- Revenue Growth Mister Car Wash's Q2 2025 revenue increased 4% to $265 million, driven by a 1.2% comparable store sales growth and new store openings.
- UWC Membership Growth The company's UWC membership base grew 5% year-over-year, reaching 2.2 million members, with a 1.2% comp store sales growth.
- Operating Expenses and Margins Total operating expenses increased 200 basis points to 67.2%, leading to a 200 basis point decrease in EBITDA margin to 32.8%.
- Revised Guidance The company modestly revised its full-year guidance for comparable revenue, adjusted EBITDA, and adjusted EPS due to Q2 performance and a cautious outlook on consumer behavior.
- Store Expansion Mister Car Wash added four new greenfield locations, expanding its total unit count to 522 stores, while moderating new store openings to focus on high-performing markets.
Financial Performance
The company's financial performance was mixed, with revenue growth offset by margin pressures. Total operating expenses increased 200 basis points to 67.2%, primarily due to sales deleverage. EBITDA margin decreased 200 basis points to 32.8%. The company's balance sheet remains healthy and flexible, with $26 million in cash and cash equivalents and $853 million in outstanding long-term debt. The net leverage ratio is expected to improve to under 2.5x adjusted EBITDA by the end of the year.
Segment Performance
The company's UWC membership base grew 5% compared to Q2 last year, with 2.2 million members. Best Express revenue per member in Q2 increased approximately 4% to $29.23, driven by the successful rollout of price increases to the base membership tier. The company saw an uptick in titanium sign-ups and capture rates driven by a targeted trial promotion.
Guidance and Outlook
The company modestly revised its full-year guidance for comparable revenue, adjusted EBITDA, and adjusted EPS due to Q2 performance and a cautious outlook on retail consumer behavior. The company assumes retail trends in the second half of the year will remain consistent with the negative low double-digit performance observed in Q2. For the full year, comparable store sales growth is expected to be stronger in Q3 relative to Q4.
Valuation
At current prices, Mister Car Wash trades at a P/E ratio of 21.54, a P/B ratio of 1.75, and a P/S ratio of 1.83. The EV/EBITDA multiple is 11.12, and the dividend yield is 0.0%. The free cash flow yield is -0.25%, and ROIC is 4.67%, while ROE is 8.53%. The net debt to EBITDA ratio is 3.64. According to analyst estimates, the company's revenue growth is expected to be 7.7% next year.
Competitive Landscape and M&A
The competitive landscape is shifting in the company's favor, with fewer new competitors entering the market. Stores with competitors within a 3-mile radius have seen a negative low single-digit comp, while those without competition have seen a positive mid-single digit comp. The company views M&A as a key part of its growth opportunity over the next several years and remains opportunistic and open to evaluating potential acquisitions.