Joint NASDAQ: JYNT reported second-quarter results that reflected progress in its shift toward a capital-light, pure-play franchisor model, while management said patient retention improved to its highest level in more than five years.
Revenue increased 14% year over year to $15.2 million for the quarter ended June 30. Consolidated net income rose to $653,000 from $93,000 in the prior-year period, while adjusted EBITDA from continuing operations increased to $1.5 million from $88,000. Cash flow from operating activities rose 152% to $2.2 million, and free cash flow increased by $1.6 million to $1.9 million.
President and CEO Sanjiv Razdan said the results reflected execution on the company’s “Joint 2.0” initiative, including refranchising company-operated clinics, improving patient retention and maintaining disciplined capital allocation.
Refranchising Nears Completion
The company said its three previously announced clinic-sale bundles are progressing, with buyers operating certain clinics under management service agreements while lease assignments and ownership transfers are completed.
- In Southern California, ownership has transferred for 32 clinics, while 13 remaining clinics are operated by the buyer under management service agreements.
- In Northern California, the company has signed an asset purchase agreement covering four clinics.
- In the Southeast, ownership has transferred for six clinics, while the buyer operates 15 remaining clinics under management service agreements.
Once the transfers are finalized, The Joint expects to have three company-owned or managed clinics remaining. Razdan said that position would effectively make the company a capital-light, pure-play franchisor.
CFO Scott Bowman said the company expects to receive about $500,000 or slightly less in remaining proceeds from the clinic transfers. He said the timeline depends on working with landlords to complete lease assignments.
The company expects the new financial model to be fully in place in the second half of 2026 after the remaining transfers are completed. Its stated starting points for the model include gross margin of 83% to 85% of revenue, general and administrative expenses of 40% to 42% of revenue, capital expenditures of about 3% of revenue, free-cash-flow conversion of 60% to 70%, adjusted EBITDA margin of 19% to 21%, and net income margin of 13% to 15%.
Bowman emphasized that these figures are starting points rather than long-term targets. He said management expects additional sales growth to provide an opportunity to leverage the company’s cost structure and expand margins over time, though the company did not provide guidance for 2027 or 2028.
Retention, Marketing and Pricing Efforts
Same-store sales declined 2.8% in the second quarter, improving by 140 basis points from the first quarter. System-wide sales were $128 million, down 3.7% year over year.
Razdan said flexible and expanded membership-plan options introduced earlier in the year contributed to the company’s strongest quality retention rate in more than five years. He said The Joint is focusing on patient acquisition, retaining active members and winning back former patients.
During the question-and-answer session, Razdan identified pain relief, time constraints and affordability as the three principal reasons patients lapse. He said consumer research found that lapsed patients generally retain positive memories of receiving pain relief and may be willing to return.
Bowman said the company’s flexible plans have increased conversion rates among lapsed patients by several hundred basis points. One option allows patients to pay $35 for one visit per month and $25 for additional visits, offering an alternative to the standard wellness plan.
The company also expanded $5 and $10 pricing increases in July, bringing the number of clinics that have adopted higher pricing to more than 500. Razdan said the price changes have been applied to new patients, meaning their impact builds gradually as more members enroll at current rates. Bowman said pricing appeared to contribute in the low-single-digit range during the quarter and could be toward the high end of that range in the second half.
Management said digital marketing initiatives, including search-engine optimization and AI-search visibility efforts, are supporting organic traffic and lead quality. Razdan said The Joint’s AI visibility score had risen from 71 late last year to the high 70s in recent months.
Capital Allocation and Clinic Portfolio
Unrestricted cash totaled $22.2 million at quarter-end, compared with $23.6 million at the end of 2025. The company’s $20 million JPMorgan Chase line of credit remained fully undrawn and is available through August 2029.
During the quarter, The Joint repurchased about 82,000 shares for $677,000, or an average price of $8.23 per share. It had $3.8 million remaining under its $12 million share-repurchase authorization.
The company also completed three regional developer territory buybacks in the quarter, bringing the year-to-date total to four. Management expects the four completed transactions to reduce regional developer royalties by about $630,000 annually, partly offset by internal territory-management costs.
The clinic count stood at 941 at the end of the quarter. The company opened five clinics, closed seven and refranchised 29. Bowman said 2026 openings are reaching break-even in less than six months and are outperforming comparable cohorts.
Guidance Reaffirmed, Opening Outlook Reduced
The Joint reiterated its full-year 2026 outlook for system-wide sales of $519 million to $552 million, same-store sales between negative 3% and positive 3%, and consolidated adjusted EBITDA of $12.5 million to $13.5 million.
Management said it expects same-store sales to improve in the second half, with fourth-quarter performance stronger than the third quarter. Bowman said July same-store sales were modestly better than the end of the second quarter.
The company reduced its expected number of new franchise-clinic openings to 22 to 26 from prior guidance of 30 to 35. Closures are expected to offset openings as the company reshapes its portfolio around stronger operators and sites, resulting in a lower year-end clinic count than in 2025.
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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