The Joint NASDAQ: JYNT reported first-quarter 2026 results that management said reflect improving profitability as the company nears completion of its “Joint 2.0” transformation into a “pure-play franchisor.” President and CEO Sanjiv Razdan highlighted progress on refranchising, marketing initiatives aimed at improving patient trends, and early moves to position the business for what the company calls “Joint 3.0” beginning in 2027.
Refranchising nears completion, shifting The Joint to a pure franchisor model
Razdan said the company made “meaningful progress” with Joint 2.0 and described refranchising as “effectively complete.” In April, the company entered into an agreement to sell 45 company-owned or managed clinics in Southern California. When combined with two other signed refranchising agreements pending closing, Razdan said just three clinics across the company’s portfolio will remain company-owned or managed, down from 135 at the start of the initiative.
Razdan called the refranchising milestone “defining,” adding that with the effort nearly finished, “The Joint is now, in every meaningful sense, a pure-play franchisor.” CFO Scott Bowman said the timing of closing depends largely on lease assignments. “Over the next couple of months, we should be very near completion of that lease assignment process,” Bowman said.
Razdan added that “all but six or seven” of the clinics involved are already being operated by the buyers—either with leases transferred or under management services agreements that “mirror the economics of a pure franchisor model.” He also noted a separate “small cluster” of five clinics in Northern California under a letter of intent, with an asset purchase agreement expected to be signed shortly.
First-quarter results show higher profitability and cash flow from continuing operations
Razdan said the company’s financial results are benefiting from increased cost discipline and a greater mix of royalty- and fee-based franchise revenue. Revenue from continuing operations grew 13% year-over-year to $14.8 million. Adjusted EBITDA from continuing operations was $2.2 million, up from $46,000 in the prior-year quarter. Net income from continuing operations was $1.1 million versus a net loss of $506,000 in Q1 2025.
Bowman said system-wide sales in the first quarter were $126 million, down 4.9% year-over-year, with comp sales of -4.2%. Despite the comp decline, he said adjusted EBITDA from consolidated operations grew 22% to $3.5 million.
On expenses within continuing operations, Bowman reported:
- Cost of revenues of $2.7 million, down 8%, “primarily due to lower regional developer royalties.”
- Selling and marketing expense of $3.7 million, up 6%, driven by the transition of clinics to continuing operations.
- G&A expense of $7.1 million, up 2%; Bowman said about $300,000 of this relates to expenses that “will not be incurred upon the completion of our refranchising strategy.”
Bowman said the company expects G&A to decline as a percentage of revenue as the transition to a franchise model concludes. In Q&A, he confirmed the $300,000 figure was quarterly and said it should go away after refranchising is complete. He also noted the quarter included a $600,000 restructuring charge, “most of that…was in G&A,” and it was added back for adjusted EBITDA.
Clinic count declines amid portfolio optimization; openings expected to be back-half weighted
Total clinic count was 943 at the end of the first quarter, down from 960 at year-end 2025. Bowman said the company opened three clinics and closed 20 in the quarter, ending with 868 franchise clinics and 75 company-owned or managed clinics. He characterized the closures as part of the company’s portfolio optimization strategy “for quality and performance.”
Razdan said management remains confident in its previously issued guidance for 30 to 35 new franchise clinic openings in 2026, with the cadence “skewed towards the back half of the year.” He attributed improved performance in newer clinics to stronger franchisees, more rigorous site selection, and enhanced opening protocols, saying 2025 openings are “tracking to breakeven times at half the time of the run rate.” He added that early 2026 openings are tracking “at an even faster run rate,” though he cautioned it is still early.
Razdan said the company is seeing interest from both new and existing franchisees and identified the Northeast as a focus area where the brand has been “traditionally under-penetrated.” He also noted that the Southern California corporate clinic bundle was sold to a franchisee “completely new to our system.”
Marketing, pricing actions, and retention initiatives aimed at improving comps
Management emphasized that comp sales remain pressured by macro conditions, but said trends are expected to improve through 2026. Razdan said Q1 comp sales of -4.2% reflected “continued macro headwinds,” including cost-of-living pressures. However, he noted the company has seen four consecutive months of month-on-month improvement in active member count per clinic beginning in January.
Bowman said comps at the end of Q1 were “similar to the full quarter -4.2%,” but improved in April. “Quarter to date, we’re running about -3%,” he said, attributing improving trends to better new patient attraction, conversion, and retention.
Razdan detailed several initiatives he said are contributing to improving member trends, including a shift in external messaging toward pain relief, a change in marketing mix by transferring “$500 per clinic per month from local marketing to national advertising,” and improvements in SEO and “AI visibility,” with the company’s AI visibility score improving to between 78 and 80 from about 70 earlier in the process.
On retention, Razdan said the minimum contract term was extended from two months to three months with “zero pushback,” and described a new “Align One” plan—positioned as an option for members seeking to cancel a four-visits-per-month wellness plan—that offers one visit per month at $35 or $39 depending on geography, with the ability to buy additional visits. Razdan said the plan has shown “significantly lower attrition,” and that usage is “closer to two visits per month” on average.
The company also discussed pricing optimization. Razdan said $5 to $10 price increases have been rolled out across approximately 300 clinics, with the rest of the portfolio expected to begin implementing pricing starting in the third quarter. In Q&A, Bowman said the company is “leveraging the $10 price increase more” and confirmed the price increases are for new patients only, with existing plan members staying at their current prices. Bowman said the company has seen “little or no pushback,” adding that conversion rates have not declined and attrition has improved in the test markets.
Capital allocation: share repurchases, RD territory buybacks, and updated credit facility maturity
Bowman said unrestricted cash was $20.7 million at quarter-end, down from $23.6 million at year-end 2025. The company’s $20 million JPMorgan Chase line of credit remained undrawn, and Bowman said the maturity was extended in early May by two years to August 2029.
During the quarter, The Joint repurchased about 137,000 shares for $1.1 million at an average price of $8.35 per share, leaving $4.5 million remaining under a $12 million authorization approved in November 2025.
Razdan and Bowman also highlighted regional developer (RD) territory buybacks. Bowman said the company recently completed three RD territory buybacks and expects approximately $450,000 in reduced RD royalties on an annualized basis, partially offset by internal costs to manage the territories. In Q&A, Bowman said 12 RD territories remain, and management will continue evaluating opportunities.
For full-year 2026, Bowman reiterated guidance originally issued in March: system-wide sales of $519 million to $552 million, comp sales of -3% to +3%, consolidated adjusted EBITDA of $12.5 million to $13.5 million, and 30 to 35 new franchise clinic openings. He said management expects “slightly negative comps in Q2,” followed by positive comps in Q3 and Q4, with Q4 expected to be higher than Q3.
Looking beyond Joint 2.0, Razdan said the company is increasingly focused on Joint 3.0, beginning “in earnest” in 2027, with priorities including B2B initiatives, expansion into under-penetrated U.S. markets, and a “potential entry into our first international market.”
About Joint NASDAQ: JYNT
The Joint Chiropractic, Inc, doing business as Joint NASDAQ: JYNT, is a franchisor and operator of outpatient chiropractic clinics in the United States. Under its flagship The Joint Chiropractic brand, the company offers membership-based, cash-focused spinal adjustment services designed to promote accessible, routine care for neck and back discomfort. By removing insurance requirements and offering walk-in visits, Joint aims to streamline the patient experience and reduce cost barriers to ongoing chiropractic treatment.
Joint's growth strategy centers on partnering with franchisees to expand its network of clinics.
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