2024. Net earnings for the period benefited from higher operating income, partially offset by an increase in depreciation expense due to location growth and acquisition and transformation costs. Excluding fair value adjustments, acquisition and transformational cost initiatives, and amortization of intangibles arising from acquisitions, adjusted net earnings for the Q4 of 2025 were CAD 22.8 million or CAD 0.90 per share compared to adjusted net earnings of CAD 10.8 million or CAD 0.50 per share in the same period of the prior year.

[Jeff Murray, EVP and CFO at The Boyd Group Services]

Commencing in the Q4 of 2025 and to align with many other growth companies, the calculation of adjusted net earnings now also excludes amortization of intangibles arising on acquisitions. Comparative periods have been restated for consistency. Now moving on to our annual results. For the year ended December 31, 2025, we reported sales of CAD 3.1 billion, an increase of 2.4% over the prior year, driven by contributions from 119 new locations that had not been in operation for the full comparative period, partially offset by same-store sales declines of 0.2%. It is important to note that fiscal 2025 included one fewer selling and production day compared to fiscal 2024, which reduced capacity by approximately 0.4% and resulted in the decline in same-store sales.

[Jeff Murray, EVP and CFO at The Boyd Group Services]

I'm pleased to report that we once again outperformed the industry in 2025, with our same-store sales performance exceeding the estimated 5%-7% decline in repairable claims. Gross margin increased by 90 basis points year-over-year to 46.4% of sales compared to the prior period, reflecting the benefits from internalization of scanning and calibration, improved parts margins, and improvement in performance-based pricing. Operating expenses as a percentage of sales declined 20 basis points to 34.4% for the year ended December 31, 2025, compared to 34.6% for the same period in 2024, primarily driven by Project 360 cost savings. These improvements were partially offset by negative leverage on lower same-store sales, incremental costs from scanning and calibration, and an investment in facilities maintenance costs.

[Jeff Murray, EVP and CFO at The Boyd Group Services]

Adjusted EBITDA for the year ended December 31, 2025, increased 12.4% year-over-year to CAD 376.3 million, while adjusted EBITDA margins expanded to 12% from 10.9% in the same period of the prior year. The improvement in adjusted EBITDA was a result of an increased sales from new location growth, gross margin improvement, and the significant cost savings achieved through Project 360. We reported net earnings of CAD 18.4 million compared to CAD 24.5 million in the prior year. The decline was driven in part due to acquisition and transformational cost initiatives of CAD 22.6 million net of tax, including CAD 9.1 million related to the Joe Hudson's acquisition and CAD 9.9 million related to Project 360 implementation.

[Jeff Murray, EVP and CFO at The Boyd Group Services]

Adjusted net earnings in 2025 increased 28.8% year-over-year to CAD 62.4 million, while adjusted net earnings per share increased to CAD 2.78 in 2025 from CAD 2.26 in 2024. The growth in adjusted net earnings came from increased sales, improvement in gross margins, and cost efficiencies from Project 360. As previously noted, commencing in the Q4, we have begun to exclude amortization of intangibles arising from acquisitions from adjusted net earnings, and comparative periods have also been restated. At the end of 2025, we had total debt net of cash of CAD 488.1 million compared to CAD 1.28 billion at the end of the Q3 of 2025.

[Jeff Murray, EVP and CFO at The Boyd Group Services]

Before lease liabilities, we exited 2025 with net cash of CAD 290.7 million compared to net debt of CAD 521.1 million at the end of September 2025. The decrease in debt net of cash was a result of the proceeds received from the CAD 525 million senior unsecured note offering and the $897 million bought deal initial public offering in the US that reduced draws on the credit facilities and partially offset by location growth.

[Jeff Murray, EVP and CFO at The Boyd Group Services]

The net proceeds of these offerings were used to fund the $1.3 billion acquisition of Joe Hudson's Collision Center on January 9, 2026. During 2026, the company plans to make capital expenditures, excluding those related to acquisition development of new locations, within the range of 1.6%-1.8% of sales. In addition to these capital expenditures, the company expects to incur approximately $30 million related to the Joe Hudson's acquisition, as well as completing our planned investment in network technology updates. In 2026, we also expect to incur one-time costs related to the Project 360 cost savings initiative and the realization of the synergies from the Joe Hudson's acquisition.

[Jeff Murray, EVP and CFO at The Boyd Group Services]

For Project 360, the total costs to achieve are expected to be between CAD 20 million-CAD 23 million, of which CAD 13.4 million were incurred in 2025. In 2024, similar transformation costs were incurred totaling CAD 4.4 million. The cost to achieve the Joe Hudson's synergies are estimated at approximately CAD 30 million in one-time costs. I will now pass it back to Brian for closing remarks.

[Brian Kaner, President and CEO at The Boyd Group Services]

Thank you, Jeff. Throughout 2025, we significantly strengthened our business through improved profitability, a more focused location growth strategy centered on densification, a meaningfully expanded footprint, and a stronger capital markets profile. Looking ahead to 2026 and beyond, we believe our strength and position enables us to deliver even greater value as we leverage our leadership in the highly fragmented North American collision repair industry and continue executing the disciplined growth strategy that has driven Boyd's success for more than three decades. With that, I would now like to open the call to questions.

[Operator]

Thank you. We will now begin the question-and-answer session. If you'd like to ask a question, please press star one on your telephone keypad. If you'd like to withdraw your question, simply press star one again. Your first question today comes from the line of Krista Friesen from CIBC. Your line is open.

[Brian Kaner, President and CEO at The Boyd Group Services]

Hi, Krista.

[Krista Friesen, Executive Director in Equity Research at CIBC]

Hi. Thanks for taking my question. Good morning. Can you give a little bit more color on what you're seeing for same-store sales growth right now? I appreciate there were some storms in January, but just curious how you view Boyd exiting Q1 and maybe what the run rate is in March, if you can share that.

[Brian Kaner, President and CEO at The Boyd Group Services]

Yeah. Well, obviously, we won't show the run rate in March. As we look at the first two months of the year, you know, what we saw was what we said. You know, strength in the northern markets, partially offset by just a couple day period of time where, you know, the storms in the south. There was a batch of storms that hit the south, you know, late in January that just negatively affected our arrivals for a couple of day period of time, and that partially offset, you know, our ability to, you know, to get back into the range. I think without that, I would suggest we probably would have been, you know, talking about something that was more in line with the range, which is reflective of.

[Brian Kaner, President and CEO at The Boyd Group Services]

Which is certainly reflective of the macro backdrop that we're experiencing. You know, we've continued to outperform the market, you know, by somewhere around five points. You know, if the market's down 2%-4%, you'd expect us to be, you know, in that, you know, kind of 3%-3+% range. With the storms that affected the South, it just put us in a position where we saw that very temporary impact on the business. The growth in our northern markets where we've had snow and pretty consistent weather has been very strong. I think we're, you know, all we're really flagging there is a short-term, very short-term impact, you know, from the weather.

[Krista Friesen, Executive Director in Equity Research at CIBC]

Okay. Thank you. Maybe just on the Q4 same-store sales growth. I believe when you had reported Q3 in mid-November, you talked about Q4 kind of being back within the target range. Just wondering if you can speak to kind of what caused that difference in the last half of Q4. Thank you.

[Brian Kaner, President and CEO at The Boyd Group Services]

Yeah. Yeah. I mean, I think the only thing I can really point to that caused any sort of, you know. When we had reported, we certainly were in the range that we talked about as we progressed throughout the quarter. You know, we saw a little bit more, you know, a little bit more vacation time from the technicians and, you know, that put us slightly behind where we expected to be. Really had nothing to do with the work coming into the shops or a slowdown in work coming into the shops. It had more to do with our ability to get through it in light of just the way that the holidays fell. So, nothing really more to note than that.

[Krista Friesen, Executive Director in Equity Research at CIBC]

Okay. Thank you for the color. I'll leave it there.

[Brian Kaner, President and CEO at The Boyd Group Services]

Yeah. Thank you.

[Operator]

Your next question comes from a line of Sabahat Khan from RBC Capital Markets. Your line is open.

[Sabahat Khan, Managing Director in Equity Research at RBC Capital Markets]

Great. Thanks, and good morning. Maybe, I guess, just kind of continuing on 26. You know, with sort of that operating backdrop you just talked about and the integration of Joe Hudson, how are you thinking about just run rate M&A of smaller shops? You know, what is kind of the capacity or just the willingness to sort of pursue that over the course of this year while you integrate the Joe Hudson transaction? Thanks.

[Brian Kaner, President and CEO at The Boyd Group Services]

Yeah. Well, look, I think as we've said on a couple different occasions, we intend to integrate the Joe Hudson's business with, you know, a separate team of people that's focused on, you know, the base business acquisition activity that we do. We don't expect to see a big slowdown in activity as it relates to acquisitions driven by what we're, you know, driven by the integration. As I said in the prepared remarks, our intention is to get through the integration of Joe Hudson's by, you know, early in the Q2 to have all the shops converted and have that business kind of up on our operating platform and running and ready to go. The organization is already put in place.

[Brian Kaner, President and CEO at The Boyd Group Services]

I don't expect it to be distracting throughout the year. You know, the pipeline for activity remains very robust. Our balance sheet still remains very well-positioned to be able to take advantage of those opportunities. As we've said, we've already got 32 startup locations already planned for 2026 and would expect to infill the balance of our expected 80-100-unit growth, you know, with acquisitions or even further startups to pull in.

[Sabahat Khan, Managing Director in Equity Research at RBC Capital Markets]

Great. Then I guess just to put a finer point on the same-store sales discussion that you outlined a bit earlier, you know, is, I guess, the expectation based on the operating backdrop and how you're sort of evolving through Q1 that you could still be within that sort of 3%-5% range for the year, or too early to sort of comment on that? Thanks.

[Brian Kaner, President and CEO at The Boyd Group Services]

Yeah. I mean, look, I think we you know we've said we expect to be in a 3%-5% you know range over you know our long-term you know over the long-term horizon. I think the market backdrop continues to progress to move positively towards that. You know, the claims environment continues to get better quarter-after-quarter-after-quarter, which gives us you know confidence that we can get back into that range. As I said, without the impact of you know this couple day impact of just really odd storm activity that hit the South, you know we very much would have likely been in that you know position in the Q1. I don't expect us to be out of that range.

[Sabahat Khan, Managing Director in Equity Research at RBC Capital Markets]

Great. Thanks very much.

[Operator]

Your next question comes from a line of Chris Murray from ATB Capital Markets. Your line is open.

[Chris Murray, Managing Director of Institutional Research in Diversified Industries at ATB Capital Markets]

Yeah. Thanks, folks. You know, maybe Brian, going back to maybe sort of the bigger macro pieces, you know, it sort of feels like you are seeing the improvement in the underlying. I guess a couple pieces of this. One, you know, is your expectation that sort of the claims volume numbers, I mean, at least they're trending to be positive. Would you expect that the kind of a spread between what Boyd has historically been doing versus the industry to continue?

[Brian Kaner, President and CEO at The Boyd Group Services]

Yeah. I would expect the spread to continue. I don't know that the claims environment is going to go positive. You know, I think it's progressing less negative, which is, you know, what we expect it to do. You know, we've always said that, you know, based on collision avoidance systems, we expect the underlying marketplace to be negative by 2%. We expect that to be offset by 1%, you know, 1% improvement in miles driven as well as a 1% increase in the car park, you know, which leaves the market kind of down 1%. You know, as we suggested in the Q4, we're starting to near that 1%.

[Brian Kaner, President and CEO at The Boyd Group Services]

You know, we wouldn't expect, you know, to give up the share gains that we're getting right now, you know, in the down environment. We'd expect that to continue even as the market improves.

[Jeff Murray, EVP and CFO at The Boyd Group Services]

Maybe I'd just add to that, Brian, is that we certainly have seen sort of a delay in the maturation of some of the stores we've added over the last, you know, few years. I think that's also something to take into account is that we could benefit just from maturation of those stores.

[Chris Murray, Managing Director of Institutional Research in Diversified Industries at ATB Capital Markets]

Okay. That's helpful. Maybe just looking at operating expenses, you know, certainly some really good performance in the quarter. I'm just wondering, you know, how you're thinking about it. There were a lot of things called out. I mean, you talked about scanning and calibration helped you, but it also hurts you a little bit. Then that maturation piece. Like, if we were thinking about net, that kind of pace of or directionality of margin improvement, you know, if you were to kind of back out the, call it the one-time accrual adjustments, like, how are we thinking about kind of progressive margin improvement through the balance of the year?

[Jeff Murray, EVP and CFO at The Boyd Group Services]

Well, I think I would go back to looking at just our Project 360, you know, ambition that we've talked about of getting back to 14% by 2029. We've also really highlighted the improvements in terms of Project 360 and Joe Hudson's that we expect to realize in 2026. That number is CAD 50 million. I would just layer that CAD 50 million improvement into your assumptions around OpEx, and that'll give you your answer.

[Chris Murray, Managing Director of Institutional Research in Diversified Industries at ATB Capital Markets]

Okay. I'll leave it there. Thanks, folks.

[Brian Kaner, President and CEO at The Boyd Group Services]

Thanks.

[Operator]

Your next question comes from a line of Mark Jordan from Goldman Sachs. Your line is open.

[Mark Jordan, VP in Equity Research at Goldman Sachs]

Hey. Good morning. Thank you very much. You know, as we think about the same-store sales growth, are you able to talk about the pricing benefit that you're seeing from the pass-through of parts inflation, and maybe how we should think about that tailwind going forward?

[Brian Kaner, President and CEO at The Boyd Group Services]

Yeah. Well, if you look at what's happening with you know, parts prices, as you've highlighted, they continue to go up. You know, parts pricing CPI in February was 2.6%. We also continue to see labor price increases. We still believe that, you know, that's still partially being offset by the blending down of the overall claims' population driven by the elevated total losses. I think the tailwind is as total losses start to come down, reflecting the used car price increases that are now in the marketplace. You know, Manheim would suggest those are up 4% in the month of February, which is really probably the first meaningful improvement in or increase in used car prices that we've seen over the past few months.

[Brian Kaner, President and CEO at The Boyd Group Services]

I'd expect that to come through more visibly as we start to see total losses come down. We haven't yet seen it in our results to date. You know, right now, if you look at, you know, through Q3 of 2025, the industry claims or the industry cost to repair was up about 1.7%. That's still far off of the 3%-5% that we would expect it to be driven by the factors that you just articulated.

[Mark Jordan, VP in Equity Research at Goldman Sachs]

Okay, perfect. Thank you very much. You know, as we think about the synergies that are expected for Joe Hudson, midpoint CAD 40 million, half are expected to be realized this year. You know, it kind of sounds like you've realized some already, but is it fair to say the majority of that should be more back half-weighted?

[Brian Kaner, President and CEO at The Boyd Group Services]

No. No, I mean, I think some of the savings that we're expecting for 2026 are really largely driven by procurement savings. Those procurement savings, you know, were starting to be realized as early as the time we closed on the transaction. We had very good visibility to where those opportunities were at. The team worked very quickly to put those best of the best contracts in place. I think we'll start to see some of that benefit even in the Q1. You know, fair to say that some of the other synergies would be, you know, more likely executed towards the back half. I wouldn't weight it so heavily to the back half.

[Mark Jordan, VP in Equity Research at Goldman Sachs]

Perfect. Thank you very much.

[Brian Kaner, President and CEO at The Boyd Group Services]

Yep.

[Operator]

Your next question comes from a line of Thomas Wendler from Stephens. Your line is open.

[Thomas Wendler, Equity Research Analyst at Stephens]

Hey, good morning, everyone. We've heard some chatter that OEMs intend to raise their prices with the 2027 model year. You know, as new prices kind of increase, the used generally follow suit. Do you think the company could see a bit of a bump up in the back half of the year as the repair versus replace dynamics kind of start leaning towards repairing?

[Brian Kaner, President and CEO at The Boyd Group Services]

It's very possible. I mean, I've been surprised that the used car prices haven't moved more meaningfully even this year as, you know, as the tariffs have impacted the, you know, the new car pricing. New car prices are at, you know, an all-time high even as we sit here today. So, it wouldn't surprise me that as total losses or as used car prices go up in a more meaningful way that, you know, total losses come down. I think what the way that manifests itself is it just shows itself as, you know, a higher average cost to repair.

[Brian Kaner, President and CEO at The Boyd Group Services]

Instead of total losses muting the benefit we're seeing from just the previously mentioned, you know, parts price increases and labor price increases, they may actually put us in a position, you know, similar to what we saw in, you know, 2022 and 2023, where the prices actually elevate greater than that 3%-5%.

[Thomas Wendler, Equity Research Analyst at Stephens]

Perfect. Thank you. Maybe just one more. It's been almost a year since you've kind of aligned the regional and field management compensation to key performance metrics from the insurance partners. Can you maybe talk about how this has impacted your volumes, maybe some wins you've seen on the market share side from this?

[Brian Kaner, President and CEO at The Boyd Group Services]

Yeah. I mean, look, I would tell you that I think that's what's driving the outperformance to the market as we sit here today. You know, the client performance metrics have moved very positively over the past 12 months. The team has done a phenomenal job of focusing in on you know on what I call majoring in the minors and making sure that we're not just winning on the big three things that are important to insurance carriers, but we're winning on all of the smaller things that are important to them as well. As we've done that, we've seen meaningful progress with you know with one our largest carrier, but all of the other carriers as well have benefited by you know a team that's just uber-focused on you know driving a great result with our customers.

[Thomas Wendler, Equity Research Analyst at Stephens]

Perfect. I appreciate you answering my questions.

[Brian Kaner, President and CEO at The Boyd Group Services]

Yep. Thank you.

[Operator]

Your next question comes from a line of Steve Hansen from Raymond James. Your line is open.

[Brian Kaner, President and CEO at The Boyd Group Services]

Hey, Steve.

[Steve Hansen, Managing Director and Equity Analyst at Raymond James]

Yeah. Hi, guys. Thanks for the time. Brian, not to beat the same source horse too hard here, but is it fair to say that the activity levels in March have improved back to the range you would have expected, absent the weather stuff you saw earlier in the year? I'm just trying to understand sort of the cadence through the quarter.

[Brian Kaner, President and CEO at The Boyd Group Services]

Yeah. We actually

[Steve Hansen, Managing Director and Equity Analyst at Raymond James]

And-

[Brian Kaner, President and CEO at The Boyd Group Services]

Yeah. I would say that it's not. It's less about March and frankly more about we saw the activity bounce back pretty quickly even as we got into February. It was very much so. That impact was very much so isolated to, you know, a few days of really just a marketplace that got shut down from, frankly, Texas all the way to the Carolinas. You know, it was just a very odd storm that just had an impact on, you know, the southern region. You know. It was very short term in nature, and as we came out of it, we saw the dip and then we saw, you know, the bounce back pretty quickly.

[Steve Hansen, Managing Director and Equity Analyst at Raymond James]

Okay, that's helpful. Just wanted to circle back on the M&A side again, these small MSOs become more thematic or topical here. I mean, how competitive are they? The broader landscape has had some challenges of course, but are you having to pay up for these small MSOs or are you finding there's still good value to be had there?

[Brian Kaner, President and CEO at The Boyd Group Services]

Yeah, I think there's actually as time goes on, there's even more value to be had there. The competitive backdrop is less competitive right now as, you know, as a few of the major players in the business or in the industry are going through different things. You know, I think it's putting us in a position to be, you know, a bit of the acquirer of choice and, you know, as you well can appreciate as that happens, the competitive environment actually starts to slant more towards the buyer versus the seller.

[Steve Hansen, Managing Director and Equity Analyst at Raymond James]

Appreciate the time. Thanks.

[Brian Kaner, President and CEO at The Boyd Group Services]

Yep.

[Operator]

Your next question comes from the line of Derek Lessard from TD Cowen. Your line is open.

[Derek Lessard, Managing Director in Equity Research at TD Cowen]

Yeah. Good morning everybody. I wanna switch gears here and focus on your strong margin performance in the quarter. Can you just maybe break down how much of the remaining is driven by?

[Brian Kaner, President and CEO at The Boyd Group Services]

Hey, Derek, you're breaking up. You're breaking up, Derek.

[Derek Lessard, Managing Director in Equity Research at TD Cowen]

Can you hear me now?

[Brian Kaner, President and CEO at The Boyd Group Services]

Yeah, we can hear you now. We heard everything up to, you know, how much of the strong performance is driven by. You broke up.

[Derek Lessard, Managing Director in Equity Research at TD Cowen]

Yeah. How much, I guess the remaining path to your 14% target, how much of that is being driven by Project 360 versus mix and scale and Joe Hudson's synergies?

[Brian Kaner, President and CEO at The Boyd Group Services]

Good question. I mean, we still expect the pathway to 14% in the base business to be paved by Project 360. No doubt that Joe Hudson's profit profile enhances and accelerates our ability to get to that objective. We're not slowing anything down relative to the benefits we would expect Project 360 to deliver. Frankly would expect, you know, as we get further out into the plan period, you know, that plus that we have at the end of the 14% to be positively impacted by, you know, Joe Hudson's mixing into the business.

[Derek Lessard, Managing Director in Equity Research at TD Cowen]

Okay. When you think about the internalization of your scanning and calibration, I think you put out in the press release you're at 75% in Q4. Where does this, I guess, ultimately plateau and how should we be thinking about the incremental margin and competitive benefits from further internalization?

[Brian Kaner, President and CEO at The Boyd Group Services]

Yeah. Well, we've talked about the benefits associated with it are certainly related to shifting that, you know, that labor cat or that revenue category from a sublet category, which is our lowest margin category to a labor margin. You know, we've talked about that being anywhere from 25-30 points of difference between those two categories. From a customer benefit, what we do know is when we do it internally, we're able to offer better pricing because we offer our menu-based pricing as well as, you know, drive down the cycle time for repair because we're not beholden to somebody else to actually complete that repair. Lots of benefits there.

[Brian Kaner, President and CEO at The Boyd Group Services]

As far as where it plateaus, you know, we've said we wanted to be at 80% by the end of this year. We're clearly on track to be able to do that. I don't know that that's the plateau. I think as the car part continues to require more calibration services over time, what'll happen is that we'll migrate into a shop and we've talked about how that migration into a shop will offer up then. Will open up the opportunity for us to leverage the mobile capabilities that we have to expose that more to the external market and maybe even potentially take care of mom-and-pop shops that don't have the financial wherewithal to invest in this type of equipment.

[Brian Kaner, President and CEO at The Boyd Group Services]

I do believe that, you know, over time you'll see us doing even greater than 80%. For now, we flagged the 80% as the market continues to mature.

[Jeff Murray, EVP and CFO at The Boyd Group Services]

Brian, I'd highlight though, there is two components. There's the internalization piece which offers a margin uplift, but there is also just the growth in the volume of calibrations, the number of cars that require calibrations. Since it is a higher margin category, just higher margin or sorry, higher volumes over time is also going to help provide additional margin lift going forward.

[Derek Lessard, Managing Director in Equity Research at TD Cowen]

Awesome. Thanks for the color guys.

[Brian Kaner, President and CEO at The Boyd Group Services]

Thanks.

[Operator]

Your next question comes from a line of Daryl Young from Stifel. Your line is open.

[Daryl Young, Managing Director and Equity Research Analyst at Stifel]

Hey, good morning, everyone. Just as it relates to the insurance, pricing, I know we talk a lot about the macro and pricing coming down, but are you seeing any signs of customer behavior around customer cash pay or any previous deferrals that are starting to come back through the shops? Or is there any green shoots there that you can speak to that kind of corroborate the upside that should come?

[Brian Kaner, President and CEO at The Boyd Group Services]

I don't know that we're seeing anything differently as it relates to customer pay or. Obviously, the claims environment is getting less negative, which, you know, it would indicate that people are more likely that they're more likely filing claims when they get into an accident. You know, whether or not there's a deferral benefit, you know, as we look back to the last 2x we saw, you know, the industry kind of react or behave this way. There was a period of time, you know, in the coming out of the recession, I think it was two years after the recession ended, that we saw an outsized growth in the market.

[Brian Kaner, President and CEO at The Boyd Group Services]

Certainly COVID, you know, we saw, you know, in the year right after COVID, we saw an exact inverse of what we were experiencing in the COVID period and then the period after, you know, 2020 and 2023, we saw an outsized performance. So, if you look at history, you might believe that there's something there. Right now, the focus of our organization is just to make sure that we're taking care of the volume that's coming in and that we're continuing to deepen the relationships we have with our insurance partners. As we do that, we know that we're continuing to outpace the market and would expect to continue to do that if the market continues to get more positive.

[Daryl Young, Managing Director and Equity Research Analyst at Stifel]

Got it. Okay. One other question just around labor rates. Seen some news headlines around regional pressure on labor rates, and they're actually coming down from insurance companies. Is that something that's more idiosyncratic, or are you seeing pressure on labor rates from your insurance partners?

[Brian Kaner, President and CEO at The Boyd Group Services]

We are not seeing pressure from labor rates with our insurance carriers. I mean, I think the insurance carriers recognize that the cost of labor continues to move at, generally speaking, inflationary levels. You know, the cost of a labor hour or the price of a labor hour is going to have to move commensurate with that.

[Daryl Young, Managing Director and Equity Research Analyst at Stifel]

Got it. Okay. Thanks very much.

[Brian Kaner, President and CEO at The Boyd Group Services]

Yep.

[Operator]

Your next question comes from a line of Bret Jordan from Jefferies. Your line is open.

[Bret Jordan, Managing Director and Senior Equity Research Analyst at Jefferies]

Hey, good morning, guys. Obviously, the impact on arrivals that you had on the very short term, does the longer term impact from higher weather-related crash become a net positive, or do you think the driving reduction makes weather a net negative in Q1?

[Brian Kaner, President and CEO at The Boyd Group Services]

You broke up on, like, one piece of your question. I don't know.

[Bret Jordan, Managing Director and Senior Equity Research Analyst at Jefferies]

I was saying, does the weather-related collision create a net positive in Q1, or was the timing of the arrivals and lack of driving a negative?

[Brian Kaner, President and CEO at The Boyd Group Services]

Yeah. I think it probably creates a slight net negative in Q1. But the benefit we're seeing in the north probably extends into the Q2 and creates a little bit of a tailwind as we get into the Q2.

[Bret Jordan, Managing Director and Senior Equity Research Analyst at Jefferies]

About scanning and calibration, you know, it is outgrowing the underlying market. Do you have a feeling for what the maybe three-year outlook for scanning and calibration growth might be, just as more cars require it?

[Brian Kaner, President and CEO at The Boyd Group Services]

There's been research, you know, reports processed or done on this that would suggest that piece of business is growing at, you know, 20%-25% a year. I, you know, I think we saw, you know, something very early on that said, you know, it would grow from $1 billion-$5 billion. I believe the timeframe was till 2029.

[Bret Jordan, Managing Director and Senior Equity Research Analyst at Jefferies]

Okay. Great. Thanks.

[Operator]

Your next question comes from a line of Razi Hasan from Paradigm Capital. Your line is open.

[Razi Hasan, Equity Research Analyst in Diversified Industries at Paradigm Capital]

Good morning. Thanks for taking my questions. Could you maybe just talk about operating leverage potential as same-store sales grow, and which costs you saw improve in the quarter related to leverage? If any color, there would be helpful.

[Jeff Murray, EVP and CFO at The Boyd Group Services]

Yeah. Well, I think we've always really discussed what we would expect from an operating leverage perspective and same-store sales based on what you've seen historically. If you see a steady level of same-store sales growth in that 2%-4% range over time, we've seen kind of a 20 basis point improvement in operating leverage. It really just comes down to, you know, we do have fixed costs that we can leverage, like general manager salaries and other occupancy type costs that don't flex at all with growth. That's where we get that leverage from.

[Jeff Murray, EVP and CFO at The Boyd Group Services]

You could see, you know, at 20% a year, you could see sort of a 1% overall improvement over a five-year period if you get consistent same-store sales growth.

[Razi Hasan, Equity Research Analyst in Diversified Industries at Paradigm Capital]

Okay. Great. That's helpful. Then maybe just your cash position. Expect that to get back to historical levels going forward?

[Jeff Murray, EVP and CFO at The Boyd Group Services]

Sorry, could you repeat the question?

[Razi Hasan, Equity Research Analyst in Diversified Industries at Paradigm Capital]

Cash.

[Jeff Murray, EVP and CFO at The Boyd Group Services]

Our cash flow? Yeah. Yeah. It's certainly this end of this year was an anomaly in terms of the cash on the balance sheet, as a result of preparing for the closure of the transaction with Joe Hudson's. Yes, going forward, we would expect to have the cash balances come back to their normal range.

[Razi Hasan, Equity Research Analyst in Diversified Industries at Paradigm Capital]

Okay. Great. Thanks for taking my questions.

[Jeff Murray, EVP and CFO at The Boyd Group Services]

Sure.

[Operator]

Your next question comes from a line of Tristan Thomas-Martin from BMO Capital Markets. Your line is open.

[Tristan Thomas-Martin, Equity Research Analyst at BMO Capital Markets]

Hey, good morning. Brian, I think you called out some kind of, in a normalized year, basically a 1% benefit for miles driven. Should we think about that for this year as well, given just we've seen such an increase in gas prices recently?

[Brian Kaner, President and CEO at The Boyd Group Services]

Yeah. I mean, look, over a long term, over a long period of time, you know, that's what we expect. I don't know that I haven't seen any data relative to what's happened thus far given the gas price movement. I also wouldn't want to predict how long that's going to be. I'd, you know, it'd be speculative for me to suggest that, you know, we're gonna see any negative associated with that. You know, people also do tend to drive more when, you know, you're also seeing inflation on, you know, airline tickets as well, driven by the price of gas, which, you know, puts people in their cars more for vacations and things like that, particularly as we get into these types of months. I think that might be an offset anyways.

[Tristan Thomas-Martin, Equity Research Analyst at BMO Capital Markets]

Okay. No, that makes sense. Just kind of curious, as you continue to do work on the Joe Hudson's integration, anything that surprised you or any sources of, like, incremental upside from when you last updated us? Thanks.

[Brian Kaner, President and CEO at The Boyd Group Services]

Yeah. I mean, Jeff mentioned earlier the notion that there's, you know, they, not dissimilar to us, have a lot of stores that are in the maturation process. Still believe those stores have, you know, good opportunity to be a tailwind to the business. They certainly were purchased. We bought 140 locations, you know, over the last three years leading up to 2025. There's probably some untapped value there. The team has been very positive, very accepting of the Boyd organization. The integration is progressing very well. Couldn't frankly be happier with the pacing of the integration process at this point in time.

[Brian Kaner, President and CEO at The Boyd Group Services]

You know, the synergies that we were expecting are real and, you know, so we're very, very positive about what we're seeing thus far.

[Tristan Thomas-Martin, Equity Research Analyst at BMO Capital Markets]

Okay, great. Thanks, everyone.

[Brian Kaner, President and CEO at The Boyd Group Services]

Yep.

[Operator]

Again, if you'd like to ask a question, press star one on your telephone keypad. Your next question comes from the line of Zachary Evershed from National Bank Financial. Your line is open.

[Brian Kaner, President and CEO at The Boyd Group Services]

Hey, Zach.

[Zachary Evershed, Equity Research Analyst at National Bank Financial]

Morning, everyone. Congrats on the quarter. Hoping you could quantify the impact of paint rebates in gross margins, and what are your expectations of changes there as supply consolidates?

[Brian Kaner, President and CEO at The Boyd Group Services]

I mean, when you're talking about rebates, are you talking about rebates from suppliers or are you talking about rebates elsewhere?

[Zachary Evershed, Equity Research Analyst at National Bank Financial]

From suppliers.

[Brian Kaner, President and CEO at The Boyd Group Services]

Yeah. I don't think we'll really talk about what's happening with rebates with suppliers. I mean, obviously we have some volume-triggered rebates that will benefit from continued growth in the, you know, in our purchases and, you know, frankly, as we integrate Joe Hudson's, those things can be a benefit for us as well. Nothing on the specific numbers.

[Zachary Evershed, Equity Research Analyst at National Bank Financial]

Any downdraft expected as supply consolidates?

[Brian Kaner, President and CEO at The Boyd Group Services]

No. No. There's nothing that we would, nothing that we see from that perspective.

[Zachary Evershed, Equity Research Analyst at National Bank Financial]

Beauty. Thanks. I'll turn it over.

[Brian Kaner, President and CEO at The Boyd Group Services]

Yep. Thank you.

[Operator]

Your next question comes from a line of Jonathan Goldman from Scotiabank. Your line is open.

[Jonathan Goldman, Equity Research Analyst at Scotiabank]

Hey, good morning, team, and thanks for taking my questions. Good morning. Maybe just the first one. Brian, like, I understand all the comments around the weather in Q1, and obviously no one has a crystal ball, but, you know, going back to your comments, you know, back on the Q3 earnings call about kind of trending back to the 3%-5% same-store sales range based on what you saw in October and the industry fundamentals, did you have any visibility on the vacation schedule and how that would line up for Q4 and the impact on that?

[Brian Kaner, President and CEO at The Boyd Group Services]

Not good visibility. You know, we made some changes to the way that we, you know, that we pay out vacation. We used to pay out vacation, you know, for people that had unused vacation time. We stopped doing that last year, and it probably had a bit of a short-term negative impact on the business but would've been difficult for us to see that ahead of time. No real visibility. As we exited the month of October, we did see, you know, we had seen a nice bounce back in the activity in the month of October, but nothing really, nothing from a arrivals perspective really slowed as we got into November, December.

[Brian Kaner, President and CEO at The Boyd Group Services]

It was really more a function of our ability to get through the work that was coming in.

[Jonathan Goldman, Equity Research Analyst at Scotiabank]

Okay. Then maybe one more for me. If we were to strip out the noise from vacation schedules and the weather in Q1, would you have seen a sequential improvement in same-store sales in Q4 versus Q3, and then again, sequential improvement from Q1 versus Q4?

[Brian Kaner, President and CEO at The Boyd Group Services]

Probably, yes. Yeah, probably.

[Jonathan Goldman, Equity Research Analyst at Scotiabank]

Okay. Thanks for taking my questions.

[Brian Kaner, President and CEO at The Boyd Group Services]

Yep.

[Operator]

That concludes our question-and-answer session. I will now turn the call back over to Brian for closing remarks.

[Brian Kaner, President and CEO at The Boyd Group Services]

Okay. All right. Well, thank you all again for joining the call today. We look forward to reporting our Q1 results in May. Thanks again. Have a great day.

[Operator]

This concludes today's conference call. Thank you for your participation. You may now disconnect.

Participants

Executives

• Brian Kaner, President and CEO
• Jeff Murray, EVP and CFO
• Linda Funk, VP of Finance

Analysts

• Bret Jordan, Managing Director and Senior Equity Research Analyst at Jefferies
• Chris Murray, Managing Director of Institutional Research in Diversified Industries at ATB Capital Markets
• Daryl Young, Managing Director and Equity Research Analyst at Stifel
• Derek Lessard, Managing Director in Equity Research at TD Cowen
• Jonathan Goldman, Equity Research Analyst at Scotiabank
• Krista Friesen, Executive Director in Equity Research at CIBC
• Mark Jordan, VP in Equity Research at Goldman Sachs
• Razi Hasan, Equity Research Analyst in Diversified Industries at Paradigm Capital
• Sabahat Khan, Managing Director in Equity Research at RBC Capital Markets
• Steve Hansen, Managing Director and Equity Analyst at Raymond James
• Thomas Wendler, Equity Research Analyst at Stephens
• Tristan Thomas-Martin, Equity Research Analyst at BMO Capital Markets
• Zachary Evershed, Equity Research Analyst at National Bank Financial